8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): January 21, 2008

Bell Microproducts Inc.

(Exact name of registrant as specified in its charter)

California	0-21528	94-3057566
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
1941 Ringwood Avenue, San Jose, California		95131-1721
(Address of principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code:		408-451-9400

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
	Item 9.01 Financial Statements and Exhibits.
SIGNATURES
Exhibit Index
EXHIBIT 10.1

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

          On January 21, 2008, the compensation committee (the “Compensation Committee”) of the board of directors of Bell Microproducts Inc. (the “Company”) adopted the 2008 Management Incentive Plan (the “Plan”). The Company’s executive officers, including the chief executive officer (collectively, the “Officers”) and others, are eligible to participate in the Plan. The Officers are eligible for a bonus payment upon the Company achieving a predetermined threshold in one or more of the following areas: earnings per share, net income, pretax profit, operating contribution, return on equity, return on invested capital, return on working capital, and accomplishment of specific individual objectives. The target bonus for the chief executive officer is approximately 50% of his total target cash compensation. The target bonus for the executive officers, other than the chief executive officer, is between 29% and 40% of each executive officer’s total target cash compensation. No bonus will be paid out to any Officer who does not meet at least 80% of the financial-related goals stated above. In the event any Officer meets or exceeds 150% of the financial-related goals stated above, such Officer would be eligible to receive a maximum of 200% of his total target bonus tied to such financial-related goals.

          In addition, for the first half of 2008, the Company has established goals to substantially exceed its profit plan for this period. To support this goal, the Compensation Committee had authorized an additional bonus opportunity for Mr. James Illson, Chief Operating Officer and President of the Americas and Mr. Graeme Watt, President of Bell Microproducts Europe.

          At the end of each fiscal quarter, the Company will compare the financial performance with the financial plan and each eligible Officer will be paid a portion of his annual incentive, except that no quarterly payments will be made for achievements of over 100% of the Plan until the end of the fiscal year. The amount to be paid in each quarter is 20% for the first and second quarters of 2008 and 30% for the third and fourth quarters of 2008. After the close and audit of the year, the Company will compare the financial performance of the year with the financial plan and will also review the accomplishments of each Officer against his specific individual objectives. Upon approval by the Compensation Committee, the Company will pay each eligible Officer the total incentive earned for the year, less the quarterly amounts previously paid.

          A copy of the Plan is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits:

Exhibit 10.1 — Bell Microproducts Inc. Management Incentive Plan Year 2008.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Bell Microproducts Inc.
January 25, 2008	By:	/s/ Andrew S. Hughes
		Name:	Andrew S. Hughes
		Title:	Vice President, General Counsel and Corporate Secretary

Exhibit Index

Exhibit No.	Description
10.1	Bell Microproducts Inc. Management Incentive Plan Year 2008.

EX-10.1

Exhibit 10.1

Bell Microproducts Inc.
Management Incentive Plan
Year 2008

The Management Incentive Plan (the “Plan”) is established to provide the Chief Executive Officer, other executive officers, and division heads of Bell Microproducts Inc. (the “Company”) with a financial incentive to meet and exceed financial and other objectives. The following is a description of the Plan.

1.	Participation: The Compensation Committee of the Board of Directors (the “Committee”), upon the recommendation of the Chief Executive Officer, is responsible to designate participants in the Plan, approve Plan goals, establish target incentives and approve Plan payouts.
2.	Performance Targets: Performance goals are established at the beginning of the year for the first and second fiscal quarters based on the Annual Operation Plan. The goals for third and fourth fiscal quarters will be established at the beginning of the second half of the fiscal year. The goals will consist of one or more of the following:

a.	Earnings per Share, Net Income, Pretax Profit (“PTP”) or Operating Contribution.
b.	Return on Equity (“ROE”), Return on Invested Capital (“ROIC”), or Return on Working Capital (“ROWC”)
c.	Individual Objectives (“MBOs”).

Note:

• ROE is derived by dividing net income for the accounting period by common shareholder equity.

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

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

3. Payment of Incentives:

a. Quarterly Advance Payments
At the end of each fiscal quarter following the financial audit, the financial performance for the quarter will be compared to the financial plan for the quarter and participants will be paid an advance of their annual incentive based on the payment schedule shown in paragraph 3c below, except that there shall be no advance payments for achievement above 100% of the Plan. Incentives will be paid after quarter end financial results are finalized and the Committee has approved the payments. The amount of target incentive assigned to each quarter is generally based on the amount of planned corporate profit for each quarter. For 2008, the amount

Management Incentive Plan Description
Year 2008
Page 2

assigned to each quarter is: first quarter: 20%, second quarter: 20%, third quarter: 30% and fourth quarter: 30%.

b.

Year End Payments After the financial close and audit of the year, financial performance for the year will be compared to the financial plan for the year (the sum of the financial targets for first, second, third and fourth quarters) to determine the amount of incentive each participant earned due to financial performance. In addition, the accomplishments of each participant’s individual MBOs will be reviewed to determine the amount of incentive earned for MBO accomplishment. The total incentive earned for the year (for financial performance and MBO performance), less the amount of quarterly advances, will be paid following approval of the Committee.

c.

Payout of incentives for financial goals is based on the following:

% Of Plan Achieved	% Of Incentive Earned
<80%	0%
80%	50%
100%	100%
150%	200%
>150%	200%

Use straight-line interpolation between metrics

d.	Objectives (MBOs):
	Objectives must be in writing and approved at the beginning of the year by the Chief Executive Officer. The objectives for the Chief Executive Officer shall be approved by the Committee. The written objectives must include a statement of the objective, the delivery date and the expected result (i.e., a definition of how the accomplishment is to be measured). If there is more than one objective, each will be weighted equally, unless the objective states otherwise.
	Because the actions taken to accomplish most objectives will generally span several quarters, payment of the incentive is made on an annual basis.

4.	The target incentive for Plan participants who become participants after the start of the fiscal year will be prorated for the period of time as a participant.
5.	Participants must be employees of the Company on the date incentives are paid to be eligible for the quarterly or year-end Plan payments.
6.	The Company, in its sole discretion, has the authority to change the Plan at any time, including but not limited to, increasing incentive payouts above target in the event of superior performance, in the event of significant over-achievement of goals, adjusting payouts to prevent unwarranted “windfalls,” and make other changes in the Plan or Plan targets that are in the best interests of the Company.

Management Incentive Plan Description
Year 2008
Page 3

7.	In the event that the Company raises new equity funds during the year, thereby eliminating interest charges, the financial plan may be adjusted accordingly.
8.	In the event of an acquisition or divestiture, the Committee will make a determination as to the impact on the financial plan and may modify the Plan accordingly.
9.	The Company, in its sole discretion has the authority to make incentive payments in cash, restricted stock units or a combination thereof.