Exhibit 10.2
GTSI CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (“Agreement”) is entered into as of
September 1, 2009 (the “Effective Date”), by and between William Weber
(“Executive”) and GTSI Corp., a Delaware corporation (the “Company” or “GTSI”).
RECITALS
R1. The Company may from time to time consider the possibility of being acquired
or otherwise controlled by another individual or entity. The Company’s board of
directors (the “Board”) recognizes that such consideration can be a distraction
to Executive and can cause Executive to consider alternative employment
opportunities. The Board has determined that it is in the best interests of the
Company and its stockholders to assure that the Company will have Executive’s
continued dedication and objectivity, notwithstanding the possibility, threat or
occurrence of a Change of Control (as defined below).
R2. The Board believes that it is imperative, without changing the nature of the
at-will employment relationship between Executive and GTSI, to provide Executive
upon a Change of Control event with reasonable financial security and incentive
and encouragement to remain employed by the Company’s employment notwithstanding
the possibility of a Change of Control.
NOW, THEREFORE, in consideration of the mutual promises contained herein, and
for good and valuable other consideration, the receipt and adequacy of which is
hereby acknowledged, Executive and GTSI, each intending to be legally bound,
agree as follows:
1. Definition. The capitalized terms used but not defined in Sections 1 through
5 below shall have the meanings ascribed to them in Exhibit A.
2. Change of Control Benefits.
(a) Change of Control Event. If a Change of Control occurs while Executive is
employed by the Company on a full time basis, the following, subject to the
terms and conditions hereof, shall apply:
(i) Accelerated Vesting. On the date that the Change of Control occurs, any
unvested stock awards, whether in the form of restricted stock, stock settled
appreciation rights, stock options, or any other form of unvested stock awards
granted by Company to Executive shall become immediately vested and exercisable
as to the number of shares that would have otherwise vested before the fifth
anniversary of the date of the Change of Control had Executive remained employed
by Company during such period.

 

 

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(ii) Employment Termination. If (x) Executive’s employment with the Company is
terminated by the Company without Cause during the Change of Control Period or
(y) Executive resigns as an employee of the Company for Good Reason during the
Change of Control Period, or events leading to Executive’s resignation for Good
Reason are effected in anticipation of a Change of Control, including an attempt
by the Company or its successor to avoid the Company’s or its successor’s
obligations under this Agreement:
(1) The Company will pay to Executive, commencing with the Company’s first
standard full payroll period after the effective date of such termination of
employment (“Termination Date”), substantially equal installments of severance
payments, subject to standard withholdings and deductions, in an aggregate
cumulative amount equal to Executive’s Total Severance Amount during the period
commencing on the Termination Date and ending on the 90th day after the first
anniversary of the Termination Date (the “15-Month Severance Period”). Such
severance installments will be payable by the Company during the 15-Month
Severance twice a month on the Company’s standard payroll schedule.
Notwithstanding the foregoing, the severance installments payable during the
first six months after the Termination Date shall not exceed two times the
maximum amount that may be taken into account under a qualified retirement plan
under Section 401(a)(7) of the Internal Revenue Code of 1986, as amended (the
“Code”), for the year in which the Termination Date occurs. Any portion of the
severance installments scheduled but not payable under this Section 2(a)(ii)(1)
during the first six months after the Termination Date because of the
immediately preceding sentence shall be paid in a lump sum with the first
severance installment due after the end of such six-month period.
(2) The Company will provide, at its expense, Executive with continued group
health insurance benefits (medical, dental and vision) for Executive and
Executive’s eligible dependents under the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended (“COBRA”), for a period ending on the
earlier of (x) the first anniversary of the Termination Date or (y) the date on
which Executive becomes gainfully employed again.
(3) Any unvested stock awards, whether in the form of restricted stock, stock
settled appreciation rights, stock options, or any other form of unvested stock
award granted by the Company to Executive shall upon the Termination Date become
immediately vested and exercisable as to the number of shares that would vest
during the 15-Month Severance. Notwithstanding the foregoing, if the Termination
Date is prior to the actual date on which the Change of Control occurs, the
exercise period for such stock awards, and all existing stock awards, shall be
extended to cover such Change of Control date.
(b) Notwithstanding anything herein to the contrary, prior to Executive having
the right to receive, and in exchange for, the severance compensation, benefits
and stock award vesting acceleration provided in Section 2(a), to which
Executive would not otherwise be entitled, Executive shall first enter into and
execute and deliver to the Company a release and obligation agreement in the
form of Exhibit B attached hereto (the “Release”) upon Executive’s termination
of employment with the Company. Unless the Release is executed by Executive and
delivered to the Company within 21 days after the Termination Date, Executive
will not be entitled to (i) any severance benefits provided under this
Agreement, (ii) acceleration, if any, of Executive’s stock awards as provided in
this Agreement and (iii) Executive’s rights in such stock awards following the
Termination Date will only be to the extent provided under their original terms
in accordance with the applicable stock option or stock incentive plan and award
agreements.

 

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3. Gross-up Payment.
(a) If it is determined that any payment or distribution by the Company to or
for the benefit of Executive in accordance with Section 2 (a “Payment”) would be
subject to the excise tax imposed by Code Section 4999, Executive will be
entitled to receive an additional payment in an amount such that, after payment
by Executive of the excise tax imposed by Code Section 4999 and regular federal
and state income taxes on the Gross-up Payment, Executive retains an amount of
the Gross-up Payment equal to the excise tax imposed upon the Payment (a
“Gross-up Payment”). Executive and the Company shall use commercially reasonable
efforts to reach mutual agreement, with advice from each party’s tax advisers,
regarding the applicable excise tax and the amount of the Gross-up Payment.
(b) Executive will, within 30 days after his receipt thereof, notify the Company
in writing of any inquiry, claim or proceeding brought by the Internal Revenue
Service, or other state or federal taxing authority, that would reasonably be
expected to result in a requirement that the Company pay the Gross-up Payment.
4. At-Will Employment.
Notwithstanding anything herein to the contrary, (a) Executive’s relationship
with the Company shall continue to be an at-will employment relationship,
(b) the Company and Executive each has the right to terminate Executive’s
employment with the Company at any time, with or without Cause, and with or
without notice, and (c) nothing herein confers upon Executive any right to
continue in the Company’s employ prior to, on or after a Change of Control
occurs or in any other way limit the Company’s rights, except as expressly
stated herein, to discharge Executive as an employee at any time prior to, on or
after the date of a Change of Control for any reason whatsoever, with or without
Cause.
5. General Provisions.
(a) Notices. Any notices provided hereunder or otherwise in respect hereof will
be in writing and will be deemed effective upon personal delivery (including,
personal delivery by facsimile transmission), the day delivery is confirmed by a
national courier, or the third day after mailing by first class mail, to the
Company at its primary office location and to Executive at his address as listed
on the Company payroll (which address may be changed by written notice).
(b) Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity or unenforceability will not affect any other provision or any other
jurisdiction, and such invalid or unenforceable provision will be reformed,
construed and enforced in such jurisdiction so as to render it valid and
enforceable consistent with the intent of the parties insofar as possible.
(c) Waiver. Any waiver of a breach of any provisions of this Agreement will not
be deemed to have waived any preceding or succeeding breach of the same or any
other provision of this Agreement.
(d) Entire Agreement; Survival. This Agreement (including Exhibits A and B)
supersedes any prior change of control agreement between the parties hereto. In
addition, this Agreement, together with Executive’s offer letter (if any), the
GTSI Non-Disclosure Agreement signed by Executive (if any) forms the complete
and exclusive statement of Executive’s employment with the Company, and will
survive any Change of Control. This Agreement is entered into without reliance
on any promise, representation, statement or agreement other than those
expressly contained or incorporated herein, and it cannot be modified or amended
except in a writing signed by Executive and another duly authorized officer of
the Company. The terms and conditions of the Company’s Director and Officers
Insurance Policy, that by their nature survive Executive’s termination of
employment with the Company, shall also survive any termination hereunder.
(e) Successors and Assigns. This Agreement is intended to bind and inure to the
benefit of and be enforceable by Executive, the Company and their respective
successors, assigns, heirs, executors and administrators, except that Executive
may not assign any of his duties or rights hereunder without the Company’s
written consent of the Company.

 

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(f) Attorneys’ Fees. If either party hereto brings any action to enforce the
rights hereunder, the prevailing party in any such action shall be entitled to
recover such party’s reasonable attorneys’ fees and costs incurred in connection
with such action.
(g) Governing Law. All questions concerning the construction, validity and
interpretation of this Agreement will be governed by the law of the Commonwealth
of Virginia as applied to contracts made and to be performed entirely within
Virginia.
(h) Construction of this Agreement and Certain Terms and Phrases.
(i) Unless the context of this Agreement otherwise requires, (1) words of any
gender include each other gender; (2) words using the singular or plural number
also include the plural or singular number, respectively; (3) the terms
“hereunder,” “hereof,” “herein,” “hereby” and derivative or similar words refer
to this entire Agreement and not to any particular provision of this Agreement;
and (4) the terms “Section” and “Exhibit” without any reference to a specified
document refer to the specified Section and Exhibit, respectively, of this
Agreement.
(ii) The words “including,” “include” and “includes” are not exclusive and shall
be deemed to be followed by the words “without limitation”; if exclusion is
intended, the word “comprising” is used instead.
(iii) The word “or” shall be construed to mean “and/or” unless the context
clearly prohibits that construction.
(iv) Whatever this Agreement refers to a number of days, such number shall refer
to calendar days.
(v) Executive and the Company have participated jointly in the negotiation and
drafting of this Agreement. If an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party hereto by virtue of the authorship of any of the
provisions hereof.
(vi) The word “extent” in the phrase “to the extent” as used in this Agreement
means the degree to which a subject or other thing extends and such phrase does
not simply mean “if.”
(vii) No provision of this Agreement is to be construed to require, directly or
indirectly, any person or entity to take any action, or to omit to take any
action, to the extent such action or omission would violate applicable laws.
IN WITNESS WHEREOF, Executive and the Company have executed this Agreement
effective as of the Effective Date above written.

                  Executive           GTSI Corp., a Delaware corporation
 
               
 
          By:                  
 
              James J. Leto
Print Name:
              Chief Executive Officer
 
 
 
           

 

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GTSI Change of Control Provision, Exhibits
Exhibit A
Definitions of Certain Terms
The following definitions shall apply to the Agreement:
(a) “Cause” means Executive’s (i) willful and continued failure to substantially
perform his duties with the Company or willful and continued failure to
substantially follow and comply with the specific and lawful directives of the
Company’s chief executive officer (the “CEO”), as reasonably determined by the
CEO (other than any such failure resulting from Executive’s incapacity due to
physical or mental illness or any such actual or anticipated failure after
notice of resignation), after a written demand for substantial performance is
delivered to Executive by the CEO that identifies in reasonable detail the
manner in that the CEO believes Executive has not substantially performed his
duties, (ii) conviction of any felony involving moral turpitude; (iii) engaging
in illegal business practices or other practices contrary to the Company’s
written policies; (iv) misappropriation of assets of the Company; (v) continual
or repeated insobriety or drug use; (vi) continual or repeated absence for
reasons other than disability or sickness; (vii) fraud; or (viii) embezzlement
of Company funds.
(b) “Change of Control” means (i) the acquisition by any individual or entity
resulting in the control of 50% or more of the outstanding voting securities of
GTSI; (ii) a change in a majority of the Board (other than through an “act of
God”) if (x) the change is clearly related to an acquisition referenced in
clause (i) above, (y) the change occurred during any consecutive 365 days, and
(z) the new Board members were elected by neither the Company’s stockholders nor
by a majority of the directors who were in office at the beginning of the
respective 365-day period; or (iii) the Company’s stockholders approve a merger
or consolidation of the Company with any other corporation (and the consummation
thereafter), other than a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation.
(c) “Change of Control Period” means the period of time starting 180 days prior
to the date on which the Change of Control occurs and ending on the second
anniversary of such date of Change of Control.
(d) “Executive’s Total Severance Amount” means the sum of (i) the base salary,
based on the rate thereof as of the Termination Date, that would have otherwise
been payable to Executive during the 15-Month Severance had he remained in the
Company’s employment during such period and (ii) 125% of Executive’s Targeted
Cash Bonus.
(e) “Executive’s Targeted Cash Bonus” means, as of the respective Termination
Date, the targeted annual cash bonus, at 100% achievement, as had been most
recently established by the Board for Executive in respect of (i) the Company’s
then current fiscal year or, (ii) if the Board has not as of the Termination
Date established Executive’s targeted annual cash bonus for the Company’s then
current year, the Company’s most recently completed fiscal year.
(f) “Good Reason” means any one of the following events, provided that
(i) Executive has notified the Company of the existence of the event within
60 days after its initial occurrence or existence, (ii) the Company has not
within 30 days after its receipt of the notice referenced in clause (i) above
remedied the matter in compliance with this Agreement and (iii) within 30 days
after the expiration of the 30-day period referenced in clause (ii) above,
Executive tenders his resignation to the Company: (1) any material diminution of
Executive’s then existing annual base salary; (2) any material diminution of
Executive’s duties, responsibilities, authority, reporting structure, titles or
offices, (3) any material change in the geographic location at which Executive
must perform his services to the Company; or (4) any action or inaction by the
Company that constitutes a material breach of its obligations under this
Agreement.

 

 

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GTSI Change of Control Provision, Exhibits
Exhibit B
RELEASE AND OBLIGATION AGREEMENT
I understand that my position with GTSI Corp., a Delaware corporation (the
“Company” or “GTSI”), terminated effective                      (the “Separation
Date”). The Company has agreed that if I sign this Release and Obligation
Agreement (“Release”) and deliver it to the Company, the Company will, within
30 days after the Release Effective Date (as defined below), pay me certain
severance benefits (minus the standard withholdings and deductions) pursuant to
the GTSI Change of Control Agreement (the “Agreement”), dated as of
                    , 200_____, between myself and the Company, and any
agreements incorporated therein by reference. I understand that I am not
entitled to such severance benefits unless and until I sign and comply with this
Release. I further understand that, regardless of whether I sign and deliver
this Release, the Company will pay me all of my accrued salary and paid time off
through the Separation Date, to which I am entitled by law.
In consideration for the severance benefits I am receiving under the Agreement,
I agree to the following:
(a) Non-Solicitation of Executives. For the first, including to be legally
bound, 183 days after the Separation Date, I will not, without the prior written
consent of GTSI’s chief executive officer (or equivalent) solicit or attempt to
solicit for employment for or on behalf of any corporation, partnership, venture
or other business entity any person who, as of the Separation Date or within
183 days prior to that date, was employed by GTSI or any subsidiary thereof
(“Subsidiary”) as an officer, manager or employee and with whom I had material
contact during the course of his or her employment with GTSI or Subsidiary
(whether or not such person would commit a breach of contract).
(b) Non-Solicitation of Customers and Non-Disparagement. I owe GTSI a duty of
loyalty, and to preserve and protect, among other things, GTSI’s Confidential
Information, as well as the relationships of GTSI and its Subsidiaries with
their current and potential customers and partners. As a result, during the
first 183 days after the Separation Date, I will not solicit or make any
statement or do any act intended to cause such customer or partner to make use
of or obtain from any person or business, services or goods that are similar or
related to those offered by GTSI or any Subsidiary; or discuss with any other
GTSI Executive the current operations or formation and future operations of any
business competing with or intended to compete with GTSI or any Subsidiary. I
further agree, that my communications with any GTSI officer, customer, vendor,
supplier and any competitor and any person associated with any media that in any
way relates to GTSI or any Subsidiary or to directors, officers, management or
employees of GTSI or any Subsidiary: (i) will be truthful; and (ii) will not
disparage or undermine the reputation or business practices of GTSI or any
Subsidiary or its directors, officers, management or employees of GTSI or any
Subsidiary.
(c) Release. I hereby release GTSI and each of its Subsidiaries and its
officers, directors, agents, attorneys, executives, stockholders and parents
from any and all claims, liabilities, demands, causes of action, attorneys’
fees, damages, or obligations of every kind and nature, whether they are now
known or unknown, arising at any time prior to the date I sign this Release.
This general release includes, but is not limited to: all federal and state
statutory and common law claims, claims related to my employment or the
termination of my employment or related to breach of contract, tort, wrongful
termination, discrimination, harassment, defamation, fraud, wages or benefits,
or claims for any form of equity or compensation. Notwithstanding the release in
the preceding sentence, I am not releasing any right of indemnification, or
Company director and officer insurance protection, I may have for any
liabilities and costs of defense (including without limitation reasonable
attorneys’ fees) arising from my actions within the course and scope of my
employment with the Company.

 

 

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GTSI Change of Control Provision, Exhibits
(d) If I am 40 years of age or older as of the Separation Date, I am knowingly
and voluntarily waiving and releasing any rights I may have under the federal
Age Discrimination in Employment Act of 1967, as amended (“ADEA”). I also
acknowledge that the consideration given for the waiver in the above paragraph
is in addition to anything of value to which I was already entitled. I have been
advised by this writing, as required by the ADEA that: (i) my waiver and release
do not apply to any claims that may arise after my signing of this Release;
(ii) I should consult with an attorney prior to executing this Release; (iii) I
have 21 days (or 45 days in the event of a related group termination) within
which to consider this Release (although I may choose to voluntarily execute
this Release earlier); (iv) I have seven days following the execution of this
Release to revoke the Release; and (v) this Release will not be effective until
the eighth day after this Release has been signed by me and by the Company
(“Release Effective Date”).

             
Agreed:
           
 
 
 
Date  
 
[Name]