Document:

ex10-1.htm

    
      
        EXHIBIT 10.1

      

    

     

    URS
CORPORATION

    

    Restated
Incentive Compensation Plan

    2010
Plan Year Summary

     

    I.   Plan
Objectives

     

    The URS
Corporation Restated Incentive Compensation Plan (the “Plan”) is intended to
provide rewards to individuals who make a significant contribution to the
financial performance of URS Corporation and its Infrastructure &
Environment, Federal Services, and Energy & Construction businesses
(collectively, the “Company”) during each fiscal year (a “Plan
Year”).  Among other things, the Plan is intended to:

    

    
      	
              ·  

            	
              Help
      key employees to focus on achieving specific financial
      targets;

            

    

     

    
      	
              ·  

            	
              
                Reinforce
      teamwork;

              

            

      	
              ·  

            	
              
                
                  Provide
      significant award potential for achieving outstanding performance;
      and

                

              

            

    

     

    
      	
              ·  

            	
              
                
                  Enhance
      the Company’s ability to attract and retain highly talented and competent
      people.

                

              

            

    

     

    This
document is only a summary regarding the application of the Plan with respect to
the 2010 Plan Year.  For complete information regarding the Plan
(including defined terms not defined in this Summary document), participants
should refer to the Plan document.  Each Award provided by the Plan
constitutes a Performance Cash Award (as defined in the URS Corporation 2008
Equity Incentive Plan, as amended from time to time (the “EIP”)) and will be
governed by the provisions of the EIP, the Plan, and any documents regarding the
application of the Plan with respect to a particular Plan Year (including this
summary).  In the event of any conflict between the provisions of the
EIP, the Plan and any such documents, the provisions of the EIP will
control.  In the event of any conflict between the provisions of the
EIP, the Plan or any such documents and the provisions of a Designated
Participant’s employment agreement, the provisions of the Designated
Participant’s employment agreement will control.

     

    II.   General
Plan Description

     

    
      	
               

            	
              A.   Eligibility

            

    

     

    The Plan
provides an opportunity for employees to earn cash Awards based on achievement
of Company and individual Performance Goals during a Plan
Year.  Eligible participants are classified in one of two
categories:

    

    
      	
               
      

            	
              1.

            	
              “Designated
      Participants” are key employees who have the potential to significantly
      impact the Company’s success; or

            

    

    

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              2.

            	
              “Non-Designated
      Participants” are employees who demonstrate outstanding individual effort
      and results during the year.  Awards to this group of employees
      are paid from a discretionary bonus
pool.

            

    

    

    Except as
noted in this paragraph, to be eligible to receive an Award under the Plan,
participants must be employed by the Company at the end of the Plan
Year.  However, if the employment of a Designated Participant is
terminated prior to the end of a Plan Year due to the Designated Participant’s
death, Disability or Retirement (as such terms are defined in the EIP), other
than the Retirement of a Covered Employee (as defined in the Plan), the
Designated Participant (or the Designated Participant’s heirs in the case of
death) will be eligible to receive a pro-rata Award based on the time the
Designated Participant was employed by the Company and the Performance Goals
achieved.  If a Designated Participant’s employment is terminated for
any other reason prior to the end of a Plan Year (whether voluntary or
involuntary), the Designated Participant will not receive an Award.

    

    New hires
(employees who join the Company during a Plan Year after the Performance Goals
for the Plan Year have been established) who are identified as Designated
Participants must have at least three months of service and be employed by the
Company at the end of the Plan Year to be eligible to receive a pro-rata Award
based on the time the Designated Participant was employed by the Company and the
Performance Goals achieved (except in the case of death, Disability or
Retirement, as described above).  New hires who are Covered Employees
are subject to certain additional requirements set forth in the
Plan.  Notwithstanding the foregoing, the terms of a Designated
Participant’s employment agreement will supersede the terms and conditions of
the Plan.

    

    Pursuant
to the administrative authority provided to the Compensation Committee of the
Board of Directors (the “Committee”) under the Plan, the Committee has
determined that an employee who is identified as a Designated Participant for
the Plan Year after the Performance Goals for the Plan Year have been
established, but who joined the Company prior to the Plan Year, shall be treated
as a new hire for purposes of the Plan and shall be subject to the requirements
described above with respect to new hires.

     

    
      	
               

            	
              B.   Performance
      Goals

            

    

     

    Each Plan
Year, the Committee establishes, or authorizes the establishment within
specified parameters of, specific Performance Goals for the Company and for
Designated Participants, including weightings of the Performance Goals, by the
business unit or units in which the Designated Participant is expected to have
the most direct impact.  The Performance Goals may be based on any one
of, or combination of, or any ratio between two or more of the Performance
Criteria set forth in the Plan, as they may be specifically defined by the
Committee for each Plan Year.

    

    In
addition, the Committee shall make appropriate adjustments in the method of
calculating the attainment of Performance Goals for the Plan Year, as authorized
under the EIP and set forth in the Plan.

    

    
      
        
           

           
 

        

         

      

      
        ii

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              C.   Target
      Bonus Pool

            

    

     

    Each Plan
Year, the Committee identifies a Target Bonus Pool as part of the Company’s
financial planning process.  The Target Bonus Pool is the sum of all
anticipated Awards for Designated Participants and Non-Designated
Participants.  The Actual Bonus Pool may be greater or less than the
Target Bonus Pool depending on the Company’s actual performance relative to the
Performance Goals established for a Plan Year.

     

    
      	
               

            	
              D.   Target
      Award Percentage

            

    

     

    Each Plan
Year, the Committee assigns to, or authorizes the assignment to, each Designated
Participant a Target Award Percentage, expressed as a percentage of Base Salary,
based on his or her anticipated contributions to the Company.

     

    III.   2010
Plan Year

     

    
      	
               

            	
              A.   Performance
      Criteria Definitions

            

    

    
    

     

    The
Committee selected and defined Performance Criteria as follows for the 2010 Plan
Year for application to the Company-wide Performance Goals and the Performance
Goals established for the Section 16 Officers (as defined in the
Plan):

    

    
      	
               
      

            	
              1.

            	
              Net
      Income.  “Net Income” shall mean the consolidated net
      income of the Company for the 2010 fiscal year as determined under
      generally accepted accounting principles, as adjusted for any material and
      objectively determinable impacts of the items specified in the Plan that
      were not reflected in the 2010 financial plan approved by the
      Board.  Net Income will be calculated after all bonuses are
      accrued and assumed to have been paid in
full.

            

    

     

    
      	
               
      

            	
              2.

            	
              Profit
      Contribution.  “Profit Contribution” shall mean the
      operating income of the business unit(s) for which a Designated
      Participant has accountability, minus interest expense and noncontrolling
      interests attributable to the unit(s), but before allocation of specified
      unit expenses, including stock compensation expenses
      and  amortization of intangible
  assets.

            

    

     

    The
Committee also selected and defined additional Performance Criteria for the 2010
Plan Year for application to, in addition to or in lieu of the Performance
Criteria specified above, the Performance Goals established for Designated
Participants other than the Section 16 Officers, including the
following:

    

    
      	
               
      

            	
              3.

            	
              Average Day Sales
      Outstanding. “Average Day Sales Outstanding” shall mean the average
      of the twelve (12) months of Day Sales Outstanding.  “Day Sales
      Outstanding” or “DSOs” shall mean ninety (90) multiplied by a fraction,
      the numerator of which is the sum of billed accounts receivable, net plus
      unbilled accounts receivable, net minus billings in excess of cost,
      and the denominator of which is the sum of the last three (3) months of
      revenues, with respect to the business unit(s) for which a Designated
      Participant has accountability.  DSOs shall be calculated
      monthly.

            

    

     

    
      
        
           
 

        

         

      

      
        iii

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              4.

            	
              Working Capital Days
      Outstanding (WCDO).  “Working Capital Days Outstanding”
      or “WCDO” shall mean the average of the four quarterly WCDOs with respect
      to the business unit(s) for which a Designated Participant has
      accountability. The quarterly WCDOs shall be calculated by dividing the
      average Working Capital of the business unit(s) for the quarter (the sum
      of the Working Capital of the business unit(s) at the end of each of the
      three months during the quarter divided by 3) by the annualized daily
      Revenue for the business unit(s) (Revenue for the business unit(s) during
      the quarter times 4 divided by 365).  Working Capital is defined
      as current assets (excluding foreign cash, corporate unrestricted cash and
      deferred taxes) less current liabilities (excluding costs to complete,
      deferred taxes and the restructuring
reserve).

            

    

     

    
      	
               
      

            	
              5.

            	
              Revenues.  “Revenues”
      shall mean the consolidated revenue of the Company, or of the relevant
      business unit(s) for which a Designated Participant has accountability, as
      determined under generally accepted accounting
  principles.

            

    

     

    
      	
               
      

            	
              6.

            	
              New
      Sales.  “New Sales” shall mean gross additions to backlog
      with respect to the business unit(s) for which a Designated Participant
      has accountability.

            

    

     

    
      	
               
      

            	
              7.

            	
              New Work
      Margin.  “New Work Margin” shall mean the margin target
      established by the relevant business unit(s) for which a Designated
      Participant has accountability for New Sales.  A volume hurdle
      will be established for those units using this criteria.  This
      criteria excludes small change orders and extensions on existing
      work.

            

    

     

    
      	
               
      

            	
              8.

            	
              Safety
      Record.  “Safety Record” shall mean the total reportable
      incident rate as defined by the Occupational Safety and Health
      Administration (OSHA).

            

    

     

    
      	
               

            	
              B.   Performance
      Goals

            

    

     

    
    

    For the
2010 Plan Year, the Committee established as a prerequisite to all bonus
payments under the Plan that the Company meet a minimum Net Income
threshold.

    

    In
addition, the Committee established, or authorized the establishment of, primary
business unit Performance Goals and individual Performance Goals for Designated
Participants by the business unit where the Designated Participant is expected
to have the most direct impact as follows:

     

    
      	
              Business Unit

            	 	
              Performance Goals

            
	
              URS
      Corporation

            	 	
              Net
      Income

            
	
              Infrastructure
      & Environment

            	 	
              Infrastructure
      & Environment Profit Contribution

            
	
              Federal
      Services

            	 	
              Federal
      Services Profit Contribution

            
	
              Energy
      & Construction

            	 	
              Energy
      & Construction Profit
Contribution

            

    

    

    
      
        
           

           
 

        

         

      

      
        iv

        
          

        

      

      
         

      

    

    In
addition, for Designated Participants in the Infrastructure & Environment,
Federal Services, and Energy & Construction businesses the Committee
established, or authorized the establishment of, various secondary individual
Performance Goals consisting of Average Day Sales Outstanding, Working Capital
Days Outstanding, Safety Record, Revenues, New Sales, New Work Margin as well as
other Performance Goals set forth in the Plan, and established, or authorized
the establishment of, relative weighting to be allocated among all such
Performance Goals.

     

    
      	
               

            	
              C.   Target
      Bonus Pool

            

    

    
    

     

    For the
2010 Plan Year, the Committee established a Target Bonus Pool which will be
funded based on achievement of the Company and business unit(s) Performance
Goals as follows:

     

    
      	
              Performance Results

            	 	
              2010 Award Pool Funding

            
	
              For
      URS Corporation and Federal Services:

            	 	 	 
	
              115%
      of Performance Goal

            	 	 200%
	
              100%
      of Performance Goal

            	 	 100%
	
              85%
      of Performance Goal, or below

            	 	 0%
	
              For
      Infrastructure & Environment:

            	 	 
	
              115%,
      120% or 125% of Performance Goal depending on the specific
      Performance Goal and Designated Participant

            	 	  200%
	
              100%
      of Performance Goal

            	 	  100%
	
              85%
      of Performance Goal, or below

            	 	  0%
	
              For
      Energy & Construction:

            	 	 
	
              115%
      of Performance Goal

            	 	 150%
	
              100%
      of Performance Goal

            	 	 100%
	
              85%
      of Performance Goal

            	 	 50%
	
              70%
      of Performance Goal, or below

            	 	 0%

    

     

    
      
        
        

      

      
        v

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              D.   Target
      Award Percentage

            

    

    
    

     

    For the
2010 Plan Year, the Committee established the following Target Award Percentages
for the Company’s Section 16 Officers:

     

    
      	
              Name

            	
              2010 Target Award Percentage

              (as
      a percentage of base salary)

            
	
              Martin
      M. Koffel

            	
              125%

            
	
              H.
      Thomas Hicks

            	
              100%

            
	
              Thomas
      W. Bishop

            	
              75%

            
	
              Reed
      N. Brimhall

            	
              75%

            
	
              Gary
      V. Jandegian

            	
              100%

            
	
              Joseph
      Masters

            	
              75%

            
	
              Randall
      A. Wotring

            	
              100%

            
	
              Susan
      B. Kilgannon

            	
              45%

            
	
              Thomas
      Zarges

            	
              100%

            

    

     

    IV.   Determination
of Awards

    
    

     

    Awards to
Designated Participants will be dependent upon satisfying one or more of the
following criteria:  (1) the Company achieving its Net Income
threshold; (2) the business unit(s) achieving its minimum Profit Contribution
threshold; and (3) the Designated Participant achieving his/her individual
Performance Goal(s).

    

    A
Designated Participant’s Award will be calculated based on the percentage of
his/her Performance Goal(s) achieved, multiplied by his/her Target Award
Percentage and by his/her Base Salary earned during the Plan
Year.  Pursuant to the administrative authority provided to the
Committee under the Plan, the Committee has determined that a Designated
Participant’s Base Salary for the Plan Year shall (i) be interpreted to mean the
Designated Participant’s Base Salary for the calendar year corresponding to the
Plan Year and (ii) any salary changes which occur during the month of January of
a calendar year will be deemed to have occurred on January 1 of the calendar
year.

    

    As
described above, certain Designated Participants (or a Designated Participant’s
heirs in the case of death) may be eligible to receive pro-rata
Awards.  Pursuant to the administrative authority provided to the
Committee under the Plan, the Committee has determined that for purposes of
prorating Awards under the Plan, any formula that incorporates a fraction where
the denominator is 365 days (or 12 months) shall be interpreted to mean a
fraction where the denominator is the actual number of days (or months) in the
Plan Year.

    

    Determinations
of Awards to Non-Designated Participants (from the discretionary pool) will be
made by the Committee or the CEO at the end of a Plan Year.

    
      
        
          
             

             
 

          

           

        

        
          vi

          
            

          

        

        
           

        

      

    

     

    V.   Other
Plan Provisions

     

    
      	
               

            	
              A.   Payment
      of Awards

            

    

    
    

     

    
    

    Assessment
of actual performance and payout of Awards will be subject to completion of the
Company’s fiscal year-end independent audit and certification by the Committee
that the applicable Performance Goals and other material terms of the Plan have
been met.

    

    The
Actual Award earned will be paid to Designated Participants (or the Designated
Participant’s heirs in the case of death) in cash within 30 days following
completion of both the independent audit and the above-referenced certification
by the Committee.  Awards to Non-Designated Participants will be paid
concurrently to the extent practicable, but in any case within thirty (30) days
following the payment of Awards to Designated Participants.  Payroll
and other taxes will be withheld as required by law.

     

    
      	
               

            	
              B.   Plan
      Accrual

            

    

    
    

     

    Estimated
payouts for the Plan will accrue monthly during each Plan Year.  At
the end of each fiscal quarter, the estimated Actual Awards for the Plan Year
will be evaluated based on actual performance to date and the monthly accrual
rate will be adjusted so that the cost of the Plan is fully accrued at Plan
Year-end.  Accrual of estimated payouts does not imply vesting of any
individual Awards to Designated Participants.

     

    
      	
               

            	
              C.   Administration

            

    

    
    

     

    The Plan
will be administered by the Committee and the CEO, except that the Committee
retains final authority regarding all aspects of Plan administration, the
resolution of any disputes, and application of the Plan in any respect to a
Covered Employee.  The Committee may, without notice, amend, suspend
or revoke the Plan at any time.

     

    
      	
               

            	
              D.   Assignment
      of Employee Rights

            

    

     

    No
employee has a claim or right to be a participant, to continue as a participant
or to be granted an Award under the Plan.  Participation in the Plan
does not give an employee the right to be retained in the employment of the
Company or its affiliates, nor does it imply or confer any other employment
rights.

    

    Nothing
contained in the Plan shall be construed to create a contract of employment with
any participant.  The Company and its Affiliates reserve the right to
elect any person to its offices and to remove any employees in any manner and
upon any basis permitted by law.

    

    Nothing
contained in the Plan shall be deemed to require the Company or its Affiliates
to deposit, invest or set aside amounts for the payment of any
Awards.  Participation in the Plan does not give a participant any
ownership, security or other rights in any assets of the Company or any of its
Affiliates.

     

    
      
        
        

      

      
        vii

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              E.   Validity

            

    

    
    

     

    In the
event that any provision of the Plan is held invalid, void or unenforceable,
such provision shall not affect, in any respect, the validity of any other
provision of the Plan.

     

    
      	
               

            	
              F.   Governing
      Law

            

    

    
    

     

    The Plan
will be governed by, and construed in accordance with, the laws of the State of
California.

    

    
      viiibm20091105_10qex10-38.htm

    DATED
day
of                                
2004

    

    

    

    

    IDEAL
HARDWARE LIMITED

    

    -
and-

    GRAEME
WATT

    

    

    

 

    

    
      
        

      

    

    SERVICE
AGREEMENT

    
      
        

      

    

    
 

    

    

    

    

    

    
 

    WEDLAKE
BELL

    

    16
Bedford Street

    Covent
Garden

    London
WC2E 9HF

    

    Direct
Tel: 020 7395 3037

    Direct
Fax: 02073953104

    

    Direct
E-Mail: disrael@wedlakebell.com

    Ref:
DEI/68670IWB2.148774

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      INDEX

      

      
        	
                Clause

              	 
      	
                Page
      No.

              
	 
      	 
      	 
      
	
                1.

              	
                INTERPRETATION

              	  1
	 
      	 
      	 
      
	
                2.

              	
                APPOINTMENT AND TERM

              	  2
	 
      	 
      	 
      
	
                3.

              	
                OBLIGATIONS DURING
      EMPLOYMENT

              	  3
	 
      	 
      	 
      
	
                4.

              	
                INTERESTS IN OTHER
      BUSINESSES

              	  4
	 
      	 
      	  
	
                5.

              	
                HOURS OF WORK

              	  5
	 
      	 
      	 
      
	
                6.

              	
                REMUNERATION AND
    BENEFITS

              	  5
	 
      	 
      	 
      
	
                7.

              	
                EXPENSES

              	  6
	 
      	 
      	 
      
	
                8.

              	
                HOLIDAYS

              	  6 
	 
      	 
      	 
      
	
                9.

              	
                SICKNESS AND INJURY

              	  7
	 
      	 
      	 
      
	
                10.

              	
                CONFIDENTIALITY

              	  7
	 
      	 
      	 
      
	
                11.

              	
                RECORDS

              	  8
	 
      	 
      	 
      
	
                12.

              	
                INTELLECTUAL PROPERTY

              	  9
	 
      	 
      	 
      
	
                13.

              	
                PROTECTIVE COVENANTS

              	  10
	 
      	 
      	 
      
	
                14.

              	
                TERMINATION

              	  12
	 
      	 
      	 
      
	
                15.

              	
                CORPORATE CHANGE

              	  14
	 
      	 
      	 
      
	
                16.

              	
                DISCIPLINARY AND GRIEVANCE
      PROCEDURES

              	  14
	 
      	 
      	 
      
	
                17.

              	
                USE OF ELECTRONIC
      COMMUNICATIONS

              	  15
	 
      	 
      	 
      
	
                18.

              	
                DATA PROTECTION

              	  15
	 
      	 
      	 
      
	
                19.

              	
                NOTICES

              	  16
	 
      	 
      	 
      
	
                20.

              	
                FORMER SERVICE
    AGREEMENTS

              	  16
	 
      	 
      	 
      
	
                21.

              	
                POWER OF ATTORNEY

              	  16
	 
      	 
      	 
      
	
                22.

              	
                MISCELLANEOUS

              	  17
	 
      	 
      	 
      
	
                23.

              	
                GOVERNING LAW AND
      JURISDICTION

              	  17
	 
      	 
      	 
      
	
                SCHEDULE 1

              	
                BONUS

              	  18
	 
      	 
      	 
      
	
                SCHEDULE 2

              	
                CONFIDENTIAL
    INFORMATION

              	 
19

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    THIS AGREEMENT is made on
2004

    

    BETWEEN:-

    

    
      	
              1.  

            	
              IDEAL HARDWARE LIMITED
      registered in England (Company No. 03969946) whose registered
      office is at Fountain Court, Cox Lane, Chessington, Surrey KT9 1S1 ("the
      Company"); and

            

    

    

    
      	
              2.  

            	
              GRAEME WATT of21
      Dalebury Road, Wandsworth Common, London SW17 7HQ ("the
      Executive").

            

    

    

    WHEREBY the Executive is
currently seeking a formal release from all contractual obligations owed to
third parties that would fetter his ability to commence employment with the
Company

    

    AND subject to the Executive
being free to commence employment with the Company on the Commencement Date (as
defined below) without being in breach of any contractual obligation owed to any
third party

    

    IT IS AGREED that the Company
shall employ the Executive upon and subject to the following terms and
conditions:

    

    IT IS AGREED as
follows:-

    

    
      	
              1.  

            	
              INTERPRETATION

            

    

    

    
      	
              1.1  

            	
              In
      this Agreement the following words and expressions shall have the
      following meanings unless the context otherwise
  requires:-

            

    

    

    "Associated Company" means any
company which is from time to time a holding company or a subsidiary (as those
expressions are defined in Section 736 of the  Companies Act 1985) of
the Company, or a subsidiary of any such holding company and so that
"subsidiary" shall also include a subsidiary undertaking as defined in Section
258 of that Act;

    

    "Board" means the board of
directors of the Company from time to time, including any duly appointed
committee or sub-committee;

    

    "Confidential Information"
means any information which the Executive knows or ought reasonably to
know concerning the business of the Company or any Associated Company or any of
its or their suppliers, agents, distributors, customers or others and which
shall have been acquired, received or made by the Executive during the Term
(whether or not expressly designated "confidential" and whether or not in
legible or tangible form) including (without limitation) the matters set out in
Schedule 2;

    

    "Group" means the Company and
the Associated Companies from time to time;

    

    "Intellectual Property" means
all copyright, moral rights, rights in the nature of copyright, trade secrets,
patents, design rights, database rights, trade marks, service marks, logos,
trading and business names, know how, other intellectual property rights and
rights in the nature of intellectual property (in each case whether registered
or not and including both registrations and applications therefor) and all
rights or forms of protection of a similar nature or having equivalent or
similar effect in any part of the world;

    

    "Records" means notes,
memoranda, tape recordings, films, photographs, plans, designs, drawings,
computer data, software or any form of record (whether electronic or otherwise),
material or document relating to any matter within the scope of the business,
finances, management or administration of the Company or any Associated Company
or any of their respective clients, customers, shareholders, employees,
officers, suppliers, distributors and agents or concerning any of its or their
respective dealings, transactions or affairs; and

    

    "Term" means the term of the
employment as defined in sub-clause 2.1.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              1.2  

            	
              Any
      reference in this Agreement to the employment of the Executive is a
      reference to the Executive's employment by the Company under this
      Agreement.

            

    

    

    
      	
              1.3  

            	
              The
      headings in this Agreement (and any descriptive notes in brackets
      following references to statutes or to other documents) and any front or
      back sheet or cover and any index hereto are for convenience only and
      shall not affect the construction or interpretation of this
      Agreement.

            

    

    

    
      	
              1.4  

            	
              Any
      reference in this Agreement to a person shall (unless the context
      otherwise requires) include a reference to a natural person and a body
      corporate and to any unincorporated body of persons including any firm,
      association, partnership, trust, society or
  charity.

            

    

    

    
      	
              1.5  

            	
              Any
      reference in this Agreement to any "party" or to the "parties" are to the
      parties to this Agreement.

            

    

    

    
      	
              1.6  

            	
              Save
      as herein expressly otherwise provided, expressions and words which are
      defined in the Companies Act 1985 shall have the same meanings in this
      Agreement.

            

    

    

    
      	
              1.7  

            	
              This
      Agreement shall be binding upon and enure for the benefit of the parties'
      respective successors in title and
assigns.

            

    

    

    
      	
              1.8  

            	
              No
      right of any party to agree any amendment, variation, waiver, or
      settlement, under or arising from or in respect of this Agreement, or to
      terminate this Agreement, shall be subject to the consent of any person
      who has rights under this Agreement by virtue of the Contracts (Rights of
      Third Parties) Act 1999.

            

    

    

    
      	
              2.  

            	
              APPOINTMENT AND
TERM

            

    

    

    
      	
              2.1  

            	
              The
      term of the employment shall commence on 13 April 2004 (the "Commencement
      Date") and, subject to Clause 14, shall continue until terminated by the
      Company or the Executive giving to the other not less than twelve months'
      notice in writing (the "Term").

            

    

    

    
      	
              2.2  

            	
              The
      Executive shall provide his services as President of Europe for Bell
      Microproducts or in such other capacity as the Company may from time to
      time reasonably require.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              2.3  

            	
              The
      Executive's employment will begin on the Commencement Date, and the
      Executive's period of continuous employment for statutory purposes shall
      be deemed to have commenced on the same
date.

            

    

    

    
      	
              3.  

            	
              OBLIGATIONS DURING
      EMPLOYMENT

            

    

    

    
      	
              3.1  

            	
              The
      Executive shall during the Term (unless prevented by sickness or
      injury):

            

    

    

    
      	
              3.1.1  

            	
              devote
      the whole of his time, attention, skill and ingenuity during working hours
      (as described in Clause 5) to his duties under this
    Agreement;

            

    

    

    
      	
              3.1.2  

            	
              faithfully
      and using his best endeavours carry out all work consistent with his
      position which may be required of him;
and

            

    

    

    
      	
              3.1.3  

            	
              faithfully
      and diligently perform such duties and exercise such powers consistent
      with his position as may from time to time be assigned to or vested in him
      by the Board;

            

    

    

    
      	
              3.1.4  

            	
              comply
      with all reasonable and lawful requests made by the
  Board;

            

    

    

    
      	
              3.1.5  

            	
              use
      his best endeavours to promote and protect and extend the business,
      regulation, welfare and the interests of the Company and the
      Group;

            

    

    

    
      	
              3.1.6  

            	
              comply
      with all the Company's rules, regulations, policies and procedures from
      time to time in force;

            

    

    

    
      	
              3.1.7  

            	
              give
      to the Board or such persons as it shall nominate at all times promptly
      (in writing if so requested) all such information and explanations as are
      known to the Executive regarding the affairs of the Company and the Group
      as the Board may require;

            

    

    

    
      	
              3.1.8  

            	
              report
      to the Board any matters of concern that come to the Executive's
      attention, it being the duty of the Executive to report any acts of
      misconduct, dishonesty, breach of Company rules or breach of any of the
      rules of any relevant regulatory bodies committed, contemplated or
      discussed by any other member of staff or other third party. The Company
      shall keep confidential whatever is reported save as required by law or a
      court or authority of competent
jurisdiction;

            

    

    

    
      	
              3.1.9  

            	
              work
      from the Company's premises in Chessington, Surrey or such other location
      in the United Kingdom as the Company shall
  require;

            

    

    

    
      	
              3.1.10  

            	
              travel
      on Company or Associated Company business in the United Kingdom or
      overseas as the Company or Associated Company may from time to time
      require or as may be necessary for the fulfilment of his role as President
      for Europe.

            

    

    

    
      	
              3.2  

            	
              The
      Company reserves the right to suspend all or any of the Executive's duties
      and powers on such terms as it considers expedient (including a term that
      the Executive shall not attend at the Company's or any Associated
      Company's premises and/or that the Executive shall not contact or have
      dealings with any customer, client, supplier or employee of the Company or
      any Associated Company) or to require the Executive to carry out the
      duties of another position either in addition to or instead of his duties
      as President for Europe of Bell
Microproducts.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              3.3  

            	
              The
      Company shall be under no obligation to assign any duties to the Executive
      and shall be entitled to exclude him from its premises. The Executive
      shall remain bound by his obligations of good faith, fidelity and loyalty
      to the Company during such suspension, and shall continue to receive his
      full salary and benefits.

            

    

    

    
      	
              3.4  

            	
              The
      Company reserves the right to assign its rights and obligations under this
      Agreement to any Associated Company and thereafter any reference to the
      Company in this Agreement shall be a reference to any such Associated
      Company.

            

    

    

    
      	
              4.  

            	
              INTERESTS IN OTHER
      BUSINESSES

            

    

    

    
      	
              4.1  

            	
              During
      the Term the Executive shall not (unless the Board shall in its absolute
      discretion so consent in writing) carryon or be concerned, engaged or
      interested in or assume responsibilities or duties for, whether directly
      or indirectly in relation to, any person whether corporate or not (other
      than any of the businesses of the Group) save that notwithstanding this
      Clause the Executive may:

            

    

    

    
      	
              4.1.1  

            	
              be
      interested as a holder directly or through nominees for investment
      purposes only in any securities in any person which are for the time being
      admitted to trading on a recognised stock exchange provided that none of
      the holdings of such securities in which the Executive shall be so
      interested shall at any time exceed three per cent in aggregate of the
      nominal value of the securities concerned for the time being in issue;
      and

            

    

    

    
      	
              4.1.2  

            	
              to
      the extent that and only for so long as the Board shall in its absolute
      discretion so consent in writing, be concerned or take an interest in or
      assume responsibilities or duties in any person, provided always
      that:

            

    

    

    
      	
              4.1.2.1  

            	
              the
      business or activity of such person does not conflict nor compete with and
      is not likely to conflict or compete with any business of the Company or
      any Associated Company; and

            

    

    

    
      	
              4.1.2.2  

            	
              the
      Executive's concern and interest in and responsibilities and duties
      towards such person do not and are unlikely to interfere with the proper
      performance of the Executive's duties under this
  Agreement.

            

    

    

    
      	
              4.2  

            	
              Subject
      to any regulations issued by the Company, the Executive shall not be
      entitled to receive or obtain directly or indirectly any inducement,
      discount, rebate or  commission in respect of any sale or
      purchase of goods effected or other business transacted (whether or not by
      him) by or on behalf of the Company or any Associated Company and if he
      (or any firm or company in which he is interested) shall obtain any such
      discount, rebate or commission he shall account to the Company or the
      relevant Associated Company for the amount received by him (or a due
      proportion of the amount received by such -company or firm having regard
      to the extent of his interest
therein).

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              5.  

            	
              HOURS OF WORK

            

    

    

    The
Executive shall work such hours as are necessary or appropriate from time to
time to carry out his duties properly and effectively, with no allowance or
additional payment for overtime. In particular, the Executive agrees that for
the purposes of the Working Time Regulations he is an autonomous worker; without
prejudice to this belief of the parties, the Executive agrees whenever necessary
to work longer than 48 hours per week. The Executive may withdraw his consent to
working in excess of 48 hours per week on three months' written notice to the
Company.

    

    
      	
              6.  

            	
              REMUNERATION AND
  BENEFITS

            

    

    

    
      	
              6.1  

            	
              The
      Company shall pay the Executive during the Term a salary at the rate of
      £285,000 per year (inclusive of any director's fees payable by the Company
      or any Associated Company) less deductions for tax and National Insurance
      Contributions (Base Salary) which shall accrue from day to day and shall
      be payable by twelve equal monthly  instalments in arrears, on
      or about the last working day of each calendar month by credit transfer
      direct to the Executive's bank
account.

            

    

    

    
      	
              6.2  

            	
              The
      Executive's salary may be reviewed from time to time at the absolute
      discretion of the Board.

            

    

    

    
      	
              6.3  

            	
              The
      Executive agrees and hereby authorises the Company to deduct from any
      wages (as defined in Part II of the Employment Rights Act 1996) due to the
      Executive any sums due from the Executive to the Company or any Associated
      Company.

            

    

    

    
      	
              6.4  

            	
              The
      Company shall pay the Executive a car allowance of £6,000 per year,
      payable by equal monthly instalments on or about the last working day of
      each month, provided the Executive shall remain eligible to drive in the
      UK.  In addition, the Company will pay the Executive a mileage
      rate of £0.24 per mile incurred in the proper performance of his duties as
      part of the Executive's expenses (Clause
7).

            

    

    

    
      	
              6.5  

            	
              The
      Company shall provide the Executive with a lap top computer and GSM mobile
      telephone that the Parties deem is appropriate. conditional upon the
      Executive complying with his obligations at Clause 17 below, his taking
      good care of the equipment and returning the equipment to the Company's
      Head Office in the United Kingdom immediately on the termination of his
      employment.

            

    

    

    
      	
              6.6  

            	
              The
      Executive is entitled to a discretionary bonus in accordance with the
      scheme set out in Schedule 1 attached to this Agreement, which shall be
      payable at the Company's absolute
discretion.

            

    

    

    
      	
              6.7  

            	
              The
      Company shall pay by way of 12 monthly instalments £12,000 per annum into
      the Executive's personal pension plan (the "Pension Payment") provided
      that the personal pension plan is approved or provisionally approved by
      the Inland Revenue; alternatively the Executive may elect to direct some
      or all of the Pension Payment for the payment of other insurances or
      memberships.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              6.8  

            	
              The
      Executive shall be eligible to join the Company's private medical
      insurance scheme, subject to the rules of the scheme from time to time in
      force, or Executive may chose to continue his current medical insurance
      scheme in which case the Company will contribute up to £2,018.00 per year
      towards the premium cost.

            

    

    

    
      	
              6.9  

            	
              The
      Executive may chose to continue his participation in his current life
      insurance scheme in which case the Company will contribute up to £3,052.00
      per year, including tax gross up, toward the premium
  cost.

            

    

    

    
      	
              6.10  

            	
              The
      Executive may chose to continue his participation in his current income
      protection scheme in which case the Company will contribute up to
      £18,210.00 per year, including tax gross up, toward the premium
      cost.

            

    

    

    
      	
              7.  

            	
              EXPENSES

            

    

    

    The
Company shall reimburse the Executive for all reasonable travelling,
accommodation, entertainment and other out-of-pocket expenses wholly and
necessarily incurred by the Executive during the Term in the proper performance
of his duties under this Agreement upon production of receipts or such
appropriate evidence of payment as the Company may require.

    

    
      	
              8.  

            	
              HOLIDAYS

            

    

    

    
      	
              8.1  

            	
              The
      Executive shall, in addition to public and bank holidays, be entitled to
      25 working days paid holiday in each calendar year or such proportionate
      number of days as shall correspond to the actual period that the Executive
      may have worked for the Company during the calendar year, to be taken at
      such times as shall have been approved by the
  Board.

            

    

    

    
      	
              8.2  

            	
              The
      Company's holiday year runs from 1 January to 31
  December.

            

    

    

    
      	
              8.3  

            	
              The
      Executive shall not be entitled to carry forward any annual holiday
      entitlement untaken by him for any reason during the calendar year in
      which it accrued without the prior written consent of the
      Board.

            

    

    

    
      	
              8.4  

            	
              Upon
      the termination of the Executive's employment the Executive's entitlement
      to accrued holiday pay shall be calculated on a pro rata basis in respect
      of each completed month of service in the calendar year in which his
      employment terminates provided that
where:-

            

    

    

    
      	
              8.4.1  

            	
              the
      Executive shall have taken more holiday than his accrued entitlement the
      Company is hereby authorised (for the purposes of Part II of the
      Employment Rights Act 1996) to make an appropriate deduction from the
      Executive's final salary payment (and so that to the extent that any sums
      due to the Executive from the Company are insufficient to cover the
      excess, the Executive shall pay the balance immediately upon request);
      and

            

    

    

    
      	
              8.4.2  

            	
              the
      Executive's employment is terminated summarily for cause he shall not be
      entitled to receive any pay in lieu of accrued holiday in excess of his
      statutory entitlement as at the termination
  date.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              8.5  

            	
              The
      Executive shall take any outstanding holiday entitlement during any period
      of notice, and should the Executive fail to do so, the Executive shall
      then lose any entitlement to holiday pay in
  lieu.

            

    

    

    
      	
              8.6  

            	
              The
      Company shall be entitled to withhold any entitlement to holiday pay in
      lieu if the Executive fails to give the Company proper notice of
      termination or if the Executive leaves before such notice has expired. In
      such a case the Executive's holiday pay in lieu shall be reduced by the
      number of days notice not worked. In any case where the Company agrees to
      waive the requirement for the Executive to work out his notice, this
      sub-clause shall not apply.

            

    

    

    
      	
              9.  

            	
              SICKNESS AND
INJURY

            

    

    

    
      	
              9.1  

            	
              If
      at any time during the Term the Executive is absent from work due to
      sicknessor injury he shall promptly forward to the Company, if required,
      evidence of such sickness or injury in a form satisfactory to the
      Board.

            

    

    

    
      	
              9.2  

            	
              Provided
      that the Executive complies with sub-clause 9.1, the Company will pay the
      Executive his Base Salary together with his benefits under the terms of
      the Agreement (inclusive of any statutory sick pay) for the first forty
      days in aggregate of absence in any period of fifty two weeks but shall
      not be required to pay the Executive any salary and/or other remuneration
      or benefits for any further periods of such absence in any period of fifty
      two weeks, although the Company may do so in its sole discretion (it being
      agreed and understood that any exercise of this discretion by the Company
      does not give the Executive any right, entitlement or legitimate
      expectation for the future).

            

    

    

    
      	
              9.3  

            	
              If
      any incapacity is caused by any alleged action or wrong of a third party
      and the Executive decides to claim damages in respect thereof~ the
      Executive shall use all reasonable endeavours to recover damages for loss
      of earnings over the period for which salary has been paid or shall be
      paid to the Executive by the Company under this Clause and shall account
      to the Company for any such damages recovered (less any costs borne by the
      Executive in achieving such recovery) in an amount not exceeding the
      actual salary paid or payable by the Company under this Clause in respect
      of such period.

            

    

    

    
      	
              9.4  

            	
              At
      such time as the Company may reasonably request and at the expense of the
      Company the Executive agrees to undergo a medical and/or psychological
      examination by a doctor or doctors of the Company's choice and permit
      unconditional disclosure of the results of such medical examination to the
      Company pursuant to the Access to Medical Reports Act 1988, including
      copies of any documents referred to in any such reports. The Company shall
      keep the results of such medical examination confidential save insofar as
      it is necessary to disclose the results for the purpose of obtaining or
      maintaining any policy of insurance required by the Company or save as
      required by law.

            

    

    

    
      	
                  10.  

            	
              CONFIDENTIALITY

            

    

    

    
      	
              10.1  

            	
              The
      Executive shall not (other than in the proper performance of his duties or
      with the prior written consent of the Company or unless ordered by a court
      or other authority of competent jurisdiction) at any time either during
      the Term or afterwards disclose or communicate to any person or use for
      his own benefit or the benefit of any person other than the Company or any
      Associated Company or through any failure to exercise all due care and
      diligence cause, enable, authorise, assist or permit any unauthorised use
      or disclosure of any Confidential Information, or attempt or purport to do
      any of the foregoing.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              10.2  

            	
              All
      Records embodying or relating to any Intellectual Property or Confidential
      Information shall be and remain the exclusive property of the Company or
      the relevant Associated Company.

            

    

    

    
      	
              10.3  

            	
              The
      provisions of this Clause 10 shall not apply to any Confidential
      Information which:-

            

    

    

    
      	
              10.3.1  

            	
              is
      in or enters the public domain other than by breach of this Agreement by
      the  Executive; or is obtained from any third party who is
      lawfully authorised to disclose such
  information.

            

    

    

    
      	
              10.4  

            	
              The
      Executive shall at all times both during the Term and afterwards use best
      endeavours to prevent the unauthorised use, publication or disclosure of
      any Confidential Information and shall inform the Company of any actual,
      suspected or threatened use, publication or disclosure of any Confidential
      Information in contravention of this Agreement as soon as the same becomes
      known to the Executive and shall unconditionally render such assistance to
      restrain such farther use or disclosure as the Company may
      request.

            

    

    

    
      	
              11.  

            	
              RECORDS

            

    

    

    
      	
              11.1  

            	
              During
      the Term the Executive shall not (otherwise than for the exclusive benefit
      of the Company or any Associated Company and on the basis that it is the
      intention of the parties hereto that the Records and any copies or
      reproductions thereof shall be and remain the exclusive property of the
      Company or the relevant Associated
Company):-

            

    

    

    
      	
              11.1.1  

            	
              make,
      copy or reproduce in any form any Records in whole or in
    part;

            

    

    

    
      	
              11.1.2  

            	
              use
      or permit any Records to be used by or for the benefit of any other
      person;

            

    

    

    
      	
              11.1.3  

            	
              or
      attempt or purport to do any of the foregoing or cause, enable, permit,
      authorize or assist any other person to do any of the
      foregoing.

            

    

    

    
      	
              11.2  

            	
              During
      the Term the Executive shall observe and comply with all security measures
      introduced by or on behalf of the Company or any Associated Company from
      time to time to safeguard and protect the Records from theft or
      unauthorised access by any person or from loss or damage caused by
      computer bugs or viruses or otherwise
howsoever.

            

    

    

    
      	
              11.3  

            	
              The
      Executive shall at any time during the Term on request by the Company and
      in any event immediately upon termination of this Agreement howsoever
      caused, at the Company's
discretion:-

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              11.3.1  

            	
              deliver
      up to the Company or any Associated
Company;

            

    

    

    
      	
              11.3.2  

            	
              and/or
      destroy, erase or delete from any data storage medium, including without
      limitation, from any computer hard disk or drive and any floppy disk in
      the Executive's possession, power, custody or
  control

            

    

    

    all
Records and/or Confidential Information which the Executive has made, copied, or
reproduced in any form, and all other documents, papers, materials or property
belonging or relating to the Company or any Associated Company in the
Executive's possession, power, custody or control and the Executive shall within
two days thereafter serve a written statement signed by him on the Company
certifying that he has complied with this Clause 11.3.

    

    
      	
              12.  

            	
              INTELLECTUAL
  PROPERTY

            

    

    

    
      	
              12.1  

            	
              The
      Executive shall immediately notify the Company in writing of the general
      nature of any discovery, invention, idea, development, secret process or
      improvement in procedure made or discovered by him during the Term
      (irrespective of whether it was so made or discovered during normal
      working hours or using the facilities of the Company or any Associated
      Company and irrespective of whether or not the Executive considers that by
      virtue of Section 39 Patents Act 1977 or any similar provision of
      applicable law not capable of exclusion rights thereto fail to vest in the
      Company or any Associated Company) and which in any way relates or may be
      related to any product, service, work, method or process of the Company or
      any Associated Company or to any Confidential Information
      ("Invention").

            

    

    

    
      	
              12.2  

            	
              As
      between the Company or any Associated Company on the one hand and the
      Executive on the other hand the entitlement to any Invention shall be
      determined in accordance with the provisions of the Patents Act
      1977.

            

    

    

    
      	
              12.3  

            	
              The
      Executive shall promptly provide to the Company or any Associated Company
      full written disclosure of any Invention and if and whenever required by
      the Company or any Associated Company so to do (whether or not during the
      Term) shall at the expense of the Company or any Associated Company but
      without additional payment to the Executive (except to the extent provided
      in Section 40 Patents Act 1977 or any similar provisions of applicable
      law) apply or join with the Company or any Associated Company or any other
      persons in applying for letters patent or other equivalent protection
      (except only to the extent that by virtue of Section 39 Patents Act 1977
      or any similar provision of applicable law not capable of exclusion such
      rights fail to vest in the Company or any Associated Company) in the
      United Kingdom and in any other part of the world for such Invention and
      unconditionally do such things and execute such documents as the Company
      or any Associated Company may reasonably
  request.

            

    

    

    
      	
              12.4  

            	
              It
      is agreed that (subject only to sub-clause 12.2) the Company or any
      Associated Company shall be solely and exclusively entitled to the entire
      and unencumbered Intellectual Property in all works, processes, methods,
      Inventions and/or products (including without limitation any computer
      software) made by the Executive during the Tenn and which are connected
      with or relate in any way to the business of the Company or any Associated
      Company whether or not so made in the course of the Executive's employment
      under this Agreement and the

            

    

    

    
      	
              12.4.1  

            	
              Executive:-
      undertakes at the expense of the Company or any Associated Company (but
      without additional payment to the Executive except to the extent provided
      in Section 40 of the Patents Act 1977 or any similar provisions of
      applicable law) immediately and unconditionally to execute all documents
      and do all things as the Company or any Associated Company shall require
      for the purpose of confirming to and assuring in the name of the Company
      or any Associated Company such Intellectual
  Property;

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              12.4.2  

            	
              undertakes
      immediately to inform the Company or any Associated Company of the
      creation or coming into existence of anything to which this Clause
      applies; and waives all moral rights in or to anything to which this
      Clause applies in favour of the Company or any Associated Company and for
      the avoidance of doubt such waiver shall extend to the licensees and
      successors in title of the Company or any Associated
    Company.

            

    

    

    
      	
              12.5  

            	
              The
      Executive shall at all times during the Term with the Company and
      afterwards inform the Company of any actual, suspected or threatened
      infringement of any Intellectual Property as soon as the same becomes
      known to the Executive and shall at the cost and expense of the Company
      unconditionally render such assistance to restrain such further
      infringement as the Company may
request.

            

    

    

    
      	
              12.6  

            	
              All
      rights and obligations under this Clause in respect of any Intellectual
      Property made or discovered by the Executive during the Term shall
      continue in full force and effect after the termination of the Executive's
      employment and shall be binding upon his personal
      representatives.

            

    

    

    
      	
              13.  

            	
              PROTECTIVE
  COVENANTS

            

    

    

    
      	
              13.1  

            	
              In
      relation to the restrictions set out in this
  clause:

            

    

    

    
      	
              13.1.1  

            	
              "Business" means any
      businesses of the Company and any Associated Company at the Termination
      Date and with which the Executive was involved to a material degree in the
      twelve months immediately preceding the Termination
  Date;

            

    

    

    
      	
              13.1.2  

            	
              "Customer" means any
      person, who at any time in the period of twelve months immediately
      preceding the Termination Date, was a customer, client, agent or
      distributor of or who had regular dealings with the Company or any
      Associated Company and with whom or which the Executive had material
      contact during the Term;

            

    

    

    
      	
              13.1.3  

            	
              "Employee" means any
      person who, at the Termination Date, was employed or engaged by the
      Company or an Associated Company:

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              13.1.2.1  

            	
              at
      a senior or key level and who was a person with whom he had material
      contact during the period of twelve months prior to the Termination Date;
      or

            

    

    

    
      	
              13.1.2.2  

            	
              in
      a position which reported directly to the Executive either at the
      Termination Date or at any time in the twelve months immediately preceding
      that date;

            

    

    

    
      	
              13.1.4  

            	
              "Supplier" means any
      person who was a supplier of the Company or any Associated Company at any
      time in the period of twelve months immediately preceding the Termination
      Date and with which the Executive had material contact during the
      Term;

            

    

    

    
      	
              13.1.5  

            	
              "Termination Date" means
      the date of termination of the Executive's
  employment.

            

    

    

    
      	
              13.2  

            	
              The
      Executive will not, for a period of twelve months after the Termination
      Date, canvass, approach or solicit or cause to be canvassed, approached or
      solicited for orders (in respect of any services provided or goods sold by
      any Business) or seek to entice away from the Company or any Associated
      Company any business or trade of a Customer with the intention of
      supplying goods or services to that Customer so as to compete or seek to
      compete with any Business.

            

    

    

    
      	
              13.3  

            	
              The
      Executive will not, for a period of twelve months after the Termination
      Date, supply goods, or services to, or otherwise have business dealings
      with, any Customer in the course of any business or entity which is, or
      seeks to be, in competition with any
Business.

            

    

    

    
      	
              13.4  

            	
              The
      Executive will not for a period of twelve months after the Termination
      Date, for himself or on behalf of any business or entity which is in
      competition with any Business, employ or offer employment to an Employee,
      or in any way try to entice an Employee away from the Company or any
      Associated Company.

            

    

    

    
      	
              13.5  

            	
              The
      Executive will not, for a period of twelve months after the Termination
      Date, be engaged in or concerned in any capacity in any business or entity
      which is or seeks to be in competition with any
  Business.

            

    

    

    
      	
              13.6  

            	
              The
      Executive will not, for a period of twelve months after the Termination
      Date contact or interfere or have dealings with any
    Supplier.

            

    

    

    
      	
              13.7  

            	
              Nothing
      in this Clause shall prevent the Executive from being engaged in or by, or
      participating in, any business or entity to the extent that any of his
      activities for such business or entity shall relate solely to matters of a
      type with which the Executive was not materially concerned in the twelve
      months immediately preceding the Termination
  Date.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              13.8  

            	
              The
      restrictions set out in this Clause apply whether the Executive is acting
      for his own benefit or on behalf of any person and whether he acts
      directly or indirectly.

            

    

    

    
      	
              13.9  

            	
              The
      Executive agrees that in the event of receiving from any person an offer
      of employment either during the Term or during the continuance in force of
      any of the restrictions set out above he shall forthwith provide to such
      person making such offer of employment, a full and accurate copy of this
      Clause.

            

    

    

    
      	
              13.10  

            	
              Any
      period spent by the Executive, either on "Garden Leave" in accordance with
      sub-clause 14.2 below or serving out notice in accordance with sub-clause
      2.1, shall be deducted from the period of restriction referred to in
      sub-clauses 13.1 to 13.8 above.

            

    

    

    
      	
              14.  

            	
              TERMINATION

            

    

    

    
      	
              14.1  

            	
              The
      Company shall be entitled, during the period of any notice given pursuant
      to this Clause and without limiting the Company's right to suspend any of
      the Executive's duties and powers under clause 3.3, to require the
      Executive to cease to attend at the premises of the Company or any
      Associated Company or to undertake any work during all or any part of the
      period of notice. During such period or periods the Executive shall
      nevertheless remain available to perform any such duties and/or to
      exercise any such powers, authorities and discretions (if any) if and when
      called upon to do so by the Company and remain bound (subject to this
      sub-clause) by the remaining provisions of this Agreement which shall
      continue to remain in fall force and effect. The Executive shall not be
      entitled to any payment in damages or be entitled to make bring or base
      any claim or counterclaim whatsoever upon or as a result of the exercise
      by the Company of its rights under this sub-clause. The Executive shall
      continue to receive his salary and other benefits (if any) should the
      Company exercise its rights under this subclause.  The
      Executive, in tum, shall remain bound by his obligations of good faith,
      fidelity and loyalty to the Company such that the Executive shall not
      compete against the Company, solicit customers or clients of the Company
      to transfer their business to the Executive or any third party, or
      otherwise make any secret profit, or solicit members of staff to leave the
      Company's employment, or breach his obligations not to reveal to any third
      party Confidential Information.

            

    

    

    
      	
              14.2  

            	
              The
      Company may at its absolute discretion elect to terminate the employment
      of the Executive with immediate effect by paying the Executive's Base
      Salary only in lieu of notice (excluding any benefits or emolument
      referable to the employment of the Executive under this Agreement).
      Furthermore, the Company may in its absolute discretion pay the payment in
      lieu of notice in equal monthly instalments in arrears on the dates on
      which the Executive's salary and benefits as would usuaily have been paid
      and if the Company elects to make such payment by instalments, the
      Executive's entitlement shall cease immediately on the date on which the
      Executive accepts an offer of alternative employment or engagement and the
      Executive shall as soon as reasonably practicable notify the Company in
      writing of any such acceptance. For the avoidance of doubt, the right of
      the Company to make a payment in lieu of notice, whether as a lump sum or
      by way of instalments does not give rise to any right of the Executive to
      receive such a payment or payments.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              14.3  

            	
              The
      employment of the Executive may be terminated by the Company with
      immediate effect without payment in lieu of notice if the
      Executive:-

            

    

    

    
      	
              14.3.1  

            	
              commits
      any serious breach or non observance of any of his duties hereunder or
      otherwise as an Executive of the Company or any Associated Company;
      or

            

    

    

    
      	
              14.3.2  

            	
              commits,
      (after warning) any persistent or continued breach or non-observance of
      any of his duties hereunder or otherwise as an Executive of the Company or
      any Associated Company; or

            

    

    

    
      	
              14.3.3  

            	
              is
      guilty of any negligence, gross misconduct or dishonesty in connection
      with or affecting the business or affairs of the Company or any Associated
      Company for which the Executive is required to perform duties; or
      i

            

    

    

    
      	
              14.3.4  

            	
              s
      guilty of conduct which in the reasonable opinion of the Board brings or
      is likely to bring the Executive, the Company or any Associated Company
      into disrepute; or

            

    

    

    
      	
              14.3.5  

            	
              is
      convicted of an arrestable offence other than a road traffic offence for
      which a non-custodial penalty is imposed;
or

            

    

    

    
      	
              14.3.6  

            	
              becomes
      bankrupt or makes any arrangement or composition with his creditors
      generally or has an interim order made against him pursuant to section 252
      of the Insolvency Act 1986; or

            

    

    

    
      	
              14.3.7  

            	
              causes
      any agreement entered into by the Company or any Associated Company
      relating to the provision of the Executive's services to be terminated
      without notice by any other party to such agreement;
  or

            

    

    

    
      	
              14.3.8  

            	
              in
      the reasonable opinion of the Company becomes incapable by reason of
      mental disorder of discharging his duties;
or

            

    

    

    
      	
              14.3.9  

            	
              is
      or becomes prohibited by an applicable law or regulation from being a
      director of the Company or Associated Company or from performing any of
      his duties, is removed from office pursuant to the Company's articles of
      association (unless the removal is caused by sickness or injury other than
      mental disorder) or (except at the request of the Company) the Executive
      resigns as a director; or

            

    

    

    
      	
              14.3.10  

            	
              or
      in any other circumstances where the Company may legally terminate the
      directorship of the Executive;

            

    

    

    
      	
              14.3.11  

            	
              is
      guilty of any breach or non observance of any code of conduct, rule or
      regulation referred to in Clause 3.1.6 or fails or ceases to be registered
      with or authorised by (where such registration or authorisation is, in the
      opinion of the Board, required for the performance of his duties) any
      regulatory body in the United Kingdom or
  elsewhere.

            

    

    

    
      	
              14.4  

            	
              The
      employment of the Executive shall terminate automatically and without
      prior notice upon the Executive attaining the age of 60., unless extended
      by the Parties.

            

    

    

    
      	
              14.5  

            	
              Upon
      termination of the Executive's employment for whatever
    reason:

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              14.5.1  

            	
              the
      Executive shall not take away, conceal or destroy but shall immediately
      deliver up to the Company all Records and Confidential Information in
      accordance with Clause 11.3;

            

    

    

    
      	
              14.5.2  

            	
              the
      Executive shall not at any time thereafter make any untrue or misleading
      oral or written statement concerning the business or affairs of the
      Company or any Associated Company nor represent himself nor permit himself
      to be held out as being in any way connected with or interested in the
      business or affairs of the Company or any Associated Company (except as a
      former employee for the purpose of communications with prospective
      employers or complying with any applicable statutory requirements);
      and

            

    

    

    
      	
              14.5.3  

            	
              the
      Executive shall immediately repay all outstanding debts or loans due to
      the Company or any Associated Company and the Company is hereby authorised
      to deduct from any wages (as defined in Part II of the Employment Rights
      Act 1996) of the Executive a sum equal to any such debts or loans together
      with any interest thereon as appropriate;
and

            

    

    

    
      	
              14.5.4  

            	
              the
      Executive shall upon request by the Company immediately resign from his
      office as a director of the Company and from all other offices and
      appointments held by the Executive in or on behalf of the Company or any
      Associated Company in each case without compensation for loss of
      office.

            

    

    

    
      	
              14.6  

            	
              Any
      rights or obligations of the Executive, the Company or any Associated
      Company under this Agreement which are expressed to continue or are
      capable of continuing after the date of termination of his employment
      shall continue in full force and effect notwithstanding the termination of
      the Executive's employment.

            

    

    

    
      	
              15.  

            	
              CORPORATE
CHANGE

            

    

    

    
      	
              15.1  

            	
              Save
      as otherwise provided for in the Bell Microproducts Inc Management
      Retention Agreement, if the employment of the Executive is terminated by
      reason of the liquidation of the Company for the purpose of reconstruction
      or amalgamation or as part of any arrangement for the amalgamation or
      reconstruction of the Company not involving liquidation and the Executive
      is offered employment with any concern or undertaking resulting from this
      reconstruction or amalgamation on terms and conditions which taken as a
      whole are not less favourable than the terms of this Agreement (and which
      protect the Executive's continuity of employment) and the Executive
      unreasonably refuses such an offer then the Executive shall have no claim
      against the Company in respect of such
  termination.

            

    

    

    
      	
              16.  

            	
              DISCIPLINARY AND GRIEVANCE
      PROCEDURES

            

    

    

    
      	
              16.1  

            	
              There
      is no formal disciplinary procedure applicable to the Executive's
      employment, although the Company shall adopt any statutory disciplinary
      procedure in force. The Executive shall be expected to maintain the
      highest standards of integrity and
behaviour.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              16.2  

            	
              The
      Company shall be entitled, in order to investigate any complaint made
      against the Executive, to suspend the Executive on full pay for so long as
      may be necessary to carry out a proper investigation and hold a
      disciplinary hearing.

            

    

    

    
      	
              16.3  

            	
              If
      the Executive is not satisfied with any disciplinary decision taken in
      relation to him, he may apply in writing (within five working days of the
      decision being notified to him) to the President of Bell Microproducts Inc
      whose decision shall be final.

            

    

    

    
      	
              16.4  

            	
              If
      the Executive has any grievance in relation to his employment he may raise
      it in writing with the President of Bell Microproducts Inc whose decision
      shall be final.

            

    

    

    
      	
              16.5  

            	
              For
      the avoidance of doubt the disciplinary rules and procedures, grievance
      and appeal procedures adopted by the Company or notified to the Executive
      will not form part of the Executive's contract, except as may be required
      by law.

            

    

    

    
      	
              17.  

            	
              USE OF ELECTRONIC
      COMMUNICATIONS

            

    

    

    
      	
              17.1  

            	
              The
      Executive shall have access to the Company's email, internet and telephone
      systems, mobile telephone and other forms of electronic communication for
      the better performance of his duties provided that the Executive shall not
      send any emails of a defamatory or abusive nature or which constitute
      sexual, racial or any other form of harassment and he shall be prohibited
      from downloading any sexually explicit, pornographic or other offensive
      material and the Executive indemnifies the Company during and after the
      Term against all liability arising from the Executive's breach of this
      sub-clause.

            

    

    

    
      	
              17.2  

            	
              The
      Company reserves the right to monitor all electronic communications sent
      and received by the Executive and to monitor the Executive's internet
      access, including, as appropriate, the right to open attachments to
      business and if appropriate other emails and any files or other material
      downloaded from the internet during and outside office hours and whether
      for personal or company use. This Clause is without prejudice to the
      Executive's obligations under Clause 18 (Data
  Protection).

            

    

    

    
      	
              18.  

            	
              DATA
PROTECTION

            

    

    

    
      	
              18.1  

            	
              For
      the purposes of complying with the Data Protection Act 1998 the Executive
      agrees to provide the Company or any Associated Company with any personal
      data and sensitive personal data relating to him that either may request
      and he further consents to the holding and processing (in manual,
      electronic or any other form) of such data by the Company and/or any
      Associated Company and/or any agent or third party nominated by the
      Company and bound by a duty of confidentiality, for the purpose
      of:

            

    

    

    
      	
              18.1.1  

            	
              employee
      related administration;

            

    

    

    
      	
              18.1.2  

            	
              processing
      his file and management of its
business;

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              18.1.3  

            	
              compliance
      with applicable procedures, laws and
  regulations;

            

    

    

    
      	
              18.1.4  

            	
              providing
      data to extemal suppliers for the provision and administration of his
      remuneration and any benefits
and/or

            

    

    

    
      	
              18.1.5  

            	
              to
      evaluate the efficiency of the Company's and any Associated Companies'
      business systems.

            

    

    

    
      	
              19.  

            	
              NOTICES

            

    

    

    
      	
              19.1  

            	
              Notices
      to be given to either party under this Agreement shall be given in writing
      by hand or by post addressed, in the case of the Company, to its
      registered office for the time being marked for the attention of the Chief
      Executive or, in the case of the Executive, to his last known
      address.

            

    

    

    
      	
              19.2  

            	
              Any
      such notice sent by post shall be deemed (in the absence of evidence of
      earlier receipt) to have been received 2 days after posting (6 days if
      sent by air mail) and in proving the time such notice was sent it shall be
      sufficient to show that the envelope containing it was properly addressed,
      stamped and posted and any such notice delivered personally shall be
      deemed to have been given at the time of such
  delivery.

            

    

    

    
      	
              20.  

            	
              FORMER SERVICE
  AGREEMENTS

            

    

    

    
      	
              20.1  

            	
              This
      Agreement supersedes all previous agreements and arrangements whether
      written, oral or implied (if any) relating to the employment of the
      Executive (such agreements and arrangements (if any) shall be deemed to
      have been terminated by mutual consent as and with effect from the
      commencement of the Term) and this Agreement sets out the entire agreement
      of the parties in relation to the Executive's
  employment.

            

    

    

    
      	
              21.  

            	
              POWER OF
ATTORNEY

            

    

    

    
      	
              21.1  

            	
              The
      Executive hereby irrevocably and by way of security grants to the Company
      (with power for the Company to grant a separate power to any Associated
      Company on behalf of the Executive) power of attorney on behalf of the
      Executive to sign all such documents, execute all such deeds and do or
      refrain from doing all such things as the Company exercising the power or
      such concurrent power may in its entire unfettered discretion consider
      appropriate convenient or necessary in any part of the world for the
      purposes of fulfilling the Executive's obligations under this Agreement.
      The Executive shall grant such separate powers of attorney in such form or
      forms as the Company (or the relevant Associated Company) may reasonably
      require for such purposes, and the power granted by this Clause shall
      empower the attorney to grant such further powers in the name and on
      behalf of the Executive.

            

    

    

    
      	
              21.2  

            	
              Notwithstanding
      the foregoing and merely as a matter between the Company (or the relevant
      Associated Company) and the Executive, the powers granted by the Executive
      under this Clause shall not be used except with the consent of the
      Executive or following the failure of the Executive to sign or execute the
      relevant document or to do or refrain from doing the relevant act
      forthwith upon request made to the Executive in writing, and no -party
      dealing with the power of attorney shall be concerned as to whether the
      procedure of this Clause shall have been
  followed.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              22.  

            	
              MISCELLANEOUS

            

    

    

    
      	
              22.1  

            	
              The
      Executive acknowledges that any breach by him of any of the terms of
      Clauses 10, 12 and 13 of this Agreement may inflict irreparable damage to
      the Confidential Information and/or Intellectual Property referred to in
      those Clauses and entitle the Company or an Associated Company to an
      injunction as well as to damages, costs and other
  relief.

            

    

    

    
      	
              22.2  

            	
              The
      failure to exercise or delay in exercising a right or remedy under this
      Agreement shall not constitute a waiver or right or remedy or a waiver of
      any other rights or remedies and no single or partial exercise of any
      right or remedy under this Agreement shall prevent any further exercise of
      the right or remedy or the exercise of any other right or
      remedy.

            

    

    

    
      	
              22.3  

            	
              In the event of any
      Clause or sub-clause or parts thereof contained in this Agreement being
      held invalid or unenforceable by any judicial, arbitral, regulatory or
      other authority of competent jurisdiction all other Clauses or subclauses
      or parts thereof contained in this Agreement shall remain in full force
      and effect to the fullest extent permitted by law and (subject as
      aforesaid) shall not be affected
thereby.

            

    

    

    
      	
              23.  

            	
              GOVERNING LAW AND
      JURISDICTION

            

    

    

    This
Agreement shall be governed by and construed in all respects in accordance with
English law and each of the parties hereto submit to the jurisdiction of the
Courts of England and Wales.

    

    
      
        	
                SIGNED as a DEED by

              	
                )

              	 
      
	
                IDEAL
      HARDWARE LIMITED

              	
                )

              	 
      
	
                acting
      by:-

              	
                )

              	 
      
	 
      	 
      	 
      
	
                /s/
      James E. Illson

              	 
      	 
      
	
                Director

              	 
      	 
      
	 
      	 
      	 
      
	
                /s/
      W. Donald Bell

              	 
      	 
      
	
                Director
      Secretary

              	 
      	 
      

      

      

      
        	
                SIGNED as a DEED by the
      said

              	
                )

              	 
      
	
                GRAEME
      WATT

              	
                )

              	
                /s/
      Graeme Watt

              
	
                acting
      by:-

              	 
      	 
      
	 
      	 
      	 
      
	
                Witness
      signature

              	 
      	
                /s/
      Daniel Howard

              
	 
      	 
      	 
      
	
                Witness
      Name:

              	 
      	
                Daniel
      Howard

              
	
                Witness
      Address:

              	 
      	
                16
      Bedford Street London WC2 9HF

              
	
                Witness
      Occupation

              	 
      	
                Trainee
      Solicitor

              

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE 1 –BONUS

    

    
      	
              1.  

            	
              In
      addition to the remuneration payable to the Executive pursuant to Clause
      6.1, the Executive shall be eligible to receive a bonus under the Bell
      Microproducts Inc. Management Incentive Plan ("MIP Bonus") for the
      Company's fmancial year, namely the relevant 12 month fmancial period from
      January to December (the "Bonus
Year").

            

    

    

    
      	
              2.  

            	
              The
      Executive's amount of MIP Bonus (if any) in any Bonus Year will be subject
      to the financial performance of Bell Microproducts, Europe and
      accomplishment of the Executive's individual objectives as determined by
      the Board and notified to the Executive from time to time ("MIP
      Targets").

            

    

    

    
      	
              3.  

            	
              If
      the Executive achieves 100% of the agreed MIP Targets, the Executive shall
      receive a MIP Bonus of £142,500 in that Bonus Year. At the discretion of
      the Bell Microproducts, Inc. board of directors, Executive may be paid up
      to 200% of his MIP Bonus for performance that is above the MIP
      Targets.

            

    

    

    
      	
              4.  

            	
              For
      each of the first three quarters ofthe year, Executive will be eligible to
      be paid a portion of his MIP Bonus to a maximum of to 25% of his annual
      MIP Bonus, based on performance against his quarterly MIP Targets, with
      the first three quarterly MIP Bonus payments being an advance of the full
      year's MIP Bonus.  Each quarter's MIP Bonus shall be paid to the
      Executive following the quarterly financial audit and close of the
      relevant quarter and approval of the Bell Microproducts Inc board of
      directors. The full year's MIP Bonus will be determined at the end of the
      Bonus Year, and after the financial audit and close of the relevant Bonus
      Year and approval of the Bell Microproducts Inc board of
      directors.

            

    

    

    
      	
              5.  

            	
              During
      the first year of the Executive's employment, the Executive shall receive
      a MIP Bonus pro-rated from the Commencement Date to 31 December 2004. In
      addition, during the period to 31 December 2004 the Executive will receive
      the following minimum guaranteed MIP Bonus
  payments:

            

    

    

    
      	
              for
      the period 1 April 2004 to 30 June 2004

            	 	£	35,625	 
	
              for
      the period 1 July 2004 to 30 September 2004

            	 	£	17,813	 
	
              for
      the period 1 October 2004 to 31 December 2004

            	 	£	17,813	 

    

    

    
      	
              6.  

            	
              In
      the event that the Executive's employment with the Company terminates,
      either by the Executive electing to terminate his employment (other than
      for constructive dismissal) or by the Company in accordance with
      sub-clause 14.3, then the Executive shall forfeit and waive any
      entitlement to the right to claim any part of the MIP Bonus Year's MIP
      Bonus not paid. In all other situations, subject to the terms of the Bell
      Microproducts Inc. Management Incentive Plan, the Executive shall be
      entitled to a MIP Bonus in respect of the quarter his employment
      terminates pro-rated in the up to the date of termination of the
      Executive's employment.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE 2 - CONFIDENTIAL
INFORMATION

    

    The
following is a non-exhaustive list of matters which in relation to the Company
or any Associated Company are considered by the Company or any Associated
Company to be confidential and the Executive hereby agrees such matters are
confidential:

    

    
      	
              1.  

            	
              all
      trade secrets of the Company or Associated
  Company;

            

    

    

    
      	
              2.  

            	
              any
      and all information relating to prices, discounts, mark-ups, marketing,
      future business strategy, tenders and any price-sensitive information of
      the Company or any Associated
Company;

            

    

    

    
      	
              3.  

            	
              any
      and all customer lists, supplier lists, details of contracts with or
      requirements of customers and suppliers, and any details relating to
      information on the Company or any Associated Company's
      database;

            

    

    

    
      	
              4.  

            	
              any
      and all details about the Company or any Associated Company's products,
      publications, processes, technologies, inventions, analysis or
      research;

            

    

    

    
      	
              5.  

            	
              any
      and all information relating to any computer software (both source code
      and object code) and other Intellectual Property of the Company or any
      Associated Company;

            

    

    

    
      	
              6.  

            	
              any
      and all technical data, know-how, information or operations manuals of the
      Company or any Associated Company;
and/or

            

    

    

    
      	
              7.  

            	
              any
      and all information in respect of which the Company or any Associated
      Company is bound by an express or implied obligation of confidence to any
      third party.

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