EXHIBIT
10.1


 


FORCE PROTECTION, INC.


2008 Stock Plan


 


ARTICLE I


GENERAL


 


1.1          Purpose


 


The
purpose of the Force Protection, Inc. 2008 Stock Plan is to attract,
retain and motivate officers, directors and key employees (including
prospective employees), consultants and others who may perform services for the
Company (as hereinafter defined), to compensate them for their contributions to
the long-term growth and profits of the Company and to encourage them to
acquire a proprietary interest in the success of the Company.


 


1.2          Definitions
of Certain Terms


 


For
purposes of this 2008 Stock Plan, the following terms have the meanings set
forth below:


 


1.2.1        “Award” means an award made pursuant to the
Plan.


 


1.2.2        “Award Agreement” means the written document
by which each Award is evidenced, and which may, but need not be (as determined
by the Committee) executed or acknowledged by a Grantee as a condition to
receiving an Award or the benefits under an Award, and which sets forth the
terms and provisions applicable to Awards granted under the Plan to such
Grantee. Any reference herein to an agreement in writing will be deemed to
include an electronic writing to the extent permitted by applicable law.


 


1.2.3        “Board” means the Board of Directors of Force
Protection.


 


1.2.4        “Certificate” means a stock certificate (or
other appropriate document or evidence of ownership) representing shares of
Common Stock.


 


1.2.5        “Change in Control” means the occurrence of
any one of the following events:


 


(a)                            any “person” (as such term is defined in Section 3(a)(9) of
the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of
the Exchange Act) is or becomes a “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of Force
Protection representing 35% or more of the combined voting power of the Company’s
then outstanding securities eligible to vote for the election of the Board (the
“Company Voting
Securities”); provided, however, that the event described in this
paragraph (a) shall not be deemed to be a Change in Control by virtue
of any of the following acquisitions: (1) by the Company; (2) by any
employee benefit plan (or related trust) sponsored or maintained by the
Company; (3) by any underwriter temporarily holding securities pursuant to
an offering of such securities; (4) pursuant to a Non-Control Transaction
(as defined in paragraph (c) below); or (5) a transaction (other
than one described in paragraph (c) below) in which Company Voting
Securities are acquired from the Company, if a majority of the Incumbent Board
(as defined in paragraph (b) below) 


 

















 


approves
a resolution providing expressly that the acquisition pursuant to this clause (5) does
not constitute a Change in Control under this paragraph (a);


 


(b)                           individuals who, on February 29, 2008, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority thereof, provided that
any person becoming a director subsequent to February 29, 2008, whose
election or nomination for election was approved by a vote of at least
two-thirds of the directors comprising the Incumbent Board (either by a
specific vote or by approval of the proxy statement of Force Protection in
which such person is named as a nominee for director, without objection to such
nomination) shall be considered a member of the Incumbent Board; provided,
however, that no individual initially elected or nominated as a
director of Force Protection as a result of an actual or threatened election
contest with respect to directors or any other actual or threatened
solicitation of proxies or consents by or on behalf of any person other than
the Board shall be deemed to be a member of the Incumbent Board;


 


(c)                            the consummation of a merger, consolidation, share exchange or similar
form of corporate transaction involving Force Protection or any of its
Subsidiaries that requires the approval of Force Protection’s stockholders
(whether for such transaction or the issuance of securities in the transaction
or otherwise) (a “Reorganization”),
unless immediately following such Reorganization: (1) more than 60% of the
total voting power of (x) the corporation resulting from such
Reorganization (the “Surviving
Company”), or (y) if applicable, the ultimate parent
corporation that directly or indirectly has beneficial ownership of 95% of the
voting securities eligible to elect directors of the Surviving Company (the “Parent Company”), is
represented by Company Voting Securities that were outstanding immediately
prior to such Reorganization (or, if applicable, is represented by shares into
which such Company Voting Securities were converted pursuant to such
Reorganization), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting Securities
among holders thereof immediately prior to the Reorganization; (2) no
person (other than any employee benefit plan (or related trust) sponsored or
maintained by the Surviving Company or the Parent Company) is or becomes the
beneficial owner, directly or indirectly, of 35% or more of the total voting
power of the outstanding voting securities eligible to elect directors of the
Parent Company (or, if there is no Parent Company, the Surviving Company); and (3) at
least a majority of the members of the board of directors of the Parent Company
(or, if there is no Parent Company, the Surviving Company) following the
consummation of the Reorganization were members of the Incumbent Board at the
time of the Board’s approval of the execution of the initial agreement
providing for such Reorganization (any Reorganization which satisfies all of
the criteria specified in (1), (2) and (3) above shall be deemed to
be a “Non-Control
Transaction”);


 


(d)                           the stockholders of Force Protection approve a plan of complete liquidation
or dissolution; or


 


(e)                            the consummation of a sale (or series of sales) of all or substantially
all of the assets of the Company to an entity that is not an affiliate of Force
Protection.


 


Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur solely because
any person acquires beneficial ownership of 35% or more of the Company Voting
Securities as a result of the acquisition of Company Voting Securities by the
Company which reduces the number 


 


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of
Company Voting Securities outstanding; provided, that, if after such
acquisition by Force Protection such person becomes the beneficial owner of
additional Company Voting Securities that increases the percentage of outstanding
Company Voting Securities beneficially owned by such person, a Change in
Control shall then occur.


 


1.2.6        “Code” means the Internal Revenue Code of
1986, as amended from time to time, or any successor thereto, and the
applicable rulings and regulations thereunder.


 


1.2.7        “Committee” has the meaning set forth in Section 1.3.1.


 


1.2.8        “Common Stock” means the common stock of Force
Protection, par value $0.001 per share, and any other securities or property
issued in exchange therefor or in lieu thereof pursuant to Section 1.6.3.


 


1.2.9        “Company” means Force Protection, Inc.
and its consolidated subsidiaries.


 


1.2.10      “Consent” has the meaning set forth in Section 3.3.2.


 


1.2.11      “Consultant” means any individual,
corporation, partnership, limited liability company or other entity that
provides bona fide consulting or advisory services to the Company pursuant to a
written agreement.


 


1.2.12      “Covered Person” has the meaning set forth in Section 1.3.4.


 


1.2.13      “Director” means a member of the Board or a
member of the board of directors of a consolidated subsidiary of Force
Protection.


 


1.2.14      “Effective Date” means September 19,
2008.


 


1.2.15      “Employee” means a regular, active employee
and a prospective employee of the Company.


 


1.2.16      “Employment” means a Grantee’s performance of
services for the Company, as determined by the Committee. The terms “employ”
and “employed” will have their correlative meanings. The Committee in its sole
discretion may determine (a) whether and when a Grantee’s leave of absence
results in a termination of Employment (for this purpose, unless the Committee
determines otherwise, a Grantee will be treated as terminating Employment with
the Company upon the occurrence of an Extended Absence), (b) whether and
when a change in a Grantee’s association with the Company results in a
termination of Employment and (c) the impact, if any, of any such leave of
absence or change in association on outstanding Awards. Unless expressly
provided otherwise, any references in the Plan or any Award Agreement to a
Grantee’s Employment being terminated will include both voluntary and
involuntary terminations.


 


1.2.17      “Exchange Act” means the Securities Exchange
Act of 1934, as amended from time to time, or any successor thereto, and the
applicable rules and regulations thereunder.


 


1.2.18      “Extended Absence” means the Grantee’s
inability to perform for six continuous months, due to illness, injury or
pregnancy-related complications, substantially all the essential duties of the
Grantee’s occupation, as determined by the Committee.


 


1.2.19      “Fair Market Value” means, with respect to a
share of Common Stock, the closing 


 


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price
reported for the Common Stock on the applicable date as reported on the NASDAQ
Capital Market or, if  not
so reported, as determined in accordance with a valuation methodology approved
by the Committee, unless determined as otherwise specified herein. For purposes
of the grant of any Award, the applicable date will be the trading day on which
the Award is granted or, if the date the Award is granted is not a trading day,
the trading day immediately prior to the date the Award is granted. For
purposes of the exercise of any Award, the applicable date is the date a notice
of exercise is received by the Company or, if such date is not a trading day,
the trading day immediately following the date a notice of exercise is received
by the Company.


 


1.2.20                  “Force Protection” means Force Protection, Inc.,
or a successor entity contemplated by Section 3.6.


 


1.2.21                  “Grantee” means an Employee, Director or
Consultant who receives an Award.


 


1.2.22                  “Incentive Stock Option” means a stock option
to purchase shares of Common Stock that is intended to be an “incentive stock
option” within the meaning of Sections 421 and 422 of the Code, as now
constituted or subsequently amended, or pursuant to a successor provision of
the Code, and which is designated as an Incentive Stock Option in the
applicable Award Agreement.


 


1.2.23                  “Plan” means this Force Protection, Inc.
2008 Stock Plan, as amended from time to time.


 


1.2.24                  “Plan Action” will have the meaning set forth
in Section 3.3.1.


 


1.2.25                  “Section 409A” means Section 409A of
the Code, including any amendments or successor provisions to that section, and
any regulations and other administrative guidance thereunder, in each case as
they may be from time to time amended or interpreted through further
administrative guidance.


 


1.2.26                  “Securities Act” means the Securities Act of
1933, as amended from time to time, or any successor thereto, and the
applicable rules and regulations thereunder.


 


1.2.27                  “Ten Percent Stockholder” means a person
owning stock possessing more than 10% of the total combined voting power of all
classes of stock of Force Protection and of any subsidiary or parent
corporation of Force Protection.


 


1.2.28                  “Treasury Regulations” means the regulations
promulgated under the Code by the United States Treasury Department, as
amended.


 


1.3                               Administration


 


1.3.1                        The Compensation Committee of the Board (as
constituted from time to time, and including any successor committee, the “Committee”) will
administer the Plan. In particular, the Committee will have the authority in
its sole discretion to:


 


(a)                            exercise all of the powers granted to it under the Plan;


 


(b)                           construe, interpret and implement the Plan and all Award Agreements;


 


(c)                            prescribe, amend and rescind rules and regulations relating to the
Plan, including rules governing the Committee’s own operations;


 


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(d)                           make all determinations necessary or advisable in administering the
Plan;


 


(e)                            correct any defect, supply any omission and reconcile any inconsistency
in the Plan;


 


(f)                              amend the Plan to reflect changes in applicable law but, subject to Section 1.6.3 or as otherwise
specifically provided herein, no such amendment shall adversely impair the
rights of the Grantee of any Award without the Grantee’s consent;


 


(g)                           grant Awards and determine who will receive Awards, when such Awards
will be granted and the terms of such Awards, including setting forth
provisions with regard to the effect of a termination of Employment on such
Awards;


 


(h)                           amend any outstanding Award Agreement in any respect, but, subject to Section 1.6.3 or as otherwise
specifically provided herein, no such amendment shall adversely impair the
rights of the Grantee of any Award without the Grantee’s consent, including,
without limitation, to (1) accelerate the time or times at which the Award
becomes vested, unrestricted or may be exercised (and, in connection with such
acceleration, the Committee may provide that any shares of Common Stock
acquired pursuant to such Award will be restricted shares, which are subject to
vesting, transfer, forfeiture or repayment provisions similar to those in the Grantee’s
underlying Award), (2) accelerate the time or times at which shares of
Common Stock are delivered under the Award (and, without limitation on the
Committee’s rights, in connection with such acceleration, the Committee may
provide that any shares of Common Stock delivered pursuant to such Award will
be restricted shares, which are subject to vesting, transfer, forfeiture or
repayment provisions similar to those in the Grantee’s underlying Award), (3) waive
or amend any goals, restrictions or conditions set forth in such Award
Agreement, or impose new goals, restrictions and conditions or (4) reflect
a change in the Grantee’s circumstances (e.g., a change to part-time
employment status or a change in position, duties or responsibilities); and


 


(i)                               determine at any time whether, to what extent and under what
circumstances and method or methods, subject to
Section 3.13, (1) Awards may be (A) settled in cash,
shares of Common Stock, other securities, other Awards or other property (in
which event, the Committee may specify what other effects such settlement will
have on the Grantee’s Award, including the effect on any repayment provisions
under the Plan or Award Agreement), (B) exercised or (C) canceled,
forfeited or suspended, (2) shares of Common Stock, other securities,
other Awards or other property and other amounts payable with respect to an
Award may be deferred either automatically or at the election of the Grantee
thereof or of the Committee, (3) to the extent permitted under applicable
law, loans (whether or not secured by Common Stock) may be extended by the
Company with respect to any Awards, (4) Awards may be settled by Force
Protection, any of its subsidiaries or affiliates or any of its or their
designees and (5) the exercise price for any stock option (other than an
Incentive Stock Option, unless the Committee determines that such a stock
option will no longer constitute an Incentive Stock Option) or stock
appreciation right may be reset.


 


1.3.2                        Actions of the Committee may be taken by the
vote of a majority of its members present at a meeting (which may be held
telephonically). Any action may be taken by a written instrument signed by a
majority of the Committee members, and action so taken will be fully as
effective as if it had been taken by a vote at a meeting. The determination of
the Committee on all matters relating to the Plan or any Award Agreement will
be final, binding and conclusive. The 


 


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Committee
may allocate among its members and delegate to any person who is not a member
of the Committee or to any administrative group within the Company, any of its
powers, responsibilities or duties. In delegating its authority, the Committee
will consider the extent to which any delegation may cause Awards to fail to be
deductible under Section 162(m) of the Code or to fail to meet the
requirements of Rule 16(b)-3(d)(1) or Rule 16(b)-3(e) under
the Exchange Act.


 


1.3.3        Notwithstanding anything to the contrary
contained herein, the Board may, in its sole discretion, at any time and from
time to time, grant Awards or administer the Plan. In any such case, the Board
will have all of the authority and responsibility granted to the Committee
herein.


 


1.3.4        No Director or Employee (each such
person, a “Covered
Person”) will have any liability to any person (including any
Grantee) for any action taken or omitted to be taken or any determination made
in good faith with respect to the Plan or any Award. Each Covered Person will
be indemnified and held harmless by Force Protection against and from (a) any
loss, cost, liability or expense (including attorneys’ fees) that may be
imposed upon or incurred by such Covered Person in connection with or resulting
from any action, suit or proceeding to which such Covered Person may be a party
or in which such Covered Person may be involved by reason of any action taken
or omitted to be taken under the Plan or any Award Agreement, in each case, in
good faith and (b) any and all amounts paid by such Covered Person, with
Force Protection’s approval, in settlement thereof, or paid by such Covered
Person in satisfaction of any judgment in any such action, suit or proceeding
against such Covered Person, provided
that Force Protection will have the right, at its own expense, to assume and
defend any such action, suit or proceeding and, once Force Protection gives
notice of its intent to assume the defense, Force Protection will have sole
control over such defense with counsel of Force Protection’s choice. The
foregoing right of indemnification will not be available to a Covered Person to
the extent that a court of competent jurisdiction in a final judgment or other
final adjudication, in either case, not subject to further appeal, determines
that the acts or omissions of such Covered Person giving rise to the
indemnification claim resulted from such Covered Person’s bad faith, fraud or
willful misconduct. The foregoing right of indemnification will not be
exclusive of any other rights of indemnification to which Covered Persons may
be entitled under Force Protection’s Amended Articles of Incorporation or
By-laws, as a matter of law, or otherwise, or any other power that Force
Protection may have to indemnify such persons or hold them harmless.


 


1.4          Persons
Eligible for Awards


 


Awards
under the Plan may be made to Employees, Directors and Consultants.


 


1.5          Types of
Awards Under Plan


 


Awards
may be made under the Plan in the form of any of the following, in each case in
respect of Common Stock: (a) stock options, (b) stock appreciation
rights, (c) restricted shares, (d) restricted stock units, (e) dividend
equivalent rights and (f) other equity-based or equity-related Awards (as
further described in Section 2.8),
that the Committee determines to be consistent with the purposes of the Plan
and the interests of the Company.


 


1.6          Shares of
Common Stock Available for Awards


 


1.6.1        Common
Stock Subject to the Plan. 
Subject to the other provisions of this Section 1.6,
the total number of shares of Common Stock that may be granted under the Plan
is 5,200,000. Such shares of Common Stock may, in the discretion of the
Committee, be either authorized but unissued shares or shares previously issued
and reacquired by Force Protection. Shares of Common Stock issued in connection
with awards that are assumed, converted or 


 


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substituted
as a result of the Company’s acquisition of another company (including by way
of merger, combination or similar transaction) will not  count against the number of shares that may
be issued under the Plan.


 


1.6.2        Replacement
of Shares.  If any Award
is forfeited, expires, terminates or otherwise lapses, in whole or in part,
without the delivery of Common Stock, then the shares of Common Stock covered
by such forfeited, expired, terminated or lapsed award will again be available
for grant under the Plan. For the avoidance of doubt, the following will not
again become available for issuance under the Plan: (A) any shares of
Common Stock withheld in respect of taxes, (B) any shares tendered or
withheld to pay the exercise price of stock options, (C) any shares
repurchased by the Company from the optionee with the proceeds from the
exercise of stock options and (D) any shares subject to stock appreciation
rights but not issued on exercise as a result of the operation of Section 2.4.4.


 


1.6.3        Adjustments.  The Committee will adjust the number of
shares of Common Stock authorized pursuant to Section 1.6.1,
adjust the individual Grantee limitations set forth in Sections 2.3.1 and 2.4.1, adjust the
number of shares of common stock set forth in
Section 2.3.2 that can be issued through Incentive Stock
Options and adjust the terms of any outstanding Awards (including, without
limitation, the number of shares of Common Stock covered by each outstanding
Award, the type of property to which the Award relates and the exercise or
strike price of any Award), in such manner as it deems appropriate (including,
without limitation, by payment of cash) to prevent the enlargement or dilution
of rights, as a result of any increase or decrease in the number of issued
shares of Common Stock (or issuance of shares of stock other than shares of
Common Stock) resulting from a recapitalization, stock split, reverse stock
split, stock dividend, spinoff, splitup, combination, reclassification or
exchange of shares of Common Stock, merger, consolidation, rights offering,
separation, reorganization or liquidation, or any other change in the corporate
structure or shares of Force Protection, including any extraordinary dividend
or extraordinary distribution; provided that no such adjustment shall be made
if or to the extent that it would cause an outstanding Award to cease to be
exempt from, or to fail to comply with, Section 409A of the Code. After
any adjustment made pursuant to this Section 1.6.3,
the number of shares of Common Stock subject to each outstanding Award will be
rounded down to the nearest whole number.


 


ARTICLE II


AWARDS UNDER THE PLAN


 


2.1          Agreements
Evidencing Awards


 


Each
Award granted under the Plan will be evidenced by an Award Agreement that will
contain such provisions and conditions as the Committee deems appropriate.
Unless otherwise provided herein, the Committee may grant Awards in tandem with
or, subject to Section 3.13,
in substitution for any other Award or Awards granted under the Plan or any
award granted under any other plan of Force Protection. By accepting an Award
pursuant to the Plan, a Grantee thereby agrees that the Award will be subject
to all of the terms and provisions of the Plan and the applicable Award
Agreement.


 


2.2          No Rights
as a Stockholder


 


No
Grantee (or other person having rights pursuant to an Award) will have any of
the rights of a stockholder of Force Protection with respect to shares of
Common Stock subject to an Award until the delivery of such shares. Except as
otherwise provided in Section 1.6.3,
no adjustments will be made for dividends, distributions or other rights
(whether ordinary or extraordinary, and whether in cash, Common Stock, other
securities or other property) for which 


 


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the
record date is before the date the Certificates for the shares are delivered.


 


2.3          Options


 


2.3.1        Grant.  Stock options may be granted to eligible
recipients in such number and at such times during the term of the Plan as the
Committee may determine; provided, however,
that the maximum number of shares of Common Stock as to which stock options may
be granted under the Plan to any one individual in any one fiscal year may not
exceed 1,000,000 shares (as adjusted pursuant to the provisions of Section 1.6.3).


 


2.3.2        Incentive
Stock Options.  At the
time of grant, the Committee will determine (a) whether all or any part of
a stock option granted to an eligible Employee will be an Incentive Stock
Option and (b) the number of shares subject to such Incentive Stock
Option; provided, however, that (1) the
aggregate Fair Market Value (determined as of the time the option is granted)
of the stock with respect to which Incentive Stock Options are exercisable for
the first time by an eligible Employee during any calendar year (under all such
plans of Force Protection and of any subsidiary or parent corporation of Force
Protection) will not exceed $100,000 and (2) no Incentive Stock Option (other
than an Incentive Stock Option that may be assumed or issued by the Company in
connection with a transaction to which Section 424(a) of the Code
applies) may be granted to a person who is not eligible to receive an Incentive
Stock Option under the Code. The form of any stock option which is entirely or
in part an Incentive Stock Option will clearly indicate that such stock option
is an Incentive Stock Option or, if applicable, the number of shares subject to
the Incentive Stock Option. No more than 5,200,000 shares of Common Stock (as
adjusted pursuant to the provisions of Section 1.6.3)
that can be delivered under the Plan shall be issued through Incentive Stock
Options.


 


2.3.3        Exercise
Price.  The exercise price
per share with respect to each stock option will be determined by the Committee
but, except as otherwise permitted by Section 1.6.3,
may never be less than the Fair Market Value of the Common Stock (or, in the
case of an Incentive Stock Option granted to a Ten Percent Stockholder, 110% of
the Fair Market Value). Unless otherwise noted in the Award Agreement, the Fair
Market Value of the Common Stock will be its closing price on the NASDAQ
Capital Market on the date of grant of the Award of stock options.


 


2.3.4        Term
of Stock Option.  In no
event will any stock option be exercisable after the expiration of
10 years (or, in the case of an Incentive Stock Option granted to a Ten
Percent Stockholder, 5 years) from the date on which the stock option is
granted.


 


2.3.5        Exercise
of Stock Option and Payment for Shares.  A stock option may be exercised at such time
or times and subject to such terms and conditions as will be determined by the
Committee at the time the stock option is granted and set forth in the Award
Agreement. Subject to any limitations in the applicable Award Agreement, any
shares not acquired pursuant to the exercise of a stock option on the
applicable vesting date may be acquired thereafter at any time before the final
expiration of the stock option. To exercise a stock option, the Grantee must
give written notice to Force Protection specifying the number of shares to be
acquired and accompanied by payment of the full purchase price therefor in cash
or by certified or official bank check or in another form as determined by the
Company, including: (a) personal check, (b) shares of Common Stock,
based on the Fair Market Value as of the exercise date, of the same class as
those to be granted by exercise of the stock option, (c) any other form of
consideration approved by the Company and permitted by applicable law and (d) any
combination of the foregoing. Any person exercising a stock option will make
such representations and agreements and furnish such information as the
Committee may in its discretion deem necessary or desirable to assure compliance
by Force Protection on terms acceptable to Force Protection with the provisions
of the 


 


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Securities
Act and any other applicable legal requirements. If a Grantee so requests,
shares acquired pursuant to the exercise of a stock option may be issued in the
name of the Grantee and another jointly with the right of survivorship.


 


2.3.6        Repricing.  Except as otherwise permitted by Section 1.6.3, reducing the exercise
price of stock options issued and outstanding under the Plan, including through
amendment, cancellation in exchange for the grant of a substitute Award or
repurchase for cash or other consideration (in each case that has the effect of
reducing the exercise price), will require approval of the stockholders of
Force Protection.


 


2.3.7        Repayment
if Conditions Not Met.  If
the Committee determines that all terms and conditions of the Plan and a
Grantee’s stock option Award Agreement in respect of exercised stock options
were not satisfied, then the Grantee will be obligated to pay the Company
immediately upon demand therefor, an amount equal to the excess of the Fair
Market Value (determined at the time of exercise) of the shares of Common Stock
that were delivered in respect of such exercised stock option over the exercise
price paid therefor, without reduction for any shares of Common Stock applied
to satisfy withholding tax or other obligations in respect of such shares.


 


2.4          Stock
Appreciation Rights


 


2.4.1        Grant.  Stock appreciation rights may be granted to
eligible recipients in such number and at such times during the term of the
Plan as the Committee may determine;
provided, however, that the maximum number of shares of Common Stock
as to which stock appreciation rights may be granted under the Plan to any one
individual in any one fiscal year may not exceed 1,000,000 shares (as adjusted
pursuant to the provisions of Section 1.6.3).


 


2.4.2        Exercise
Price.  The exercise price
per share with respect to each stock appreciation right will be determined by
the Committee but, except as otherwise permitted by Section 1.6.3, may never be less than the Fair Market
Value of the Common Stock. Unless otherwise noted in the Award Agreement, the
Fair Market Value of the Common Stock will be its closing price on the NASDAQ
Capital Market on the date of grant of the Award of stock appreciation rights.


 


2.4.3        Term of Stock Appreciation Right.  In no event will any stock appreciation right
be exercisable after the expiration of 10 years from the date on which the
stock appreciation right is granted.


 


2.4.4        Exercise
of Stock Appreciation Right and Delivery of Shares.  Each stock appreciation right may be
exercised in such installments as may be determined in the Award Agreement at
the time the stock appreciation right is granted. Subject to any limitations in
the applicable Award Agreement, any stock appreciation rights not exercised on
the applicable installment date may be exercised thereafter at any time before
the final expiration of the stock appreciation right. To exercise a stock
appreciation right, the Grantee must give written notice to Force Protection
specifying the number of stock appreciation rights to be exercised. Upon
exercise of stock appreciation rights, shares of Common Stock, cash or other securities
or property, or a combination thereof, as specified by the Committee, equal in
value to (a) the excess of (1) the Fair Market Value of the Common
Stock on the date of exercise over
(2) the exercise price of such stock appreciation right multiplied by (b) the number of
stock appreciation rights exercised will be delivered to the Grantee. Any
person exercising a stock appreciation right will make such representations and
agreements and furnish such information as the Committee may in its discretion
deem necessary or desirable to assure compliance by Force Protection on terms
acceptable to Force Protection with the provisions of the Securities Act and
any other applicable legal requirements. If a Grantee so requests, shares
purchased may be issued in the name of the Grantee and another jointly with the
right of survivorship.


 


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2.4.5                        Repricing. 
Except as otherwise permitted by Section 1.6.3,
reducing the exercise price of stock appreciation rights issued and outstanding
under the Plan, including through amendment, cancellation in exchange for the
grant of a substitute Award or repurchase for cash or other consideration (in
each case that has the effect of reducing the exercise price), will require
approval of the stockholders of Force Protection.


 


2.4.6                        Repayment
if Conditions Not Met.  If the Committee determines that all terms
and conditions of the Plan and a Grantee’s stock appreciation right Award
Agreement in respect of exercised stock appreciation rights were not satisfied,
then the Grantee will be obligated to pay the Company immediately upon demand
therefor, an amount equal to the excess of the Fair Market Value (determined at
the time of exercise) of the shares of Common Stock subject to the exercised
stock appreciation rights over the exercise price therefor, without reduction
for any amount applied to satisfy withholding tax or other obligations in
respect of such stock appreciation rights.


 


2.5                               Restricted Shares


 


2.5.1                        Grants.  The
Committee may grant or offer for sale restricted shares in such amounts and
subject to such terms and conditions as the Committee may determine. Upon the
delivery of such shares, the Grantee will have the rights of a stockholder with
respect to the restricted shares, subject to any other restrictions and
conditions as the Committee may include in the applicable Award Agreement. Each
Grantee of an Award of restricted shares will be issued a Certificate in
respect of such shares, unless the Committee elects to use another system, such
as book entries by the transfer agent, as evidencing ownership of shares of
such shares. In the event that a Certificate is issued in respect of restricted
shares, such Certificate may be registered in the name of the Grantee, and
shall, in addition to such legends required by applicable securities laws, bear
an appropriate legend referring to the terms, conditions, and restrictions
applicable to such Award, but will be held by Force Protection or its
designated agent until the time the restrictions lapse.


 


2.5.2                        Right to
Vote and Receive Dividends on Restricted Shares.  Each
Grantee of an Award of restricted shares will, during the period of
restriction, be the beneficial and record owner of such restricted shares and
will have full voting rights with respect thereto. Unless the Committee
determines otherwise in an Award Agreement, during the period of restriction, all
dividends (whether ordinary or extraordinary and whether paid in cash,
additional shares or other property) or other distributions paid upon any
restricted share will be retained by the Company for the account of the
relevant Grantee. Such dividends or other distributions will revert back to the
Company if for any reason the restricted share upon which such dividends or
other distributions were paid reverts back to the Company. Upon the expiration
of the period of restriction, all such dividends or other distributions made on
such restricted share and retained by the Company will be paid to the relevant
Grantee.


 


2.5.3                        Repayment
if Conditions Not Met.  If the Committee determines that all terms
and conditions of the Plan and a Grantee’s restricted share Award Agreement in
respect of restricted shares which have become vested were not satisfied, then
the Grantee will be obligated to pay the Company immediately upon demand
therefor, an amount equal to the Fair Market Value (determined at the time such
shares became vested) of such restricted shares, without reduction for any
amount applied to satisfy withholding tax or other obligations in respect of
such restricted shares.


 


2.6                               Restricted Stock Units


 


2.6.1                        Grant.  The
Committee may grant Awards of restricted stock units in such amounts and
subject to such terms and conditions as the Committee may determine. A Grantee
of a 


 


10

















 


restricted
stock unit will have only the rights of a general unsecured creditor of Force
Protection, until delivery of shares of Common Stock, cash or other securities
or property is made as specified in the applicable Award Agreement. On the
delivery date specified in the Award Agreement, the Grantee of each restricted
stock unit not previously forfeited or terminated will receive one share of
Common Stock, cash or other securities or property equal in value to a share of
Common Stock or a combination thereof, as specified by the Committee.


 


2.6.2                        Repayment
if Conditions Not Met.  If the Committee determines that all terms
and conditions of the Plan and a Grantee’s restricted stock unit Award
Agreement in respect of the delivery of shares underlying such restricted stock
units were not satisfied, then the Grantee will be obligated to pay the Company
immediately upon demand therefor, an amount equal to the Fair Market Value
(determined at the time of delivery) of the shares of Common Stock delivered
with respect to such delivery date, without reduction for any shares applied to
satisfy withholding tax or other obligations in respect of such shares of
Common Stock.


 


2.7                               Dividend Equivalent Rights


 


The
Committee may include in the Award Agreement with respect to any Award a
dividend equivalent right entitling the Grantee to receive amounts equal to all
or any portion of the regular cash dividends that would be paid on the shares
of Common Stock covered by such Award if such shares had been delivered
pursuant to such Award. The grantee of a dividend equivalent right will have
only the rights of a general unsecured creditor of Force Protection until
payment of such amounts is made as specified in the applicable Award Agreement.
In the event such a provision is included in an Award Agreement, the Committee
will determine whether such payments will be made in cash, in shares of Common
Stock or in another form, whether they will be conditioned upon the exercise of
the Award to which they relate, the time or times at which they will be made,
and such other terms and conditions as the Committee will deem appropriate.


 


2.8                               Other Stock-Based Awards


 


The
Committee may grant other types of equity-based or equity-related Awards
(including the grant or offer for sale of unrestricted shares of Common Stock
and performance share awards and performance units settled in cash) in such
amounts and subject to such terms and conditions as the Committee may
determine. Such Awards may entail the transfer of actual shares of Common Stock
to Award recipients and may include Awards designed to comply with or take
advantage of the applicable local laws of jurisdictions other than the United
States.


 


ARTICLE III


MISCELLANEOUS


 


3.1                               Amendment of the Plan


 


3.1.1                        Unless otherwise provided in the Plan or in
an Award Agreement, the Board may from time to time suspend, discontinue,
revise or amend the Plan in any respect whatsoever but, subject to Section 1.6.3 or as otherwise
specifically provided herein, no such amendment shall adversely impair the
rights of the Grantee of any Award without the Grantee’s consent.


 


3.1.2                        Unless otherwise determined by the Board,
stockholder approval of any suspension, discontinuance, revision or amendment
will be obtained only to the extent necessary to comply with any applicable
laws, regulations or rules of a securities exchange or self-regulatory
agency; 


 


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provided,
however, if and to the extent the Board determines that it is appropriate for
Awards granted under the Plan to constitute performance-based compensation
within the meaning of Section 162(m)(4)(C) of the Code, no amendment
that would require stockholder approval in order for amounts paid pursuant to
the Plan to constitute performance-based compensation within the meaning of Section 162(m)(4)(C) of
the Code will be effective without the approval of the stockholders of Force
Protection as required by Section 162(m) of the Code and, if and to
the extent the Board determines it is appropriate for the Plan to comply with
the provisions of Section 422 of the Code, no amendment that would require
stockholder approval under Section 422 of the Code will be effective
without the approval of the stockholders of Force Protection.


 


3.2                               Tax Withholding


 


Grantees
shall be solely responsible for any applicable taxes (including, without
limitation, income and excise taxes) and penalties, and any interest that
accrues thereon, that they incur in connection with the receipt, vesting or
exercise of any Award. As a condition to the delivery of any shares of Common
Stock, cash or other securities or property pursuant to any Award or the
lifting or lapse of restrictions on any Award, or in connection with any other
event that gives rise to a federal or other governmental tax withholding
obligation on the part of the Company relating to an Award (including, without
limitation, FICA tax), (a) the Company may deduct or withhold (or cause to
be deducted or withheld) from any payment or distribution to a Grantee whether
or not pursuant to the Plan (including shares of Common Stock otherwise
deliverable), (b) the Committee will be entitled to require that the
Grantee remit cash to the Company (through payroll deduction or otherwise) or (c) the
Company may enter into any other suitable arrangements to withhold, in each
case in an amount not to exceed in the opinion of the Company the minimum
statutory amounts of such taxes required by law to be withheld.


 


3.3                               Required Consents and
Legends


 


3.3.1                        If the Committee at any time determines that
any Consent (as hereinafter defined) is necessary or desirable as a condition
of, or in connection with, the granting of any Award, the delivery of shares of
Common Stock or the delivery of any cash, securities or other property under
the Plan, or the taking of any other action thereunder (each such action a “Plan Action”), then,
subject to Section 3.13 such
Plan Action will not be taken, in whole or in part, unless and until such
Consent will have been effected or obtained to the full satisfaction of the
Committee. The Committee may direct that any Certificate evidencing shares
delivered pursuant to the Plan will bear a legend setting forth such
restrictions on transferability as the Committee may determine to be necessary
or desirable, and may advise the transfer agent to place a stop transfer order
against any legended shares.


 


3.3.2                        The term “Consent” as used in this Article III
with respect to any Plan Action includes (a) any and all listings,
registrations or qualifications in respect thereof upon any securities exchange
or under any federal, state, or local law, or law, rule or regulation of a
jurisdiction outside the United States, (b) any and all written agreements
and representations by the Grantee with respect to the disposition of shares,
or with respect to any other matter, which the Committee may deem necessary or
desirable to comply with the terms of any such listing, registration or
qualification or to obtain an exemption from the requirement that any such
listing, qualification or registration be made, (c) any and all other
consents, clearances and approvals in respect of a Plan Action by any
governmental or other regulatory body or any stock exchange or self-regulatory
agency, (d) any and all consents by the Grantee to (i) the Company’s
supplying to any third party recordkeeper of the Plan such personal information
as the Committee deems advisable to administer the Plan, (ii) the Company’s
deducting amounts from the Grantee’s wages, or another arrangement satisfactory
to the Committee, to reimburse the Company for advances made on the Grantee’s
behalf to satisfy certain withholding and other tax obligations in connection
with an 


 


12

















 


Award
and (iii) the Company’s imposing sales and transfer procedures and
restrictions and hedging restrictions on shares of Common Stock delivered under
the Plan and (e) any and all consents or authorizations required to comply
with, or required to be obtained under, applicable local law or otherwise
required by the Committee. Nothing herein will require the Company to list,
register or qualify the shares of Common Stock on any securities exchange.


 


3.4                               Right of Offset


 


The
Company will have the right to offset against its obligation to deliver shares
of Common Stock (or other property or cash) under the Plan or any Award
Agreement any outstanding amounts (including, without limitation, travel and
entertainment or advance account balances, loans, repayment obligations under
any Awards, or amounts repayable to the Company pursuant to tax equalization,
housing, automobile or other employee programs) that the Grantee then owes to
the Company and any amounts the Committee otherwise deems appropriate pursuant
to any tax equalization policy or agreement. Notwithstanding the foregoing, if
an Award provides for the deferral of compensation within the meaning of Section 409A
of the Code, the Committee will have no right to offset against its obligation
to deliver shares of Common Stock (or other property or cash) under the Plan or
any Award Agreement if such offset could subject the Grantee to the additional
tax imposed under Section 409A of the Code in respect of an outstanding
Award.


 


3.5                               Nonassignability; No Hedging


 


Unless
otherwise provided in an Award Agreement, no Award (or any rights and
obligations thereunder) granted to any person under the Plan may be sold,
exchanged, transferred, assigned, pledged, hypothecated or otherwise disposed
of or hedged, in any manner (including through the use of any cash-settled
instrument), whether voluntarily or involuntarily and whether by operation of
law or otherwise, other than by will or by the laws of descent and
distribution, and all such Awards (and any rights thereunder) will be
exercisable during the life of the Grantee only by the Grantee or the Grantee’s
legal representative. Notwithstanding the foregoing, the Committee may permit,
under such terms and conditions that it deems appropriate in its sole
discretion, a Grantee to transfer any Award to any person or entity that the
Committee so determines. Any sale, exchange, transfer, assignment, pledge,
hypothecation, or other disposition in violation of the provisions of this Section 3.5 will be null and void
and any Award which is hedged in any manner will immediately be forfeited. All
of the terms and conditions of the Plan and the Award Agreements will be
binding upon any permitted successors and assigns.


 


3.6                               Change in Control


 


3.6.1                        Unless otherwise provided in the applicable
Award Agreement, in the event of a Change in Control, (i) any outstanding
Awards then held by a Grantee which are unexercisable or otherwise unvested or
subject to lapse restrictions will automatically be deemed exercisable or
otherwise vested or no longer subject to lapse restrictions, as the case may
be, as of the date of such Change in Control and (ii) any outstanding
performance-based Awards shall be deemed earned at the target level (or if no
target level is specified, the maximum level) with respect to all open
performance periods.


 


3.6.2                        In the event of a Change in Control, a
Grantee’s Award shall be treated, to the extent determined by the Committee to
be permitted under Section 409A of the Code, in accordance with one of the
following methods as determined by the Committee in its sole discretion: (i) cancel
such awards for fair value (as determined in the sole discretion of the
Committee) which, in the case of stock options and stock appreciation rights,
may equal the excess, if any, of the value of the consideration to be paid in
the Change in Control transaction to holders 


 


13

















 


of
the same number of shares of Common Stock subject to such stock options or
stock appreciation rights over the aggregate exercise price of such stock
options or stock appreciation rights, as the case may be; (ii) provide for
the issuance of substitute awards that will substantially preserve the
otherwise applicable terms of any affected Awards previously granted under the
Plan, as determined by the Committee in its sole discretion; or (iii) provide
that for a period of at least 20 days prior to the Change in Control, any
stock options or stock appreciation rights that would not otherwise become
exercisable prior to the Change in Control will be exercisable as to all shares
of Common Stock subject thereto (but any such exercise will be contingent upon
and subject to the occurrence of the Change in Control and if the Change in
Control does not take place within a specified period after giving such notice
for any reason whatsoever, the exercise will be null and void) and that any
stock options or stock appreciation rights not exercised prior to the
consummation of the Change in Control will terminate and be of no further force
and effect as of the consummation of the Change in Control. For the avoidance
of doubt, in the event of a Change in Control, the Committee may, in its sole
discretion, terminate any stock option or stock appreciation right for which
the exercise price is equal to or exceeds the per share value of the
consideration to be paid in the Change in Control transaction without payment
of consideration therefor.


 


3.7                               Right of Discharge Reserved


 


Neither
the grant of an Award nor any provision in the Plan or in any Award Agreement
will confer upon any Grantee the right to continued Employment by the Company
or affect any right which the Company may have to terminate or alter the terms
and conditions of such Employment.


 


3.8                               Nature of Payments


 


3.8.1                        Any and all grants of Awards and deliveries
of Common Stock, cash, securities or other property under the Plan will be in
consideration of services performed or to be performed for the Company by the
Grantee. Awards under the Plan may, in the discretion of the Committee, be made
in substitution in whole or in part for cash or other compensation otherwise
payable to a Grantee. Only whole shares of Common Stock will be delivered under
the Plan. Awards will, to the extent reasonably practicable, be aggregated in
order to eliminate any fractional shares. Fractional shares may, in the
discretion of the Committee, be forfeited or be settled in cash or otherwise as
the Committee may determine.


 


3.8.2                        All such grants and deliveries of shares of
Common Stock, cash, securities or other property under the Plan will constitute
a special discretionary incentive payment to the Grantee and will not be
required to be taken into account in computing the amount of salary or
compensation of the Grantee for the purpose of determining any contributions to
or any benefits under any pension, retirement, profit-sharing, bonus, life
insurance, severance or other benefit plan of the Company or under any
agreement with the Grantee, unless the Company specifically provides otherwise.


 


14

















 


3.9                               Non-Uniform Determinations


 


3.9.1                        The Committee’s determinations under the Plan
and Award Agreements need not be uniform and any such determinations may be
made by it selectively among persons who receive, or are eligible to receive,
Awards under the Plan (whether or not such persons are similarly situated).
Without limiting the generality of the foregoing, the Committee will be
entitled, among other things, to make non-uniform and selective determinations
under Award Agreements, and to enter into non-uniform and selective Award
Agreements, as to (a) the persons to receive Awards, (b) the terms
and provisions of Awards and (c) whether a Grantee’s Employment has been
terminated for purposes of the Plan.


 


3.9.2                        To the extent the Committee deems it
necessary, appropriate or desirable to comply with foreign law or practices and
to further the purposes of the Plan, the Committee may, without amending the
Plan, establish special rules applicable to Awards to Grantees who are
foreign nationals, are employed outside the United States or both and grant
Awards (or amend existing Awards) in accordance with those rules.


 


3.10                        Other Payments or Awards


 


Nothing
contained in the Plan will be deemed in any way to limit or restrict the
Company from making any award or payment to any person under any other plan,
arrangement or understanding, whether now existing or hereafter in effect.


 


3.11                        Plan Headings


 


The
headings in the Plan are for the purpose of convenience only and are not
intended to define or limit the construction of the provisions hereof.


 


3.12                        Termination of Plan


 


The
Board reserves the right to terminate the Plan at any time; provided, however, that in any case, the
Plan will terminate September 18, 2018, and provided further, that all Awards made under the Plan
before its termination will remain in effect until such Awards have been
satisfied or terminated in accordance with the terms and provisions of the Plan
and the applicable Award Agreements.


 


3.13                        Section 409A


 


3.13.1                  All Awards made under the Plan that are
intended to be “deferred compensation” subject to Section 409A shall be
interpreted, administered and construed to comply with Section 409A, and
all Awards made under the Plan that are intended to be exempt from Section 409A
shall be interpreted, administered and construed to comply with and preserve
such exemption. The Board and the Committee shall have full authority to give
effect to the intent of the foregoing sentence. To the extent necessary to give
effect to this intent, in the case of any conflict or potential inconsistency
between the Plan and a provision of any Award or Award Agreement with respect
to an Award, the Plan shall govern.


 


3.13.2                  Without limiting the generality of Section 3.13.1, with respect to any
Award made under the Plan that is intended to be “deferred compensation”
subject to Section 409A: (a) any payment to be made with respect to
such Award in connection with the Grantee’s separation from service to the
Company within the meaning of Section 409A (and any other payment that
would be subject to the limitations in Section 409A(a)(2)(b) of the
Code) shall be delayed until six months after the Grantee’s separation from
service (or earlier death) in accordance with the requirements of Section 409A;
(b) if any payment to be made with respect to such Award would occur at a
time 


 


15

















 


when
the tax deduction with respect to such payment would be limited or eliminated
by Section 162(m) of the Code, such payment may be deferred by the
Company under the circumstances described in Section 409A until the
earliest date that the Company reasonably anticipates that the deduction or
payment will not be limited or eliminated; (c) to the extent necessary to
comply with Section 409A, any other securities, other Awards or other
property that the Company may deliver in lieu of shares of Common Stock in
respect of an Award shall not have the effect of deferring delivery or payment
beyond the date on which such delivery or payment would occur with respect to
the shares of Common Stock that would otherwise have been deliverable (unless
the Committee elects a later date for this purpose in accordance with the
requirements of Section 409A); (d) with respect to any required
Consent described in Section 3.3
or the applicable Award Agreement, if such Consent has not been effected or
obtained as of the latest date provided by such Award Agreement for payment in
respect of such Award and further delay of payment is not permitted in
accordance with the requirements of Section 409A, such Award or portion
thereof, as applicable, will be forfeited and terminate notwithstanding any
prior earning or vesting; (e) if the Award includes a “series of
installment payments” (within the meaning of Section 1.409A-2(b)(2)(iii) of
the Treasury Regulations), the Grantee’s right to the series of installment
payments shall be treated as a right to a series of separate payments and not
as a right to a single payment; (f) if the Award includes “dividend  equivalents”
(within the meaning of Section 1.409A-3(e) of the Treasury Regulations), the
Grantee’s right to the dividend equivalents shall be treated separately from
the right to other amounts under the Award; and (g) for purposes of
determining whether the Grantee has experienced a separation from service to
the Company within the meaning of Section 409A, “subsidiary” shall mean a
corporation or other entity in a chain of corporations or other entities in
which each corporation or other entity, starting with Force Protection, has a
controlling interest in another corporation or other entity in the chain,
ending with such corporation or other entity. For purposes of the preceding
sentence, the term “controlling interest” has the same meaning as provided in Section 1.414(c)-2(b)(2)(i) of
the Treasury Regulations, provided that the language “at least 20 percent”
is used instead of “at least 80 percent” each place it appears in Section 1.414(c)-2(b)(2)(i) of
the Treasury Regulations.


 


3.14                        Governing Law


 


THE
PLAN WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEVADA, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.


 


3.15                        Choice of Forum


 


3.15.1                  The Company and each Grantee, as a condition
to such Grantee’s participation in the Plan, hereby irrevocably submit to the
exclusive jurisdiction of any state or federal court located in South Carolina
over any suit, action or proceeding arising out of or relating to or concerning
the Plan. The Company and each Grantee, as a condition to such Grantee’s
participation in the Plan, acknowledge that the forum designated by this Section 3.15.1 has a reasonable
relation to the Plan and to the relationship between such Grantee and the
Company. Notwithstanding the foregoing, nothing herein will preclude the
Company from bringing any action or proceeding in any other court for the
purpose of enforcing the provisions of Section 3.15.1.


 


3.15.2                  The agreement by the Company and each Grantee
as to forum is independent of the law that may be applied in the action, and
the Company and each Grantee, as a condition to such Grantee’s participation in
the Plan, (i) agree to such forum even if the forum may under applicable
law choose to apply non-forum law, (ii) hereby waive, to the fullest
extent permitted by applicable law, any objection which the Company or such
Grantee now or hereafter may have to personal 


 


16

















 


jurisdiction
or to the laying of venue of any such suit, action or proceeding in any court
referred to in Section 3.15.1,
(iii) undertake not to commence any action arising out of or relating to
or concerning the Plan in any forum other than the forum described in this Section 3.15 and (iv) agree
that, to the fullest extent permitted by applicable law, a final and
non-appealable judgment in any such suit, action or proceeding in any such
court will be conclusive and binding upon the Company and each Grantee.


 


3.15.3                  Each Grantee, as a condition to such Grantee’s
participation in the Plan, hereby irrevocably appoints the General Counsel of
Force Protection as such Grantee’s agent for service of process in connection
with any action, suit or proceeding arising out of or relating to or concerning
the Plan, who will promptly advise such Grantee of any such service of process.


 


3.15.4                  Each Grantee, as a condition to such Grantee’s
participation in the Plan, agrees to keep confidential the existence of, and
any information concerning, a dispute, controversy or claim described in Section 3.15, except that a Grantee
may disclose information concerning such dispute, controversy or claim to the
court that is considering such dispute, controversy or claim or to such Grantee’s
legal counsel (provided that such counsel agrees not to disclose any such
information other than as necessary to the prosecution or defense of the
dispute, controversy or claim).


 


3.16                        Severability; Entire Agreement


 


If
any of the provisions of the Plan or any Award Agreement is finally held to be
invalid, illegal or unenforceable (whether in whole or in part), such provision
will be deemed modified to the extent, but only to the extent, of such
invalidity, illegality or unenforceability and the remaining provisions will
not be affected thereby; provided
that if any of such provisions is finally held to be invalid, illegal, or
unenforceable because it exceeds the maximum scope determined to be acceptable
to permit such provision to be enforceable, such provision will be deemed to be
modified to the minimum extent necessary to modify such scope in order to make
such provision enforceable hereunder. The Plan and any Award Agreements contain
the entire agreement of the parties with respect to the subject matter thereof
and supersede all prior agreements, promises, covenants, arrangements,
communications, representations and warranties between them, whether written or
oral with respect to the subject matter thereof.


 


3.17                        Waiver of Claims


 


Each
Grantee of an Award recognizes and agrees that before being selected by the
Committee to receive an Award he or she has no right to any benefits under the
Plan. Accordingly, in consideration of the Grantee’s receipt of any Award
hereunder, he or she expressly waives any right to contest the amount of any
Award, the terms of any Award Agreement, any determination, action or omission
hereunder or under any Award Agreement by the Committee, the Company or the
Board, or any amendment to the Plan or any Award Agreement (other than an
amendment to the Plan or an Award Agreement to which his or her consent is
expressly required by the express terms of an Award Agreement).


 


3.18                        No Liability With Respect to Tax Qualification or
Adverse Tax Treatment


 


Notwithstanding
anything to the contrary contained herein, in no event shall the Company be
liable to a grantee on account of an Award’s failure to (a) qualify for
favorable United States or foreign tax treatment or (ii) avoid adverse tax
treatment under United States or foreign law, including, without limitation, Section 409A.


 


17

















 


3.19                        No Third Party Beneficiaries


 


Except
as expressly provided in an Award Agreement, neither the Plan nor any Award
Agreement will confer on any person other than the Company and the Grantee of
any Award any rights or remedies thereunder. The exculpation and
indemnification provisions of Section 1.3.4
will inure to the benefit of a Covered Person’s estate and beneficiaries and
legatees.


 


3.20                        Successors and Assigns of Force Protection


 


The
terms of the Plan will be binding upon and inure to the benefit of Force
Protection and any successor entity contemplated by Section 3.6.


 


3.21                        Waiver of Jury Trial


 


EACH
GRANTEE WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THE PLAN.


 


3.22                        Date of Adoption, Approval of Stockholders and
Effective Date


 


The
Plan was adopted on September 19, 2008 by the Board, subject to the
approval by the stockholders of Force Protection at the 2008 Annual Meeting of
Stockholders on November 21, 2008. The Plan will only be effective if it
is approved by the stockholders of Force Protection at the 2008 Annual Meeting
of Stockholders. If the Plan is not so approved by the stockholders of Force
Protection, then the Plan will be null and void in its entirety.


 


18