MERGER: DRS Technologies, Inc. (DRS) and Engineered Support Systems, Inc. (EASI)

Issue:

This DRS / EASI merger is an atypical merger with extra cash, as the entire transaction is taxable.

Cause:

Refer to the DRS filing: http://www.shareholder.com/Common/Edgar/28630/1047469-05-27386/05-00.pdf

Resolution:

This merger is not a typical cash plus stock reorganization. It is a completely taxable transaction, as has been attested to by the parties' experts.

For each Engineered Support common share, holders received $30.10 in cash and 0.2628 of a share of DRS Technologies common stock

Step 1) If you have made any entries for this transaction in the Club Accounting software, you should delete them.

Step 2) Determine the total consideration you received.

2a) Your number of EASI shares ______________________* 0.2628 = Your number of DRS shares ______________________
Remember to include the fraction - don't round it off! Your broker sells the fraction for the price that day and gives you cash as "cash in lieu". You will enter this sale in Step 5 below.

2b) Multiply the number of DRS shares (above) ______________ * $49.09/share = $___________________, then add in the cash received $___________________ = the Total Consideration $___________________ .

Step 3) Enter the sale of your EASI shares for the total consideration in Step 2b, above.

Step 4) Enter the purchase of your DRS shares from Step 2a, above.

Step 5) Enter the sale of the fractional portion of the DRS shares, from the broker statement.

Consult your broker statements to determine the dates of the above transactions. If you have any questions on this please let us know.