Exhibit 10.1 
 
 
[bellmicrologo_blackandwhite.jpg]
 
 
Bell Microproducts Inc.
Management Incentive Plan
Year 2009
 
The Management Incentive Plan (the “Plan”) is established to provide the Chief
Executive Officer, other executive officers, and division heads of Bell
Microproducts Inc. (the “Company”) with a financial incentive to meet and exceed
financial and other objectives.  The following is a description of the Plan.
 
1.
Participation:

The Compensation Committee of the Board of Directors (the “Committee”), upon the
recommendation of the Chief Executive Officer, is responsible to designate
participants in the Plan, approve Plan goals, establish target incentives, and
approve Plan payouts.
 
2.
Performance Targets:

Performance goals are established at the beginning of the year for the first
half of the year based on the Annual Operating Plan.  The goals for the second
half of the year will be established at the beginning of the second half of the
fiscal year.  The goals will consist of one or more of the following elements:
 
Earnings Per Share (EPS), Net Income, Pretax Profit (PTP), Operating
Contribution, Return on Equity (ROE), Return on Invested Capital (ROIC), Return
on Working Capital (ROWC), and Individual Objectives (short-term tactical MBOs
as well as objectives based on strategic initiatives).
Note:
·  
ROE is derived by dividing net income for the period by common shareholder
equity.

·  
ROIC is derived by taking business unit pretax profit and dividing it into Bell
Micro’s investment/intercompany loans, including acquisition interest, to the
business unit.  At the corporate level, after tax profit is used instead of
pretax profit.

·  
ROWC is derived by taking business unit pretax profit and dividing it into
working capital (A/R + Inventory – AP).

 
3.  
First Half Plan and Second Half Plan

For 2009, the Plan consists of a stand alone First Half Plan based on financial
performance and a stand alone Second Half Plan based on financial performance,
as well as annual objectives or “MBOs,” as follows:

 
 

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a.      First Half Plan
After the close of the first half of the year and approval by the Committee,
financial performance for the First Half will be compared to the financial goals
for the First Half to determine the amount of incentive each participant earned
in the First Half.  In calculating the amount of earned incentive, the payment
calculation schedule shown in paragraph 4 below shall be used.
 
b.      Second Half Plan
After the close of the second half of the year and approval by the Committee,
financial performance for the Second Half will be compared to the financial
goals for the Second Half to determine the amount of incentive each participant
earned in the Second Half.  In calculating the amount of earned incentive, the
payment calculation schedule shown in paragraph 4 below shall be used.
 
The amount of target incentive applied to each half of the year will generally
be the same as the ratio set forth in the Annual Operating Plan for corporate
profit in each half of the fiscal year.
 
c.      MBOs
At the beginning of each year, each participant in the Plan shall submit in
writing to their manager, four to six MBOs, and as directed by the Compensation
Committee, additional MBOs based on strategic initiatives.  The MBOs represent
business priorities for the year.  The MBOs shall be approved by the Chief
Executive Officer.  The objectives for the Chief Executive Officer shall be
approved by the Committee.  The written objectives must include a statement of
the objective, the delivery date, and the expected result (i.e., a definition of
how the accomplishment is to be measured).  If there is more than one objective,
each will be weighted equally, unless the objective states otherwise.
 
Because the actions necessary to accomplish MBOs will generally span several
quarters, payment of the MBO-based incentive will be made on an annual
basis.  After the close of the year, each participant shall review their
approved MBOs and submit in writing to their manager an evaluation of their
performance of each MBO.  The Chief Executive Officer shall approve or change
the recommended performance level for each MBO and communicate this to the
Committee.  The performance achievement of the MBOs for the Chief Executive
Officer shall be approved by the Committee.  Payment for MBO performance of all
participants requires the prior approval of the Committee.

 
 

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4.  
Payment Calculation Schedule

 
Payout of incentives for profit and other financial goals is based on the
following metric.

 

Plan Achievement
Incentive Earned
Below Tier I
0%
At Tier I
50%
At Tier II
100%
150% or more of Tier II
150%

                  Use straight-line interpolation between metrics
 

  Definitions  
 
Tier I:
The minimal acceptable level of performance for bonus eligibility.  If Tier I is
achieved, 50% of the target incentive applicable to this performance metric will
be paid.
  Tier II:
If Tier II is achieved, 100% of the target incentive applicable to this
performance metric will be paid.

 
5.  
The target incentive for Plan participants who become participants after the
start of the fiscal year will be prorated for the period of time as a Plan
participant.

 
6.  
Participants must be employees of the Company on the date incentives are paid to
be eligible for payments under the Plan.

 
7.  
The Company, in its sole discretion, has the authority to change this Plan at
any time, including but not limited to, increasing incentive payouts above
target in the event of superior performance; in the event of a significant
overachievement of goals, adjusting payouts to prevent unwarranted “windfalls,”
and to make other changes in the Plan or Plan targets that are in the best
interests of the Company.

 
8.  
In the event that the Company issues a material restatement of its financial
statements upon which payment under the Plan was based, the Company, at the
discretion of the Committee, may require a participant in the Plan to repay any
amounts that would not have otherwise been earned as determined using the
restated financial statements, or pay additional amounts to participants if such
additional amounts had been earned as determined using the restated financial
statements.

 
9.  
In the event that the Company raises new equity funds during the year, thereby
eliminating interest charges, the financial plan may be adjusted accordingly.

 
10.  
In the event of an acquisition or divestiture, the Committee will make a
determination as to the impact on the financial plan and may modify the Plan
accordingly.

 
11.  
The Company, in its sole discretion has the authority to make incentive payments
in cash, restricted stock units, or a combination thereof.