**Exhibit 10.1**

 

**2010 Executive Short-TermIncentive Program**

 

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

 

On January 18, 2010, the Compensation Committee of ForceProtection, Inc. (the “Company”) adopted the 2010 Executive Short-TermIncentive Program for performance during 2010 (the “2010 Short-Term IncentiveProgram”).  All executive officers andcertain other management of the Company, including the Company’s namedexecutive officers as defined by Item 402 of Regulation S-K, are eligible toearn a bonus payment under the 2010 Short-Term Incentive Program.

 

Each executive officer’s target opportunity to receive a bonus paymentunder the 2010 Short-Term Incentive Program is set as a percentage of theexecutive officer’s base salary determined by taking into account theparticipant’s authority level within the Company and median-to-marketbenchmarks.  For 2010, the targetopportunity 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 hasbeen set at 100% of his base salary.

 

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

 

An award for any of the Shared Executive Metrics requires theachievement of a minimum threshold Earning Per Share (diluted) (“EPS”).  If this threshold EPS is not achieved, thenno payment for the Shared Executive Metrics shall be awarded.  If the threshold EPS is achieved, then actualperformance of the Shared Executive Metrics will be determined by a range ofperformance achieved for each metric as established by the CompensationCommittee.  The table below sets forththe ranges for each metric, as aligned with the Company’s 2010 annual budgetand 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         | %          |

 

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

 

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

 

**Eligible Target OpportunityPercentage 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         | %          |

 

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

 

Inorder to be eligible to receive any payment under the 2010 Short-Term IncentiveProgram, the participant must be employed by the Company at the time the finalaward is determined, subject to any employment agreement.  Any 2010 Short-Term Incentive Program awardshall be determined and paid by March 15, 2011.

 

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