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Exhibit 10.6
ENGINEERED SUPPORT SYSTEMS, INC.
EXECUTIVE INCENTIVE PERFORMANCE PLAN
ARTICLE I. ESTABLISHMENT AND PURPOSE
1.1 ESTABLISHMENT OF THE PLAN. Engineered Support Systems, Inc.
(the "Company") hereby establishes the
Engineered Support Systems, Inc.
Executive Incentive Performance Plan (the
"Plan") as set forth in the
Agreement.
1.2 PURPOSE. Section 162(m) of the Internal Revenue Code of
1986
limits to $1,000,000 the amount of an
employer's deduction for a fiscal year
relating to compensation for certain
executive officers, with exceptions for
specific types of compensation such as
performance-based compensation.
This Plan is intended to provide for the payment of
qualified performance-based compensation in
the form of bonuses that is not
subject to the Section 162(m) deduction
limitation.
1.3 EFFECTIVE DATE. The effective date of the Plan is July 15,
2004, subject to approval of the material
terms of the Plan by the Company's
shareholders.
ARTICLE II. DEFINITIONS
2.1 DEFINITIONS. Whenever used herein, the following terms will
have the meanings set forth below, unless
otherwise expressly provided. When
the defined meaning is intended, the term
is capitalized.
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Compensation Committee of the
Board, or another committee appointed by
the Board to serve as the
administrator for the Plan, which committee
at all times consists of persons
who are "outside directors" as that term is
defined in the regulations
promulgated under Section 162(m) of the
Code.
(d) "Company" means Engineered Support Systems, Inc.
(e) "Employer" means the Company and any entity that is a
subsidiary or affiliate of the Company.
(f) "Participant" for a Performance Period means an
officer or other key employee who is
designated by the Committee as a
participant in the Plan for that
Performance Period in accordance with
Article III.
(g) "Target Award" shall mean the maximum amount that may
be paid to a Participant as a bonus for a
Performance Period if certain
performance criteria are achieved in the
Performance Period.
(h) "Performance Period" shall mean the fiscal year of
the Company; or any other period designated
as a Performance Period by the
Committee.
2.2 SEVERABILITY. In the event any provision of the Plan shall
be
held illegal or invalid for any reason, the
illegality or invalidity will
not affect the remaining parts of the Plan,
and the Plan will be construed
and enforced as if the illegal or invalid
provision had not been included.
ARTICLE III. ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY. The Participants in this Plan for any
Performance
Period shall be comprised of each employee
of the Company who is a "covered
employee" for purposes of Section 162(m) of
the Code, or who may be such a
covered employee as of the end of a tax
year for which the Company would
claim a tax deduction in connection payment
of compensation to such
employee, during such Performance Period
and who is designated individually
or by class to be a Participant for such
Performance Period by the Committee
at the time a Target Award is established
for such employee.
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3.2 PARTICIPATION. Participation in the Plan will be determined
annually by the Committee. Employees
approved for participation will be
notified of their selection as soon after
approval as practicable.
3.3 TERMINATION OF APPROVAL. The Committee may withdraw
approval
for a Participant's participation at any
time. In the event of such
withdrawal, the Employee concerned will
cease to be a Participant as of the
date of such withdrawal. The Employee will
be notified of such withdrawal as
soon as practicable following the
Committee's action. A Participant who is
withdrawn from participation under this
Section will not receive any award
for the Performance Period under this
Plan.
ARTICLE IV. PERFORMANCE CRITERIA
4.1 TARGET AWARDS. The Committee shall establish objective
performance criteria for the Target Award
of each Participant for each
Performance Period in writing. Such formula
shall be based upon one or more
of the following criteria, individually or
in comb
