Alternative Combat System for RPGs

Ok, I've gone over the details of the weapon and armor damage system.  Now lets integrate it into a whole combat system and see how it looks so far:

Combat:

• round initiative : roll 1d10 (or 1d20 if you want more diversity), add dexterity, magic and additional bonuses (precognition, psionics etc)
• winner calls action
• attack roll : roll 1d20, base hit is 10 plus bonuses (dexterity, skill, etc)
• if it is a hit defender can parry or dodge, defender needs to roll higher than attacker roll on a d20 (adding defender bonuses)
• if the attack isn't parried or dodged then weapon and armor rolls are thrown
• roll weapon (add weapon bonuses and strength bonuses when applicable)
• roll armor (add armor bonuses)
• match die ordered by descending value
• cancel those that armor is greater than or equal to weapon roll
• add remaining die rolls
• compare sum with armor rating
• if less than armor rating only armor takes damage
• if greater than armor rating armor takes damage and amount over armor rating is received by the caracter, creature, vehicle or underlying structure
• turn ends and next player's begins

As a side note I think some sort of morale or coolness should be included in certain scenarios.  The player has to be conscious that the character is under great stress being under fire and if his coolness breaks the could turn against him.  Any ideas?  Maybe some saving throw for excessive damage received? Some morale roll?  Opinions...