bm20090312_8k-ex101.htm


    Exhibit
10.1

    


      EMPLOYMENT
AGREEMENT

       

      This
Employment Agreement (“Agreement”) is made
and entered into by and between by and between W. Donald Bell (“Bell”) and Bell
Microproducts, Inc., a California corporation (“Company”), effective
as of March 12, 2009 (“Effective
Date”).

       

      WITNESSETH:

       

      WHEREAS,
Bell has been serving and continues to serve as the President and Chief
Executive Officer of Company; and

       

      WHEREAS,
Bell and Company were previously parties to an amended “Employment Agreement”
dated July 1, 1999, which has expired in accordance with its terms;
and

       

      WHEREAS,
Bell and Company are currently party to a “Supplemental Executive Retirement
Plan,” dated July 1, 2002, as amended on November 13, 2007 (“SERP”);
and

       

      WHEREAS,
the parties wish to continue Bell’s employment with Company and wish to set
forth the terms and conditions of that employment relationship in this
Agreement; and

       

      WHEREAS,
the parties do not intend for this Agreement to supersede, modify, or otherwise
affect Bell’s rights under the SERP.

       

      NOW,
THEREFORE, in consideration of Bell’s continued employment with Company, in
consideration of the respective representations and covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties do hereby agree and contract as
follows:

       

      1. Term of
Employment.  Company hereby agrees to employ Bell as President
and Chief Executive Officer for a two-year period (“Initial Term”)
commencing on the date set forth above, and, upon the expiration of the Initial
Term, for successive one-year periods thereafter (each, a “Renewal Term”),
unless (i) written notice of non-renewal is given no less than ninety (90) days
prior to the expiration of the applicable term by either party hereto; or (ii)
Bell’s employment is terminated earlier pursuant to Paragraph 4 of this
Agreement.  If such written notice of non-renewal is delivered from
one party to the other, Bell’s employment will terminate on the last day of the
Initial Term or Renewal Term, as applicable.

       

      2. Duties.  Bell
accepts employment with Company as its President and Chief Executive
Officer.  Bell agrees to devote his full time, attention and best
efforts to the business and affairs of Company.  Bell shall perform
all duties and responsibilities commensurate with his position as President and
Chief Executive Officer and shall follow the reasonable direction of the Board
of Directors of Company (“Board”).  Bell
may serve on corporate, civic or charitable boards or committees, fulfill
speaking engagements and manage personal investments, so long as the Board, in
its sole discretion, determines that such activities do not interfere, compete
with or otherwise pose a conflict of interest with respect to the performance of
Bell’s duties and responsibilities under this Agreement.  Bell shall
comply with Company’s written policies and procedures as in effect from time to
time applicable to other executive officers of Company.

       

      
        
          
          

        

        
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      3. Compensation and
Benefits.  During the term of this Agreement, Bell shall
receive the following compensation and benefits:

       

      a. Base
Salary.  Bell shall receive a minimum base salary of six
hundred and thirty-two thousand five hundred dollars ($632,500) per year, less
applicable withholding, payable monthly or more frequently in accordance with
Company’s regular payroll practices.  The Compensation Committee of
the Board (“Compensation
Committee”) shall review Bell’s base salary at least annually and may, in
its sole discretion, increase the base salary under its normal compensation
policies for executive officers.  Notwithstanding the foregoing, the
Board or the Compensation Committee may decrease Bell’s base salary if it
decreases the base salaries of other executive officers of Company and, in such
circumstance, decreases Bell’s base salary in an amount substantially
proportional to the decreases in the base salaries of Company’s other executive
officers.

       

      b. Annual Incentive
Compensation.  Bell shall be eligible to participate in annual
incentive compensation plans, which may include the Management Incentive Plan,
that may be established from time to time by the Board or the Compensation
Committee for Company’s other executive officers.  Notwithstanding the
foregoing, neither the Board nor the Compensation Committee may decrease Bell’s
target award opportunity under the Management Incentive Plan (or any successor
plan) to an amount less than his then-current base salary unless it decreases
the target award opportunities of other executive officers of Company below
their target award opportunities as in effect on the Effective Date, and in such
circumstance, the Board or the Compensation Committee may only decrease Bell’s
target award opportunity in an amount substantially proportional to the
decreases in the target award opportunities of Company’s other executive
officers.  Bell hereby acknowledges that his actual payment under the
Management Incentive Plan will be determined by the Board or the Compensation
Committee in accordance with the terms of the Management Incentive Plan then in
effect and that his actual payment may not be proportional to the actual
payments made to other executive officers of Company.  In addition,
Bell hereby acknowledges that the Board or the Compensation Committee may adjust
the payments made to Bell with respect to any incentive compensation plans,
including the Management Incentive Plan, as it deems appropriate, in its sole
discretion, to address the payments made to Bell under the Management Incentive
Plan in effect for the year ended December 31, 2006.

       

      c. Long-Term Disability
Insurance.  Company presently provides Bell with, and pays 50%
of the premiums for, long-term disability insurance that provides Bell with
certain disability benefits.  Company presently intends to continue to
provide Bell with this benefit; provided, however, that the Compensation
Committee may, in its sole discretion, determine not to continue this benefit
based on the cost of such policy or other factors as it deems
appropriate.  Company may, in its sole discretion, provide such
long-term disability insurance under its group policy.

       

      
        d. Business
Expenses.  Company will reimburse Bell for ordinary and
necessary travel and other out-of-pocket expenses incurred by Bell in connection
with the performance of his duties, provided that Bell promptly submits to
Company receipts

         


        
          
             


          

          
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        verifying
such expenses in accordance with Company’s policies and procedures as in effect
from time to time applicable to other executive officers of
Company.

      

      


      e. Other Employee
Benefits.  Bell shall be eligible to participate in all other
employee benefit plans and programs offered by Company generally to its
executive officers, or as approved by the Board or Compensation Committee
exclusively for Bell, from time to time, including any medical, dental and life
insurance coverage, stock option plans or retirement plans, in accordance with
the terms and conditions of those benefit plans and programs.

       

      f. Vacation and Other
Absences.  Bell shall be entitled to paid vacation each year in
accordance with Company’s then-current vacation policy for other executive
officers.  The rules relating to other absences from regular duties
for holidays, sick or disability leave, leave of absence without pay, or for
other reasons, shall be the same as those provided to Company’s other executive
officers.

       

      4. Termination.  Except
for the provisions hereof which are intended to survive for other periods of
time as specified herein, including Sections 5, 6, 7 and 8, this Agreement and
Bell’s employment shall terminate (a) at any time upon mutual written agreement
of the parties; (b) immediately upon Bell’s death or Disability (as defined in
Section 5.d. below); (c) by Company, immediately and without prior notice, for
“Cause” (as defined in Section 5.d. below); or (d) by Bell or by Company for any
reason not otherwise covered by clauses (a), (b) or (c) herein, with at least
thirty (30) days’ prior written notice.  Except as otherwise provided
in Section 5, upon the termination of Bell’s employment for any reason during
the Initial Term or any Renewal Term (as applicable), Bell shall be entitled to
receive his base salary through his last date of employment, any unpaid annual
incentive compensation described in Section 3.b. earned by Bell through his last
date of employment, any unreimbursed business expenses incurred prior to such
termination of employment, any accrued but unused vacation pay, and such other
employee benefits to the extent permitted by the applicable policies or plan
documents or as required by law.  For the avoidance of doubt, no
amount subject to the requirements of Section 409A of the Internal Revenue Code
of 1986, as amended (“Code”), and its
related regulations shall become payable to Bell as a result of a termination of
employment that does not constitute a “separation from service” within the
meaning of Code Section 409A(a)(2)(A)(i) and Section 1.409A-1(h) of the Treasury
Regulations.

       

      5. Severance
Benefits.

       

      a. Termination Without Cause or
Involuntary Termination.  Subject to Section 5.c., in the event
of Company’s termination of Bell’s employment without “Cause” or Bell’s
“Involuntary Termination” (each as defined in Section 5.d. below) at any time
during the Initial Term or Renewal Term (as applicable), Bell shall be entitled
to the severance benefits described below.

       

      (i) Severance
Pay.  Company shall pay Bell severance in the form of salary
continuation equal to two times his base salary in effect on the date of his
termination of employment, with such severance payable in twelve (12) equal
installments, payable monthly, commencing on the later of (1) sixty (60) days


    

    
      


      
        
          
          

        

        
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          after the
date of Bell’s termination of employment, or (2) the earliest date on which
payment can be made under Section 13.a. below.

           

        

      

      (ii) Benefits.  If
available generally to other former U.S. employees of Company, Bell shall be
entitled to the continuation of benefits pursuant to Title X of the Consolidated
Budget Reconciliation Act of 1985 (“COBRA”), provided
that Bell shall not be obligated to pay or reimburse Company for the cost of
providing such COBRA benefits for a period of eighteen (18) months from the date
of Bell’s termination of employment (“Severance
Period”).  Company’s obligations to provide the benefits
described herein shall cease if Bell and his dependents become covered under
another employer’s group medical and health benefit plans that provide Bell and
his dependents with comparable benefits and levels of coverage. 

       

      (iii) Financial Planning
Allowance.  Company shall reimburse Bell up to $15,000 for
expenses actually incurred within twelve (12) months from the date of Bell’s
termination of employment related to personal financial or tax
planning.

       

      (iv) Change in Control
Provisions.  In the event of Company’s termination of Bell’s
employment without “Cause” or Bell’s Involuntary Termination during the twelve
(12) month period following a Change in Control, the following additional
provisions shall be effective.

       

      (A) The
severance pay described in Section 5.a.(i) above shall be payable in cash and in
full in a single lump sum on the later of (1) sixty (60) days after the date of
Bell’s termination of employment, or (2) the earliest date on which payment can
be made under Section 13.a. below.

       

      (B) One
hundred percent (100%) of the unvested portion of any stock option, restricted
stock and restricted stock units held by Bell upon his termination date shall
automatically be accelerated in full so as to become completely
vested.

       

      b. Termination Upon
Disability.  Subject to Section 5.c., if Bell’s employment with
Company is terminated on account of Disability at any time during the Initial
Term or Renewal Term (as applicable), Bell shall be entitled to COBRA
continuation benefits if such benefits are available generally to other former
U.S. employees of Company, provided that Bell shall not be obligated to pay or
reimburse Company for the cost of providing such COBRA benefits during the
Severance Period.  Company’s obligations to provide the benefits
described herein shall cease if Bell and his dependents become covered under
another employer’s group medical and health benefit plans that provide Bell and
his dependents with comparable benefits and levels of coverage.

       

      c. Release of
Claims.  Bell’s eligibility for severance benefits pursuant to
this Section 5 is conditioned on his execution, delivery and non-revocation,
within sixty (60) 

       

      
        
          
          

        

        
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        days
following his termination of employment, of a release agreement in the form
attached hereto as Exhibit A.

      

       

      d. Definitions.

       

      (i) Cause.  “Cause”
shall mean (A) any act of personal dishonesty taken by Bell in connection with
his responsibilities as an employee and intended to result in substantial
personal enrichment of Bell; (B) Bell’s conviction of a felony; (C) a
willful act by Bell which constitutes gross misconduct and which is injurious to
Company; or (D) following delivery to Bell of a written demand for performance
from Company which described the basis for Company’s belief that Bell has not
substantially performed his duties, continued violations by Bell of his
obligations to Company which are demonstrably willful and deliberate on Bell’s
part.

       

      (ii) Change of
Control. “Change of
Control” means the occurrence of any of the following
events:

       

      (A) a “change
in the ownership” of Company as determined in accordance with Section
1.409A-3(i)(5)(v) of the Treasury Regulations;

       

      (B) a “change
in effective control” of Company as determined in accordance with Section
1.409A-3(i)(5)(vi) of the Treasury
Regulations; or

       

      (C) a “change
in the ownership of a substantial portion of the assets” of Company as
determined in accordance with Section 1.409A-3(i)(5)(vii) of the Treasury
Regulations.

       

      (iii) Disability.  “Disability”
shall have the same meaning set forth in the long-term disability insurance
contract referred to in Section 3.c. as in effect on the Effective
Date.

       

      (iv) Involuntary
Termination.  For purposes of this Agreement, “Involuntary
Termination” shall mean:

       

      (A) Without
Bell’s express written consent, a significant reduction of Bell’s duties,
authority or responsibilities as President and Chief Executive Officer of
Company, relative to his duties, authority or responsibilities as President and
Chief Executive Officer as in effect immediately prior to such reduction, or the
assignment to Bell of such reduced duties, authority or
responsibilities;

       

      (B) Without
Bell’s express written consent, a substantial reduction, without good business
reasons, of the facilities and perquisites (including office space and location)
available to Bell immediately prior to such reduction;

       

      
        
          
          

        

        
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      (C) A
material reduction by Company in Bell’s base salary as in effect immediately
prior to such reduction, except as permitted by Section 3.a.;

       

      (D) The
relocation of Bell’s principal place of work to a location more than thirty-five
(35) miles from Bell’s then present location, without Bell’s express written
consent;

       

      (E) Any
purported termination of Bell by Company during the Initial Term or Renewal Term
(as applicable) not effected for Disability or for Cause; or

       

      (F) The
failure of Company to obtain the assumption of this Agreement by any successor
contemplated in Section 9 below.

       

      Bell’s
termination of employment shall not constitute an Involuntary Termination unless
and until (1) Bell provides written notice to Company of the existence of
one or more of the foregoing conditions within ninety (90) days of its
occurrence, (2) such condition or conditions have not been cured within
thirty (30) days after Company’s receipt of such written notice from Bell and
(3) Bell terminates his employment with Company within thirty (30) days
after Company’s failure to cure such condition or conditions during the time
period set forth in clause (2).

       

      6. Protection of Confidential
Information.  Bell acknowledges that during the course of his
employment with Company he has received and will continue to receive documents
and other information regarding the confidential and proprietary affairs of
Company and its subsidiaries and affiliates, including information about their
past, present and future financial condition, the markets for their products,
key personnel, past, present or future actual or threatened litigation, trade
secrets, current and prospective suppliers and customers, operational methods,
acquisition plans, prospects, plans for future development and other business
affairs and information about Company and its subsidiaries and affiliates not
readily available to the public (collectively, “Confidential
Information”).  Bell further acknowledges that the services to
be performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character.  In recognition of the
foregoing, Bell covenants and agrees as follows:

       

      a. No Disclosure or Use of
Confidential Information.  At no time during his employment
with Company or at any time thereafter shall Bell divulge, disclose, or
otherwise use any Confidential Information, except as properly required in the
ordinary course of Company’s business, as directed and authorized by Company or
if such information is readily available in the public domain by reason other
than Bell’s disclosure or use thereof in violation of the first sentence of this
Section 6.a.

       

      b. Return of Company Property,
Records and Files.  Upon the
later of (1) the date of termination of Bell’s employment with Company, and (2)
the date of termination of Bell’s service on the Board (such later event being
the “Property Return Event”), or at any other time the Board may so direct, Bell
shall promptly deliver to Company’s

         

        
          
            
            

          

          
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        headquarters
all of the property and equipment of Company and its subsidiaries and affiliates
(including any cell phones, pagers, credit cards, personal computers, etc.) and
any and all documents, records, and files, including any notes, memoranda,
customer lists, reports and any and all other documents, including any copies
thereof, whether in hard copy form or on a computer disk or hard drive, that
relate to Company or its subsidiaries or affiliates or their respective past and
present officers, directors, employees or consultants (collectively, “Company Property, Records
and Files”); it being expressly understood that, upon the occurrence of
the Property Return Event, Bell shall not be authorized to retain any Company
Property, Records and Files.  Notwithstanding the foregoing, Company
will use its reasonable efforts to transfer Bell’s cell phone number to him
following the termination of Bell’s employment with Company; provided, however,
that the cost, if any, of such transfer shall be paid by
Bell.


      

       

      7. Nonsolicitation.  For
a period of one year immediately following the date of termination of Bell’s
employment, Bell shall not, directly or indirectly, without the prior written
consent of Company, solicit, induce, or attempt to solicit or induce any
director, officer, employee, agent or consultant of Company or any of its
subsidiaries or affiliates to terminate his, her or its employment or other
relationship with Company or its subsidiaries or affiliates for employment or
for retention as a consultant or service provider, or otherwise encourage any
such person or entity to leave or sever his, her or its employment or other
relationship with Company or its subsidiaries or affiliates for any other
reason.

       

      8. Remedies.  The
restrictions contained in Sections 6 and 7 are necessary for Company’s
protection, and any breach thereof will cause Company irreparable damage for
which there is no adequate remedy at law.  Bell agrees that, in the
event of such breach, Company shall, in addition to any other remedy which
Company may have at law or in equity, be entitled to seek such equitable and
injunctive relief as may be available without the necessity of proving
damages.  Each party agrees that, in the event of a breach of this
Agreement by the other party, the non-breaching party shall have all such
remedies as may be available at law or in equity.

       

      9. Successors.

       

      a. Company’s
Successors.  Any successor to Company (whether direct or
indirect and whether by purchase, merger, consolidation, liquidation or
otherwise) to all or substantially all of Company’s business and/or assets shall
assume the obligations under this Agreement and agree expressly to perform the
obligations under this Agreement in the same manner and to the same extent as
Company would be required to perform such obligations in the absence of a
succession.  For all purposes under this Agreement, the term “Company”
shall mean Company, as defined above, and any such successor, by merger or
otherwise.

       

      b. Employee’s
Successors.  The terms of this Agreement and all of Bell’s
rights hereunder shall inure to the benefit of, and be enforceable by, Bell’s
personal or legal representatives, executors, administrators, successors, heirs,
distributes, devisees and legatees.

       

      
        
          
          

        

        
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      10. Notice.  Notices
and all other communications contemplated by this Agreement shall be in writing
and shall be deemed to have been duly given when personally delivered or when
mailed by U.S. registered or certified mail, return receipt requested and
postage prepaid.  In the case of Bell, mailed notices shall be
addressed to him at the home address which he most recently communicated to
Company in writing.  In the case of Company, mailed notices shall be
addressed to its corporate headquarters, and all notices shall be directed to
the attention of its Secretary.

       

      11. Coordination of
Agreements.  Except as expressly set forth in this Agreement,
in the event of any conflict between this Agreement and the SERP, the terms of
this Agreement shall control; provided, however, that the terms of this
Agreement shall not be effective to alter the form or timing of payments under
the SERP in a manner contrary to the requirements of Code Section 409A and its
related regulations.

       

      12. Termination of Management
Retention Agreement.  The Management Retention Agreement
entered into by and between Bell and the Company as of August 7, 2005 is
terminated in its entirety as of the Effective Date by mutual agreement of the
parties.

       

      13. Tax
Provisions.

       

      a. Company
shall delay the payment of any severance benefits payable under this Agreement
as required to comply with Code Section 409A(a)(2)(B)(i) (relating to
payments made to certain “specified employees” of certain publicly-traded
companies) and in such event, any such amount to which Bell would otherwise be
entitled during the six (6) month period immediately following his termination
of employment shall instead be accumulated through and paid or provided,
together with interest at the long-term applicable federal rate (annual
compounding) under Section 1274(d) of the Code in effect on his termination
of employment, on the first business day following the expiration of such six
(6) month period, or if earlier, the date of his death.  For the
avoidance of doubt, no portion of the any such severance benefits shall be
subject to the foregoing delay if and to the extent that such benefits
(i) constitute a “short term deferral” within the meaning of Section
1.409A-1(a)(4) of the Treasury Regulations, or (ii) (A) are being paid
due to Bell’s “involuntary separation from service” (within the meaning of
Section 1.409A-1(n) of the Treasury Regulations); (B) do not exceed two times
the lesser of (1) Bell’s annualized compensation from Company for the
calendar year prior to the calendar year in which the termination occurs, or (2)
the maximum amount that may be taken into account under a qualified plan
pursuant to Code Section 401(a)(17) for the year in which Bell’s employment
terminates; and (C) the payment is required under this Agreement to be paid no
later than the last day of the second (2nd)
calendar year following the calendar year during which Bell’s “separation from
service” (within the meaning of Code Section 409A) occurs.  For
purposes of Code Section 409A, Bell’s right to receive installment payments
pursuant to Section 5 above shall be treated as a right to receive a series of
separate and distinct payments.  The determination of whether Bell is
a “specified employee” for purposes of Code Section 409A(a)(2)(B)(i) as of the
time of his termination of employment shall made by Company in accordance with
the terms of Code Section 409A and the applicable guidance thereunder (including
without limitation Treasury Regulation Section 1.409A-1(i) and any successor
provision thereto).

       

      
        
          
          

        

        
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      b. The
continued benefits provided under Section 5 above that are taxable benefits (and
that are not disability pay or death benefit plans within the meaning of Code
Section 409A) are intended to comply, to the maximum extent possible, with the
exception to Code Section 409A set forth in Section 1.409A-1(b)(9)(v) of the
Treasury Regulations (and any successor thereto).  To the extent that
any of those benefits either do not qualify for that exception, or are provided
beyond the applicable time periods set forth in Section 1.409A-1(b)(9)(v) of the
Treasury Regulations, then such amounts will be reimbursed or provided no later
than December 31 of the year following the year in which the expense was
incurred and will be subject to the following additional
rules:  (i) the amount of in-kind benefits provided, during any
calendar year shall not affect the amount of in-kind benefits to be provided,
during any other calendar year; and (ii) the right to in-kind benefits shall not
be subject to liquidation or exchange for another benefit.

       

      c. In the event
of an event constituting a change in the ownership or effective control of
Company or ownership of a substantial portion of the assets of Company described
in Code Section 280G(b)(2)(A)(i) (a “280G Transaction”),
Company shall cause its independent auditors promptly to review all payments,
accelerations, distributions and benefits that have been made to or provided to,
and are to be made, or may be made, to or provided to, Bell under this
Agreement, the SERP, and any other arrangements providing for payments or
benefits contingent on the occurrence of a 280G Transaction (irrespective of
whether such payments or benefits are then payable to Bell at that time), and
any other agreement or plan under which they may individually or collectively
benefit (collectively the “Original Payments”),
to determine the applicability of Code Section 4999 to Bell in connection with
such event.  Company’s independent auditors will perform this analysis
in conformity with the foregoing provisions and will provide Bell with a copy of
their analysis and determination.  Notwithstanding anything contained
in this Agreement to the contrary, to the extent that the Original Payments
would be subject to the excise tax imposed under Code Section 4999 (the “Excise Tax”), the
Original Payments shall be reduced (but not below zero) to the extent necessary
so that no Original Payment shall be subject to the Excise Tax, but only if, by
reason of such reduction, the net after-tax benefit received by Bell shall
exceed the net after-tax benefit received by him if no such reduction was
made.  For purposes of this Agreement, “net after-tax benefit” shall
mean (a) the Original Payments which Bell receives or is then entitled to
receive from Company that would constitute “parachute payments” within the
meaning of Code Section 280G, less (b) the amount of all federal, state and
local income taxes payable with respect to the foregoing calculated at the
maximum marginal income tax rate for each year in which the foregoing shall be
paid to Bell (based on the rate in effect for such year as set forth in the Code
as in effect at the time of the first payment of the foregoing), less (c) the
amount of the Excise Tax imposed with respect to the payments and benefits
described in (a) above.  If a reduction is to occur pursuant to this
Section 13.c., the payments and benefits shall be reduced in the following
order: any cash severance to which Bell becomes entitled (starting with the last
payment due), then other cash amounts that are parachute payments (starting with
the last payment due), then any stock option awards that have exercise prices
higher than the then-fair market value price of the stock (based on the latest
vesting tranches), then restricted stock and restricted stock units based on the
latest awards scheduled to be distributed, and then other
stock


         

        
          
            
            

          

          
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        options
based on the latest vesting tranches.  The fees and expenses of
Company’s auditor for its services in connection with the determinations and
calculations contemplated by this provision will be borne by
Company


      

       

      14. Miscellaneous
Provisions.

       

      a. No Duty to
Mitigate.  Bell shall not be required to mitigate the amount of
any payment contemplated by this Agreement, nor shall any such payment be
reduced by any earnings that Bell may receive from any other
source.

       

      b. Amendment;
Waiver.  No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by Bell and by an authorized officer of Company (other
than Bell).  No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at any other time.

       

      c. Entire
Agreement.  No agreement, representations or understandings
(whether oral or written and whether express or implied) which are not expressly
set forth in this Agreement have been made or entered into by either party with
respect to the subject matter hereof.  Except as expressly provided
herein, this Agreement supersedes in its entirety any prior or contemporaneous
agreements, whether written, oral, express or implied, relating to the subject
matter hereof.

       

      d. Governing
Law.  The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California.

       

      e. Severability.  The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision hereof,
which shall remain in full force and effect.

       

      f. Withholding.  All
payments made pursuant to this Agreement will be subject to the withholding of
all applicable federal, state or local income and employment taxes.

       

      g. Counterparts.  This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together will constitute one and the same
instrument.

       

      


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      IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
set forth above.

       

      
        
          
            
              	 COMPANY:	BELL
      MICROPRODUCTS INC.	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ Andrew
      S. Hughes    	 
	 	 	ANDREW
      S. HUGHES	 
	 	 	Vice
      President, General Counsel & Corporate
      Secretary	 
	 	 Dated:	 March
      12, 2009	 


            

          

        

      

       

      
        
          
            	 BELL:	 	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/ W.
      Donald Bell 	 
	 	 	W.
      Donald Bell	 
	 	 Dated:	March
      12, 2009	 
	 	 	 	 


          

        

      

       

       

      
        
          
             

          

           


        

        
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      EXHIBIT
A

       

      FORM
OF RELEASE AGREEMENT

       

      This Release Agreement (“Release”) is made and
entered into by and between W. Donald Bell (“Executive”) and Bell
Microproducts Inc., a California corporation (“Company”), effective
as of _______, 20__.

       

      WHEREAS, Executive and Company were
previously parties to an Employment Agreement, dated February __, 2009 (“Employment
Agreement”); and

       

      WHEREAS, Executive’s eligibility for
severance benefits pursuant to the Employment Agreement is conditioned on his
execution, delivery and non-revocation of this Release within sixty (60) days
following his termination of employment; and

       

      WHEREAS, this Release was a material
inducement to Executive and Company to enter into the Employment
Agreement.

       

      NOW, THEREFORE, in consideration of the
respective representations and covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties do hereby agree and contract as follows:

       

      1. Defined
Terms.  Initially capitalized terms used, but not otherwise
defined, herein shall have the meanings ascribed to such terms in the Employment
Agreement.

       

      2. General
Release.  Executive hereby releases and forever discharges the
“Executive Releasees” hereunder, consisting of Company and each of its
subsidiaries, affiliates, successors, assigns, agents, directors, officers,
employees, shareholders, representatives, lawyers, insurers, and all persons
acting by, through, under or in concert with them, or any of them, of and from
any and all Claims, as defined in Section 3. 

       

      3. Claims
Released.   The
“Claims” released herein include any and all manner of action or actions, cause
or causes of action, in law or in equity, suits, debts, liens, contracts,
agreements, promises, liability, claims, demands, damages, losses, costs,
attorneys’ fees or expenses, of any nature whatsoever, known or unknown, fixed
or contingent, which Executive now has or may hereafter have against the
Executive Releasees, or any of them, by reason of any matter, cause, or thing
whatsoever from the beginning of time to the date hereof.  Without
limiting the generality of the foregoing, Claims shall include: any claims in
any way arising out of, based upon, or related to Executive’s employment by or
service as a director to any of the Executive Releasees, or any of them, or the
termination thereof; any claim for wages, salary, commissions, bonuses, fees,
incentive payments, profit-sharing payments, expense reimbursements, leave,
vacation, severance pay or other benefits; any claim for benefits under any
stock option, restricted stock or other equity-based incentive plan of the
Executive Releasees, or any of them (or any related agreement to which any
Executive Releasee is a party); any alleged breach of any express or implied
contract of employment; any alleged torts or other alleged legal restrictions on
the Executive Releasees’ right to terminate the employment of Executive; and any
alleged violation of any federal, state or local statute or ordinance including,
without limitation, Claims arising under: Age Discrimination in Employment Act,
as amended,

         


        
          
             


          

          
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        29 U.S.C.
§ 621, et
seq.; Title VII
of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991, 42
U.S.C. § 2000 et
seq.; Equal Pay Act, as amended, 29 U.S.C. § 206(d); the Civil
Rights Act of 1866, 42 U.S.C. § 1981; the Family and Medical Leave Act of 1993,
29 U.S.C. § 2601 et
seq.; the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101
et seq.; the
False Claims Act , 31 U.S.C. § 3729 et seq.; the Employee
Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et seq.; the Worker
Adjustment and Retraining Notification Act, as amended, 29 U.S.C.  § 2101
et seq. the Fair Labor
Standards Act, 29 U.S.C. § 215 et seq., the
Sarbanes-Oxley Act of 2002; the California Fair Employment and Housing Act, as
amended, § 12940 et seq.; the Cal. Lab.
Code; the California Equal Pay Law, as amended, Cal. Lab. Code §§
1197.5(a),1199.5; the Moore-Brown-Roberti Family Rights Act of 1991, as amended,
Cal. Gov’t Code §§12945.2, 19702.3; California Labor Code §§ 1101, 1102, 69 Ops.
Cal. Atty. Gen. 80 (1986); California Labor Code §§ 1102.5(a), (b); the
California WARN Act, Cal. Lab. Code § 1400 et seq.; the
California False Claims Act, Cal. Gov’t Code § 12650 et
seq.;  the California Corporate Criminal Liability Act, Cal.
Penal Code § 387; or under the California Labor
Code), or any other federal, state or local law.

      

       

      4. Claims Not
Released. Notwithstanding the
generality of the foregoing, Executive does not release the following claims and
rights:

       

      a. Executive’s
rights under the Employment Agreement and this Release;

       

      b. Any
Claims for unemployment compensation or any state disability insurance benefits
pursuant to the terms of applicable state law;

       

      c. Claims to
continued participation in certain of Company’s group benefit plans pursuant to
the terms and conditions of the federal law known as COBRA or the comparable
California law known as Cal-COBRA;

       

      d. Claims to
any benefit entitlements vested as of the date of termination of Executive’s
employment, pursuant to written terms of any Company employee benefit plan,
including the Company’s Supplemental Executive Retirement Plan;

       

      e. Executive’s
right to bring to the attention of the Equal Employment Opportunity Commission
claims of discrimination; provided, however, that Executive does release his
right to secure any damages for alleged discriminatory treatment;

       

      f. Executive’s
right, if any, to indemnity pursuant to Company’s articles or bylaws, any
written indemnification agreement between Executive and Company, and/or
Company’s directors and officers insurance policies; and

       

      g. Any other
claims that Executive cannot waive by operation of law.

       

      (collectively,
the “Executive Unreleased Claims”).

       

      
        
          
          

        

        
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      5. Unknown Claims. EXECUTIVE ACKNOWLEDGES
THAT EXECUTIVE IS HEREBY ADVISED OF AND IS FAMILIAR WITH THE PROVISIONS OF
CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

       

      “A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

       

      EXCEPT
WITH RESPECT TO THE EXECUTIVE UNRELEASED CLAIMS, EXECUTIVE, BEING AWARE OF SAID
CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS HE MAY HAVE THEREUNDER, AS WELL
AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR
EFFECT.

       

      6. Review and
Revocation.  Executive agrees and expressly acknowledges that
this Release includes a waiver and release of all claims which Executive has or
may have under the Age Discrimination in Employment Act of 1967, as amended, 29
U.S.C. § 621, et seq. (“ADEA”).  The
following terms and conditions apply to and are part of the waiver and release
of the ADEA claims under this general release:

       

      a. This
Release is written in a manner calculated to be understood by Executive, and
Executive understands it.

       

      b. The
waiver and release of claims under the ADEA contained in this Release does not
cover rights or claims that may arise after the date on which Executive signs
this Release.

       

      c. This
Release provides for consideration in addition to anything of value to which
Executive is already entitled.

       

      d. Executive
understands that Executive is hereby advised to consult an attorney before
signing this Release.

       

      e. Executive
understands that Executive has been granted sixty (60) days following his
termination of employment to decide whether or not to sign this
Release.  If Executive executes and delivers this Release prior to the
expiration of such period, Executive does so voluntarily and after having had
the opportunity to consult with an attorney, and hereby waives the remainder of
the sixty (60) day period.

       

      f. Executive
understands that Executive has the right to revoke this Release during the seven
(7) days following the day on which Executive signs this Release
(the ”Revocation
Period”).  In the event this Release is revoked, this Release
will be null and void in its entirety.

       

      
        
          
          

        

        
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      This
Release shall not become effective until the day after the Revocation Period has
expired (the “Effective
Date”).  If Executive wishes to revoke this Release during the
Revocation Period, Executive must deliver written notice stating Executive’s
intent to revoke this Release, on or before 5:00 p.m. on the last day of the
Revocation Period, to Company’s General Counsel at Company’s headquarters
located at 1941 Ringwood Avenue, San Jose, California
95131-1721.

       

      7. No Assignments of
Claims. Executive represents
and warrants that there has been no assignment or other transfer of any interest
in any Claim which he may have against Executive Releasees, or any of them, and
Executive agrees to indemnify and hold Executive Releasees, and each of them,
harmless from any liability, Claims, demands, damages, costs, expenses and
attorneys’ fees incurred by Executive Releasees, or any of them, as the result
of any such assignment or transfer or any rights or Claims under any such
assignment or transfer.  It is the intention of the parties hereto that
this indemnity does not require payment as a condition precedent to recovery by
the Executive Releasees against Executive under this indemnity.

       

      8. No Actions. Executive acknowledges
and agrees that he has no pending lawsuit, administrative charge or complaint
against Company or any of the other Executive Releasees, in any court or with
any governmental agency.  Executive acknowledges and agrees that he is
not aware of any work-related injury suffered prior to the Effective Date for
which he may be entitled to workers’ compensation benefits, nor is he aware of
any facts or circumstances from which such any injury may later
arise.  Executive also agrees that, to the extent permitted by law,
Executive will not allow any lawsuit, administrative charge or complaint to be
pursued on his behalf, or to accept any remedies from any lawsuit,
administrative charge or complaint pursued on his behalf.  Executive
further agrees that he will not participate, cooperate or assist in any
litigation against the Executive Releasees in any manner, to the extent
permitted by law.  If lawfully subpoenaed to testify in court or in a
deposition, Executive agrees to provide Company written notice of such a
subpoena within five (5) days of receipt.  Executive agrees that if he
hereafter commences, joins in, or in any manner seeks relief through any suit
arising out of, based upon, or relating to any of the Claims released hereunder
or in any manner asserts against the Executive Releasees any of the Claims
released hereunder, then he will pay to the Executive Releasees against whom
such claim(s) is asserted, in addition to any other damages caused thereby, all
attorneys’ fees incurred by such Executive Releasees in defending or otherwise
responding to said suit or Claim.  Provided, however, that the
obligation to pay attorneys’ fees shall not apply to: (1) Executive’s right to
file a charge with the United States Equal Employment Opportunity Commission (as
to which Executive hereby waives any right to any damages or individual relief
resulting from any charge) or (2) any suit or Claim to the extent it challenges
the effectiveness of this Release with respect to a claim under the Age
Discrimination in Employment Act.

       

      9. No
Admission.  Executive further understands and agrees that
neither the payment of any sum of money nor the execution of this Release shall
constitute or be construed as an admission of any liability whatsoever by the
Executive Releasees, or any of them, who have consistently taken the position
that they have no liability whatsoever to Executive.

       

      
        
          
          

        

        
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      10. No
Reliance.  Executive acknowledges that different or additional
facts may be discovered in addition to what is now known or believed to be true
by him with respect to the matters released in this Release, and Executive
agrees that this Release shall be and remain in effect in all respects as a
complete and final release of the matters released, notwithstanding any
different or additional facts.

       

      11. Successors.  This
Release will be binding upon and inure to the benefit of the heirs, legatees,
executors, estates, successors and permitted assigns, as applicable, of each
party hereto.  No rights, obligations or liabilities hereunder will be
assigned by either party without the prior written consent of the other
party.

       

      12. Notice.  Notices
and all other communications contemplated by this Release shall be in writing
and shall be deemed to have been duly given when personally delivered or when
mailed by U.S. registered or certified mail, return receipt requested and
postage prepaid.  In the case of Executive, mailed notices shall be
addressed to him at the home address which he most recently communicated to
Company in writing.  In the case of Company, mailed notices shall be
addressed to its corporate headquarters, and all notices shall be directed to
the attention of its Secretary.

       

      13. Amendment;
Waiver.  No provision of this Release shall be modified, waived
or discharged unless the modification, waiver or discharge is agreed to in
writing and signed by Executive and by an authorized officer of
Company.  No waiver by either party of any breach of, or of compliance
with, any condition or provision of this Release by the other party shall be
considered a waiver of any other condition or provision or of the same condition
or provision at any other time.

       

      14. Entire
Agreement.  No agreement, representations or understandings
(whether oral or written and whether express or implied) which are not expressly
set forth in this Release have been made or entered into by either party with
respect to the subject matter hereof.  Except as expressly provided
herein, this Release supersedes in its entirety any prior or contemporaneous
agreements, whether written, oral, express or implied, relating to the subject
matter hereof.

       

      15. Governing
Law.  The validity, interpretation, construction and
performance of this Release shall be governed by the laws of the State of
California.

       

      16. Severability.  The
invalidity or unenforceability of any provision or provisions of this Release
shall not affect the validity or enforceability of any other provision hereof,
which shall remain in full force and effect.

       

      17. Counterparts.  This
Release may be executed in counterparts, each of which shall be deemed an
original, but all of which together will constitute one and the same
instrument.

       

      


       

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      IN
WITNESS WHEREOF, the parties have executed this Release as of the day and year
set forth above.

       

       

      
        
          	 COMPANY:	BELL
      MICROPRODUCTS INC.	 
	 	 	 	 
	
                   

                	
                   

                	 	 
	 	 Its:	 	 
	 	 	 	 
	 	 Dated:	 	 


        

         

        
          
            
              	 BELL:	 	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	 	 
	 	 	W.
      Donald Bell	 
	 	 Dated:	 	 
	 	 	 	 


            

          

        

      

       

       

      
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