Exhibit 10.19

 

GTSI

 

2005 EXECUTIVE INCENTIVE COMPENSATION PLAN

 

I.  Introduction

 

The 2005 Executive Incentive Compensation Plan, (“the Executive Plan” or the
“Plan”), seeks to motivate and reward Executive employees for helping GTSI
achieve and exceed its 2005 sales, financial and strategic goals. The Executive
Plan focuses attention on specific performance measures that lead to increased
net profit and shareholder value.

 

The provisions in this Plan apply to employees in Executive positions who are
eligible for only this incentive Plan, which occur during the term of the Plan
year, which begins January 1, 2005 and extends through December 31, 2005.

 

For calendar year 2005, there will be four measurement periods corresponding to
the four (4) calendar quarters.    Each measurement period will be evaluated
separately against the respective plan Earnings Before Tax (“EBT”) objective.

 

II.  Eligibility & Participation

 

Participation in this Plan is limited to Executive employees.  Participants
generally hold one of the following titles:  CEO, Senior Vice President, Group
Vice President and Vice President.  The Compensation Committee of the Board of
Directors specifically approves these employees for participation.  Participants
in the Executive Plan are excluded from participating in other GTSI annual
cash-based incentive plans (outside of the LTIP and stock).

 

Employees hired during the year will be eligible for a pro-rated incentive
starting on their date of hire.  Part-time employees are eligible for a
pro-rated incentive based on their scheduled time as a percent of a full-time
schedule.  Those employees who transfer or are promoted from one position to
another are eligible for pro-rated incentives for both their new position and
prior position.

 

Eligibility for participation and receipt of compensation under the Plan are
expressly conditioned upon strict compliance with GTSI’s policies and procedures
regarding ethical business conduct, appropriate business practice, and proper
handling of contacts with customer and government representatives, vendors,
agents, brokers and other intermediaries.  GTSI has full authority to cancel
incentive compensation eligibility if, in its sole discretion, it finds
noncompliance with such policies and procedures.

 

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III. Total Compensation

 

All Plan participants will receive a base salary and an incentive. The target
incentive is usually expressed as a percent of the participant’s base salary.  
In these cases, GTSI will calculate the target incentive amount by applying the
target incentive percent to the base salary in effect as of the beginning of the
designated period.

 

IV.  Target Incentive

 

Target incentive, which is expressed as a fixed dollar amount, is the amount
earned for achieving 100% in all of the assigned incentive categories.  For
employees who are participating in the Plan for a partial year, the target
incentive amount is calculated by pro-rating the target incentive by the number
of months they are eligible as defined in Section II.  Any increases in base
salary received during the year will be reflected in the target for the next
designated period.

 

The annual target incentives for the following positions are defined as follows:

 

Position

 

Annual Target Incentive as a
Percentage of Base Salary

 

 

 

 

 

Chairman & CEO

 

100%
(80% EBT; 20% MBO)

 

 

 

 

 

Sr. Vice President/CFO

 

40 – 50%

 

 

 

 

 

Group Vice President Sales and Vice President Sales

 

40% - 70%
(at least 50% EBT with remainder
based on MBO)

 

 

V.  Incentive Categories & Weighting

 

Participants are evaluated on attainment of defined objectives, on a
period-by-period non-cumulative basis.

 

The following percentage applies for each designated period:

 

January – March

1/6th of the annual payout

April – June

1/6th of the annual payout

July – September

1/3rd of the annual payout

October – December

1/3rd of the annual payout

 

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Over-achievement on the Executive Plan will yield a payout that is higher than
the target incentive amount.  Conversely, underachievement will deliver a payout
that is less than the target incentive amount.

 

At the end of each calculating period, the incentive amount earned for the
Executive Plan will be the period’s achievement; interpolating the payout
percent from the appropriate schedule and multiplying the result by the
category’s target incentive amount.  The resulting payout will be rounded to the
nearest dollar.

 

In the event of unusual nonrecurring events, GTSI may, at its sole discretion,
adjust the incentive schedule to reflect more accurately the contributions of
participants in the Plan.

 

COMPANY FINANCIAL GOALS (EBT)

•                  Earnings before Tax (consistent with GAAP accounting)

 

The Compensation Committee of the GTSI’s Board of Directors establishes the
Company’s EBT goals and the attainment range/minimum and maximum payment levels.

 

VI. Incentive Calculation for Achievement of Company Financial Goals  – EBT

 

The 2005 Executive Plan has four (4) designated periods.  Each period is
independent of the other and each period has three unique Company Financial Goal
(EBT) achievement thresholds.  These thresholds represent (a) the entry point
into the Plan; (b) 100% achievement of Plan; and (c) maximum payout of the
Plan.  The range of achievement from entry to maximum payout is 0% to 200%
payout of the Participant’s target incentive.

 

VII.  Administration

 

All incentive compensation earned under this Plan will be credited and scheduled
to be paid within 45 days after the close of the quarter.

 

A participant must be an active employee as of the payment date to be eligible
for payout under this plan.  The Plan is administered by the Vice President,
Human Resources in coordination with Finance and the various department leaders,
subject to approval by the CEO.

 

VIII.  Payment Terms Upon Separation of Employment or due to Death or Disability

 

Participants whose employment ends because of death or disability after
completion of a designated period, but before payment, shall remain eligible for
any incentive otherwise due for the designated period.   GTSI shall make such
determination of the applicability of this provision, in its sole discretion.

 

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X.  General Conditions

 

Participants who are on a performance improvement plan (PIP) at any time during
a designated period are not eligible for an incentive payment for performance
during such period (s).

 

All employees of the Company are employed in an “at will” capacity which means
that either the employee or the Company may terminate the relationship at any
time with the understanding that neither party has the obligation to base that
decision on any reason other than their intent not to continue the employment
relationship.  Nothing in this Plan shall in any way diminish or limit the
Company’s right to terminate the employment of any employee at will at any time,
in its sole discretion.

 

If any GTSI employee disputes any aspect of this Plan or any GTSI decision with
respect to any incentive received under this Plan, the employee must submit
written notice of the dispute to the direct supervisor within four months after
the employee’s receipt of the applicable payment.  Failure to do so will
constitute a waiver by the employee of any such complaint or claim.

 

GTSI reserves the right to revise any of the provisions of this Plan or to
terminate the Plan itself at anytime during the year, without prior notice.  In
any such case, GTSI will distribute the revisions or notice of termination to
affected employees.

 

The issuance of this Plan does not, in any way, commit GTSI to pay a similar
kind of compensation in any subsequent year.  GTSI may eliminate or reduce
incentive compensation at any time during the year, without prior notice
provided that payment is made for the period prior to the effective date of the
change and the Plan participants are notified in writing.

 

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