bm20091105_10qex10-39.htm


    
      EXECUTIVE EMPLOYMENT
AGREEMENT

      


      THIS
EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") was initially made and entered
into effective as of June 26, 2002 (the "Effective Date"), by and between Bell
Microproducts Inc., a California corporation (the "Company"), and Robert J.
Sturgeon, (the "Executive"), and is hereby amended and restated effective
as of the last date signed below.

      


      RECITALS:

      


      WHEREAS, Executive desires to
obtain employment with the Company and the Company desires to employee Executive
subject to the terms and conditions contained in this Agreement.

      


      NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:

      


      AGREEMENTS:

      


      1. Employment Duties.
The Company shall employ Executive in the capacity of Vice President, Operations
and Chief Information Officer for the Company, with such powers and duties in
that capacity as may be established from time to time by the Company in its
discretion. Executive will devote his best efforts, attention and energies to
the Company's business. During Executive's employment, he will not engage in any
other business activities, regardless of whether such activity is pursued for
profits, gains, or other pecuniary advantage. However, nothing in this Agreement
shall prevent Executive from being engaged in business activities outside the
Company so long as such activities require no active participation by Executive
that in any way interferes with Executive's duties and responsibilities to the
Company, competes with the business of the Company, or creates an actual or
apparent conflict of interest with Executive's employment by the
Company.  Executive understands and agrees that he will inform the
Company of any current outside business activities in which he is engaged as of
the execution of this Agreement, and in the future will inform the Company of
any additional outside business activities in which he seeks to engage in
advance of such engagement.

      


      2. Term of Employment.
Unless his employment is earlier terminated in accordance with Sections 12, 13,
14, or 15 of this Agreement or as provided in this Section, Executive shall be
employed on the Effective Date and shall continue employment through June 26,
2005 (the "Initial Term"). This Agreement, and Executive's employment under this
Agreement, shall automatically be extended for consecutive twelve (12) month
periods (each such period referenced as a "Subsequent Term") unless at any time
during the six months prior to the expiration of the Initial Term or any
Subsequent Term, either the Company or Executive provides the other with written
notice of its or his election not to extend the Agreement and Executive's
employment under this Agreement ("Notice of Non-renewal"). In the event either
Executive or the Company provides a Notice of Nonrenewal under this Section, the
Company shall pay Executive his base salary and prorated auto allowance through
his last date of employment (payable on the next payroll date) as well as a
pro-rated bonus, if any, earned under the terms of the Management Incentive Plan
(with the latter paid out at the same time as active employees, but no later
than March 15 following the calendar year in which the Company's fiscal year to
which the bonus relates ends). Executive shall not be entitled to any other
payments or benefits of any kind except as provided in applicable benefit plan
documents, stock option and/or restricted stock agreements, or as provided in
Section 14 of this Agreement.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      3. Compensation. All
compensation paid to Executive under this Agreement is subject to applicable
withholding and deductions.

      


      a. Base Salary. As
compensation for services rendered hereunder, Executive shall receive an annual
base salary of two hundred forty-three thousand dollars ($243,000.00), less
applicable withholding and deductions, at a rate payable in equal installments
according to Company's normal payroll practices. Such salary shall be subject to
review and change by the Company, in its sole discretion.

      


      b. Incentive Bonus
Compensation. On an annual basis, the Company's Board of Directors, in
its sole discretion, upon the recommendation of the Company's Chief Executive
Officer, shall establish Executive's annual target incentive and performance
metrics. The Executive will receive an incentive bonus based on Executive's
achievement of the performance metrics in accordance with the Company's
Management Incentive Plan that the Company in its discretion may establish. Any
such bonuses shall be paid out no later than March 15 following the calendar
year in which the Company's fiscal year to which the bonus relates
ends.

      


      c. Business Expenses. In
accordance with the Company's policy governing travel and other expenses, the
Company will reimburse Executive for approved and reasonable business expenses
incurred by Executive in connection with the performance of his duties, provided
that Executive properly submits to the Company receipts verifying such
expenses.

      


      d. Employee Benefits.
Executive will be eligible to participate in such group health, life or
disability plans and other benefit plans that Company may maintain from
time-to-time for all employees, provided that Executive meets the respective
eligibility requirements and subject to the terms and conditions of such plans
as they exist from time to time.

      


      e. Financial Planning/Tax
Preparation Allowance. Executive shall be entitled to an allowance of up
to $1,500 per calendar year as reimbursement for personal financial planning and
tax preparation. To receive the reimbursement, Executive will be required to
submit supporting receipts that support the reimbursement.

      


      4. Noncompetition. As a
condition to and in consideration of the terms of this Agreement, Executive
agrees that, during Executive's employment, and, if and only if severance
benefits are being paid out under Section 14 hereof, also for a period of six
(6) months following the termination of Executive's employment, Executive will
not, on Executive's behalf or on behalf of any other person or entity, directly
or indirectly, as an employee, proprietor, agent, partner, officer, director or
otherwise, participate or engage in, manage, work for, broker for, operate,
control, render advice or assistance to or be connected in any way with any
other person or entity engaged in a business which is in direct competition with
the Company's principal business (as defined and discussed in Company's
documents filed with the Securities Exchange Commission from time to time) or
any other business in which the Company or any Subsidiary was engaged at any
point during Executive's employment or other relationship with the Company.
It is
expressly understood by the parties hereto that the only remedy for a breach of
the noncompetition provisions of this Agreement following Executive's employment
shall be ceasing to provide further severance benefits pursuant to Section 14
hereof.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      5. Non-solicitation. As
a condition to and in consideration of the terms of this Agreement, Executive
agrees that, during Executive's employment, and for a period of twelve (12)
months following the termination of Executive's employment, Executive will not,
on Executive's behalf or on behalf of any other person or entity:

      


      a. Directly
or indirectly solicit, on Executive's own behalf, or on behalf of another, any
potential or existing customers, clients, accounts, vendors, licensors or
licensees of the Company or any Subsidiary; or

      


      b. Directly
or indirectly attempt to hire, or influence or solicit, or attempt to influence
or solicit, any employee of the Company, or of any Subsidiary, to leave or
terminate his or her employment, or to work for any other person or entity. For
purposes of this Section, "employee" shall mean any current employee, and any
former employee who was employed with the Company or any Subsidiary at any time
during the last twelve (12) months of Executive's employment.

      


      6. Confidential
Information. During Executive's employment with the Company, and at all times
after Executive's resignation or the termination of Executive's employment for
any reason, whether voluntary or involuntary, Executive shall not directly or
indirectly use or disclose any trade secret, proprietary or confidential
information of the Company or any Subsidiary for the benefit of any person or
entity other than the Company or any Subsidiary without prior written approval
of the Company's Chief Executive Officer. For purposes of this Agreement, in
addition to all materials and information protected by applicable statute or
law, the parties acknowledge that confidential information shall include any
information relating to the Company or any Subsidiary, whether in print, on
computer disc or tape or otherwise, which is public information and not
generally known by individuals outside the Company or any Subsidiary, including
but not limited to information relating to research, development, technology,
and/or processes; marketing, purchasing, sales, and/or servicing information,
techniques, plans, proposals or reports; all financial information, reports and
statements; information relating to sales and other financial strategies, plans
and/or goals; information relating to proprietary rights and data, ideas,
know-how, inventions, and/or trade secrets; information regarding current or
potential clients or customers, client or customer lists and other client or
customer information; information regarding active and inactive accounts of the
Company or any Subsidiary; information relating to vendors, licensors or
licensees of the Company or any Subsidiary; information provided by a client or
vendor; personnel or employee information; and information relating to the
Company's or any Subsidiary's methods of operation.

      


      7. Work Product and
Inventions. Executive agrees that the Company shall be entitled to all of
the benefits, profits, results and work product arising from or incident to all
work, services, advice and activities of Executive, including without limitation
all rights in inventions (as set forth below), trademark or trade name
creations, and copyrightable materials. Executive shall not, during the term of
Executive's employment with the Company, be interested, directly or indirectly,
in any manner, including, but not limited to, as partner, officer, advisor, or
in any other capacity in any other business similar to, or in competition with,
the Company's or any Subsidiary's business.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Executive
will communicate promptly and fully to the Company all inventions, discoveries,
improvements or designs conceived or reduced to practice by Executive during the
period of Executive's employment with the Company (alone or jointly with
others), and, except as provided in this Section, Executive will and hereby does
assign to the Company and/or its nominees all of Executive's right, title and
interest in such inventions, discoveries, improvements or designs and all of
Executive's right, title and interest in any patents, patent applications or
copyrights based thereon without obligation on the part of the Company or any
Subsidiary to make any further compensation, royalty or payment to Executive.
Executive further agrees to assist the Company and/or its nominee (without
charge but at no expense to Executive) at any time and in every proper way to
obtain and maintain for its and/or their own benefit, patents for all such
inventions, discoveries and improvements and copyrights for all such
designs.

      


      This
Section does not obligate Executive to assign to the Company any invention,
discovery, improvement or design for which no equipment, supplies, facility or
trade secret, confidential or proprietary information of the Company or any
Subsidiary was used and which was developed entirely on Executive's own time,
and (a) which does not relate (i) directly to the business of the Company or any
Subsidiary, or (ii) to the Company's or any Subsidiary's actual or demonstrably
anticipated research or development, or (b) which does not result from any work
performed by Executive for the Company or any Subsidiary.

      


      8. Exempt Inventions.
Identified below by descriptive title are all of the inventions, if any, in
which Executive possessed any right, title or interest prior to Executive's
employment with the Company or execution of this Agreement which are not subject
to the terms hereof:

      


      None.

      


      9. Copyrights. Executive
acknowledges that any documents, drawings, computer software or other work of
authorship prepared by Executive within the scope of Executive's employment is a
"work made for hire" under U.S. copyright laws and that, accordingly, the
Company exclusively owns all copyright rights in such works of authorship. For
purposes of this Section, "scope of employment" means that the work of
authorship (a) relates to any subject matter pertaining to Executive's
employment, (b) relates to or is directly or indirectly connected with the
existing or reasonably foreseeable business, products, projects or confidential
information of the Company or any Subsidiary, or (c) involves the use of any
time, material or facility of the Company or any Subsidiary.

       

      10. Return of Property.
Executive shall, immediately upon Executive's resignation or the termination of
Executive's employment for any reason, whether voluntary or involuntary, deliver
to the Company all documents, materials and other items, whether on computer
disc or tape or otherwise, including all copies thereof, belonging to the
Company or any Subsidiary, or in any way related to the business of the Company
or any Subsidiary, or the services Executive performed for the Company or any
Subsidiary, including but not limited to, any documents, materials or items
containing trade secret, proprietary, or confidential information, documents in
any way relating to any inventions or copyrights, client or customer
information, information relating to the Company's or any Subsidiary's processes
or procedures and any other documents, materials or items of any sort relating
to the Company or any Subsidiary. Executive shall not retain any copies or
summaries of any kind of documents and materials covered by this
Section.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      11. Injunctive Relief.
The parties recognize that irreparable damage will result to the Company if
Executive violates or threatens to violate the terms of Sections 4 (but only
during Executive's employment), 5, 6, 7, 8, 9, or 10, and that the damages would
be difficult to prove and quantify, and it is therefore agreed that, in the
event of a breach of Section 4, 5,6, 7, 8, 9, or 10, the Company shall be
entitled to injunctive relief, in addition to all other legal and equitable
remedies available to it.

      


      12. Death or Inability to
Perform Job Duties.

      


      a. Executive's
employment shall terminate automatically in the event of Executive's
death.  In such event, Executive's estate shall receive Executive's
base salary and prorated auto allowance through Executive's last date of
employment as well as a pro-rated bonus, if any, earned under the terms of the
Management Incentive Plan. Executive's estate shall not be entitled to any other
payments or benefits of any kind except as provided in applicable benefit plan
documents, stock option and/or restricted stock agreements.

      


      b. If, due
to mental or physical disability, Executive is unable to perform the essential
functions of Executive's job, with or without reasonable accommodation, for a
total of ninety (90) days within any twelve (12) month period, then the Company
may terminate Executive.  Executive shall, in such event, receive his
base salary and pro-rated auto allowance through his last date of employment
(payable on the next payroll date) as well as a pro-rated bonus, if any, earned
under the terms of the Management Incentive Plan (with the latter paid out at
the same time as active employees, but no later than March 15 following the
calendar year in which the Company's fiscal year to which the bonus relates
ends). Executive shall not be entitled to any other payments or benefits of any
kind except as provided in applicable benefit plan documents, stock option
and/or restricted stock agreements. Nothing in this Section shall limit the
Company's right to terminate Executive's employment under any other section of
this Agreement.

      


      13. Termination of Executive's
Employment by the Company for Cause. The Company may terminate
Executive's employment "for cause" at any time. As used herein, "for cause"
shall mean (i) any act of personal dishonesty taken by the Executive in
connection with his responsibilities as an employee and intended to result in
substantial personal enrichment of the Executive, (ii) the conviction of a
felony, (iii) a willful act by the Executive which constitutes gross misconduct
and which is injurious to the Company, and (iv) following delivery to the
Executive of a written demand for performance from the Company which describes
the basis for the Company's belief that the Executive has not substantially
performed his duties, continued violations by the Executive of the Executive's
obligations to the Company which are demonstrably willful and deliberate on the
Executive's part.

      


      In the
event the Company terminates Executive's employment for cause, Executive shall
receive his base salary and pro-rated auto allowance through his last date of
employment (payable on the next payroll date) as well as a pro-rated bonus, if
any, earned under the terms of the Management Incentive Plan (with the latter
paid out at the same time as active employees, but no later than March 15
following the calendar year in which the Company's fiscal year to which the
bonus relates ends). Executive shall not be entitled to any other payments or
benefits of any kind except as provided in applicable benefit plan documents,
stock option and/or restricted stock agreements.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      14. Termination of Executive's
Employment by the Company without Cause. In the event the Company
exercises its right to terminate Executive's employment without cause under this
Section, the Company will pay Executive his base salary and pro-rated auto
allowance through his last date of employment as well as a pro-rated bonus, if
any, earned under the terms of the Management Incentive Plan. In addition, the
Company shall pay Executive a severance payment of an amount equal to six (6)
months of his then current base salary, less applicable withholding and
deductions. This payment will be paid as part of the Company's normal payroll
processing during the six (6) month period. However, in order to receive the
severance payment under this Section, Executive must first execute a waiver and
release of claims agreement in the form prescribed by the Company (the
"Release"). In order to receive any severance payments or benefits set forth in
this Section, the Release must become effective within fifty-two (52) days
following Executive's employment termination date or such earlier date as
required by the Release (such deadline, the "Release Deadline"). No severance
payments or benefits pursuant to this Agreement will be paid or provided until
the Release becomes effective. Any severance payments or benefits to which
Executive is entitled during such fifty-two (52) day period shall be paid by the
Company to Executive in cash and in full arrears on the fifty-third (53rd) day
following Executive's employment termination date or such later date as is
required to avoid the imposition of additional taxes under Internal Revenue Code
Section 409A. Executive shall not be entitled to any other payments or benefits
of any kind except as provided in applicable benefit plan documents, stock
option and/or restricted stock agreements. This Section shall also apply if
Executive voluntarily terminates his employment after the Company downgrades
Executive position title, materially downgrades Executive's responsibility, or
reduces Executive's salary or annual target incentive. In the event that
Executive's employment termination would trigger severance benefits under both
this Agreement and Executive's Management Retention Agreement with the Company,
Executive shall only receive severance benefits under the Management Retention
Agreement and not under this Agreement.

      


      15. Termination of Employment by
Executive. Executive may terminate his own employment with the Company
with or without cause upon thirty (30) days prior written notice to the Company.
Executive shall be required to perform Executive's job duties and will be paid
his base salary through his last date of employment. At the option of the
Company, the Company may require Executive to terminate employment at any time
during the thirty (30) day notice period. In such event, Company will pay
Executive his base salary for the remainder of the thirty (30) day notice
period. Executive shall, in addition, receive his pro-rated auto allowance
through his last date of employment as well as a pro-rated bonus, if any, earned
under the terms of the Management Incentive Plan. Executive shall not be
entitled to any other payments or benefits of any kind except as provided in
applicable benefit plan documents, stock option and/or restricted stock
agreements, or pursuant to the penultimate sentence of Section 14
hereof.

      


      16. Code Section
409A.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      a. To the
extent that any taxable reimbursements of expenses are provided under Section 3,
they shall be made in accordance with Internal Revenue Code Section 409A,
including the following provisions:

      


      i. The
amount of any such expense reimbursement provided during one of Executive's tax
years shall not affect any expenses eligible for reimbursement in any other
taxable year;

      


      ii. The
reimbursement of the eligible expense shall be made no later than the last day
of Executive's tax year that immediately follows the year in which the expense
was incurred; and

      


      iii. Executive's
right to any reimbursement shall not be subject to liquidation or exchange for
another benefit or payment.

      


      b. Notwithstanding
anything to the contrary in this Agreement, no severance payments or benefits
payable to Executive, if any, pursuant to this Agreement that, when considered
together with any other severance payments or separation benefits, is considered
deferred compensation under Section 409A (together, the "Deferred Payments")
will be payable until Executive has a "separation from service" within the
meaning of Section 409A. Similarly, no severance payable to Executive, if any,
pursuant to this Agreement that otherwise would be exempt from Section 409A
pursuant to Treasury Regulation Section 1.409A-l (b)(9) will be payable until
Executive has a "separation from service" within the meaning of Section
409A.

      


      c. Further,
if Executive is a "specified employee" within the meaning of Section 409A at the
time of separation from service (other than due to death), any Deferred Payments
that otherwise are payable within the first six (6) months following Executive's
separation from service will become payable on the first payroll date that
occurs on or after the date six (6) months and one (1) day following the date of
Executive's separation from service. All subsequent Deferred Payments, if any,
will be payable in accordance with the payment schedule applicable to each
payment or benefit. Notwithstanding anything herein to the contrary, in the
event of Executive's death following Executive's separation from service but
prior to the six (6) month anniversary of Executive's separation from service
(or any later delay date), then any payments delayed in accordance with this
paragraph will be payable in a lump sum as soon as administratively practicable
after the date of Executive's death and all other Deferred Payments will be
payable in accordance with the payment schedule applicable to each payment or
benefit. Each payment and benefit payable under the Agreement is intended to
constitute a separate payment for purposes of Section 1.409A2(b)(2) of the
Treasury Regulations.

      


      d. Any
severance payment that satisfies the requirements of the "short-term deferral"
rule set forth in Section 1.409A-l(b)(4) of the Treasury Regulations will not
constitute Deferred Payments for purposes of the Agreement. Any severance
payment that qualifies as a payment made as a result of an involuntary
separation from service pursuant to Section 1.409A-l(b)(9)(iii) of the Treasury
Regulations that does not exceed the Section 409A Limit will not constitute
Deferred Payments for purposes of the Agreement. For purposes of this paragraph,
"Section 409A Limit" will mean the lesser of two (2) times: (i) Executive's
annualized compensation based upon the annual rate of pay paid to Executive
during the Company's taxable year preceding the Company's taxable year of
Executive's separation from service as determined under Treasury Regulation
Section 1.409A-l(b)(9)(iii)(A)(l) and any Internal Revenue Service guidance
issued with respect thereto; or (ii) the maximum amount that may be taken into
account under a qualified plan pursuant to Section 401(a)(l7) of the Code for
the year in which Executive's employment is terminated.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      e. The
foregoing provisions are intended to comply with the requirements of Section
409A so that none of the severance payments and benefits to be provided under
the Agreement will be subject to the additional tax imposed under Section 409A,
and any ambiguities herein will be interpreted to so comply. Executive and the
Company agree to work together in good faith to consider amendments to the
Agreement and to take such reasonable actions which are necessary, appropriate
or desirable to avoid imposition of any additional tax or income recognition
prior to actual payment to Executive under Section 409A.

      


      17. Severability and
Interpretation. In the event that any provision of this Agreement is held
invalid by a court of competent jurisdiction, the remaining provisions shall
nonetheless be enforceable according to their terms. Any provision held
overbroad or unreasonable as written shall be deemed amended to narrow its
application to the extent necessary to make the provision enforceable under
applicable law, and shall be enforced as amended. This Agreement shall be
construed without regard to any presumption or other rule requiring construction
hereof against the party causing this Agreement to be drafted.

      


      18. Survival.
Notwithstanding any provision of this Agreement to the contrary, the provisions
of Sections 4,5,6, 7,8,9, 10, and 11 shall survive the termination of this
Agreement and shall survive Executive's resignation or the termination of his
employment, whether voluntary or involuntary, and with or without
cause.

      


      19. Notices.
All notices or other communications required or permitted hereunder shall be in
writing and shall be personally delivered or provided by facsimile (with
confirmation of transmission) to the party receiving such notice or shall be
delivered by Federal Express or similar overnight courier, addressed to the
party to whom such notice is intended to be given as follows:

       

                   a. Company:

       

      Bell
Microproducts Inc.

      1941
Ringwood Avenue

      San Jose,
California 95131-1721

      Attn: Sr.
VP of Human Resources

      Facsimile:
(408) 467-2760

      


      
        	
                b.  

              	
                Executive:

              


      

      


      at the
last address known to the Company

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      All
notices shall be deemed given on the day when actually delivered personally or
by facsimile, or on the next business day after the date dispatched, if
delivered by Federal Express or other overnight courier.

      


      Either
party may, by written notice hereunder, designate a change of address. Any
notice, if mailed properly addressed, postage prepaid, by registered or
certified mail, shall be deemed dispatched on the registered date or the date
stamped on the certified mail receipt, and shall be deemed received on the fifth
business day thereafter, or when it is actually received, whichever is
sooner.

      


      20. Amendments. This
Agreement expresses the entire understanding of the parties and supersedes all
prior agreements concerning the same subject matter. It may not be
changed orally.  Any change or modification must be made in writing
and signed by the parties.

      


      21. Governing Law. The
validity, enforceability, construction, and interpretation of this Agreement
shall be governed by the laws of the State of California, without reference to
its conflict of laws provisions.

      


      22. Waiver by the
Company. Any waiver by the Company or Executive of any of its/his rights
under this Agreement shall be made in a writing signed by the party seeking to
effect the waiver of its/his rights and specifically designated as a waiver of a
right or rights under this Agreement. Neither the Company's nor Executive's
failure to enforce a breach of this Agreement shall act as a waiver or otherwise
prevent the Company or Executive from enforcing the Agreement as to such breach
or any other breach.

      


      23. Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of
the Company and its successors and assigns.

      


      [remainder
of page intentionally left blank]

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      IN WITNESS WHEREOF, the
parties have executed this Agreement on the day and year set forth
below.

      


      
        	 
      	 
      	
                BELL
      MICROPRODUCTS INC.

              
	 
      	 
      	
                By:

              	
                /s/
      Richard J. Jacquet

              
	 
      	 
      	
                Its:

              	
                Senior
      Vice President, Human Resources

              
	 
      	 
      	
                Date:

              	
                12/17/2009

              
	 
      	 
      	 
      


      

      


      
        	 
      	 
      	
                Robert
      Sturgeon

              
	 
      	 
      	
                By:

              	
                /s/
      Robert J. Sturgeon

              
	 
      	 
      	 
      	
                Executive

              
	 
      	 
      	
                Date:

              	
                12/17/2009