Exhibit 10.1


 


2010 Executive Short-Term
Incentive Program


 


Set forth below is a description of the 2010 Executive Short-Term
Incentive Program:


 


On January 18, 2010, the Compensation Committee of Force
Protection, Inc. (the “Company”) adopted the 2010 Executive Short-Term
Incentive Program for performance during 2010 (the “2010 Short-Term Incentive
Program”).  All executive officers and
certain other management of the Company, including the Company’s named
executive officers as defined by Item 402 of Regulation S-K, are eligible to
earn a bonus payment under the 2010 Short-Term Incentive Program.


 


Each executive officer’s target opportunity to receive a bonus payment
under the 2010 Short-Term Incentive Program is set as a percentage of the
executive officer’s base salary determined by taking into account the
participant’s authority level within the Company and median-to-market
benchmarks.  For 2010, the target
opportunity for the executive officers, other than the Chief Executive Officer,
has been set at 75% of his or her base salary. 
The target opportunity for the Company’s Chief Executive Officer has
been set at 100% of his base salary.


 


The 2010 Short-Term Incentive Program is comprised of four
metrics:  (i) Revenue, (ii) Net
Cash (used in) Provided by Operating Activities, (iii) New Orders and (iv) Personal
Metrics.  The first three metrics are
referred to as the “Shared Executive Metrics” and the last metric is referred
to as the “Personal Metric.”  The Shared
Executive Metrics are weighted at 66% of the payout opportunity and the
Personal Metric is weighted at 34% of the payout opportunity.  Each individual Shared Executive Metric is
weighted at 22% of the payout opportunity.


 


An award for any of the Shared Executive Metrics requires the
achievement of a minimum threshold Earning Per Share (diluted) (“EPS”).  If this threshold EPS is not achieved, then
no payment for the Shared Executive Metrics shall be awarded.  If the threshold EPS is achieved, then actual
performance of the Shared Executive Metrics will be determined by a range of
performance achieved for each metric as established by the Compensation
Committee.  The table below sets forth
the ranges for each metric, as aligned with the Company’s 2010 annual budget
and 2010-2014 Corporate Strategic Plan.


 


Performance Range


 


	
  Metric

  	
   

  	
  Budget

  	
   

  	
  Stretch

  	
   

  	
  Maximum

  	
   

  
	
  Revenue

  	
   

  	
  100

  	
  %

  	
  115

  	
  %

  	
  130

  	
  %

  
	
  Net Cash (used in) Provided by Operating
  Activities

  	
   

  	
  100

  	
  %

  	
  115

  	
  %

  	
  130

  	
  %

  
	
  New Orders

  	
   

  	
  100

  	
  %

  	
  115

  	
  %

  	
  130

  	
  %

  



 


To
determine the actual percentage payout, the actual performance for each metric
is compared to the performance range (100% to 130% of the performance target)
for each metric.  If the actual
performance is lower than budget, there is no payout for that metric.  If the actual performance is greater than the
budget, but less than the stretch, the payout shall be determined on a linear
basis from 50% up to 100% as indicated in the table below.  If the actual performance is greater than the
stretch and less than or equal to the performance maximum, the payout shall be
determined on a linear basis from 100% up to 175%, or the maximum payout.  Performance above maximum is paid out at the
maximum payout opportunity for that Shared Executive Metric.  As a result, the Company’s executive
officers, including 


 

















 


the
Chief Executive Officer, may be eligible to receive a payment up to 175% of the
executive officer’s individual target opportunity for the Shared Executive
Metrics.


 


Eligible Target Opportunity
Percentage Payout


 


	
  Metric

  	
   

  	
  Budget

  	
   

  	
  Stretch

  	
   

  	
  Maximum

  	
   

  
	
  Revenue

  	
   

  	
  50

  	
  %

  	
  100

  	
  %

  	
  175

  	
  %

  
	
  Net Cash (used in) Provided
  by Operating Activities

  	
   

  	
  50

  	
  %

  	
  100

  	
  %

  	
  175

  	
  %

  
	
  New Orders

  	
   

  	
  50

  	
  %

  	
  100

  	
  %

  	
  175

  	
  %

  



 


The
Personal Metrics for the Chief Executive Officer shall be determined and
assessed by the Compensation Committee, and are to be established in the first
quarter in conjunction with the annual performance assessment discussion.  The Personal Metrics for the other executive
officers will be determined by the Chief Executive Officer in the first quarter
in conjunction with each executive’s performance assessment discussion.  Any award for a Personal Metric requires the
achievement of a minimum threshold EPS. 
The payout for the achievement of the Personal Metrics for each executive
officer shall be assessed by the Chief Executive Officer and paid out of the
pool of available funds with concurrence from the Compensation Committee.


 


In
order to be eligible to receive any payment under the 2010 Short-Term Incentive
Program, the participant must be employed by the Company at the time the final
award is determined, subject to any employment agreement.  Any 2010 Short-Term Incentive Program award
shall be determined and paid by March 15, 2011.