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): February 17, 2010

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)
	408-451-9400
	Registrant’s telephone number, including area code:
	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 (see General Instruction A.2. below):

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 February 17, 2010, the Compensation Committee (the “Committee”) of the Board of Directors of Bell Microproducts Inc. (the “Company”) adopted the 2010 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 if the Company achieves a predetermined threshold in one or more of the following areas: earnings per share, net income, pretax profit, operating contribution, operating income, return on equity, return on invested capital, or return on working capital, and the accomplishment of specific individual objectives.  The target bonus for the chief executive officer is approximately 60% of his total target cash compensation.  The target bonus for the other executive officers is between 29% and 54% of each executive officer’s total target cash compensation.  No financial-based bonus will be paid to any Officer who does not achieve at least the minimum threshold associated with the financial-related goals assigned.  In the event the Company exceeds the financial-related goals assigned, the Officer would be eligible to receive a maximum of 200% of his total target bonus tied to such financial-related goals, depending on actual performance achieved.

Following the end of each half of the fiscal year, the Company will compare the financial performance with the financial plan and each eligible Officer will be paid that portion of his annual target incentive related to financial-related goals earned in that time period.  The total target incentive related to financial-related goals for each Officer is allocated 40% to the first half of the fiscal year and 60% to the second half of the fiscal year.  In addition, following the end of the year, the Committee will review the accomplishments of each Officer against his specific individual objectives.

The foregoing is qualified in its entirety by reference to the full text of the Plan, which is filed as Exhibit 10.1 to this report and incorporated herein by this reference.

Item 9.01. Financial Statements and Exhibits.

(d)           Exhibits

Exhibit 10.1                      Bell Microproducts Inc. Management Incentive Plan Description for 2010

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.
February 19, 2010	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 Description for 2010

EX-10.1

Bell Microproducts Inc.

Management Incentive Plan Description

Year 2010

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 half of the year based on the Annual Operating Plan.  The goals for the second half of the year 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 elements:

Earnings Per Share (EPS), Net Income, Pretax Profit (PTP), Operating Contribution, Operating Income, Return on Equity (ROE), Return on Invested Capital (ROIC), Return on Working Capital (ROWC), and Individual Objectives (short-term tactical MBOs as well as objectives based on strategic initiatives).  At the discretion of the Committee, these financial metrics may include non-cash and other adjustments.

Note:

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

·   ROIC is derived by dividing business unit pretax profit into Bell Micro’s investment/intercompany 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 dividing business unit pretax profit into working capital (A/R + Inventory – AP).

3.   First Half Plan and Second Half Plan

For 2010, the Plan consists of a stand alone First Half Plan based on financial performance and a stand alone Second Half Plan based on financial performance, as well as annual objectives or “MBOs,” as follows:

a.      First Half Plan

After the close of the first half of the fiscal year, financial performance for the first half will be compared to the financial goals for the first half to determine the amount of incentive each participant earned in the first half.  In calculating the amount of incentive earned, the payment calculation schedule shown in Paragraph 4 below shall be used.  Incentive payments require the review and approval of the Committee prior to payment.

b.      Second Half Plan

After the close of the second half of the fiscal year, financial performance for the second half will be compared to the financial goals for the second half to determine the amount of incentive each participant earned in the second half.  In calculating the amount of incentive earned, the payment calculation schedule shown in Paragraph 4 below shall be used.  Incentive payments require the review and approval of the Committee prior to payment.

The amount of target incentive applied to each half of the year will generally be the same as the ratio set forth in the Annual Operating Plan for projected corporate profit in each half of the fiscal year.

c.      MBOs

At the beginning of each year, each participant in the Plan shall submit in writing to their manager, four to six MBOs, and as directed by the Compensation Committee, additional MBOs based on strategic initiatives.  The MBOs represent business priorities for the year.  The MBOs shall be approved 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 necessary to accomplish MBOs will generally span several quarters, payment of the MBO-based incentive will be made on an annual basis.  After the close of the year, each participant shall review their approved MBOs and submit in writing to their manager an evaluation of their performance of each MBO.  The Chief Executive Officer shall approve or change the recommended achievement level for each MBO and communicate this to the Committee.  The achievement level for the MBOs of the Chief Executive Officer shall be reviewed and approved by the Committee.  Payment for MBO performance of all participants requires the review and approval of the Committee prior to payment.

4.  Payment Calculation Schedule

Payout of incentives for profit and other financial goals is based on the following metric:

Plan Achievement	Incentive Earned
< Tier 1	0%
At Tier 1	50%
At Tier  2	100%
150% or more of Tier 2	200%

 Use straight-line interpolation between metrics

Definitions

Tier I: The minimal acceptable level of performance for bonus eligibility.  If Tier I is achieved, 50% of the target incentive applicable to this performance metric will be paid.

Tier II: If Tier II is achieved, 100% of the target incentive applicable to this performance metric will be paid.

5.   The target incentive for individuals who become participants in the Plan after the start of the fiscal year will be prorated for the period of time the individual is a Plan participant.

6.   Participants must be employees of the Company on the date incentives are paid to be eligible for payments under the Plan.

7.   The Committee, 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; guaranteeing achievement under the Plan for one or more participants; in the event of a significant overachievement of goals, adjusting payouts to prevent unwarranted “windfalls;” and making other changes in the Plan or Plan targets that are in the best interests of the Company.

8.   In the event that the Company issues a material restatement of its financial statements upon which payments under the Plan were based, the Company, at the discretion of the Committee, may require participants in the Plan to repay any amounts that would not have otherwise been earned, or will pay additional amounts to participants if such additional amounts would had been earned, as determined using the restated financial statements.

9.   In the event that the Company raises new equity funds during the year, thereby eliminating or reducing interest expense, the Plan may be adjusted accordingly.

10.   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.

11.   The Company, in its sole discretion has the authority to make incentive payments in cash, restricted stock units, or a combination thereof.