First Amendment to Employment Agreement
Exhibit 10.5
Effective September 1, 2009, this Second Amendment to the Employment Agreement dated as of October
29, 2008 between GTSI Corp., a Delaware corporation (“Employer” or “GTSI”), and Xxxxx Xxxxxxxxx
(“Employee”), amends the above-referenced Employment Agreement (the “Agreement”) as follows:
| 1. | Section 7(c)(ii) of the Agreement shall be, and hereby is, amended by deleting the
entire text thereof and substituting in lieu thereof the following: |
“(ii) (1) If, during the Term, a Change of Control (as defined below) occurs, any outstanding
unvested options or any other stock awards (whether restricted stock or other awards) in GTSI
common stock previously granted to Employee will have their vesting accelerated in full so as to
become 100% vested and immediately exercisable in full as of the date of such Change of Control.
(2) If, during the Term, (x) a Change of Control occurs and Employee’s employment with GTSI is
terminated without Cause or an event occurs constituting Good Reason (as defined below), or (y) one
or more events that constitute a material breach of this Agreement leading to Employee’s
resignation for Good Reason are effected in anticipation of a Change of Control, including but not
limited to an attempt by GTSI or its successor to avoid GTSI’s or its successor’s obligations under
this Agreement, Employee may, in his sole discretion, terminate the Term upon five days’ notice to
Employer. Any vested options as set out above, shall remain in full force and effect.
(3) If Employee exercises his right to terminate the Term pursuant to Section 7(c)(ii)(2),
Employer may, at its option, at any time after receiving such notice from Employee, relieve him of
his duties hereunder and terminate the Term at any time prior to the expiration of said notice
period.
(4) If the Term is terminated by Employee pursuant to this Section 7(c)(ii)(2) or by Employer
pursuant to Section 7(c)(ii)(3), Employee will receive, commencing on the date of such termination
of the Term (“Termination Date”) and ending on the 90th day after the first anniversary of the
Termination Date (the “15-Month Severance Period”), severance payments in an aggregate cumulative
amount equal to Employee’s Total Severance Amount (as defined below), provided that the severance
amount payable during the first six months shall not exceed two times the maximum amount that may
be taken into account under a qualified retirement plan under Section 401(a)(17) of the Internal
Revenue Code of 1986, as amended, for the year in which the Termination Date occurs. Any portion
of these severance amounts scheduled but not payable under this Section 7(c)(ii)(4) during the
first six months because of the limitation in the immediately preceding sentence shall be paid in a
lump sum with the first severance payment due after the end of the six months. These severance
amounts will be payable in the same times as provided in Section 7(a)(ii), and Employee will be
entitled to the provision of all compensation and other benefits that will have accrued as of the
Termination Date, including all vested options, paid leave benefits, and reimbursement of incurred
business expenses. GTSI’s obligation to provide the foregoing will be subject to a reasonable
release and waiver under the same or similar terms that have been or will be required of other
executive officers.”
(5) For all purposes of this Agreement:
A. “Employee’s Total Severance Amount” means the sum of (x) the base salary, based on the rate
thereof as of the Termination Date, that would have otherwise been payable to Employee during the
15-Month Severance Period had he remained in the Company’s employment during such period and (y)
125% of Employee’s Targeted Cash Bonus.
B. “Employee’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 Company’s
board of directors for Employee in respect of (x) the Company’s then current fiscal year, or (y) if
the Company’s board of directors has not as of the Termination Date established Employee’s targeted
annual cash bonus for the Company’s then current year, the Company’s most recently completed fiscal
year.
C. “Good Reason” means any one of the following events, provided that (i) Employee 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, Employee provides the
Company with notice of Employee’s termination of the Term: (1) any material diminution of
Employee’s then existing annual base salary; (2) any material diminution of Employee’s duties,
responsibilities, authority, reporting structure, titles or offices; (3) any material change in the
geographic location at which Employee must perform his services hereunder; or (4) any other action
or inaction by the Company that constitutes a material breach of its obligations under this
Agreement.”
| 2. | Except as specifically amended herein, the Agreement shall remain in full force and
affect. |
GTSI and Employee have duly executed this Second Amendment effective as of September 1, 2009.
| GTSI Corp. | Xxxxx Xxxxxxxxx | |||||||||
By:
|
Signature: | |||||||||
| Chief Executive Officer | ||||||||||
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