***Exhibit 10.19***

 

***GTSI***

 

***2005 EXECUTIVE INCENTIVE COMPENSATION PLAN***

 

***I. Introduction***

 

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

 

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

 

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

 

***II. Eligibility & Participation***

 

Participation in this Plan is limited****toExecutive employees.  Participantsgenerally hold one of the following titles: CEO, Senior Vice President, Group Vice President and Vice President.  The Compensation Committee of the Board ofDirectors specifically approves these employees for participation.  Participants in the Executive Plan areexcluded 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-ratedincentive starting on their date of hire. Part-time employees are eligible for a pro-rated incentive based ontheir scheduled time as a percent of a full-time schedule.  Those employees who transfer or are promotedfrom one position to another are eligible for pro-rated incentives for boththeir new position and prior position.

 

Eligibility for participation and receipt ofcompensation under the Plan are expressly conditioned upon strict compliancewith GTSI’s policies and procedures regarding ethical business conduct,appropriate business practice, and proper handling of contacts with customerand government representatives, vendors, agents, brokers and otherintermediaries.  GTSI has full authorityto cancel incentive compensation eligibility if, in its sole discretion, itfinds noncompliance with such policies and procedures.

 

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***III. Total Compensation***

 

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

 

***IV. Target Incentive***

 

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

 

The annual target incentives for the following positions are defined asfollows:

 
| **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 ofdefined objectives, on a period-by-period non-cumulative basis.

 

The following percentage applies for eachdesignated 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 ishigher than the target incentive amount. Conversely, underachievement will deliver a payout that is less than thetarget incentive amount.

 

At the end of each calculating period, the incentive amount earned forthe Executive Plan will be the period’s achievement; interpolating the payoutpercent from the appropriate schedule and multiplying the result by thecategory’s target incentive amount.  Theresulting payout will be rounded to the nearest dollar.

 

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

 

# **Company Financial Goals (EBT)**

•                  Earningsbefore Tax (consistent with GAAP accounting)

 

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

 

***VI. Incentive Calculation for Achievement of Company FinancialGoals  – EBT***

 

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

 

***VII. Administration***

 

All incentive compensation earned under this Plan will be credited andscheduled 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 beeligible for payout under this plan.  ThePlan is administered by the Vice President, Human Resources in coordinationwith Finance and the various department leaders, subject to approval by theCEO.

 

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

 

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

 

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***X. General Conditions***

 

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

 

All employees of the Company are employed in an “at will” capacitywhich means that either the employee or the Company may terminate therelationship at any time with the understanding that neither party has theobligation to base that decision on any reason other than their intent not tocontinue the employment relationship. Nothing in this Plan shall in any way diminish or limit the Company’sright to terminate the employment of any employee at will at any time, in itssole discretion.

 

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

 

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

 

The issuance of this Plan does not, in anyway, commit GTSI to pay a similar kind of compensation in any subsequentyear.  GTSI may eliminate or reduceincentive compensation at any time during the year, without prior noticeprovided that payment is made for the period prior to the effective date of thechange and the Plan participants are notified in writing.

 

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