|
<PAGE>
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.
1
<PAGE>
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 combinat
| 
