Document:

exv4w1

 

Exhibit 4.1

FOURTH AMENDMENT TO CREDIT AGREEMENT

     THIS FOURTH AMENDMENT, dated as of April 28, 2004, amends and modifies a
certain Credit Agreement, dated as of April 30, 2002, as amended by amendments
dated as of September 19, 2002, April 29, 2003 and August 25, 2003 (as so
amended, the “Credit Agreement”), among OTTER TAIL CORPORATION, a Minnesota
corporation (the “Borrower”), U.S. BANK NATIONAL ASSOCIATION, as Agent (in such
capacity, the “Agent”), and the Banks, as defined therein. Terms not otherwise
expressly defined herein shall have the meanings set forth in the Credit
Agreement.

     FOR VALUE RECEIVED, the Borrower, the Agent and the Banks agree that the
Credit Agreement is amended as follows.

ARTICLE I — AMENDMENT TO THE CREDIT AGREEMENT

     1.1 Termination Date. The definition of “Termination Date” in Section
1.1 is amended by deleting “April 28, 2004” (added by the Second Amendment) and
inserting “April 27, 2005” in place thereof.

     1.2 Construction. All references in the Credit Agreement to “this
Agreement”, “herein” and similar references shall be deemed to refer to the
Credit Agreement as amended by this Amendment.

ARTICLE II — REPRESENTATIONS AND WARRANTIES

     To induce the Agent and the Banks to enter into this Amendment and to make
and maintain the Loans under the Credit Agreement as amended hereby, the
Borrower hereby warrants and represents to the Agent and the Banks that it is
duly authorized to execute and deliver this Amendment, and to perform its
obligations under the Credit Agreement as amended hereby, and that this
Amendment constitutes the legal, valid and binding agreement of the Borrower,
enforceable in accordance with its terms.

ARTICLE III — CONDITIONS PRECEDENT

     This Amendment shall become effective on the date first set forth above,
provided, however, that the effectiveness of this Amendment is subject to the
satisfaction of each of the following conditions precedent:

     3.1 Warranties. Before and after giving effect to this Amendment, the
representations and warranties in Article VII of the Credit Agreement shall be
true and correct as though made on the date hereof, except for changes that are
permitted by the terms of the Credit Agreement. The execution by the Borrower
of this Amendment shall be deemed a representation that the Borrower has
complied with the foregoing condition.

 

 

     3.2 Defaults. Before and after giving effect to this Amendment, no
Default and no Event of Default shall have occurred and be continuing under the
Credit Agreement. The execution by the Borrower of this Amendment shall be
deemed a representation that the Borrower has complied with the foregoing
condition.

     3.3 Documents and Fee. The following shall have been executed, delivered
and paid to the Agent:

	 	 
	     

	(a) This Amendment, executed by the Borrower, the Agent and the Banks;
	 
	 
	

	(b) The Acknowledgment in the form attached hereto, executed by the
Guarantor;
	 
	 
	

	(c) A supplement to the Agent’s Fee Letter (which, together with the
original Agent’s Fee Letter and the prior supplement dated as of August
20, 2003, will be deemed the “Agent’s Fee Letter” for purposes of
reference thereto in the Credit Agreement); and
	 
	 
	

	(d) A non-refundable fee of $35,000 in consideration of the extension of
the Commitments hereunder, which fee shall be divided and paid by the
Agent to the Banks in proportion to their respective Percentages.

ARTICLE IV — GENERAL

     4.1 Expenses. The Borrower agrees to reimburse the Agent upon demand for
all reasonable expenses (including reasonable attorneys’ fees and legal
expenses) incurred by this Agent in the preparation, negotiation and execution
of this Amendment and any other document required to be furnished herewith.

     4.2 Counterparts. This Amendment may be executed in as many counterparts
as may be deemed necessary or convenient, and by the different parties hereto
on separate counterparts, each of which, when so executed, shall be deemed an
original but all such counterparts shall constitute but one and the same
instrument.

     4.3 Severability. Any provision of this Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.

     4.4 Law. This Amendment shall be a contract made under the laws of the
State of Minnesota, which laws shall govern all the rights and duties
hereunder.

     4.5 Successors; Enforceability. This Amendment shall be binding upon the
Borrower, and Agent and the Banks and their respective successors and assigns,
and shall inure to the benefit of the Borrower, the Agent and the Banks and the
successors and assigns of the Agent and the Banks.

2

 

Except as hereby amended, the Credit Agreement shall remain in full force and
effect and is hereby ratified and confirmed in all respects.

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed at Minneapolis, Minnesota by their respective officers thereunto duly
authorized as of the date first written above.

	 	 	 	 	 
	 	OTTER TAIL CORPORATION

 	 
	 	By:  	/s/ Kevin G. Moug
 	 
	 	 	 	 
	 	Title:  	CFO 	 
	 
	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION,

     as Agent and a Bank

 	 
	 	By:  	/s/ Randy Salzwedel
 	 
	 	 	     Randy A. Salzwedel 	 
	 	 	     Vice President 	 
	 
	 	 	 	 	 
	 	BANK ONE, N.A., as a Bank

 	 
	 	By:  	/s/ Sharon K. Webb
 	 
	 	 	     Sharon K. Webb 	 
	 	 	     Director 	 
	 
	 	 	 	 	 
	 	BANK HAPOALIM B.M., as a Bank

 	 
	 	By:  	/s/ Laura A. Raffa
 	 
	 	 	 	 
	 	Title:  	Executive Vice President

	 
	 	and
	 
	 	By:	/s/ Helen H. Gateson
	 
	 	Title:	Vice President 	 
	 
	 	 	 	 	 
	 	WELLS FARGO BANK, NATIONAL

ASSOCIATION, as a Bank

 	 
	 	By:  	/s/ G. N. Ophaug
 	 
	 	 	 	 
	 	Title:  	V.P. 	 

3

 

	 	 	 	 	 

ACKNOWLEDGMENT

     Reference is made to the Guaranty, dated as of April 30, 2002 (the
“Guaranty”) pursuant to which the undersigned, as Guarantor (the “Guarantor”)
has guaranteed payment and performance of obligations of Otter Tail Corporation
(the “Borrower”) to U.S. Bank National Association, as Agent, and the Banks
(the “Creditors”) under the Credit Agreement among the Borrower and the
Creditors dated as of April 30, 2002 (as thereafter amended, the “Credit
Agreement”) and under each Note and Loan Document, as defined in the Credit
Agreement. The Guarantor acknowledges that it has received a copy of the
proposed Fourth Amendment to the Credit Agreement, to be dated on or about
April 28, 2004 (the “Amendment”). The Guarantor agrees and acknowledges that
the Amendment shall in no way impair or limit the right of the Creditors under
the Guaranty, and confirm that by the Guaranty, the Guarantor continues to
guaranty payment and performance of the obligations of the Borrower to the Bank
under the Credit Agreement as amended pursuant to the Amendment. The Guarantor
hereby confirms that the Guaranty remains in full force and effect, enforceable
against the Guarantor in accordance with its terms.

Dated as of April 28, 2004.

	 	 	 	 	 
	 	VARISTAR CORPORATION

 	 
	 	By:  	/s/ Kevin G. Moug
 	 
	 	 	 	 
	 	Title:  	CFO<PAGE>
                                                                    EXHIBIT 10.1

                             BELL MICROPRODUCTS INC.

                          EMPLOYEE STOCK PURCHASE PLAN
               (AS AMENDED AND RESTATED THROUGH FEBRUARY 19, 2004)

      The following constitute the provisions of the Employee Stock Purchase
Plan of Bell Microproducts Inc.

      1.    Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.

      2.    Definitions.

            (a)   "Board" shall mean the Board of Directors of the company.

            (b)   "Code" shall mean the Internal Revenue Code of 1986, as
amended.

            (c)   "Common Stock" shall mean the Common Stock of the Company.

            (d)   "Company" shall mean Bell Microproducts Inc.

            (e)   "Compensation" shall mean all base straight time gross
earnings, including payments for sick pay, vacation pay, holiday pay, bonuses,
commissions and other compensation, but excluding car allowance, lead pay,
SPIFFs, jury duty pay, bereavement pay, shift premium, overtime pay and
executive incentive compensation-(MIP).

            (f)   "Designated Subsidiaries" shall mean the Subsidiaries which
have been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.

            (g)   "Employee" shall mean any individual (i) who is an employee of
the Company or any Designated Subsidiary for purposes of tax withholding under
the Code, and (ii) except with respect to employees of a Designated Subsidiary
located in The United Kingdom, whose customary employment with the Company or
any Designated Subsidiary is at least twenty (20) hours per week and more than
five (5) months in any calendar year. For purposes of the Plan, the employment
relationship shall be treated as continuing intact while the individual is on
sick leave or other leave of absence approved by the Company. Where the period
of leave exceeds 90 days and the individual's right to reemployment is not
guaranteed either by statute or by contract, the employment relationship will be
deemed to have terminated on the 91st day of such leave.

<PAGE>

            (h)   "Enrollment Date" shall mean the first day of each Offering
Period or Extended Offering Period.

            (i)   "Exercise Date" shall mean the last day of each Offering
Period, or with respect to an Extended Offering Period, the last day of each
Purchase Period.

            (j)   "Extended Offering Period" shall mean a period of
approximately twelve (12), eighteen (18) or twenty-four (24) months, commencing
on the date or dates so specified by the Board, during which options granted
pursuant to the Plan may be exercised. The duration, commencement and
termination of Extended Offering Periods may be changed pursuant to Section 4 of
this Plan.

            (k)   "Fair Market Value" shall mean, as of any date, the value of
Common Stock determined as follows:

                  (1)   If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day on the date of such determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable, or;

                  (1)   If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean of the closing bid and asked prices for the Common Stock on
the date of such determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable, or;

                  (1)   In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Board.

            (l)   "Offering Period" shall mean a period of approximately six (6)
months, commencing on a date determined by the Board, during which an option
granted pursuant to the Plan may be exercised. The duration, commencement and
termination of Offering Periods may be changed pursuant to Section 4 of this
Plan.

            (m)   "Plan" shall mean this Employee Stock Purchase Plan.

            (n)   "Purchase Price" shall mean an amount equal to 85% of the Fair
Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.

            (o)   "Purchase Period" shall mean, with respect to an Extended
Offering Period, the approximately six (6) month period commencing after one
Exercise Date and ending with the next Exercise Date, except that the first
Purchase Period of any Extended Offering Period shall commence on the Enrollment
Date and end with the next Exercise Date. The duration, commencement and
termination of Purchase Periods may be changed pursuant to Section 4 of this
Plan.

                                      -2-
<PAGE>

            (p)   "Reserves" shall mean the number of shares of Common Stock
covered by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.

            (q)   "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.

      3.    Eligibility.

            (a)   Any Employee (as defined in Section 2(g)), who shall be
employed by the Company on a given Enrollment Date shall be eligible to
participate in the Plan.

            (b)   Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company or of
any Subsidiary, or (ii) to the extent his or her rights to purchase stock under
all employee stock purchase plans of the Company and its subsidiaries to accrue
at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock
(determined at the fair market value of the shares at the time such option is
granted) for each calendar year in which such option is outstanding at any time.

      4.    Offering Periods and Extended Offering Periods. The Plan shall be
implemented by Offering Periods and/or Extended Offering Periods which may be
consecutive and/or overlapping, as determined by the Board, commencing on such
dates as the Board shall determine, and continuing thereafter until terminated
in accordance with Section 19 hereof. The Board shall have the power to change
the duration, commencement and termination of Offering Periods, Extended
Offering Periods and/or Purchase Periods with respect to future offerings
without shareholder approval if such change is announced at least five (5) days
prior to the scheduled beginning of the first Offering Period, Extended Offering
Period or Purchase Period to be affected thereafter.

      5.    Participation.

            (a)   An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the Company's payroll office prior
to the applicable Enrollment Date.

            (b)   Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the last payroll in
the Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.

                                      -3-
<PAGE>

            6.    Payroll Deductions.

                  (a)   At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay day
during the Offering Period or Extended Offering Period in an amount not
exceeding ten percent (10%) of the Compensation which he or she receives on each
pay day during the Offering Period or Extended Offering Period, and the
aggregate of such payroll deductions during the Offering Period or Extended
Offering Period shall not exceed ten percent (10%) of the participant's
Compensation during any such Offering Period or Extended Offering Period.

                  (b)   All payroll deductions made for a participant shall be
credited to his or her account under the Plan and will be withheld in whole
percentages only. A participant may not make any additional payments into such
account.

                  (c)   A participant may discontinue his or her participation
in the Plan as provided in Section 10 hereof, or may increase or decrease the
rate of his or her payroll deductions during the Offering Period or Extended
Offering Period by completing or filing with the Company a new subscription
agreement authorizing a change in payroll deduction rate. The Board may, in its
discretion, limit the number of participation rate changes during any Offering
Period or Extended Offering Period. The change in rate shall be effective with
the first full payroll period following five (5) business days after the
Company's receipt of the new subscription agreement unless the Company elects to
process a given change in participation more quickly. A participant's
subscription agreement shall remain in effect for successive Offering Periods or
Extended Offering Periods unless terminated as provided in Section 10 hereof.

                  (d)   Notwithstanding the foregoing, to the extent necessary
to comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a
participant's payroll deductions may be decreased to 0% at such time during any
Offering Period or Extended Offering Period which is scheduled to end during the
current calendar year (the "Current Offering Period or Extended Offering
Period") that the aggregate of all payroll deductions which were previously used
to purchase stock under the Plan in a prior Offering Period or Extended Offering
Period which ended during that calendar year plus all payroll deductions
accumulated with respect to the Current Offering Period or Extended Offering
Period equal $21,250. Payroll deductions shall recommence at the rate provided
in such participant' s subscription agreement at the beginning of the first
Offering Period or Extended Offering Period which is scheduled to end in the
following calendar year, unless terminated by the participant as provided in
Section 10 hereof.

                  (e)   At the time the option is exercised, in whole or in
part, or at the time some or all of the Company's Common Stock issued under the
Plan is disposed of, the participant must make adequate provision for the
Company's federal, state, or other tax withholding obligations, if any, which
arise upon the exercise of the option or the disposition of the Common Stock. At
any time, the Company may, but will not be obligated to, withhold from the
participant's compensation the amount necessary for the Company to meet
applicable withholding obligations, including any withholding required to make
available to the Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by the Employee.

                                      -4-
<PAGE>

      7.    Grant of Option. On the Enrollment Date of each Offering Period or
Extended Offering Period, each eligible Employee participating in such Offering
Period or Extended Offering Period shall be granted an option to purchase on the
Exercise Date(s) of such Offering Period or Extended Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be granted an option to purchase more than 1,500 shares of the
Company's Common Stock during any two Offering Periods (or, with respect to an
Extended Offering Period, during any two Purchase Periods); and provided,
further, that in no event shall an Employee be permitted to purchase during any
two Offering Periods (or, with respect to an Extended Offering Period, during
any two Purchase Periods) more than a number of Shares determined by dividing
$25,000 by the Fair Market Value of a share of the Company's Common Stock on the
Enrollment Date; and provided, further, that such purchase shall be subject to
the limitations set forth in Sections 3(b) and 12 hereof. Exercise of the option
shall occur as provided in Section 8 hereof, unless the participant has
withdrawn pursuant to Section 10 hereof, and shall expire on the last day of the
Offering Period or Extended Offering Period.

      8.    Exercise of Option. Unless a participant withdraws from the Plan as
provided in Section 10 hereof, his or her option for the purchase of shares will
be exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional shares will be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant' s account for the subsequent
Offering Period or Extended Offering Period, subject to earlier withdrawal by
the participant as provided in Section 10 hereof. Any other monies left over in
a participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to purchase
shares hereunder is exercisable only by him or her.

      9.    Delivery. As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, of a certificate representing the shares
purchased upon exercise of his or her option.

      10.   Withdrawal; Termination of Employment.

            (a)   A participant may withdraw all but not less than all the
payroll deductions credited to his or her account and not yet used to exercise
his or her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit B to this Plan. All of the participant's payroll
deductions credited to his or her account will be paid to such participant
promptly after receipt of notice of withdrawal and such participant's option for
the Offering Period or Extended Offering Period will be automatically
terminated, and no further payroll deductions for the purchase of shares will be
made during the Offering Period or Extended Offering Period or Extended Offering
Period. If a participant withdraws from an Offering Period or Extended Offering
Period, payroll deductions will not resume at the beginning of the

                                      -5-
<PAGE>

succeeding Offering Period or Extended Offering Period unless the participant
delivers to the Company a new subscription agreement.

            (b)   Upon a participant's ceasing to be an Employee (as defined in
Section 2(g) hereof ), for any reason, including by virtue of him or her having
failed to remain an Employee of the Company for at least twenty (20) hours per
week during an Offering Period or Extended Offering Period in which the Employee
is a participant, he or she will be deemed to have elected to withdraw from the
Plan and the payroll deductions credited to such participant' s account during
the Offering Period or Extended Offering Period but not yet used to exercise the
option will be returned to such participant or, in the case of his or her death,
to the person or persons entitled thereto under Section 14 hereof, and such
participant's option will be automatically terminated.

            (c)   A participant's withdrawal from an Offering Period or Extended
Offering Period will not have any effect upon his or her eligibility to
participate in any similar plan which may hereafter be adopted by the Company or
in succeeding Offering Periods or Extended Offering Periods which commence after
the termination of the Offering Period or Extended Offering Period from which
the participant withdraws.

      11.   Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.

      12.   Stock.

            (a)   Subject to adjustment upon changes in capitalization of the
Company as provided in Section 18 hereof, the maximum number of shares of the
Company's Common Stock which shall be made available for sale under the Plan
shall be 2,228,498 shares, plus an annual increase to be added on the first day
of the Company's fiscal year beginning January 1, 2004, equal to the lesser of
(i) 400,000 shares, (ii) 2.0% of the outstanding shares on such date or (iii) a
lesser amount determined by the Board. If on a given Exercise Date the number of
shares with respect to which options are to be exercised exceeds the number of
shares then available under the Plan, the Company shall make a pro rata
allocation of the shares remaining available for purchase in as uniform a manner
as shall be practicable and as it shall determine to be equitable.

            (b)   The participant will have no interest or voting right in
shares covered by his option until such option has been exercised.

            (c)   Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his or her spouse.

      13.   Administration.

            (a)   Administrative Body. The Plan shall be administered by the
Board or a committee of members of the Board appointed by the Board. The Board
or its committee shall have full and exclusive discretionary authority to
construe, interpret and apply the terms of the Plan, to determine eligibility
and to adjudicate all disputed claims filed under the Plan. Every finding,
decision and determination made by the Board or its committee shall, to the full
extent

                                      -6-
<PAGE>

permitted by law, be final and binding upon all parties. Further, the Board or
its committee may, at any time, modify or interpret the provisions of the Plan
or take any other action which it deems necessary to permit participation by
employees in non-U.S jurisdictions and to comply with the applicable laws of
such non-U.S. jurisdictions, including but not limited modifying the eligibility
criteria set forth in Section 2(g) and collecting any income or payroll taxes
resulting from such participation.

      14.   Designation of Beneficiary.

            (a)   A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to an
Exercise Date on which the option is exercised but prior to delivery to such
participant of such shares and cash. In addition, a participant may file a
written designation of a beneficiary who is to receive any cash from the
participant's account under the Plan in the event of such participant's death
prior to exercise of the option. If a participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for such
designation to be effective.

            (b)   Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.

      15.   Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 14 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period or Extended Offering Period in accordance with
Section 10 hereof.

      16.   Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.

      17.   Reports. Individual accounts will be maintained for each participant
in the Plan. Statements of account will be given to participating Employees at
least annually, which statements will set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.

                                      -7-
<PAGE>

      18.   Adjustments Upon Changes in Capitalization.

            (a)   Changes in Capitalization. Subject to any required action by
the shareholders of the Company, the Reserves as well as the price per share of
Common Stock covered by each option under the Plan which has not yet been
exercised shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration". Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an option.

            (b)   Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period or Extended
Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board.

            (c)   Merger or Asset Sale. In the event of a proposed sale of all
or substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each option under the Plan shall be assumed or
an equivalent option shall be substituted by such successor corporation or a
parent or subsidiary of such successor corporation, unless the Board determines,
in the exercise of its sole discretion and in lieu of such assumption or
substitution, to shorten the Offering Period(s) or Extended Offering Period(s)
then in progress by setting a new Exercise Date (the "New Exercise Date") or to
cancel each outstanding right to purchase and refund all sums collected from
participants during the Offering Period(s) or Extended Offering Period(s) then
in progress. If the Board shortens the Offering Period(s) or Extended Offering
Period(s) then in progress in lieu of assumption or substitution in the event of
a merger or sale of assets, the Board shall notify each participant in writing,
at least ten (10) business days prior to the New Exercise Date, that the
Exercise Date for his option has been changed to the New Exercise Date and that
his option will be exercised automatically on the New Exercise Date, unless
prior to such date he has withdrawn from the Offering Period(s) or Extended
Offering Period(s) as provided in Section 10 hereof. For purposes of this
paragraph, an option granted under the Plan shall be deemed to be assumed if,
following the sale of assets or merger, the option confers the right to
purchase, for each share of option stock subject to the option immediately prior
to the sale of assets or merger, the consideration (whether stock, cash or other
securities or property) received in the sale of assets or merger by holders of
Common Stock for each share of Common Stock held on the effective date of the
transaction (and if such holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
shares of Common Stock); provided, however, that if such consideration received
in the sale of assets or merger was not solely common stock of the successor
corporation or its parent (as defined in Section 424(e) of the Code), the Board
may, with the consent of the successor corporation and the participant, provide
for the consideration to be received upon exercise of the option to be solely
common stock of the successor corporation

                                      -8-
<PAGE>

or its parent equal in fair market value to the per share consideration received
by holders of Common Stock and the sale of assets or merger.

      The Board may, if it so determines in the exercise of its sole discretion,
also make provision for adjusting the Reserves, as well as the price per share
of Common Stock covered by each outstanding option, in the event the Company
effects one or more reorganizations, recapitalization, rights offerings or other
increases or reductions of shares of its outstanding Common Stock, and in the
event of the Company being consolidated with or merged into any other
corporation.

      19.   Amendment or Termination.

            (a)   The Board of Directors of the Company may at any time and for
any reason terminate or amend the Plan. Except as provided in Section 18 hereof,
no such termination can affect options previously granted, provided that an
Offering Period or Extended Offering Period may be terminated by the Board of
Directors on any Exercise Date if the Board determines that the termination of
the Plan is in the best interests of the Company and its shareholders. Except as
provided in Section 18 hereof, no amendment may make any change in any option
theretofore granted which adversely affects the rights of any participant. To
the extent necessary to comply with Section 423 of the Code (or any successor
rule or provision or any other applicable law or regulation), the Company shall
obtain shareholder approval in such a manner and to such a degree as required.

            (b)   Without shareholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods or
Extended Offering Periods, limit the frequency and/or number of changes in the
amount withheld during an Offering Period or Extended Offering Period, establish
the exchange ratio applicable to amounts withheld in a currency other than U.S.
dollars, permit payroll withholding in excess of the amount designated by a
participant in order to adjust for delays or mistakes in the Company's
processing of properly completed withholding elections, establish reasonable
waiting and adjustment periods and/or accounting and crediting procedures to
ensure that amounts applied toward the purchase of Common Stock for each
participant properly correspond with amounts withheld from the participant's
Compensation, and establish such other limitations or procedures as the Board
(or its committee) determines in its sole discretion advisable which are
consistent with the Plan.

      20.   Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

      21.   Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock

                                      -9-
<PAGE>

exchange upon which the shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance.

      As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.

      22.   Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 19 hereof.

      23.   Automatic Transfer to Low Price Extended Offering Period. To the
extent permitted by any applicable laws, regulations, or stock exchange rules if
the Fair Market Value of the Common Stock on any Exercise Date in an Extended
Offering Period is lower than the Fair Market Value of the Common Stock on the
Enrollment Date of such Extended Offering Period, then all participants in such
Extended Offering Period shall be automatically withdrawn from such Extended
Offering Period immediately after the exercise of their option on such Exercise
Date and automatically re-enrolled in the immediately following Extended
Offering Period as of the first day thereof.

                                      -10-
<PAGE>

                                    EXHIBIT A

                             BELL MICROPRODUCTS INC.

                          EMPLOYEE STOCK PURCHASE PLAN

                             SUBSCRIPTION AGREEMENT

_____ Original Application                           Enrollment Date: __________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)

1.    _____________________________________ hereby elects to participate in the
      Bell Microproducts Inc. Employee Stock Purchase Plan (the "Employee Stock
      Purchase Plan") and subscribes to purchase shares of the Company' s Common
      Stock in accordance with this Subscription Agreement and the Employee
      Stock Purchase Plan.

2.    I hereby authorize payroll deductions from each paycheck in the amount of
      ____% of my Compensation on each payday (not to exceed 10%) during the
      Offering Period or Extended Offering Period in accordance with the
      Employee Stock Purchase Plan. (Please note that no fractional percentages
      are permitted.)

3.    I understand that said payroll deductions shall be accumulated for the
      purchase of shares of Common Stock at the applicable Purchase Price
      determined in accordance with the Employee Stock Purchase Plan. I
      understand that if I do not withdraw from an Offering Period or Extended
      Offering Period, any accumulated payroll deductions will be used to
      automatically exercise my option.

4.    I have received a copy of the complete "Employee Stock Purchase Plan." I
      understand that my participation in the Employee Stock Purchase Plan is in
      all respects subject to the terms of the Plan. I understand that the grant
      of the option by the Company under this Subscription Agreement is subject
      to obtaining shareholder approval of the Employee Stock Purchase Plan.

5.    Shares purchased for me under the Employee Stock Purchase Plan should be
      issued in the name(s) of (Employee or Employee and Spouse Only):

6.    I understand that if I dispose of any shares received by me pursuant to
      the Plan within 2 years after the Enrollment Date (the first day of the
      Offering Period or Extended Offering Period during which I purchased such
      shares), or one year from the Exercise Date, I will be treated for federal
      income tax purposes as having received ordinary income at the time of such

<PAGE>

      disposition in an amount equal to the excess of the fair market value of
      the shares at the time such shares were purchased by me over the price
      which I paid for the shares. I hereby agree to notify the Company in
      writing within 30 days after the date of any disposition of shares and I
      will make adequate provision for Federal, state or other tax withholding
      obligations, if any, which arise upon the disposition of the Common Stock.
      The Company may, but will not be obligated to, withhold from my
      compensation the amount necessary to meet any applicable withholding
      obligation including any withholding necessary to make available to the
      Company any tax deductions or benefits attributable to sale or early
      disposition of Common Stock by me. If I dispose of such shares at any time
      after the expiration of the 2-year and 1-year holding periods, I
      understand that I will be treated for federal income tax purposes as
      having received income only at the time of such disposition, and that such
      income will be taxed as ordinary income only to the extent of an amount
      equal to the lesser of (1) the excess of the fair market value of the
      shares at the time of such disposition over the purchase price which I
      paid for the shares, or (2) 15% of the fair market value of the shares on
      the first day of the Offering Period or Extended Offering Period. The
      remainder of the gain, if any, recognized on such disposition will be
      taxed as capital gain.

7.    I hereby agree to be bound by the terms of the Employee Stock Purchase
      Plan. The effectiveness of this Subscription Agreement is dependent upon
      my eligibility to participate in the Employee Stock Purchase Plan.

8.    In the event of my death, I hereby designate the following as my
      beneficiary(ies) to receive all payments and shares due me under the
      Employee Stock Purchase Plan:

NAME: (Please print)    ________________________________________________________
                        (First)           (Middle)              (Last)

                        ________________________________________________________
                        Relationship

                        ________________________________________________________

                        ________________________________________________________
                        (Address)

<PAGE>

NAME: (Please print)    ________________________________________________________
                        (First)           (Middle)              (Last)

                        ________________________________________________________
                            Relationship

                        ________________________________________________________

                        ________________________________________________________
                        (Address)

Employee's Social
Security Number:        ________________________________________________________

Employee's Address:     ________________________________________________________

                        ________________________________________________________

                        ________________________________________________________

I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS OR EXTENDED OFFERING PERIODS UNLESS TERMINATED BY
ME.

Dated: ___________                          ____________________________________
                                                     Signature of Employee

                                            ____________________________________
                                             Spouse's Signature (If beneficiary
                                                other than spouse)

<PAGE>

                                    EXHIBIT B

                             BELL MICROPRODUCTS INC.

                          EMPLOYEE STOCK PURCHASE PLAN

                              NOTICE OF WITHDRAWAL

      The undersigned participant in the Offering Period or Extended Offering
Period of the Bell Microproducts Inc. Employee Stock Purchase Plan which began
on ________________ 20____ (the "Enrollment Date") hereby notifies the Company
that he or she hereby withdraws from the Offering Period or Extended Offering
Period. He or she hereby directs the Company to pay to the undersigned as
promptly as practicable all the payroll deductions credited to his or her
account with respect to such Offering Period or Extended Offering Period. The
undersigned understands and agrees that his or her option for such Offering
Period or Extended Offering Period will be automatically terminated. The
undersigned understands further that no further payroll deductions will be made
for the purchase of shares in the current Offering Period or Extended Offering
Period and the undersigned shall be eligible to participate in succeeding
Offering Periods or Extended Offering Periods only by delivering to the Company
a new Subscription Agreement.

                                            Name and Address of Participant:
                                            ____________________________________

                                            ____________________________________

                                            ____________________________________

                                            Signature:

                                            ____________________________________

                                            Date: ______________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}]]