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.


 





















 


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

  



 





















 


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.


 





















 


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.