Exhibit 10.3


Description of
Senior Management Bonus Program


The
following is a description of the senior management bonus program, as adopted
by the compensation committee (the “Committee”) of the board of directors of
Houston Wire & Cable Company (the “Company”) on December 20, 2006.  The bonus program provides for the payment of
discretionary annual cash bonuses to employees who are considered management
level.  The bonus program is administered
by the Committee, which has full authority to select participants, set bonus
amounts and fix performance targets.  The
Company’s board of directors receives a report from the Committee of all awards
granted and targets established.


For
each participant, the potential bonus award is based on the employee’s salary
for the year with respect to which the bonus is payable (the “Bonus Year”).  In order for any bonus to be paid, the
Company must achieve the operating income threshold (the “Threshold”) set by
the Committee for the Bonus Year.  If the
Threshold is met, then the participant may receive a “basic” bonus equal to a
percentage (ranging from 0% to 40%) of his or her salary, depending on the
Company’s performance with respect to targets established for three incentive
factors: operating income, revenue and inventory turns.  70% of the bonus is based on meeting the
established targets for operating income, 20% of the bonus is based on meeting
the established targets for revenues, and 10% of the bonus is based on meeting
the established targets for inventory turns. 
The full basic bonus of 40% of salary will be available if the Company
achieves the maximum target for each of the three incentive factors.  The bonus available for each incentive factor
will be calculated on a stand alone basis (provided the Threshold is met) and
will be calculated on a pro rata, straight line basis between the 0 and 40%
level, provided the specific target for such incentive factor has been met.


The
program also provides that a bonus of an additional 10% of salary may be
awarded if the Company achieves certain sales thresholds with respect to
certain proprietary products, provided established gross margins are
maintained, and that a bonus of an additional 5% of salary may be awarded in
the event the Company makes one or more acquisitions during the Bonus Year and
the acquired businesses meet established financial goals.  The maximum bonus paid (the basic bonus plus
the additional bonuses) may not exceed 55% of the participant’s base
salary.  All bonuses are payable the year
following the Bonus Year, after receipt of (and subject to) the audit of the
financial statements for the Bonus Year.


No
award will be paid for any full or partial year to a participant whose
employment with the Company terminates prior to the time the bonus is
paid.  In all cases the payment is in the
discretion of the Committee, and the Committee retains the right to terminate a
participant’s participation in the bonus program at any time, in which case no
bonus may be paid.


The
Chief Executive Officer’s bonus, as described in his employment contract, is
based on performance targets established by the Committee and board of
directors each year.