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NOTICE OF ANNUAL MEETING

AND PROXY STATEMENT

March 31, 2010

The Annual Meeting of the Stockholders of GTSI Corp., a Delaware corporation (“GTSI” or the “Company”), will be held at 10:00 a.m., local time, on Wednesday, April 21, 2010, at the Company’s headquarters located at 2553 Dulles View Drive, Suite 100, Herndon, Virginia (the “Meeting”) to consider and act on the following matters:

To elect four Class 1 directors to serve until our 2013 Annual Meeting of Stockholders and one Class 2 director to serve until our 2011 Annual Meeting of Stockholders, until their successors are elected and qualified; and

To transact such other business as may properly come before the Meeting or any adjournment(s) thereof.

If you are a holder of record of the Company’s common stock as of the close of business on March 3, 2010, you will be entitled to notice of, and vote at, the Meeting and at any adjournment(s) thereof. All stockholders are cordially invited to attend the Meeting in person.

You can vote your shares in one of four ways:

Visit the web-site noted on your proxy card to vote via the internet;

Use the toll-free telephone number on your proxy card to vote by telephone;

Sign, date and return your proxy card in the enclosed envelope to vote by mail; or

Attend the meeting in person to ensure your representation at the Meeting.

Please mark, sign, date and return your proxy card as promptly as possible.

Stockholders are invited to visit the Corporate Governance section of our web-site in the “Investors” section of GTSI.com.

By Order of the Board of Directors

Charles E. De Leon

SVP, General Counsel & Corporate Secretary

TABLE OF CONTENTS


INFORMATION CONCERNING SOLICITATION AND VOTING	1
General	1
Voting and Solicitation	1
PROPOSAL 1	2
ELECTION OF DIRECTORS	2
Introduction	2
Class 1 Nominees for a Three-Year Term Expiring in 2013	2
Other Information	4
Class 2 Nominee for a One-Year Term Expiring in 2011	4
Class 2 Directors – Term Expiring in 2011	5
Class 3 Directors - Term Expiring in 2012	5
BOARD LEADERSHIP STRUCTURE, RISK OVERSIGHT, EXECUTIVE SESSIONS OF NONEMPLOYEE DIRECTORS, AND COMMUNICATIONS BETWEEN STOCKHOLDERS AND THE BOARD	6
COMPENSATION OF DIRECTORS	11
EXECUTIVE COMPENSATON AND RELATED INFORMATION	14
Compensation Discussion and Analysis	14
SUMMARY COMPENSATION TABLE	26
EXECUTIVE OFFICERS	34
AUDIT FEES	44

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON APRIL 21, 2010

The Notice of Annual Meeting of Stockholders, Proxy Statement and Form of Proxy regarding the Annual Meeting of GTSI’s stockholders and GTSI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 are available at www.GTSI.com and can be accessed through the home page by clicking on “Investors” in the upper right hand corner. Once on the Investor page, go to the left-hand column and near the bottom click on “SEC Filings.” On this page, you will find our Annual Report on Form 10-K, Notice of Annual Meeting of Stockholders, Form of Proxy and Proxy Statement pursuant to SEC Schedule 14A (Proxy Statement).

The Annual Meeting of Stockholders will be held at 10:00 a.m., local time, on Wednesday, April 21, 2010, at the Company’s headquarters located at 2553 Dulles View Drive, Suite 100, Herndon, Virginia.

For directions on attending the meeting and voting in person, please contact Paul Liberty at 703-502-2540 or via email at paul.liberty@gtsi.com; alternatively please go to our website at www.GTSI.com. On the upper left-hand corner of our homepage, roll your mouse over “About GTSI” and click on “Directions” and follow the appropriate instructions.

At the Annual Meeting, you will be asked to vote on the matter of electing four Class 1 directors to serve until our 2013 Annual Meeting of Stockholders and one Class 2 director to serve until our 2011 Annual Meeting of Stockholders and any other business as may properly come before the Meeting or any adjournment(s) thereof.

Details on voting are set out in the Notice of Annual Meeting and Proxy Statement on the cover page, and additional details and background on the matters to be considered are set out in the Proxy Statement.

PROXY STATEMENT
For the Annual Meeting of Stockholders
to be held April 21, 2010

INFORMATION CONCERNING SOLICITATION AND VOTING

General

The enclosed proxy is solicited by and on behalf of the Board of Directors of GTSI Corp., a Delaware corporation (“GTSI” or the “Company”), for use at the Annual Meeting of Stockholders to be held on April 21, 2010 at 10:00 a.m., local time, or at any adjournment(s) thereof, for the purposes set forth herein and in the accompanying Notice of Annual Meeting of Stockholders (the “Meeting”).

The Meeting will be held at the Company’s principal executive offices located at 2553 Dulles View Drive, Suite 100 in Herndon, Virginia 20171. The Company’s telephone number is (703) 631-3333. This Proxy Statement and the accompanying notice of the Meeting and form of proxy are first being sent or given to stockholders entitled to notice of, and to vote at, the Meeting on or about March 31, 2010.

The Company’s annual report for the fiscal year ended December 31, 2009, which contains consolidated financial statements and other information of interest to stockholders, accompanies this Proxy Statement, but it is not part of the Company’s proxy soliciting material.

Only stockholders of record at the close of business on March 3, 2010 (the “Record Date”) are entitled to notice of, and to vote at, the Meeting. At the Record Date, 10,119,038 shares of the Company’s common stock, par value $0.005 per share (“Common Stock”), were issued and, excluding 326,052 shares held in treasury, 9,792,986 shares were outstanding for voting purposes. None of the Company’s 680,850 shares of authorized preferred stock is outstanding.

Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before its use by delivering to the Company’s Secretary a written notice of revocation or a duly executed proxy bearing a later date or by attending the Meeting and voting in person.

Voting and Solicitation

As to all matters to be voted upon at the Meeting, each stockholder is entitled to one vote for each share of Common Stock held. The presence in person or by proxy of a majority of the outstanding Common Stock entitled to vote constitutes a quorum for the conduct of business at the Meeting.

With respect to Proposal 1, if a quorum is present at the Meeting, the four nominees for Class 1 directors and the one nominee for Class 2 director, receiving the highest number of affirmative votes of Common Stock present in person or by proxy and entitled to vote on the election of directors will be elected. In the election of directors, votes may be cast in favor or withheld with respect to any and all nominees; votes that are withheld may be excluded entirely from the vote and will have no effect on the outcome of the vote. Broker non-votes (proxies that indicate that brokers or nominees have not received instructions from the beneficial owner of shares) are counted as shares that are present and entitled to vote for purposes of determining a quorum. If a broker indicates on the proxy that it does not have discretionary authority to vote on a particular matter as to certain shares, those shares will be counted for pur poses of determining the presence of a quorum but will not be treated as present and entitled to vote with respect to that matter.

If a stockholder returns a proxy and no instructions are given, the Common Stock represented thereby will be voted as recommended by the Company’s Board of Directors (the “Board”), including “FOR” the election of the five nominees for directors, as listed below under “Election of Directors”.

The cost of this solicitation of proxies will be borne by the Company. Proxies will be solicited by certain of the Company’s directors, officers and regular employees, without additional compensation, personally or by telephone, email or fax. In addition, the Company may reimburse brokerage firms and other persons representing beneficial owners of Common Stock for their expenses in forwarding solicitation materials to such beneficial owners.

PROPOSAL 1

ELECTION OF DIRECTORS

Introduction

The Company currently has a classified Board currently consisting of four Class 1 directors, three Class 2 directors and three Class 3 directors. The current terms of Class 2 and Class 3 directors continue until the annual meeting of stockholders to be held in 2011 and 2012, respectively, and until their respective successors are elected and qualified. There are currently ten Board members.

At each annual stockholders meeting, directors are elected for a full term of three years to succeed those directors whose term expires at the annual meeting date.

At the Meeting, the holders of Common Stock as of the Record Date will elect four Class 1 directors for three-year terms and one Class 2 director for a one-year term to fill the vacancy created by James Leto’s retirement from the Board as of April 21, 2010. Unless otherwise instructed, proxy holders will vote the proxies received by them for the election of the Company’s four nominees named below for Class 1 directors, all of whom are currently directors of the Company and the nominee named below for Class 2 director. If any of the Company’s nominees is unable or declines to serve as a director at the time of the Meeting, the proxies will be voted for a nominee who will be designated by the current Board to fill the vacancy. It is not, however, expected that any of the nominees will be unable or will decline to serve as a director. Except for the relationship between James J. Leto and Todd Leto described in the section entitled “Certain Relationships and Related Transactions” below, there is no family relationship between any director, nominee for election as a director or executive officer of the Company and any other director, nominee for election as a director or executive officer of the Company.

Class 1 Nominees for a Three-Year Term Expiring in 2013

Following are summaries of the background, business experience and descriptions of the principal occupations of the nominees, as well as the specific qualifications, attributes or skills that led to the conclusion that these individuals should serve as directors of the Company.


Name	Age	Position(s) with the Company
Daniel R. Young	76	Director
Joseph “Keith” Kellogg, Jr.	61	Director
Lloyd Griffiths	68	Director
Linwood (Chip) Lacy, Jr.	64	Director

Daniel R. Young, age 76, has served as a director since 2001. From 1977 until 2000, Mr. Young had been a senior executive officer of Federal Data Corporation, a provider of information technology products and services to government agencies, including serving since 1995 as President and Chief Executive Officer and since 1998 as Vice Chairman of the Board of Directors of Federal Data Corporation. Mr. Young is also a director of Halifax Corporation, an enterprise maintenance solutions company, and NCI Corp., an information technology, systems engineering and integration company. Mr. Young served as a director for Analex Corp. from 2004 to 2007. As a result of these and other professional experiences, Mr. Young possesses particular knowledge and experience in strategic planning and leadership of information technology based organizations that strengthen the Board’s collective qualifications, skills and experience.

Joseph “Keith” Kellogg, Jr., age 61, has served as a director since April 2004 and previously was a Board member from October 29, 2003 until he resigned on December 8, 2003 to provide temporary service to the Federal Government. During this temporary service, General Kellogg served as Chief Operating Officer of the Coalition Provisional Authority in Baghdad, Iraq. General Kellogg was a member of the U.S. Army from 1971 to 2003, when he retired as a Lieutenant General and a highly decorated war veteran. From September 2003 until January 2005, General Kellogg served as Senior Vice President for Homeland Security Solutions for Oracle Corp. From January 2005 until July 2009, General Kellogg was employed by CACI International Inc., as an Executive Vice President, Research and Technology Systems. Since June 2009, General Kellogg has been employed by Cubic Defense Applications, Inc. as Senior Vice President of Ground Operations. As a result of these and other professional experiences, Mr. Kellogg possesses particular knowledge and experience in governmental organization, strategic planning and leadership that strengthen the Board’s collective qualifications, skills and experience.

Lloyd Griffiths, age 68, has served as a director since April 2008. He is the current Dean of The Volgenau School of IT & Engineering at George Mason University, Fairfax, Virginia since 1997. Prior to joining George Mason, Dr. Griffiths was Chair of the Electrical and Computer Engineering Department at the University of Colorado from 1994 to 1997; and Associate Dean for Research and Administration in the School of Engineering for nine years at the University of Southern California. Dr. Griffiths is on the board of directors of Information Systems Laboratories, Inc., a private engineering firm; and also serves as a Member of the Advisory Board of Geographic Services, Inc., a provider of geospatial systems; a Member of the Advisory Board of Vangard Voice Systems, a provider of voice technology for mobile enterprise; and a Member of the Technical Advisory Board of The Centre Tecnològic de Telecomunicacions de Catalunya (CTTC) in Barcelona, Spain. Dr. Griffiths holds M.S. and Ph.D. degrees in Electrical Engineering from Stanford University. As a result of these and other professional experiences, Mr. Griffiths possesses particular knowledge and experience in technology, engineering, and design, innovation that strengthen the Board’s collective qualifications, skills and experience.

Linwood (Chip) Lacy, Jr., age 64 has served as a director since November 4, 2009. Since 2008, Mr. Lacy has been an operating partner at Council Ventures, a private equity firm that makes investments in healthcare companies. Previously, he served as the President and Chief Executive Officer of Micro Warehouse Incorporated from October 1996 to October 1997. Mr. Lacy served as the Chief Executive Officer of Ingram Industries Inc., from June 1995 to April 1996 and President from December 1993 to June 1995. He served as the Co-Chairman and Chief Executive Officer of Ingram Micro, Inc., from 1985 to May 1996. He has held executive positions with Best Products and Zale Corporation's Catalogue Showroom Division. He has been a Director of NETGEAR Inc. since September 2002 and its Lead Independent Director since April 2006. He has been Chairman of MailExpress, Inc. since September 23, 2008. Mr. Lacy serves as a Director of Ingram Industries Inc., and Confidex OY. He is a Director of New Day Pharmacy Corporation since, May 27, 2009. He served as a Director of pcOrder.com, Inc. since August 1998 and as a Director of Modus Media, Inc. (Formerly, Modus Media International Holdings,

Inc.) since August 1998. He served as Director of EarthLink Network from June 1996 to February 2000 and as a Director of EarthLink Inc. from February 2000 to May 2008 when EarthLink Network merged with MindSpring. He previously served as a director for Evault, Inc., Marketworks Inc., Ingram Micro, Inc., CashConductor.com, ModusLink Corporation, SemEquip, Inc. and Auctionworks, Inc. He was inducted into the CRN Computer Museum Industry Hall of Fame in 1997. Mr. Lacy received both a B.S. degree in Chemical Engineering and an M.B.A. in Business from the Darden Graduate School of Business Administration at the University of Virginia. As a result of these and other professional experiences, Mr. Lacy possesses particular knowledge and experience in technology sales, operations and distribution that strengthen the Board’s collective qualifications, skills and experience.

The Board recommends a vote FOR the election of the four nominees listed above.

Class 2 Nominee for a One-Year Term Expiring in 2011

The name of the nominee for Class 2 director and certain information about him are set forth below:


Name	Age	Position(s) with the Company
Scott W. Friedlander	50	President and Chief Executive Officer

Scott W. Friedlander, age 50, has been President and CEO since February 16, 2010. From December 1, 2007 until February 15, 2010, he was President and Chief Operating Officer of GTSI. Joining GTSI in 2001, Mr. Friedlander built a number of Enterprise Technology Practices as Vice-President. Mr. Friedlander's career in sales, marketing, enterprise solutions, operations and services spans nearly 25 years in the information technology industry. Prior to joining GTSI, he spent 19 years with Xerox Corporation in positions of ascending responsibility, culminating as Vice President/General Manager of Public Sector Operations for North America Solutions Group. In that role, he was responsible for revenues generated from seven Xerox Business Units, including the Federal, State and Local, Higher Education and the K-16 market place. Mr. Friedlander holds a BS Degree in Finance from the University of Maryland, College Park, Smith School of Business. As a result of these and other professional experiences, Mr. Friedlander possesses particular knowledge and experience of the Company’s structure and requirements, along with sales and operations experience that strengthen the Board’s collective qualifications, skills and experience.

The Board recommends a vote FOR the election of the nominee listed above.

Other Information

Securities and Exchange Commission (the “SEC”) regulations require the Company to describe material legal proceedings, including bankruptcy and insolvency filings, involving nominees for the Board of directors or companies of which a nominee was an executive officer. The Board’s Nominating & Governance Committee is not aware of any nominee involved in any of the foregoing types of legal proceedings during the past 10 years.

_________________

Following are summaries of the background, business experience and descriptions of the principal occupations of the directors not currently up for election, as well as the specific qualifications, attributes or skills that led to the conclusion that these individuals should serve as directors of the Company.

Class 2 Directors – Term Expiring in 2011

Lee Johnson, age 82, has served as a director since 1996. Since 1984, Mr. Johnson has been the President of Federal Airways Corporation, a provider of highly modified, special mission high altitude aircraft to civilian and defense agencies. From 1986 to 1994, Mr. Johnson served as Chairman of the Board of Directors of Falcon Microsystems, Inc., a government microcomputer reseller that was acquired by the Company in 1994. As a result of these and other professional experiences, Mr. Johnson possesses particular knowledge and experience in the information technology market, and the Company’s internal operations, and governmental organization that strengthen the Board’s collective qualifications, skills and experience.

Thomas L. Hewitt, age 71, has served as a director since May 2003, and previously served as a director from March 1996 until May 1998. Since January 2000, Mr. Hewitt has been the Chief Executive Officer of Global Governments, Inc., a strategic planning and marketing company. In 1984, Mr. Hewitt founded Federal Sources, Inc., a market research and consulting firm, where he served as Chief Executive Officer and Chairman of the Board until 1999. Mr. Hewitt is also a director of Halifax Corporation, an enterprise maintenance solution company. Mr. Hewitt served as a director for Analex Corp. from 2004 to 2007. As a result of these and other professional experiences, Mr. Hewitt possesses particular knowledge and experience in organizational structure, major corporation operations, as well as the technology sector that strengthen the Board’s collective qualifications, skills and experience.

Class 3 Directors – Term Expiring in 2012

Steven Kelman, Ph.D., age 61, has served as a director since 1997. Since 1997, he has been the Weatherhead Professor of Public Management at Harvard University’s John F. Kennedy School of Government. From 1993 to 1997, Dr. Kelman served as Administrator of the Office of Federal Procurement Policy at the Office of Management and Budget. From 1986 to 1993, he was Professor of Public Policy at Harvard University’s John F. Kennedy School of Government. As a result of these and other professional experiences, Mr. Kelman possesses particular knowledge and experience in government operations and policy matters, as well as Federal regulatory insight that strengthen the Board’s collective qualifications, skills and experience.

Barry L. Reisig, age 64, has served as a director since May 2003. Since July 2006, Mr. Reisig has been a business consultant. From 2002 until 2006, Mr. Reisig was Vice President of Finance of System Planning Corporation, a developer of high technology systems, and President and Chief Executive Officer of its subsidiary, SPC International. From 1980 to 2002, Mr. Reisig was a partner of Arthur Andersen LLP, involved principally in tax matters. Mr. Reisig served as a board member for Healthaxis, Inc. from 2005 to 2008. As a result of these and other professional experiences, Mr. Reisig possesses particular knowledge and experience in business operations and accounting, finance, and capital structure that strengthen the Board’s collective qualifications, skills and experience.

John M. Toups, age 84, has served as a director since 1997 and as Chairman of the Board since May 2007. From 1978 until his retirement in 1987, Mr. Toups was President and Chief Executive Officer of PRC, Inc. Mr. Toups is also a director of NVR, Inc., a homebuilding and mortgage banking company, Halifax Corporation, an enterprise maintenance solutions company, and Wildan Group, a civil engineering services company. Mr. Toups possesses particular knowledge and experience of and board practices of other major corporations, and finance, and capital structure that strengthen the Board’s collective qualifications, skills and experience.

BOARD LEADERSHIP STRUCTURE, RISK OVERSIGHT, EXECUTIVE SESSIONS OF NONEMPLOYEE DIRECTORS, AND COMMUNICATIONS BETWEEN STOCKHOLDERS AND THE BOARD

Board Leadership Structure

There are currently 10 Board members. With the exception of Mr. Lee Johnson and Mr. Jim Leto (who intends to retire from the Board as of the Annual Meeting), all of our current directors are “independent” as defined by the applicable rule of The Nasdaq Stock Market, Inc. (“Nasdaq”). We believe that the number of independent, experienced directors that make up our Board, along with the independent oversight of the Company’s Chairman, benefits GTSI and its stockholders. GTSI’s President and Chief Executive Officer, Scott Friedlander, who is a nominee for election as a director, would not be an independent director under the Nasdaq rule.

The independent directors regularly have the opportunity to meet without Mr. Johnson and Mr. Leto in attendance, and, as discussed below, the Board has had since 2004 the position of lead independent director (“Lead Independent Director”). In 2007, Mr. Toups, the designated Lead Independent Director was elected to the Chairman of the Board role, and as a result, the Lead Independent Director role has been incorporated into the Chairman role for his tenure. During 2009, there were four regular Board meetings and two special meetings. During 2009 no director attended (in person or by telephone) less than 75% of the aggregate of (a) all Board meetings and (b) all meetings of Board committees of which he was a member. The Company does not have a specific policy regarding attendance of directors at the annual stockholder meeting. All directors, however, are encouraged to attend if available, and the Company tries to ensure that at least one independent director is present at the annual meeting and available to answer any stockholder questions. Messrs. Jim Leto, John Toups, Tom Hewitt, Lee Johnson, Steven Kelman, Keith Kellogg, Barry Reisig and Daniel Young were present at last year’s annual stockholders meeting (the “2009 Annual Meeting”).

Lead Independent Director

The Lead Independent Director role was created in 2004, to assist the Chairman of the Board and the other Board members in assuring effective corporate governance. The Lead Independent Director’s responsibilities also include assisting the Chairman in reviewing the functions of Board committees and recommending the creation or discontinuance of committees, considering questions of potential conflicts of interest, acting as a resource on corporate governance matters, and acting as the spokesperson for the Company if the Chairman is absent. For this service, the Lead Independent Director is to receive a yearly retainer of $10,000. Mr. Toups was initially appointed as Lead Independent Director on April 29, 2004, and served in this role until his election to Chairman of the Board in May 2007. At that time, the role of Lead Independent Director was incorporated into the Chairman role for Mr. Toups’ tenure.

Chairman of the Board

In February 2006, the Board separated the duties of the Chairman of the Board and the Company’s Chief Executive Officer. Mr. Toups, who is the current Chairman of the Board, has been Chairman since the 2007 annual meeting of GTSI’s stockholders.

GTSI recognizes that different board leadership structures may be appropriate for companies in different situations and believes that no one structure is suitable for all companies, and that the Company’s current Board leadership structure of separating the Chairman and the Company’s Chief Executive Officer (“CEO”) is optimal for the Company because it demonstrates to GTSI’s employees, vendors, customers

and other stakeholders that GTSI is under balanced leadership, with these separate functions handled by separate individuals, providing for appropriate prioritization and individual focus, while maintaining strong governance methods. The Board and the CEO believe that GTSI, like many U.S. companies, has been well-served by this leadership structure.

Risk Oversight

Our Board is responsible for overseeing GTSI’s risk management process. The Board considers GTSI’s general risk management strategy, the most significant risks facing GTSI, and works to ensure that appropriate risk mitigation strategies are considered by management. The Board is also apprised by our senior management of particular risk management matters in connection with the Board’s general oversight and approval of corporate matters.

The Board has delegated to the Audit Committee oversight of GTSI’s risk management process. Among its duties, the Audit Committee reviews with management (a) GTSI policies with respect to certain risk areas that may be material to GTSI, (b) GTSI’s system of disclosure controls and system of internal controls over financial reporting, and (c) GTSI’s compliance with legal and regulatory requirements. Management primarily reports known or potential risk to the Audit Committee, however other Board committees also consider and address risks as they perform their respective committee responsibilities. All committees report to the full Board as appropriate, including when a matter rises to the level of a material or enterprise level risk.

GTSI’s management is responsible for day-to-day risk management. Our Treasury, Compliance and Internal Control areas serve as the primary monitoring and testing function for company-wide policies and procedures, and manage the day-to-day oversight of the risk management strategy for the ongoing business of GTSI. This oversight includes identifying, evaluating, and addressing potential risks that may exist at the enterprise, strategic, financial, operational, and compliance and reporting levels.

We believe the division of risk management responsibilities described above is an effective approach for addressing the risks facing GTSI and that our Board leadership structure supports this approach.

Executive Sessions of Nonemployee Directors

The Board holds executive sessions of its nonemployee directors generally at each regularly scheduled meeting. The Chairman of the Board serves as the chairperson for these executive sessions.

Communications between Stockholders and the Board

Interested parties, including stockholders, may communicate directly with the Chairman of the Board or specific individual directors may do so by direct mail to the following address: GTSI Corp., 2553 Dulles View Drive, Suite 100, Herndon, Virginia 20171, attn: General Counsel. GTSI's General Counsel will receive and review the communications and has been instructed by the Board to promptly forward all such communications to the director or directors indicated on the communications, unless the communication is clearly more appropriately addressed by other departments, such as customer service or accounts payable, in which case the communication will be forwarded by the General Counsel to the appropriate department.

When reporting a concern, interested parties are asked to supply sufficient information so that the matter may be addressed properly, and encouraged to identify themselves to assist GTSI in effectively

addressing the concern. The interested party may choose to remain anonymous, and GTSI will use its reasonable efforts to protect the party’s identity to the extent appropriate or permitted by law.

COMMITTEES AND TRANSACTIONS WITH RELATED PARTIES

Committees

The Board has an Audit Committee, a Compensation Committee and a Nominating and Governance Committee. The current charters of each of these committees, as well as the duties of the Lead Independent Director, are available on the Company’s Internet website, www.GTSI.com (located on the “About Us” web page, under Investors/Corporate Governance). Also posted on such website is a description of the process for stockholders to send communications to the Board or to one or more particular Board members, as noted above.

Audit Committee

The primary purpose of the Audit Committee is to oversee the Company’s accounting and financial reporting processes and the audits of its financial statements. The Audit Committee is directly responsible for, among other things, the appointment, compensation, retention and oversight of the Company’s independent auditor.

Since the 2009 Annual Meeting, the Audit Committee has been composed of Messrs. Reisig (Chairman), Hewitt, Kellogg and Kelman. All of the Audit Committee members during the past year, and all of the members who will be appointed for the current year, are independent in accordance with applicable rules of the SEC and Nasdaq. Each current member is able to read and understand fundamental financial statements, including the Company’s balance sheet, statement of operations and statement of cash flow. The Board has determined that Mr. Reisig is an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). During 2009, the Audit Committee met four times.

Compensation Committee

The primary purpose of the Compensation Committee is to provide assistance to the Board in fulfilling its responsibility with respect to oversight of the establishment, administration and appropriate functioning of stock, compensation and related matters for the Company’s employees. The Committee reviews the salaries and bonuses to be paid to the Company’s Chief Executive Officer and the Company’s other principal executive officers (Chief Financial Officer and President), and make recommendations to the Board on such salaries and bonuses. The Compensation Committee reviews and approves the salaries and bonuses for the Company’s other officers, reviews and approves the compensation discussions and analysis, and administers the Company’s stock option and stock incentive plans. Since the 2009 Annual Meeting, the Compensation Committee has been composed of Messrs. Young (Chairman), Griffiths and Toups. Each of the committee members is independent in accordance with applicable Nasdaq rules. During 2009, the Compensation Committee formally met seven times.

Nominating and Governance Committee

The primary purpose of the Nominating and Governance Committee (“Nominating Committee”) is to provide assistance to the Board in fulfilling its responsibility with respect to oversight of the appropriate and effective governance of the Company, as well as identify and recommend individuals to be presented

to the stockholders for election or re-election as Board members. Since the 2009 Annual Meeting, the Nominating Committee has been composed of Messrs. Toups (Chairman), Reisig and Young, all of whom are independent in accordance with applicable Nasdaq rules. During 2009, the Nominating Committee formally met one time.

Transactions with Related Persons

We may occasionally participate in transactions with certain “related persons.” Related persons include our executive officers, directors, director nominees, the beneficial owners of more than 5% of our common stock, immediate family members of these persons, and entities in which one of these persons has a direct or indirect material interest. In 2003, we adopted a written policy as part of our audit committee charter that provides for the review and, if applicable, approval at each regularly scheduled meeting any related party transaction as required by Nasdaq. Under this policy, the Audit Committee is responsible for the review and approval of each related person transaction exceeding $120,000. The Audit Committee, or the Chairman, considers all relevant factors when determining whether to approve a related person transaction including, without limitation, whether the proposed transaction is on terms and made under circumstances that are at least as favorable to the Company as would be available in comparable transactions with or involving unaffiliated third parties. Among other relevant factors, they consider the following:

· the size of the transaction and the amount of consideration payable to the related person(s);

· the nature of the interest of the applicable director, director nominee, executive officer or 5% stockholder, in the transaction; and

· whether we have developed an appropriate plan to monitor or otherwise manage the potential for a conflict of interest.

Based on all relevant facts and circumstances, taking into consideration our contractual obligations, the Audit Committee determines whether it is in our and our stockholders’ best interest to continue, modify or terminate the related person transaction. In 2009, other than as discussed below under the caption “Certain Relationships and Related Transactions” the Audit Committee did not identify any related person transaction.

DIRECTOR NOMINATIONS AND QUALIFICATIONS

The Nominating Committee will consider nominees for director recommended by stockholders with respect to elections to be held at an annual stockholders meeting. In accordance with the Company’s Bylaws, to nominate an individual for election to the Board at an annual stockholders meeting, a stockholder must deliver written notice of such nomination to the Company’s Secretary not fewer than 60 days nor more than 90 days prior to the date of the annual meeting (or if less than 60 days notice or prior public disclosure of the date of such annual meeting is given or made to the stockholders, not later than the tenth day following the day on which notice of the date of the annual meeting was mailed or public disclosure was made). The notice of a stockholder’s intention to nominate a director must include:

information regarding the stockholder making the nomination, including name, address and number of GTSI shares that are beneficially owned by the stockholder;

a representation that the stockholder is entitled to vote at the meeting at which directors will be elected, and that the stockholder intends to appear in person or by proxy at the meeting to

nominate the person or persons specified in the notice;

the name and address of the person or persons being nominated and such other information regarding each nominated person that would be required in a proxy statement filed pursuant to the SEC’s proxy soliciting rules if the person had been nominated for election by the Board;

a description of any arrangements or understandings between the stockholder and such nominee and any other persons (including their names), pursuant to which the nomination is made; and

the consent of each such nominee to serve as a director if elected.

The Chairman of the Board, other directors and executive officers may also recommend director nominees to the Nominating Committee. The committee will evaluate nominees recommended by stockholders against the same criteria that it uses to evaluate other nominees. These criteria include the candidate’s experience, skills and personal accomplishments, including: intelligence, integrity, strength of character, and commitment. Nominees should also have the sense of timing required to assess and challenge the way things are done and recommend alternative solutions to problems; the independence necessary to make an unbiased evaluation of management performance and effectively carry out responsibilities of oversight; an awareness of both the business and social environment in which today’s corporation operates; and a sense of urgency and spirit of cooperation that will enable them to interact with other Board members in directing the future, profitable growth of GTSI. Desired experience for director nominees include: at least 10 years of experience in a senior executive role with a major business organization, preferably, as either chief executive officer or chairman (equivalent relevant experience from other backgrounds such as academics or government may also be considered); a record of accomplishment and line operating (or equivalent) experience; first-hand experience with government contracting; a working knowledge of corporate governance issues and the changing role of the Board; and exposure to corporate programs designed to create stockholder value, while balancing the needs of all stakeholders. The foregoing is in addition to the other factors that are listed as an appendix to the Nominating Committee charter, which is posted on the Company’s Internet website, www.GTSI.com (located on the “About Us” web page, under Investors/Corporate Governance), as noted above. The committee has not in the past retained any third party to assist it in identifying nominees.

Director nominees should not be employed by or affiliated with any organization that has competitive lines of business or that may otherwise present a conflict of interest. The composition, skills and needs of the Board change over time and will be considered in establishing the profile of desirable candidates for any specific vacancy on the Board. The Nominating Committee does not have a formal policy with respect to diversity; however, the Nominating Committee has determined that it is desirable for the Board to have a variety of differences in viewpoints, professional experiences, educational background, skills, race, gender, age and national origin, and considers issues of diversity and background in its selection process.

The Nominating Committee utilizes a variety of methods for identifying and evaluating nominees for director. The committee periodically assesses the appropriate size of the Board, and whether any vacancies on the Board are expected due to retirement or otherwise. If vacancies are anticipated, or otherwise arise, the Nominating Committee will consider various potential candidates for director. These candidates are evaluated at regular or special meetings of the Nominating Committee, and may be considered at any point during the year. As described above, the Nominating Committee will consider properly submitted stockholder nominations for candidates for the Board. Following verification of the stockholder status of persons proposing candidates, recommendations will be aggregated and considered by the Nominating Committee at a meeting. If any materials are provided by a stockholder in connection

with the nomination of a director candidate, such materials will be forwarded to the Nominating Committee. Such committee also will review materials provided by professional search firms or other parties in connection with a nominee who is not proposed by a stockholder. In evaluating such nominations, the Nominating Committee seeks to achieve a balance of knowledge, experience, and capability on the Board.

DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS

Proposals of stockholders that are intended to be presented by such stockholders at the annual meeting of stockholders to be held in 2011, including the nomination of persons to serve on the Board, must be received by the Company’s Secretary not later than December 1, 2010, for inclusion in the proxy statement for that annual meeting. Stockholders who wish to present a proposal at the annual meeting of stockholders to be held in 2011, which has not been included in the Company’s proxy materials, must submit such proposal in writing to the Company in care of the Company’s Secretary. Any such proposal received by the Company’s Secretary after January 23, 2011, shall be considered untimely under the provisions of the Company’s bylaws governing nominations and the proposal of other business to be considered by the Company’s stockholders at that annual meeting. As discussed above, the Company’s bylaws contain further requirements relating to timing and content of the notice that stockholders must provide to the Company’s Secretary for any nomination or other business to be properly presented at an annual meeting of stockholders. It is recommended that stockholders submitting proposals direct them to the Company’s Secretary by certified mail, return receipt requested, to ensure timely delivery. No stockholder proposals were received with respect to the Meeting.

Stockholders submitting proposals must have continuously held at least $2,000 in market value, or one percent (1%), of the Company’s securities entitled to be voted on the proposal for at least one year prior to submitting the proposal. The stockholder’s proposal and accompanying supporting statement cannot exceed 500 words. Stockholders may not submit more than one proposal per year.

CODE OF ETHICS

The Company has adopted a Code of Ethics that applies to all of its directors, officers (including principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions) and employees. The Code of Ethics was updated in 2009, and a notice via an 8-K filing was made. The Code of Ethics is posted on the Company’s Internet website, www.GTSI.com (located on the Investor Relations web page). The Company intends to satisfy the disclosure requirements under Item 5.05 of SEC Form 8-K regarding any amendment to or waiver of the Code of Ethics with respect to the Company’s principal executive officer, principal financial officer, principal accounting officer or controller and persons performing similar functions, by posting such information on the Company’s Internet website.

COMPENSATION OF DIRECTORS

Each non-employee director of the Company (other than Mr. Lacy, who has requested not to be compensated) is compensated by the payment of an annual retainer of $25,000 (without proration thereof in the event of a partial quarter of service). The Chairs of the Compensation and Audit Committees receive a $3,500 annual retainer, and each member of the Compensation and Audit Committees receives $1,500 per meeting attended in person or via telephone. In addition, each Board member receives $1,500 for each Board meeting attended in person and $750 for each Board meeting attended via telephone. Each

non-employee director also receives compensation in the form of a long-term incentive award, which may be restricted stock or stock options. In 2009, the non-employee directors received awards of restricted stock. Under the Amended and Restated 2007 Stock Incentive Plan, each eligible non-employee director is granted such restricted stock, restricted stock units, or other forms of long-term compensation available under the Plan, as the Board shall determine based on Compensation Committee recommendations using information provided by an independent executive compensation consultant. Grants of restricted stock or restricted stock units are based on the closing price of Common Stock on Nasdaq on the date of grant. Non-employee directors of the Company are not eligible to participate in the Company’s other stock option plans or the Company’s Employee Stock Purchase Plan. The Lead Independent Director receives an additional annual retainer of $10,000. In 2007, Mr. Toups, the designated Lead Independent Director, was elected to the Chairman of the Board role, and as a result, the Lead Independent Director role he held has been incorporated into the Chairman role for his tenure. During 2009, the non-employee Chairman of the Board received an annual fee of $40,000.

Except as discussed above, directors of the Company do not receive any other compensation for their service on the Board or any committee thereof, but are reimbursed for their reasonable expenses incurred in association with the performance of their duties. In addition, Mr. Johnson received compensation for his services as a consultant to the Company (see section entitled “Certain Relationships and Related Transactions” below for information regarding this compensation.


DIRECTOR COMPENSATION
Name (a)	Fees Earned or Paid in Cash ($) (b)	Stock Awards ($) (1) (c)	Option Awards ($) (d)	All Other Compensation ($) (e)	Total ($) (f)
Lloyd Griffiths	38,500	13,999	0	0	52,499
Thomas L. Hewitt	40,000	13,999	0	15,000(2)	68,999
Lee Johnson	32,500	13,999	0	195,000(3)	241,499
Joseph “Keith” Kellogg, Jr.	37,750	13,999	0	0	51,749
Steven Kelman, Ph.D.	38,500	13,999	0	0	52,499
Linwood “Chip” Lacy, Jr. (4)	0	0	0	0	0
James J. Leto (5)	-	-	-	-	-
Barry L. Reisig	42,000	13,999	0	0	55,999
John M. Toups	78,500	13,999	0	0	92,499
Daniel R. Young	43,500	13,999	0	0	57,499

(1)

Amount reflects the grant date fair value of the award computed in accordance with FASB ASC Topic 718. Each director with an amount in this column received a restricted stock award of 3,333 shares of restricted stock.

(2)

Mr. Hewitt’s compensation is for services on the Professional Services Advisory Board.

(3)

Mr. Johnson’s compensation is shown in the section entitled “Certain Relationships and Related Transactions.”

(4)

Mr. Lacy is not receiving any compensation or stock awards as a director.

(5)

Mr. Leto’s compensation as Chief Executive Officer is shown in the Summary Compensation Table.

As of December 31, 2009, each director had the following amounts of options and restricted stock:


DIRECTOR’S OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
Name	Option Shares (#)	Restricted Stock Shares (#)
Lloyd Griffiths	0	3,333
Thomas L. Hewitt	20,000	3,333
Lee Johnson	60,100	3,333
Joseph “Keith” Kellogg, Jr.	10,000	3,333
Steven Kelman, Ph.D.	60,000	3,333
Linwood “Chip” Lacy, Jr. (1)	0	0
James J. Leto (2)	-	-
Barry L. Reisig	20,000	3,333
John M. Toups	62,000	3,333
Daniel R. Young	50,000	3,333

(1)

Mr. Lacy is not receiving Equity Awards as a director.

(2)

Mr. Leto’s equity awards as Chief Executive Officer are shown in the Outstanding Equity Awards at Fiscal Year-End Table.

Executive Compensation and Related Information

Background

At GTSI we recognize and understand that our people drive our success. GTSI operates in an innovative and progressive segment of the systems integration industry. Our employees – our human capital – are central to the value that GTSI creates for our clients and stockholders. We believe that our key investments in our human capital management programs and practices have significantly improved our employees’ commitment, engagement, performance and retention. We also believe this investment and improvement in employee engagement will continue to significantly improve our overall business performance.

Why human capital is such an important component

GTSI’s business involves several different, but related, elements: the creation and delivery of customized solutions that enable our clients to achieve their performance and business goals; and the management of

complex services and solutions.

Our success as a technology and strategic consulting services / solutions company is highly dependent on our employees. We believe we have successfully developed a culture focused on embracing strategic human capital programs as well as our core values of Integrity, Trust, Teamwork, Accountability, Customer Focus and Fun. We reinforce these key principles regularly in our training, our talent acquisition process/programs, performance management systems and internal communications.

Our compensation structure is designed to provide the framework for rewarding our human capital – our employees – for their contribution to our success. The essential nature of their role in value creation is reflected in the industry’s compensation policies and levels, which tend to be highly incentive-driven and reflect generally high levels of compensation for many employees and, in particular, for key executives and producers.

Just as we strive to deliver profitability and competitive returns on our human capital, our compensation framework must also remain competitive to attract, retain and develop talented employees to serve client and stockholder interests.

Compensation Discussion and Analysis

This discussion describes and analyzes GTSI’s compensation program for GTSI’s named executive officers as of December 31, 2009. These include: GTSI’s Chief Executive Officer, GTSI’s Chief Financial Officer, and the three most highly compensated executive officers (other than the Chief Executive Officer and the Chief Financial Officer) in fiscal 2009. At the time this report was completed, the three additional most highly compensated executives were the President and Chief Operating Officer, the Senior Vice President of Sales and Marketing, and the Senior Vice President of Professional Services.

In this section we first cover GTSI’s compensation philosophy and objectives, the foundation of which is compensating for performance. Next we review the process the Compensation Committee follows in deciding how to compensate GTSI’s named executive officers and provide a brief overview of the components of GTSI’s compensation program. Finally, we engage in a detailed discussion and analysis of the Compensation Committee’s specific decisions about the compensation of the named executive officers for fiscal 2009.

The Compensation Committee’s Charter can be found on GTSI’s internet web-site under the corporate governance section. For the fiscal year 2009, the Compensation Committee had seven formal meetings.

Compensation Philosophy and Objectives

GTSI’s executive compensation program is overseen by the Board’s Compensation Committee, the basic responsibility of which is to review the performance and development of GTSI’s management in achieving corporate goals/objectives and to assure that GTSI’s executive officers are compensated effectively in a manner consistent with GTSI’s strategy, competitive practice, sound corporate governance principles and stockholder interests. The Compensation Committee believes that the compensation programs for GTSI’s executive officers should be designed to attract, motivate and retain talented executives responsible for the success of GTSI and should be determined within a framework that rewards performance.

Within this overall philosophy, the Compensation Committee’s key objectives are to:

Offer a total compensation program that is fair, flexible, and competitive and takes into consideration the compensation practices of a group of peer companies identified based on an

objective set of criteria (the “Compensation Peer Group”).

Offer performance based, quarterly and annual variable short-term cash incentive awards based on GTSI’s achievement of designated quarterly and annual objectives. These incentive awards are designed to comprise a significant portion of the executive’s total compensation.

Align the financial interests of executive officers with those of stockholders by providing appropriate long-term, equity-based incentives and retention awards that encourage a culture of ownership and retention.

Provide differentiated pay based on the executive’s skills, role in the organization, and contribution to performance.

The core of GTSI’s executive compensation philosophy is to pay for performance. The Compensation Committee reviews GTSI’s compensation philosophy each year. There are four major components of the compensation of our named executive officers: 1) base salary, 2) short-term variable cash incentive awards, 3) long-term, equity-based incentive awards and 4) insurance, retirement and other employee benefits. The weighting among the first three major components is structured heavily towards performance-based components such as attainment of earnings before tax – EBT.

The target baseline mix (which is subject to individual discretionary factors) for base salary, short-term variable cash incentive awards and long-term, equity- based incentive awards for 2009 are shown in the chart below. As determined by the recently completed executive compensation analysis and benchmarking study facilitated through Mercer, the current mix of pay analysis for total direct compensation is aligned with the market and the peer companies identified below. This is clearly evident in the below summary graphics. These baseline amounts only serve as targets, and for individual executives the mix may vary depending upon individual performance, compensation history, scope of responsibility, internal equity, the external market and experience level.


Reflects Actual Annual Incentive	Base	Annual Incentive	Long Term Incentive
GTSI Executives Total Direct Compensation	48%	11%	41%
Market 25th Percentile Total Direct Compensation	36%	25%	39%
Market 50th Percentile Total Direct Compensation	36%	18%	46%

Reflects Target Annual Incentive	Base	Annual Incentive	Long Term Incentive
GTSI Executives Total Direct Compensation	48%	11%	41%
Market 25th Percentile Total Direct Compensation	38%	26%	37%
Market 50th Percentile Total Direct Compensation	35%	21%	44%

Compensation Process

In its process for deciding how to compensate GTSI’s named executive officers, the Compensation Committee begins by considering the competitive market data provided by its independent compensation consultant (Mercer). The Compensation Committee engages an independent compensation consultant, to provide advice and recommendations on competitive market practices and specific compensation decisions. For purposes of evaluating competitive practices, the Compensation Committee, with assistance from their independent compensation consultant, identified criteria to select a list of companies that constitute GTSI’s Compensation Peer Group. The Compensation Peer Group is reviewed annually and was last updated during late fiscal 2009. GTSI’s Compensation Peer Group consists of publicly traded companies, of similar size, that provide services, solutions and/or product to the federal and state and local governments. With this in mind, we also research and retain information about competitive pay levels through relevant and specific executive salary surveys. The Compensation Peer Group data prepared by Mercer as well as key selected survey instruments is used for year-end compensation benchmarking. The Compensation Peer Group was changed in 2010 to better align with the company’s current, on-going and future evolution to a systems integrator.

The members of the Compensation Peer Group (as of December 31, 2009) are as follows:

Companies


ScanSource Inc	SRA International	CIBER Incorporated
Stanley, Incorporated	EnPointe Technologies	ePlus Incorporated
MAXIMUS, Incorporated	Sapient Corporation

References to the “Compensation Peer Group” below refer to the Compensation Peer Group in effect at the time of the point of reference.

The Company provides named executive officers and other employees with base salary to compensate them for services rendered during the fiscal year. Base salary usually represents 40% to 50% of the executive’s total compensation and is intended to compensation the executive for the base market value of the position. Base salary ranges and total target compensation (base salary plus annual short-term incentive opportunity) for named executive officers are determined for each executive based on his or her position and responsibility by using the following weighted formula:

50% = Comparison of the positions of GTSI’s named executive officers to their counterpart positions in the Compensation Peer Group, plus

50% = Comparison of the positions of GTSI’s named executive officers in select executive compensation salary surveys. Specific surveys used including: Mercer, Watson Wyatt, Radford, and Culpepper.

During its review of base salaries for executives, the Committee primarily considers:

Market data provided by our outside consultant;

Internal review of the executive’s compensation, both individually and relative to other officers; and

Individual performance and contribution of the executive.

For competitive benchmarking purposes, the positions of GTSI’s named executive officers were compared to their counterpart positions in the Compensation Peer Group, and the compensation levels for comparable positions in the Compensation Peer Group were examined for guidance in determining base

salaries, annual cash incentives, total cash compensation, long-term incentive grant values and total compensation. The Compensation Committee considers the value of each item of compensation, both separately and in the aggregate.

The Compensation Committee retains and does not delegate any of its exclusive power to determine all matters of executive compensation and benefits, although the Chief Executive Officer and the Human Resources Department present industry-specific competitive market data, proposals and recommendations to the Compensation Committee. The Compensation Committee reports to the Board on the major items covered at each Compensation Committee meeting. The independent compensation consultant works directly with the Compensation Committee (and not on behalf of management) to assist the Compensation Committee in satisfying its responsibilities and will undertake no projects for management except at the request of the Compensation Committee chair and in the capacity of the Compensation Committee’s agent. To date, Mercer has not undertaken any projects for management.

Compensation Components

To attract and retain key executives, GTSI follows a best practices pay model of providing total compensation to its named executive officers consisting of base salaries, short-term variable cash incentive awards and long-term, equity-based incentive awards. Under this pay model, cash compensation is generally modest such that salary ranges for a given position will be between 40% and 50% of the midpoint of the base salary/ total target compensation (“TTC”) range established for each position.

The three major elements of GTSI’s executive officer compensation continue to be: (a) base salary, (b) short-term variable cash incentive awards, and (c) long-term, equity-based incentive awards. For named executive officers, the Compensation Committee aims to set individual base salaries and at-target annual cash compensation with reference to the 25^th - 50^th percentile of the Compensation Peer Group and salary survey pool. The total value of long-term, equity-based incentive awards is targeted with reference to the 50^th percentile of the Compensation Peer Group and salary survey pool which, when combined with the 50^th percentile-based target for cash compensation, results in an overall total target compensation at approximately the 50^th percentile of the Compensation Peer Group and salary survey pool for these named executive officers.

The Compensation Peer Group was changed for 2010 to better align with the Company’s current, on-going and future evolution to a systems integrator.

These target percentiles are subject to the Compensation Committee’s discretion to pay below or above the stated percentiles based on recruiting needs, retention requirements, individual or company performance, succession planning, etc. The following outlines how each compensation element accomplishes the above stated objectives and how the elements, in total, support GTSI’s compensation philosophy.

The Compensation Committee believes that the Company pays base salaries to its executive officers that are set conservatively and near the 25^th percentile, compared with executive officers of the Compensation

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Goal Attainment	% Deferred to Year End
125% - 224.9%	100%
225% - 350%	Restricted stock


Named Executive Officer	Base Salary	2009 Target Award Percentage	2009 EBT Target Achieved	2009 EIP Payment
James Leto	$525,000	100%	125%	$656,250
Scott Friedlander	$340,000	75%	125%	$318,750
Peter Whitfield	$250,000	50%	125%	$156,250
Todd Leto	$280,000	70%	125%	$245,000
Charles DeLeon	$250,000	50%	125%	$156,250


Executive	Base Salary Change - Fiscal 2009
James Leto	0%
Scott Friedlander	0%
Peter Whitfield	0%
Todd Leto	12.0%
Charles DeLeon	4.2%


	•		enhancing the link between the creation of stockholder value and long-term executive incentive compensation;
	•		maintaining and improving long-term retention of key personnel;
	•		ensuring the company provides a very competitive total compensation program for its key personnel;
	•		provides an opportunity for increased equity ownership by executives; and
	•		maintains competitive levels of total compensation.



OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

OPTION AWARDS						STOCK AWARDS

Name (a)	Number of Securities Underlying Unexercised Options (#) Exercisable (b)	Number of Securities Underlying Unexercised Options (#) Unexercisable (c)	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d)	Option Exercise Price ($) (e)	Option Expiration Date (f)	Number of Shares or Units of Stock That Have Not Vested (#) (g)	Market Value of Shares or Units of Stock That Have Not Vested ($) (h)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (i)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#) (j)

James Leto	15,000 10,000 10,000 10,000 268,000 83,035 0	0 0 0 0 132,000(1) 124,553(2) 20,000(4)	0 0 0 0 0 0 0 20,000(5)	6.20 8.48 8.30 10.15 6.75 9.60 6.40 6.40	5/15/2011 5/9/2012 5/9/2013 5/10/2014 4/28/2013 2/2/2014 8/5/2016 12/31/2018	47,216(3)	234,191	0 0 0 0 0 0 0 0	0 0 0 0 0 0 0 0

Scott Friedlander	15,000 15,000 53,600 30,000 33,006 0	0 0 26,400(6) 10,000(7) 49,510(9) 30,000(11)	0 0 0 0 0 0 30,000(12)	11.30 12.48 8.09 6.75 9.60 6.40 6.40	1/28/2010 12/1/2010 7/21/2012 4/28/2013 2/2/2014 8/5/2016 12/31/2018	4,620(8) 18,768(10)	22,915 93,089	0 0 0 0 0 0 0 0	0 0 0 0 0 0 0 0

Peter Whitfield	7,500 7,265 6,250 3,113 0	7,500(13) 10,899(14) 18,750(16) 12,456(17) 30,000(19)	0 0 0 0 0 30,000(20)	11.00 9.60 5.55 9.60 6.40 6.40	3/22/2014 2/2/2014 10/29/2015 10/29/2015 8/5/2016 12/31/2018	4,132(15) 4,322(18)	20,495 21,437	0 0 0 0 0 0 0	0 0 0 0 0 0 0

Todd Leto	20,000 5,000 15,000 25,948 0	0 0 5,000(23) 38,923(24) 50,000(26)	0 0 0 0 0 50,000(27)	8.79 12.10 6.75 9.60 6.40 6.40	7/8/2010 3/19/2011 4/28/2013 2/2/2014 8/5/2016 12/31/2018	1,650(21) 4,620(22) 14,755(25)	8,184 22,915 73,185	0 0 0 0 0 0 0 0	0 0 0 0 0 0 0 0

Charles DeLeon	5,000 5,000 10,000 10,050 15,000 19,098 0	0 0 0 4,950(28) 5,000(29) 28,647(30) 15,000(32)	0 0 0 0 0 0 0 15,000(33)	11.30 12.10 11.34 8.09 6.75 9.60 6.40 6.40	1/28/2010 3/19/2011 6/29/2011 7/21/2012 4/28/2013 2/2/2014 8/5/2016 12/31/2018	10,860(31)	53,866	0 0 0 0 0 0 0 0	0 0 0 0 0 0 0 0


OPTION EXERCISES AND STOCK VESTED
	OPTION AWARDS		STOCK AWARDS
Name (a)	Number of Shares Acquired on Exercise (#) (b)	Value Realized on Exercise ($) (c)	Number of Shares Acquired on Vesting (#) (d)	Value Realized on Vesting ($) (e)
Jim Leto	30,000	64,680	18,586	90,494
Scott Friedlander	0	0	9,991	49,371
Peter Whitfield	0	0	2,457	16,050
Todd Leto	0	0	9,944	50,967
Charles DeLeon	0	0	4,304	20,815


Plan Category	Number of Shares to be Issued upon Exercise of Outstanding Options/ Restricted Stock (a)	Weighted Average Exercise Price of Outstanding Options/ Restricted Stock (b)	Number of Shares Remaining Available for Future Issuance Under Equity Compensation Plans (excluding shares reflected in column (a)) (c)
Equity compensation plans approved by stockholders	2,388,028	$8.25	133,570
Equity compensation plans not approved by stockholders¹	9,000	$9.14	N/A
Total	2,397,028	$4.35	133,570


	Shares	Percent
Name of Beneficial Owner¹	Beneficially Owned	of Class
Linwood A. (“Chip”) Lacy, Jr.² c/o Solomon, Ward, Seidenwurm & Smith 401 B Street Suite 1200 San Diego, CA 92101	1,419,600	14.5%
T. Rowe Price 100 Light Street Baltimore, MD 21202	950,000	9.7%
Dimensional Fund Advisors, Inc. 1299 Ocean Avenue, 11^th Floor Santa Monica, CA 90401	833,541	8.5%
M. Dendy Young c/o Charles Schwab & Co. ATTN: Thomas Farley Bethesda, MD 20814	783,284	8.0%
Franklin Advisors 1 Franklin Parkway San Mateo, CA 94402	625,000	6.4%
James J. Leto³	545,920	5.3%
Lee Johnson⁴	194,265	2.0%
Scott Friedlander⁵	181,609	1.8%
John M. Toups⁶	118,665	1.2%
Todd Leto⁷	110,674	1.1%
Steven Kelman, Ph.D.⁸	102,446	1.0%
Daniel R. Young⁹	86,665	*
Charles DeLeon¹⁰	83,087	*
Thomas L. Hewitt¹¹	45,665	*
Peter Whitfield¹²	44,364	*
Barry L. Reisig¹³	39,665	*
Joseph “Keith” Kellogg, Jr.¹⁴	26,665	*
Lloyd Griffiths¹⁵	6,666	*
All Directors and Executive Officers as a group (14 persons)¹⁶	3,005,956	27.7%


Annual Base Salary ($)¹	Prior 12 month short term incentive earned ($) ²	Total ($)
525,000	656,250	1,181,250


Name	Cash Benefit ($)
Scott Friedlander	340,000¹
Peter Whitfield	125,000²
Todd Leto	140,000²
Charles DeLeon	125,000²


	2009		2008
Audit Fees	$	1,119,103	$	1,308,500	¹
Audit Related Fees	$	0	$	80,000
Tax Fees	$	55,000	$	20,000
All Other	$	6,500	$	1,500
Total	$	1,180,603	$	1,410,000