
<PAGE>
 
                                                                   EXHIBIT 10.21

                         TELETRAC, INC.
             MANAGEMENT INCENTIVE COMPENSATION PLAN
                                
                            ARTICLE I
                       Purpose of the Plan
                                
     1.1  The purpose of the Teletrac, Inc. Management Incentive
Compensation Plan (the "Plan") of Teletrac, Inc. (the "Company"),
a wholly owned subsidiary of Axsys Technologies, Inc. ("Axsys"),
is to advance the interests of the Company and Axsys by providing
eligible employees of the Company with additional incentive to
promote the success of the Company's business, to increase their
vested interest in the success of the Company's business and to
encourage them to remain employees through the making of certain
incentive cash bonus awards ("Awards") linked to performance
goals.

                           ARTICLE II
                   Administration of the Plan
                                
     2.1  The Plan shall be administered and interpreted by a
committee (the "Committee") comprised solely of (i) Richard
Howitt, so long as he is President and a full-time employee of
the Company, (ii) if Richard Howitt shall not be President and a
full-time employee of the Company, David Barker, so long as he is
Vice-President, Research and Development and at least a half-time
employee of the Company, and (iii) thereafter, individuals
appointed from time to time by the Board of Directors of the
Company (the "Board").

     2.2  Upon the terms and subject to the conditions set forth
elsewhere herein, the Committee shall have, and is hereby
delegated, full authority to designate Participants, make or
withhold Awards, to construe and interpret the terms and
provisions of the Plan and any Award made hereunder, to adopt,
alter and repeal such administrative rules, guidelines and
practices governing this Plan and perform all acts, including the
delegation of its administrative responsibilities, as it shall,
from time to time, deem advisable, and to otherwise supervise the
administration of this Plan.  The Committee shall consult with
the Board prior to exercising any of its authority hereunder,
including making any Award, but such consultation shall not
impair the full authority of the Committee as set forth herein.

                           ARTICLE III
                           Eligibility
                                
     3.1  Eligible persons mean (i) employees of the Company who
are senior officers, members of senior management or key
employees, provided such employees are full-time employees (other
than David Barker, who may be a half-time employee), unless the
requirement of full-time employment with the Company is waived in
writing by the Board, and (ii) consultants to the Company
approved in writing by the Board.  "Participants" shall mean all
such eligible persons who are, in addition, designated by the
Committee as Participants.  Subject to the next succeeding
sentence, the Participants shall at a minimum include David
Barker, Richard Howitt, William Hurst, William Kingsbury, Barton
Norton (but only so long as he works at least 30 hours per week
for the Company) and John Van Dyke, who are all full-time
employees of the Company on the date of adoption of this Plan.
Except to the extent otherwise expressly provided in an agreement
with a Participant as permitted by Section 6.10, including the
Employment Agreements, dated May 30, 1997 (collectively, the
"Employment Agreements"), between the Company and each of David
Barker and Richard Howitt, and except to the extent otherwise
provided in Section 4.3(d) hereof, if a Participant who is a full-
time employee ceases to be employed by the Company as a full-time
employee, or if a Participant who is a consultant approved by the
Board ceases to serve as a consultant to the Company, at any time
during any Incentive Period (as defined below) for any reason,
then each such Participant shall not be eligible for any payment
made after his termination of employment or consultancy in
respect of any Incentive Period.

                           ARTICLE IV
                      Awards Under the Plan
                                
     4.1  (a)  The Company shall establish separate incentive
compensation pools (collectively, the "Incentive Compensation
Pools") for each of the fiscal years ending December 31, 1997
(which commenced on February 1, 1997) and December 31, 1998 and
the thirteen-month period ending January 31, 2000 (each referred
to, generically, as an "Incentive Period" and, respectively, as
the "1997 Incentive Period," the "1998 Incentive Period" and the
"1999 Incentive Period").  The Incentive Compensation Pools for
each of such Incentive Periods are referred to as the "1997
Incentive Pool", the "1998 Incentive Pool" and the "1999
Incentive Pool", respectively.

     The amount of the 1997 Incentive Pool shall be 60% of the
excess, if any, of Gross Profit (as defined) for the 1997
<PAGE>
 
Incentive Period over $3,097,000.  The amount of the 1998
Incentive Pool shall be 60% of the excess, if any, of Gross
Profit for the 1998 Incentive Period over the sum of (x)
$3,379,000 and (y) the amount, if any, by which the Gross Profit
for the 1997 Incentive Period was less than $3,097,000.  The
amount of the 1999 Incentive Pool shall be 60% of the excess, if
any, of Gross Profit for the 1999 Incentive Period over the sum
of (x) $3,660,000, (y) the amount, if any, by which the Gross
Profit for the 1998 Incentive Period was less than $3,379,000 and
(z) the amount, if any, by which the Gross Profit for the 1997
Incentive Period was less than $3,097,000 (but only to the extent
such shortfall for the 1997 Incentive Period was not taken into
account in determining the 1998 Incentive Pool).

     Notwithstanding the foregoing or any other provision hereof
to the contrary,

          (i)  the aggregate amount of the Incentive Compensation
     Pools shall not exceed $3,000,000,
     
          (ii)  the maximum amount of the 1997 Incentive Pool
     shall be $1,000,000 (the "1997 Cap"), and any amount (the
     "1997 Deferred Amount") which would otherwise be payable in
     respect of the 1997 Incentive Pool but for the application
     of the 1997 Cap shall be carried forward for payment in
     subsequent years, but only if the 1997 Deferred Amount
     exceeds the amount (the "1998 Deficit Amount"), if any, by
     which Gross Profit for the 1998 Incentive Period is less
     than $3,379,000 and then only to the extent set forth in
     clauses (iii) and (iv) of this sentence, provided, however,
     that the amount of the 1997 Deferred Amount to be carried
     forward for payment in subsequent years subject to the
     satisfaction of the foregoing conditions in this clause (ii)
     shall be reduced by the amount, if any, of the 1998 Deficit
     Amount,
     
          (iii)  the maximum aggregate amount payable in respect
     of the 1998 Incentive Pool and any 1997 Deferred Amount
     carried forward pursuant to clause (ii) (reduced in amount
     by application of the proviso in clause (ii)) shall not
     exceed an amount (the "1998 Cap") equal to $2,000,000, less
     all amounts previously paid in respect of the 1997 Incentive
     Pool, and any amount (the "1998 Deferred Amount") which
     would otherwise remain payable in respect of the 1998
     Incentive Pool or the 1997 Deferred Amount (reduced in
     amount by application of the proviso in clause (ii)), but
     for the application of the 1998 Cap, shall be carried
     forward for payment, but only if the 1998 Deferred Amount
     exceeds the amount (the "1999 Deficit Amount"), if any, by
     which Gross Profit for the 1999 Incentive Period is less
     than $3,660,000 and then only to the extent set forth in
     clause (iv) of this sentence, provided, however, that the
     amount of the 1998 Deferred Amount to be carried forward for
     payment in the subsequent year subject to the satisfaction
     of the foregoing conditions in this clause (iii) shall be
     reduced by the amount, if any, of the 1999 Deficit Amount,
     and
     
          (iv)  the maximum aggregate amount payable in respect
     of the 1999 Incentive Pool and any unpaid 1997 Deferred
     Amount carried forward pursuant to clause (ii) (reduced in
     amount by any application of the proviso in clause (ii)) and
     any 1998 Deferred Amount carried forward pursuant to clause
     (iii) (reduced in amount by application of the proviso in
     clause (iii)) shall not exceed an amount equal to 3,000,000,
     less all amounts previously paid in respect of the 1997
     Incentive Pool and 1998 Incentive Pool.
     
     Subject to the next succeeding paragraph, the term "Gross
Profit" means the consolidated gross profit or gross loss of the
Company determined in accordance with generally accepted
accounting principles and applied on a basis consistent with the
determination of gross profit of the Company for the fiscal year
ended January 31, 1997 as shown on the financial statements of
the Company for such fiscal year audited by Arthur Andersen LLP.
Without limiting the generality of the foregoing, in calculating
Gross Profit the Company shall take into account on an accrual
basis the items (but not amounts) of cost and expense set forth
on Schedule I hereto.  The fiscal year for the Company shall end
on December 31, commencing December 31, 1997.

     In the event any "Axsys-Directed Change" shall occur, the
Committee, on the one hand, and the Board, on the other hand,
shall agree on the appropriate changes to be made to the amounts
of Gross Profit that must be earned after giving effect to such
Axsys-Directed Change, but not to the limitations on payments
pursuant to this Plan contained in Section 4.1 hereof, so that,
after giving effect to such Axsys-Directed Change, the
Participants are not prejudiced or benefited in terms of their
opportunity to earn Awards thereafter compared to their
opportunity to earn Awards immediately prior to such Axsys-
Directed Change.  In making such determination, the Committee and
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the Board shall take into account solely the impact on Gross
Profit which would reasonably be expected to occur as a result of
such Axsys-Directed Change.  As used herein, the term "Axsys-
Directed Change" means any material change to the conduct of the
operation of the business of the Company, not approved by the
Committee directly affecting Gross Profit, such as material
intercompany sales and purchases of goods and services and any
acquisition of or merger, consolidations or combinations with
other business entities or operations (including present or
future affiliates of Axsys) which directly affect Gross Profit.
The Committee shall inform the Board in writing within five
business days after it learns of any proposed event which it
believes will constitute an Axsys-Directed Change.

     (b)  The Company shall establish an incentive compensation
pool in addition to the Incentive Compensation Pools (the
"Additional Incentive Compensation Pool").  The amount of the
Additional Incentive Compensation Pool shall be 33-1/3% of the
excess, if any, of the sum of Gross Profit for each of the
Incentive Periods, over $15,137,000, but in no event shall the
amount of the Additional Incentive Compensation Pool be greater
than $1,100,000.

     4.2  Subject to Sections 4.3(b), (c) and (d) hereof,
promptly after the end of each Incentive Period, the Board shall
determine the amount of Gross Profit for such Incentive Period
and the amount of the related Incentive Compensation Pool or
Additional Incentive Compensation Pool, as the case may be.
Promptly after the determination by the Board of Gross Profit
(and the amount of the related Incentive Compensation Pool or
Additional Incentive Compensation Pool) for an Incentive Period,
the Committee shall make an Award (and, subject to Section 4.1
hereof, the Company shall pay) to each Participant in an amount
equal to the percentage determined by the Committee for such
Participant of the Incentive Compensation Pool or Additional
Incentive Compensation Pool then payable; provided, however, that
neither Richard Howitt nor David Barker shall be entitled to an
Award at any time exceeding 43% of the amount of any Incentive
Compensation Pool or the Additional Incentive Compensation Pool
then payable; and provided further, however, that the aggregate
Awards which may be made to all Participants in respect of any
Incentive Compensation Pool or the Additional Incentive
Compensation Pool shall not exceed 100% of the amount of each
such Incentive Compensation Pool or the Additional Incentive
Compensation Pool, as the case may be.  Subject to
Sections 4.3(b), (c) and (d) hereof, no Participant shall be
entitled to any individual Award unless and until the Committee
determines to make such Award.

     4.3  (a)  The termination of employment of any Participant
with the Company for any reason shall not result in the reduction
in the size of any Incentive Compensation Pool or the Additional
Incentive Compensation Pool or a reduction in any limitations on
payments in respect of any Incentive Compensation Pool or the
Additional Incentive Compensation Pool.  The reduction in David
Barker's full-time employment to half-time employment (as
permitted by Section 2(b) of his Employment Agreement) shall not
result in a reduction in the size of any Incentive Compensation
Pool or the Additional Incentive Compensation Pool or, except as
determined by the Committee, his right to any Award thereunder.

     (b)  In accordance with Section 7(b)(iii) of the Employment
Agreements of David Barker and Richard Howitt (collectively, the
"Founders"), if the employment with the Company of a Founder
shall be terminated by the Company other than for Cause or
Disability, or by such Founder with Good Reason (as such
capitalized terms are defined in such Employment Agreements),
then, notwithstanding such termination of employment, such
Founder shall be entitled to receive an Award of 40% (or such
lesser percentage as determined by the Committee prior to such
Founders' Termination Date (as defined in his Employment
Agreement)) of all amounts payable after his Termination Date in
respect of each Incentive Compensation Pool and the Additional
Incentive Compensation Pool as to which payments are made, when,
as and if payments are required to be made in respect of such
Incentive Compensation Pools and the Additional Incentive
Compensation Pool pursuant to the other provisions of this Plan.

     (c)  Notwithstanding any provision hereof to the contrary,
including Section 4.1(a) hereof, an amount (a "Deferred Amount")
which would otherwise be payable in respect of an Incentive
Compensation Pool but for the application of the 1997 Cap or the
1998 Cap shall not be vested or otherwise accrue, and no
Participant shall have any right to any Deferred Amount, except
(i) to the extent such Deferred Amount becomes payable by
application of the provisions of Section 4.1(a), and (ii) solely
in the case of the Founders, in the event of a Founder's
Disability (as defined in such Founder's Employment Agreement) or
death, in which event such Founder or his estate will be entitled
to receive promptly thereafter an amount equal to 40% (or such
lesser percentage as determined by the Committee prior to such
Founder's Disability or death) of any Deferred Amount which has
<PAGE>
 
arisen prior to such Founder's Disability or death.  All payments
to the Founders in respect of Deferred Amounts pursuant to this
Section 4.3(c) shall be counted as payments for purposes of the
limitation on payments set forth in Sections 4.1(a) and 4.1(b)
hereof.

     (d)  If the employment with the Company of William Hurst,
William Kingsbury or John Van Dyke is terminated by the Company
without cause (as defined in such Participant's Severance
Agreement entered into with the Company on the date of adoption
of this Plan) and not as a result of such Participant's long-term
disability, or if the employment with the Company of such
Participant shall be terminated by such Participant with Good
Reason (as defined in his Severance Agreement), then,
notwithstanding such termination of employment, such Participant
shall be entitled to receive an Award of 3% of all amounts
payable after his Termination Date in respect of each Incentive
Compensation Pool and the Additional Incentive Compensation Pool
as to which payments are made, when, as and if payments are
required to be made in respect of such Incentive Compensation
Pools and the Additional Incentive Compensation Pool pursuant to
the other provisions of this Plan.  If the employment with the
Company of Barton Norton is terminated by the Company during any
Incentive Period for any reason other than for cause or
disability (as defined in the Company's Long-Term Disability
Plan) of such Participant, such Participant shall be entitled to
receive any Award to which he otherwise would have been entitled
to receive in respect of such Incentive Period (and any prior
Incentive Period) had his employment not been terminated, but
only on a pro-rata basis through the date of his termination of
employment.

                            ARTICLE V
              Amendment or Termination of the Plan
                                
     5.1  Notwithstanding any other provision of this Plan, the
Board may at any time, and from time to time, amend, in whole or
in part, any or all of the provisions of the Plan, or suspend or
terminate it entirely, retroactively or otherwise; provided,
however, that any such amendment, suspension or termination may
not, without the Participant's consent, adversely affect any
Award theretofore made to him under the Plan or contravene the
Company's obligations under Section 4.3(b), (c) or (d) hereof.
In the event that Axsys shall cease to be entitled to elect a
majority of the Board, or in the event the Company shall sell all
or substantially all of its assets, then there shall be paid
promptly after such change or acquisition to the individuals as a
group who are Participants immediately prior to such change or
acquisition an amount equal to $4,100,000 less all amounts
previously paid in respect of all Incentive Pools and the
Additional Incentive Compensation Pool, unless (i) the Committee
comprised of Richard Howitt or David Barker shall approve in
writing such change or sale or (ii) the person or entity (or
group of persons or entities) acquiring the right to elect a
majority of the Board or purchasing such assets shall agree to be
bound by the terms of this Plan and the Employment Agreements and
Axsys shall have delivered its guarantee of the acquiror's
obligations.  Each Participant's interest in any such payment
shall be as determined by the Committee in effect immediately
prior to such change or acquisition.

                           ARTICLE VI
                          Miscellaneous
                                
     6.1  No person shall have any claim or right to be made an
Award under the Plan, until (i) such time as the amount of any
Incentive Compensation Pool or the Additional Incentive
Compensation Pool is determined and (ii) the Committee acting in
its sole discretion, subject to Sections 4.3(b), (c) and (d)
hereof, determines to make an Award to such person based on the
percentage for such person of the Incentive Compensation Pool or
the Addition of Incentive Compensation Pool determined by the
Committee in its sole discretion, subject to Section 4.3(b), (c)
and (d) hereof.  Neither this Plan, nor the granting of a right
to participate (whether pursuant to a written agreement or
otherwise) in this Plan, nor the establishment of any goals or
standards, nor the making of an Award under this Plan, shall, in
and of themselves, give any Participant or other employee any
right with respect to continuance of employment by the Company or
any subsidiary or Axsys, nor shall this Plan limit in any way the
right of the Company or any subsidiary by which an employee is
employed to terminate his employment at any time.  The foregoing
shall not limit the rights of Richard Howitt and David Barker
under their Employment Agreements.

     6.2  Except by will or the laws of descent and distribution
or as provided in a written agreement between the Company and a
Participant, no right or interest in any award made under this
Plan shall be assignable or transferable, and no right or
interest of any Participant hereunder shall be subject to any
lien, obligation or liability of such Participant.
<PAGE>
 
     6.3  The Company will bear all expense incurred in
administering this Plan.

     6.4  Subject to the approval of the Committee and any
agreement entered into pursuant to Section 6.10 hereof, the
Company may make such changes in this Plan as may be necessary or
desirable, in the opinion of the Board, to comply with the laws,
rules and regulations of any governmental or regulatory
authority, or to be eligible for tax benefits under the Code, or
any other laws or regulations of any Federal, state, local or
foreign government.

     6.5  The Company shall have the right to deduct from any
payment to be made pursuant to this Plan, or to otherwise require
prior to the payment of any amount hereunder, payment by the
Participant of, any Federal, state or local taxes required by law
to be withheld.

     6.6  No assets shall be segregated or earmarked in respect
of any Award hereunder and no Participant shall have any right to
assign, transfer, pledge or hypothecate his interest, or any
portion thereof, in his Award.  The Plan and the making of Awards
hereunder shall not constitute a trust.

     6.7  This Plan and actions taken in connection herewith
shall be governed and construed in accordance with the laws of
the State of California (regardless of the law that might
otherwise govern under applicable California principles of
conflict of laws).

     6.8  Wherever any words are used in the Plan in the
masculine gender they shall be construed as though they were also
used in the feminine gender in all cases where they would so
apply, and wherever any words are used herein in the singular
form they shall be construed as though they were also used in the
plural form in all cases where they would so apply.  The
titles to Articles of this Plan are intended solely as a
convenience and shall not be used as an aid in construction of
any provisions thereof.

     6.9  This Plan shall be known as "The Teletrac, Inc.
Management Incentive Compensation Plan."

     6.10 The Company may enter into written agreements with one
or more Participants limiting the Company's discretion under the
Plan as set forth herein, and modifying the terms hereof, to the
extent set forth in the terms of such agreements.

     6.11 Axsys has guaranteed the Company's obligations under
this Plan to the extent set forth in Section V(c) of the Stock
Purchase Agreement, dated May 27, 1997 (the "Stock Purchase
Agreement"), between Axsys, the Company and the Company's
stockholders.

     6.12 The Board of Directors of the Company in effect
immediately after the Closing (as defined in the Stock Purchase
Agreement) has ratified and approved this Plan as contemplated by
Section V(e) of the Stock Purchase Agreement.


                                
                   Schedule I to Exhibit 5(c)
                              
                         TELETRAC, INC.
                                
                 ANALYSIS OF COST OF GOODS SOLD
                                
               FOR THE YEAR ENDED JANUARY 31, 1997


BEGINNING INVENTORY                                   $   628,309

ADD:  DIRECT COSTS
      Purchase                      3,353,788
      Wages                         1,045,178
      Employee benefits               189,115
      Auto mileage                      1,441
      Business meals                      317
      Contract 1abor                   27,272
      Direct applied account            9,997
      Finishing                        75,347
      Freight                          43,644
      Lot Charge                        3,637
      Modifications                    19,985
      Packaging supplies                6,011
      Setup charge                     14,176
      Travel and lodging               33,001
                                    ---------


Total Direct Costs                                      4,822,909

ADD:  INDIRECT COSTS
<PAGE>
 
      Business meals                      300
      Contract labor                   59,482
      Depreciation                     21,361
      Equipment rental                 15,904
      Overhead expenses allocation     92,812
      Repairs and maintenance          11,742
      Small tools                       5,422
      Supplies and lab.                12,008
      Test equipment                      502
      Travel and lodging               47,566
      Warehouse expense                 4,689
                                    ---------

Total Indirect Costs                                      271,788
                                                      ------------
TOTAL GOODS AVAILABLE FOR SALE                          5,723,006

LESS: ENDING INVENTORY                                 (1,174,958)
                                                      ------------
COST OF GOODS SOLD                                    $ 4,548,048
                                                      ============
