ENGINEERED SUPPORT SYSTEMS INC, S-8, 2000-09-01

ENGINEERED SUPPORT SYSTEMS INC
S-8, 2000-09-01
AIR-COND & WARM AIR HEATG EQUIP & COMM & INDL REFRIG EQUIP

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<PAGE>

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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ENGINEERED SUPPORT SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)

MISSOURI 43-1313242
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)

201 Evans Lane
St. Louis, Missouri 63121
(314) 553-4000

(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)

ENGINEERED SUPPORT SYSTEMS, INC.
2000 STOCK OPTION PLAN
FOR NONEMPLOYEE DIRECTORS
(Full Title of Plan)

DAVID DOUGLASS MATTERN
201 Evans Lane
St. Louis, Missouri 63121
(314) 553-4984

(Name, address, including zip code, and telephone number, including area
code, of agent for service)

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PROSPECTUS

ENGINEERED SUPPORT SYSTEMS, INC.
2000 STOCK OPTION PLAN
FOR NONEMPLOYEE DIRECTORS
100,000 Shares
Engineered Support Systems Inc.
Common Stock
$.01 Par Value

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE

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Engineered Support Systems, Inc., by this prospectus, offers to
nonemployee directors of the Company, upon the terms and conditions set
forth in this prospectus, the possibility of receiving awards of, or
options to purchase, no more than 100,000 shares of common stock of the
Company.

No person has been authorized to give any information or to make
any representations, other than as contained herein, in connection with
the offer contained in this prospectus, and if given or made, such
information or representations must not be relied upon. This prospectus
does not constitute an offer of any securities other than the registered
securities to which it relates or an offer to any person in any state
where such an offer would be unlawful.

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THE DATE OF THIS PROSPECTUS IS SEPTEMBER 1, 2000

<TABLE>
CALCULATION OF REGISTRATION FEE

============================================================================================

<CAPTION>
Title of Each Class Amount to Proposed Proposed Amount of
of Securities to be be Maximum Maximum Registration
Registered Registered Offering Assessment Fee
Price Price
Per
Share <F1>

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<S> <C> <C> <C> <C>
Common Stock $.01 100,000 $19.9375 $1,993,750 $526.35
Par Value

============================================================================================

<FN>
<F1> Represents the closing price as reported on August 29, 2000.
</TABLE>

ENGINEERED SUPPORT SYSTEMS, INC.
Cross-Reference Sheet
Pursuant to Item 501 (b) of Regulation S-K

1. Forepart of Registration Statement Outside Front Cover
and Outside Front Cover Page of
Prospectus

2. Inside Front and Outside Back Cover Inside Front and Outside
Pages of Prospectus Back Cover Pages

3. Summary Information and Risk Factors Incorporation of Certain
Documents by Reference;
Engineered Support
Systems, Inc.

4. General Information Regarding Creation, Duration,
the Plan Purposes and Securities
to be Offered; Tax
Effects

5. Securities to be Offered and Eligibility, Creation,
Directors Who May Participate Duration, Purpose and
in the Plan Securities to be Offered

6. Purchase of Securities Pursuant Awards
to the Plan

7. Payment for Securities Offered Awards

8. Contributions Under the Plan Not Applicable

9. Withdrawal from the Plan - Assignment; Forfeiture
Assignment of Interest of Awards

10. Defaults Under the Plan Forfeiture of Awards

11. Administration of the Plan Administration

12. Investment of Funds Not Applicable

13. Charges and Deductions and Liens Therefore Not Applicable

14. Description of Registrant's Description of Common
Securities Stock

15. Incorporation of Certain Incorporation of Certain
Documents by Reference Documents by Reference

16. Additional Information Not Applicable

17. Interest of Named Experts Legal Opinion

18. Disclosure of Commission Indemnification of
Position on Indemnification Directors and
for Securities Act Liabilities Officers

AVAILABLE INFORMATION
---------------------

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 and in accordance therewith files
reports, proxy statements and other information with the Securities and
Exchange Commission. Information as of a particular date, concerning
the directors and officers, their remuneration, options granted to them,
principal holders of securities and any information of material interest
of such persons in transactions with the Company, is set forth in proxy
statements distributed to the shareholders and filed with the Securities
and Exchange Commission. Such reports, proxy statements and other
information can be obtained from the Public Reference Section of the
Commission, Washington, D.C. 20549 at prescribed rates. This
information may also be inspected at the offices of Engineered Support
Systems, Inc., 201 Evans Lane, St. Louis, Missouri 63121. The Company
will supply a copy of any and all such information (exclusive of any
exhibits) without charge upon request of Gary C. Gerhardt, Vice
Chairman-Administration and Chief Financial Officer, 201 Evans Lane, St.
Louis, Missouri 63121, telephone number (314) 553-4000.

ENGINEERED SUPPORT SYSTEMS, INC.
--------------------------------

Engineered Support Systems, Inc. was incorporated under the laws
of the State of Missouri in December 1983. Engineered Support Systems,
Inc. has six wholly-owned subsidiaries: Engineered Air Systems, Inc.,
which was incorporated under the laws of the State of Missouri on
December 24, 1981 and acquired the assets of the Defense Systems
Division of Allis-Chalmers Corporation on March 30, 1982; Engineered
Specialty Plastics, Inc., which was acquired on March 9, 1993;
Engineered Coil Company, d/b/a Marlo Coil, which acquired substantially
all of the net assets of Nuclear Cooling, Inc. effective February 1,
1998; Keco Industries, Inc. which was acquired on June 24, 1998;
Engineered Electric Company, d/b/a Fermont, which acquired substantially
all of the net assets of the Fermont division of Dynamics Corporation of
America on February 22, 1999; and, Systems & Electronics Inc., which was
acquired on September 30, 1999. Unless the context otherwise requires,
the term "Company" refers to Engineered Support Systems, Inc. and to
Engineered Air Systems, Inc., Engineered Specialty Plastics, Inc.,
Engineered Coil Company, Keco Industries, Inc., Engineered Electric
Company and Systems & Electronics Inc. The Company's headquarters are
located at 201 Evans Lane, St. Louis, Missouri 63121 and its telephone
number is (314) 553-4000. This offering relates to the Company's 2000
Stock Option Plan for Nonemployee Directors. Any proceeds will be added
to the general funds of the Company and used for its corporate purposes
as determined by the Board of Directors.

STOCK OPTION PLAN
-----------------

Creation, Duration, Purpose and Securities to be Offered
--------------------------------------------------------

The Engineered Support Systems, Inc. 2000 Stock Option Plan for
Nonemployee Directors (the "Plan") was approved by the Board of
Directors and by the shareholders of Engineered Support Systems, Inc. on
March 7, 2000. The purpose of the Plan is to enhance the profitability
and value of the Company for the Benefit of its shareholders by
providing stock options to attract and retain the services of
experienced and knowledgeable nonemployee directors for Engineered
Support Systems, Inc. The Plan has made available 100,000 shares of
Engineered Support Systems, Inc. $.01 par value common stock for
purposes of making awards under the Plan. The shares available for use
will consist of authorized but unissued shares of the common stock. The
number of shares available for awards under the Plan may be increased
from time to time by the Board of Directors of the Company and will be
adjusted to reflect any stock split, stock dividend, combination or
reclassification of shares of stock or consolidation, merger or sale of
all or substantially all of the assets of the Company. Any awards made
under the Plan will likewise be adjusted upon the occurrence of any of
those events. The Plan terminates on October 31, 2005 for the purpose
of granting awards thereunder, but is deemed to continue for
administration of the awards granted prior to termination of the Plan.
The Plan is not qualified under Section 401(a) of the Internal Revenue
Code and is not subject to any provision of the Employee Retirement
Income Security Act of 1974.

Amendments
----------

The Board of Directors of the Company may from time to time amend,
suspend or terminate the Plan in whole or in part, and if terminated may
reinstate any and all of the provisions of the Plan, except that (1) no
amendment, suspension or termination may apply to the terms of any award
(contingent or otherwise) granted prior to the effective date of such
amendment, suspension or termination without the recipient's consent;
(2) no amendment may withdraw the authority from the Plan Administrator
to administer the Plan; (3) no amendment may change the persons who may
be eligible; and (4) no amendment may change the restrictions in the
Plan against the transferability of awards.

Administration
--------------

The Plan is administered by Chairman of the Board of the Company.
The business address of the Plan Administrator is 201 Evans Lane, St.
Louis, Missouri 63121. The Plan Administrator has full power to grant
awards, construe and interpret the Plan, establish rules and regulations
and perform all other acts the Plan Administrator believes reasonable
and proper including the power to delegate related responsibilities.
Any Plan participant requiring additional information regarding the Plan
should contact Mr. Gary C. Gerhardt, Vice Chairman-Administration and
Chief Financial Officer, at 201 Evans Lane, St. Louis, Missouri 63121 or
by telephone at (314) 553-4000.

Eligibility
-----------

An option to purchase 3,000 shares shall be granted to each
nonemployee director immediately following the first annual meeting of
shareholders after such director is first elected or appointed to the
Board of Directors. Thereafter, an option to purchase 2,000 shares
shall be granted to each nonemployee director immediately following the
annual meeting of shareholders. As of the date of this prospectus,
options on 4,750 shares of common stock have been granted under the
Plan.

Awards
------

The terms and conditions of a grant of any stock option must be
set forth in a written notice consistent with the provisions of the
Plan. The option price of shares subject to any stock option shall be
the closing price of the stock on the date the option is granted and may
not be repriced at any time. No stock options may be exercised more
than five years after the date the stock option is granted. The
purchase price of any shares exercised under any stock options must be
made in full upon such exercise. The payment shall be made in such
form, which may be in cash or stock, as the Plan Administrator may
determine.

Death of Recipient
------------------

In the event of the death of a stock option recipient, the option,
to the extent exercisable on the date of the recipient's death, may be
exercised by the recipient's personal representative or the person or
persons entitled thereto by will or in accordance with the laws of
descent and distribution at any time within six (6) months after the
recipient's death, but not after the expiration of the term of the
option.

Forfeiture of Awards
--------------------

Unless the Plan Administrator determines otherwise, the recipient
of an award shall forfeit all amounts not payable or rights not
exercisable if he is (1) discharged for cause (2) voluntarily terminates
his employment other than by Normal Retirement as defined in the
Engineered Support Systems, Inc. Employee Stock Ownership Plan (3)
engages in competition with the Company or any affiliate or (4) engages
in any activity or conduct contrary to the best interest of the Company
or any affiliate.

Assignment
----------

No recipient of an award under the Plan, or any person claiming
by, under or through him, has any right with respect to the Plan or in
the shares reserved or in any award thereof, contingent or otherwise,
unless and until such award or written notice of such award has been
delivered to the recipient, and all the terms and provisions of the Plan
have been complied with. Hence, no assignment or hypothecation of any
employee or consultant expectation of receiving any award under the Plan
may be made except by will or the laws of descent and distribution.

TAX EFFECTS
-----------

In the opinion of David Douglass Mattern, General Counsel for the
Company, the federal income tax consequences to the Company and the
employee of the grant and exercise of stock options under the Plan under
the now applicable provisions of the Internal Revenue Code of 1986 as
amended (the "Code") and the regulations thereunder are substantially as
follows:

Stock Options
-------------

The stock options to be issued under the Plan will be treated as
non-statutory options and will be taxed in accordance with the
provisions of Code Section 83. The stock options will have the
following tax consequences:

1. The optionee (person exercising the option) will have ordinary
income at the time the option is exercised in an amount equal to
the excess of the fair market value at the date of exercise over
the option price of the common stock;

2. The Company will have a deductible expense in an amount equal to
the ordinary income of the optionee;

3. No amount other than the price paid under the option shall be
considered as received by the Company for shares so transferred;

4. Any gain from the subsequent sale of the shares for an amount in
excess of fair market value on the date the option is exercised
will be capital gain and any loss will be capital loss; and,

5. Upon the exercise of the option, the optionee will be required to
pay withholding for federal and state income tax for the ordinary
income recognized. The ordinary income will be included in the
optionee's W-2 in the year of exercise.

This brief summary of applicable tax provisions is furnished for
the information of recipients, who are cautioned to review the
tax laws carefully and consider the need for professional
assistance before determining their actions under this Plan.

OPTIONS TO PURCHASE SECURITIES
------------------------------

There are 4,750 shares of common stock issuable under outstanding
options granted under the terms of the Plan as of the date of this
prospectus. Updated information regarding options to purchase
securities under the Plan will be contained in the Company's annual
report to shareholders and proxy statement which will be delivered to
Plan participants annually.

Description of Common Stock
---------------------------

The authorized common stock of the Company consists of 10,000,000
shares of common stock, $.01 par value per share. There are, as of July
31, 2000, 7,007,758 shares of common stock validly issued, outstanding,
fully paid and non-assessable. The common stock offered hereby for the
account of the Company, when issued and sold as contemplated by this
prospectus, will be validly issued, outstanding, fully paid and non-
assessable.

Holders of common stock, except at elections of directors, are
entitled to cast one vote for each share held of record on all matters
presented to the shareholders. At all elections of directors, each
shareholder is entitled to as many votes as equals the number of his
shares of common stock multiplied by the number of directors to be
elected, and he may cast all of such votes for a single director or may
distribute them among any two or more directors as he may see fit. The
common stock of the Company has equal rights to participate in dividends
declared by the Board of Directors out of such funds legally available
therefore and to participate, in the event of liquidation of the
Company, in the distribution of the net assets of the Company legally
available therefore. There are no pre-emptive rights with respect to
the common stock.

The Company's transfer agent and registrar is ChaseMellon
Shareholder Services, St. Louis, Missouri.

LEGAL OPINION
-------------

The legality of the common stock offered hereby will be passed
upon for the Company by David Douglass Mattern, General Counsel for the
Company.

INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------

Under the Company's by-laws, the Company may indemnify any person
who is or was a director, officer, employee or agent of the Company or
is or was serving, at the request of the Company, as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses actually and
reasonably incurred by him in connection with any civil, criminal,
administrative or investigative action, suit, proceeding or claim to the
full extent and in the manner permitted by law.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
persons controlling the registrant pursuant to the foregoing provisions,
the registrant has been informed that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is therefore unenforceable.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
-----------------------------------------------

The documents listed below of Engineered Support Systems, Inc. and
all such documents subsequently filed by it pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment which indicates that all securities
have been sold or which de-registers all securities then remaining
unsold, shall be deemed to be incorporated by reference in this
prospectus and be deemed to be a part thereof from the date of filing of
such documents.

1. Engineered Support Systems, Inc. Form 10-K Annual Report for
the fiscal year ended October 31, 1999 and Form 10-Q for the
quarters ended January 31, 2000 and April 30, 2000 filed
pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934.

2. Engineered Support Systems, Inc. definitive proxy statement
dated February 1, 2000 filed pursuant to Section 14 of the
Securities Exchange Act of 1934 in connection with the
annual meeting of shareholders held March 7, 2000.

3. Engineered Support Systems, Inc. Form 8-K/A dated December
14, 1999 filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934.

TABLE OF CONTENTS
-----------------

Page
----

STOCK OPTION PLAN

Creation, Duration, Purpose and
Securities to be Offered 3

Amendments 4

Admissions 4

Eligibility 4

Awards 4

Death of Recipient 5

Forfeiture of Awards 5

Assignment 5

TAX EFFECTS

Stock Options 6

OPTIONS TO PURCHASE SECURITIES 7

Description of Common Stock 7

LEGAL OPINION 8

INDEMNIFICATION OF DIRECTORS AND OFFICERS 8

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 8

PART II
-------

INFORMATION NOT REQUIRED IN PROSPECTUS
--------------------------------------

Item 19. Indemnification of Directors and Officers.
------------------------------------------

Section 351.355 of the General and Business Corporation Law of
Missouri authorizes a corporation, under certain circumstances, to
indemnify its officers, directors and others. The By-Laws of the
Registrant authorize indemnification of officers and directors to the
full extent permitted by the above-mentioned Missouri statute.

In addition, the Registrant maintains officers' and directors'
liability insurance for the benefit of its officers and directors.

Item 20. Exhibits.
---------

See Exhibit Index on Page II-2.

Item 21. Undertakings.
-------------

(1) The undersigned registrant hereby undertakes to deliver or
cause to be delivered with the prospectus to each employee
or consultant to whom the prospectus is sent or given a copy
of the registrant's annual report to shareholders for its
last fiscal year, unless such employee or consultant
otherwise has received a copy of such report, in which case
the registrant shall state in the prospectus that it will
promptly furnish, without charge, a copy of such report on
written request of the employee or consultant. If the last
fiscal year of the registrant has ended within 120 days
prior to the use of the prospectus, the annual report of the
registrant for the preceding fiscal year may be so
delivered, but within such 120 day period the annual report
for the last fiscal year will be furnished to each such
employee or consultant.

(2) The undersigned registrant hereby undertakes to transmit or
cause to be transmitted to all employees or consultants
participating in the Plan who do not otherwise receive such
material as shareholders of the registrant, at the time and
in the manner such material is sent to its shareholders,
copies of all reports, proxy statements and other
communications distributed to its shareholders generally.

II-1

EXHIBIT INDEX
-------------

Page #
------

4.0 Engineered Support Systems, Inc.
2000 Stock Option Plan for Nonemployee Directors II-3

5.0 Opinion of David Douglass Mattern II-6

23.0 Consent of PricewaterhouseCoopers LLP II-8

23.1 Consent of KPMG LLP II-9

24.0 Power of Attorney II-10

II-2

ENGINEERED SUPPORT SYSTEMS, INC.
2000 STOCK OPTION PLAN
FOR NONEMPLOYEE DIRECTORS

ARTICLE I. GENERAL PROVISIONS

Section 1. Purpose of Plan. The purpose of the Engineered
Support Systems, Inc. 2000 Stock Option Plan for Nonemployee
Directors (the "Plan") is to enhance the profitability and value of
Engineered Support Systems, Inc. (the "Company") and its
shareholders by strengthening the Company's ability to attract and
retain the services of experienced and knowledgeable nonemployee
directors and by encouraging such directors to acquire an increased
proprietary interest in the Company.

Section 2. Definitions of Terms as Used in the Plan.

(a) "Affiliate" means any subsidiary or parent of the Company.

(b) "Award" means a Stock Option granted under Article II.

(d) "Company" means Engineered Support Systems, Inc.

(e) "Director" means a member of the Board of Directors of
Engineered Support Systems, Inc.

(f) "Plan" means the Engineered Support Systems, Inc. 2000 Stock
Option Plan for Nonemployee Directors.

(g) "Stock" means the $.01 par value common stock of Engineered
Support Systems, Inc.

Section 3. Authorization and Reservation. There shall be
established a reserve of 100,000 shares of Stock of authorized and
unissued shares, which shall be the total number of shares of Stock
that may be issued pursuant to Awards. The Board of Directors may,
from time to time, increase the number of shares allocated to the
Plan as approved by the Board of Directors. The reserve may consist
of authorized but unissued shares of Stock or of reacquired shares,
or both. Upon the cancellation or expiration of an Award, all shares
of Stock not issued thereunder shall become available for the
granting of additional Awards.

Section 4. Administration of the Plan. The Chairman of the Board
of the Company shall administer the Plan. Subject to the terms of
the Plan, the Plan Administrator shall have full power to grant
Awards, construe and interpret the Plan, establish rules and
regulations and perform all other acts the Plan Administrator
believes reasonable and proper, including the power to delegate
responsibility to others to assist in administering the Plan.

Section 5. Participation in the Plan. Each member of the
Company's Board of Directors who is not otherwise an employee of the
Company or of any subsidiary of the Company ("Eligible Director")
shall be eligible to participate in the Plan.

ARTICLE II. STOCK OPTIONS

Section 1. Description. All options granted under the Plan shall
be nonstatutory options not intended to qualify under Section 422 of
the Internal Revenue Code of 1986, as amended.

Section 2. Terms and Conditions.

(a) Each Stock Option shall be set forth in a written Notice
containing such terms and conditions as the Plan Administrator may
determine, subject to the provisions of the Plan.

(b) The purchase price of any shares exercised under any Stock
Option must be paid in full upon such exercise. The payment shall be
made in such form, which may be in cash or stock, as the Plan
Administrator may determine.

(c) No Stock Option may be exercised after the expiration of
five (5) years from the date such Option is granted unless such term
is extended by the Plan Administrator as evidenced in writing.

II-3

(d) The option price of shares subject to any Stock Option shall
be the closing price of the Stock on the date that the Stock Option
is granted and may not be repriced at any time.

Section 3. Option Grant Size and Grant Dates.

(a) Initial Grants. An option to purchase 3,000 Shares (as
adjusted pursuant to Article VI, Section 6) shall be granted to each
Eligible Director immediately following the Annual Meeting after
such Eligible Director is first elected or immediately following the
first Annual Meeting after such Eligible Director is elected or
appointed by the Board to be Director. Eligible Directors are only
entitled to receive one (1) initial grant during their lifetime.

(b) Annual Grants. An option to purchase 2,000 Shares (as
adjusted Pursuant to Article VI, Section 6) shall be granted
automatically each year immediately following the Annual Meeting, to
each Eligible Director who has not received an initial grant in that
fiscal year.

Section 4. Option Exercise Price. The option exercise price per
share for an initial or annual award shall be the closing price of
the Stock on the date the Option is granted and may not be repriced
at any time.

ARTICLE III. FORFEITURE OF AWARDS

Section 1. Termination Other Than by Retirement, Disability, or
Death. In the event of the termination of an optionee's service as a
Director, other than by reason of retirement, total and permanent
disability, or death, the then outstanding options of such optionee
shall automatically expire on the effective date of such
termination. For purposes of the Plan, the term "by reason of
retirement" means (i) mandatory retirement pursuant to Board Policy
or (ii) termination of service at a time when the optionee would be
entitled to a retirement benefit under the Engineered Support
Systems, Inc. Employee Stock Ownership Plan as then in effect, if
the Eligible Director were an employee of the Company.

Section 2. Termination By Retirement or Disability. In the event
of the termination of an optionee's service as a Director by reason
of retirement or total and permanent disability, the then
outstanding options of such optionee shall become exercisable to the
full extent of the number of Shares remaining covered by such
options, regardless of whether such options were previously
exercisable, and each such option shall expire four years after the
date of such termination or on the stated grant expiration date,
whichever is earlier.

ARTICLE IV. DEATH OF AWARDEE

Section 1. Death of Optionee. Upon the death of an Award
recipient, a Stock Option, to the extent exercisable on the date of
his death, may be exercised at any time within six (6) months after
the recipient's death, but not after the expiration of the term of
the option, by the recipient's personal representative or the person
or persons entitled thereto by will or in accordance with the laws
of descent and distribution for the State of Missouri.

ARTICLE V. EXERCISE OF OPTION AND ISSUANCE OF STOCK

Section 1. Exercise of Option. The holder of an Award shall
exercise their right to acquire the Stock pursuant to the Award by
written notice to the Secretary of the Company at 201 Evans Lane,
St. Louis, Missouri 63121. Written notice shall set forth the
number of shares for which the exercise is applicable together with
a check for the purchase price for the Stock. If the holder of the
Award exercises his option for less than the total number of Shares
awarded, he will execute such documents as required by the Corporate
Secretary for the remaining number of shares subject to the Award.

Section 2. Endorsement on Stock Certificates.

(a) The Stock issued pursuant to an Award shall be restricted
before Stock is issued until the Plan is registered in accordance
with the provisions of the applicable Securities Act and the
provisions of applicable state securities laws or until the Stock
may be transferred in accordance with an exemption from
registration.

(b) Until registered, the certificate or certificates
representing the shares issued by the Company to any of the parties
hereto shall have endorsed upon them the following legend:

"The shares represented by this certificate have not been
registered pursuant to the Securities Act of 1934 or the
Missouri Uniform Securities Act, and therefore are "restricted
securities" within the meaning of the Act. These shares have
been acquired for investment and not with a view to
distribution

II-4

or resale and may not be made subject to a security interest,
pledge, hypothecation, or otherwise transferred without an
effective registration statement for such shares under the
Securities Act of 1934 or the Missouri Uniform Securities Act
or an opinion of counsel for the corporation that registration
is not required under the Acts."

ARTICLE VI. OTHER GOVERNING PROVISIONS

Section 1. Transferability. No Award shall be transferable other
than by will or the laws of descent and distribution as set out in
Article V, and any right granted under an Award may be exercised
during the lifetime of the holder thereof only by him or at his
death by his legal representative within six (6) months after such
date.

Section 2. Rights as a Shareholder. A recipient of an Award
shall, unless the terms of the Award provide otherwise, have no
rights as a shareholder with respect to any options or shares which
may be issued in connection with the Award until the issuance of a
Stock certificate for such shares, and no adjustment shall be made
for dividends or other rights for which the record date is prior to
the issuance of such stock certificate.

Section 3. General Conditions of Awards. No employee or other
person shall have any right with respect to this Plan, in the shares
reserved, or in any Award, contingent or otherwise, until written
evidence of the Award shall have been delivered to the recipient and
all the terms, conditions and provisions of the Plan applicable to
such recipient have been met.

Section 4. Limitation as to Directorship. Neither the Plan, nor
the granting of an option, nor any other action taken pursuant to
the Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that an Eligible Director has a
right to continue as a Director for any period of time or at any
particular rate of compensation.

Section 5. Acceleration. The Plan Administrator may in its sole
discretion accelerate the date of exercise of any Award.

Section 6. Adjustments. Upon any Stock split-up, Stock dividend,
combination or reclassification of shares of Stock, or
consolidation, merger or sale of all or substantially all of the
assets of the Company, appropriate adjustments shall be made to the
shares reserved under Article I of the Plan and the terms of the
outstanding Awards.

Section 7. Withholding of Taxes. The Company shall deduct from
any payment, or otherwise collect from the recipient, any taxes
required to be withheld by federal, state or local governments in
connection with any Award.

Section 8. No Warranty of Tax Effect. Except as may be contained
in the terms of any Award, no opinion is expressed nor warranties
made as to the effect for federal, state, or local tax purposes of
any Awards.

Section 9. Amendment of Plan. The Board of Directors of the
Company may from time to time amend, suspend or terminate the Plan,
in whole or in part, and if terminated may reinstate any or all of
the provisions of the Plan, except that (1) no amendment, suspension
or termination may apply to the terms of any Award (contingent or
otherwise) granted prior to the effective date of such amendment,
suspension or termination without the recipient's consent; (2) no
amendment may withdraw the authority from the Plan Administrator to
administer the Plan; (3) no amendment may change the persons who may
be eligible; and (4) no amendment may change the restrictions in the
Plan against the transferability of Awards.

Section 10. Construction of Plan. The place of administration of
the Plan shall be in the State of Missouri, and the validity,
construction, interpretation, administration and effect of the Plan
and of its rules and regulations, and rights relating to the Plan,
shall be determined solely in accordance with the laws of the State
of Missouri.

ARTICLE VII. EFFECTIVE DATE AND TERM

This Plan shall be effective upon approval by the shareholders
of the Company. The Plan shall continue until October 31, 2005
unless extended by the Board of Directors, when it shall terminate.
Any balances in the Share Reserve shall be canceled, and no Awards
shall be granted under the Plan thereafter. The Plan shall continue
in effect, however, insofar as is necessary to complete all of the
Company's obligations under outstanding Awards and to conclude the
administration.

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DAVID DOUGLASS MATTERN
ENGINEERED SUPPORT SYSTEMS, INC.
SECRETARY AND GENERAL COUNSEL
201 EVANS LANE
ST. LOUIS, MISSOURI 63121

-------------------------------

SEPTEMBER 1, 2000

Engineered Support Systems, Inc.
201 Evans Lane
St. Louis, Missouri 63121

Re: Registration of Engineered Support Systems, Inc.
2000 Stock Option Plan for Nonemployee Directors

To Whom It May Concern:

I have assisted in the preparation and filing with the Securities and
Exchange Commission of a Registration Statement on Form S-8 ("Registration
Statement"), relating to 100,000 shares of common stock, $.01 par value per
share ("Common Stock") of Engineered Support Systems, Inc. ("Company") to be
offered pursuant to the Engineered Support Systems, Inc. 2000 Stock Option Plan
for Nonemployee Directors.

I have examined the Company's Article of Incorporation, and all
amendments thereto, which have been duly certified by the Secretary of the State
of Missouri, the By-laws of the Company, and all amendments thereto, which have
been duly certified by the Secretary of the Company, and have examined and
relied upon the originals or copies, duly certified to my satisfaction, of such
records of meetings of the directors and shareholders of the Company, and such
other documents and other instruments as in my judgment are necessary or
appropriate to enable me to render the opinions expressed below.

Based upon the foregoing, I am of the opinion that:

1. The Company is a corporation duly organized and validly existing
under the laws of the State of Missouri, with corporate power
and authority adequate for the conduct of its business as described
in the Registration Statement and the Prospectus constituting a part
thereof.

2. The shares of Common Stock to be offered to the Plan on behalf of
the Company have been duly authorized for issuance and, upon
issuance of the certificates by the Company, the shares will be
validly issued, fully paid, and non-assessable.

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3. The section of the Prospectus entitled "Tax Effects" describes the
current federal income tax consequences to the Company and the
recipient of a grant.

I hereby consent to the use of my name in the Registration Statement and
under the caption "Legal Opinion" in the related Prospectus and consent to the
filing of this opinion as an exhibit to the Registration Statement.

Respectfully submitted,

/s/ David Douglass Mattern
------------------------------------------------
David Douglass Mattern, Esq.

II-7

CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------

We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 relating to the Engineered Support Systems, Inc.
2000 Stock Option Plan for Nonemployee Directors of our report dated
December 10, 1999 relating to the financial statements, which appears in
the 1999 Annual Report to Shareholders of Engineered Support Systems, Inc.,
which is incorporated by reference in Engineered Support Systems, Inc.'s
Annual Report on Form 10-K for the year ended October 31, 1999. We also
consent to the incorporation by reference of our report dated
December 10, 1999 relating to the financial statement schedules, which
appears in such Annual Report on Form 10-K.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
Saint Louis, Missouri
August 31, 2000

II-8

INDEPENDENT AUDITORS' CONSENT

The Board of Directors
Engineered Support Systems, Inc.:

We consent to the use of our report on the financial statements of Systems and
Electronics, Inc. as of September 30, 1999 and 1998 and for each of the years
in the three-year period ended September 30, 1999 incorporated herein by
reference.

/s/ KPMG LLP

KPMG LLP

St. Louis, Missouri
August 31, 2000

II-9

SIGNATURES
----------

Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing of Form S-8 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the County of St. Louis
and State of Missouri on August 31, 2000.

ENGINEERED SUPPORT SYSTEMS, INC.

By /s/ Michael F. Shanahan Sr.
-----------------------------
Michael F. Shanahan Sr.
Chairman of the Board and
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below on August 31, 2000 by the
following persons in the capacities indicated.

Each of the persons whose signature appears below authorizes
Michael F. Shanahan Sr., Gary C. Gerhardt and David D. Mattern, or any
one of them, as Attorney-In-Fact to sign on his behalf individually and
in each capacity stated below, and to file any amendments, including
post-effective amendments to registration statements.

Capacity in Which Signed
------------------------
/s/ Michael F. Shanahan Sr. Chairman of the Board and
------------------------------ Chief Executive Officer
MICHAEL F. SHANAHAN SR.

/s/ Gerald A. Potthoff Director, President
------------------------------ and Chief Operating Officer
GERALD A. POTTHOFF

/s/ Gary C. Gerhardt Director, Vice Chairman-Administration
------------------------------ and Chief Financial Officer
GARY C. GERHARDT

/s/ William H. T. Bush Director
------------------------------
WILLIAM H. T. BUSH

/s/ Michael P.C. Carns Director
------------------------------
MICHAEL P.C. CARNS

/s/ George E. Friel Director
------------------------------
GEORGE E. FRIEL

/s/ Thomas J. Guilfoil Director
------------------------------
THOMAS J. GUILFOIL

/s/ S. Lee Kling Director
------------------------------
S. LEE KLING

/s/ Kenneth E. Lewi Director
------------------------------
KENNETH E. LEWI

Crosbie E. Saint Director
------------------------------
CROSBIE E. SAINT

/s/ Michael F. Shanahan Jr. Director
------------------------------
MICHAEL F. SHANAHAN JR.

/s/ Earl W. Wims Director
------------------------------
EARL W. WIMS

II-10

Pursuant to the requirements of the Securities Act of 1933, the
Plan Administrator has duly caused this registration statement to be
signed, thereunto duly authorized in the County of St. Louis, State of
Missouri on August 31, 2000.

ENGINEERED SUPPORT SYSTEMS, INC.
2000 STOCK OPTION PLAN FOR
NONEMPLOYEE DIRECTORS

By: /s/ Michael F. Shanahan Sr.
------------------------------------
Michael F. Shanahan Sr.
Plan Administrator

II-11