Document:

EXHIBIT 10.1

 

SEVERANCE AGREEMENT

 

This SEVERANCE AGREEMENT (this “Agreement”)
is entered into as of the 24th  day of March, 2008 (the “Effective
Date”), by and between Force Protection, Inc., a Nevada
corporation (the “Company”),
and Lenna Ruth Macdonald (“Executive”).

 

W I T N E S S E T H:

 

WHEREAS, the Executive currently serves as a key
employee of the Company and the Executive’s services and knowledge are valuable
to the Company in connection with the management of one or more of the Company’s
principal operating facilities, divisions, departments or Subsidiaries (as
defined in Section 1);

 

WHEREAS, the Board (as defined in Section 1)
has determined that it is in the best interests of the Company and its
stockholders to improve upon the existing severance protections for its key
employees and to provide an additional inducement to secure the Executive’s
continued services and, in the event of any threat or occurrence of, or
negotiation or other action that could lead to, or create the possibility of, a
Change in Control (as defined in Section 1) of the Company, to
ensure the Executive’s continued and undivided dedication to the Executive’s
duties when faced with the possibility of 
Change in Control; and

 

WHEREAS, the Board has authorized the Company to
enter into this Agreement.

 

NOW,
THEREFORE, for
and in consideration of the promises and the mutual covenants and agreements
herein contained, the Company and the Executive hereby agree as follows:

 

1.             Definitions.  As used in this Agreement, the following terms
shall have the respective meanings set forth below:

 

(a)           “Board”
means the Board of Directors of the Company.

 

(b)           “Cause”
means (i) the Executive’s material breach of the Executive’s duties and
responsibilities (other than as a result of the Executive’s Disability) which
is (x) demonstrably willful and deliberate on the Executive’s part, (y) committed
in bad faith or without reasonable belief that such breach is in the best
interests of the Company and (z) not remedied within ten (10) days
after receipt of written notice from the Company specifying such breach; (ii) the
Executive’s indictment for, conviction of, or plea of nolo
contendere to, a felony; or (iii) the Executive’s gross
negligence or any act of theft, fraud, misappropriation, malfeasance or
dishonesty by the Executive in connection with the performance of the Executive’s
duties to the Company which is demonstrably willful and deliberate on the
Executive’s part.

 

 

                Cause shall not exist unless and until the Company
has delivered to the Executive a copy of a resolution duly adopted by a
majority of the entire Board at any duly called meeting of the Board (after
reasonable notice to the Executive and an opportunity for the Executive,
together with counsel, to be heard before the Board), finding that in the good
faith opinion of the Board an event set forth in clauses (i), (ii) or (iii) has
occurred and specifying the particulars thereof in detail.

 

                The Company must notify the Executive of any event
constituting Cause (in accordance with the provisions of Section 14(b))
within ninety (90) days following the Board’s (excluding, if applicable, the
Executive) knowledge of its existence or such event shall not constitute Cause
under this Agreement.

 

(c)           “Change in Control”
means the occurrence of any one of the following events:

 

(i)            any
“person” (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (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 the Company
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 (i) shall not be deemed to be a
Change in Control by virtue of any of the following acquisitions:  (A) by the Company or any Subsidiary; (B) by
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any Subsidiary; (C) by any underwriter temporarily holding
securities pursuant to an offering of such securities; (D) pursuant to a
Non-Control Transaction (as defined in paragraph (iii) below); or (E) a
transaction (other than one described in paragraph (iii) below) in which
Company Voting Securities are acquired from the Company, if a majority of the
Incumbent Board (as defined in paragraph (ii) below) approves a resolution
providing expressly that the acquisition pursuant to this clause (E) does
not constitute a Change in Control under this paragraph (i);

 

(ii)           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 the Company 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 the Company as a result of an actual or threatened election contest with
respect to directors or any other 

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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;

 

(iii)          the
consummation of a merger, consolidation, share exchange or similar form of
corporate transaction involving the Company or any of its Subsidiaries that
requires the approval of the Company’s stockholders (whether for such
transaction or the issuance of securities in the transaction or otherwise) (a “Reorganization”),
unless immediately following such Reorganization:  (A) 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; (B) 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 (C) 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 (A), (B) and (C) above shall be deemed to
be a “Non-Control
Transaction”);

 

(iv)          the
stockholders of the Company approve a plan of complete liquidation or
dissolution; or

 

(v)           the
consummation of a sale (or series of sales) of all or substantially all of the
assets of the Company and its Subsidiaries to an entity that is not an
affiliate of the Company.

 

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 of Company Voting Securities outstanding;
provided, that, if after such acquisition by the Company such person becomes
the 

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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.

 

(d)           “Change in Control
Termination Period” means the period of time beginning with a
Change in Control and ending at the end of the Window Period.

 

(e)           “Date of Termination”
means (i) the effective date on which the Executive’s employment with the
Company terminates, as specified in a prior written notice by the Company or
the Executive, as the case may be, to the other, delivered pursuant to Section 14,
or (ii) if the Executive’s employment with the Company terminates by
reason of death, the date of death of the Executive.

 

(f)            “Disability”
means the Executive’s incapacity due to physical or mental illness, as
evidenced by a written statement from a licensed physician acceptable to the
Company or by the insurance company which insures the Company’s long-term
disability plan in which the Executive is eligible to participate which
confirms the Executive’s inability to perform due to such physical or mental
illness.

 

(g)           “Good Reason”
means, without the Executive’s express written consent, the occurrence of any
of the following events following a Change in Control:

 

(i)            (A) any
change in the authority, duties or responsibilities that is inconsistent in any
material and adverse respect with the Executive’s authority, position(s), duties,
responsibilities or status with the Company immediately prior to such Change in
Control (including any material and adverse diminution of such duties or
responsibilities) or (B) a material and adverse change in the Executive’s
reporting responsibilities, titles or offices with the Company as in effect
immediately prior to such Change in Control;

 

(ii)           a
material reduction by the Company in the Executive’s rate of annual base salary
or annual target bonus opportunity (including any material and adverse change
in the formula for such annual bonus target) as in effect immediately prior to
such Change in Control or as the same may be increased from time to time
thereafter;

 

(iii)          any
requirement of the Company that the Executive be based anywhere more than fifty
(50) miles from the place of business where the Executive is located at the
time of the Change in Control;

 

(iv)          the
failure of the Company to continue in effect any employee benefit plan or
compensation plan in which the Executive is participating immediately prior to
such Change in Control and which is material to the Executive’s overall
compensation, unless the Executive is permitted to participate 

 

4

 

in other plans providing the Executive with benefits
or compensation which are not materially less, or the taking of any action by
the Company which would materially and adversely affect the Executive’s
participation in or materially and adversely reduce the Executive’s benefits
under any such plan; or

 

(v)           a
material breach by the Company of this Agreement or any other material
agreement in effect between the Executive and the Company.

 

                Any event described in this Section 1(g) which
occurs prior to a Change in Control, but was at the request of a third party
who had indicated an intention or taken steps reasonably calculated to effect a
Change in Control and who effectuates a Change in Control, shall constitute
Good Reason following a Change in Control for purposes of this Agreement
(treating the date of such event as the date of the Change in Control)
notwithstanding that it occurred prior to the Change in Control.  For purposes of this Agreement, any good
faith determination of Good Reason made by the Executive shall be conclusive; provided,
however, that an isolated, insubstantial and inadvertent action taken in
good faith and which is remedied by the Company promptly after receipt of
notice thereof given by the Executive shall not constitute Good Reason.  The Executive must provide notice of
termination of employment (in accordance with the provisions of Section 14(b))
within ninety (90) days of the Executive’s knowledge of an event constituting
Good Reason or such event shall not constitute Good Reason under this
Agreement.  The Company shall have thirty
(30) days following its receipt of a notice of termination of employment from
the Executive to remedy the condition the Executive claimed to provide a basis
for such termination in the notice of termination.

 

(h)           “Nonqualifying Termination”
means a termination of the Executive’s employment (i) by the Company for
Cause, (ii) by the Executive for any reason other than (x) for Good
Reason during the Change in Control Termination Period or (y) for any
reason during the Window Period, (iii) as a result of the Executive’s
death, or (iv) by the Company due to the Executive’s absence from the
Executive’s duties with the Company on a full-time basis for at least one
hundred thirty (130) business days during any consecutive twelve month period
as a result of the Executive’s Disability.

 

(i)            “Subsidiary”
means any corporation
or other entity in which the Company has a direct or indirect ownership
interest of 50% or more of the total combined voting power of the then
outstanding securities or interests of such corporation or other entity
entitled to vote generally in the election of directors or in which the Company
has the right to receive 50% or more of the distribution of profits or 50% of
the assets on liquidation or dissolution.

 

(j)            “Window Period”
means the thirty (30) day period immediately following the six (6) month
anniversary of a Change in Control.

 

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2.             Obligations of the Executive.  The Executive agrees that if a Change in
Control shall occur, the Executive shall not voluntarily leave the employ of
the Company without Good Reason until ninety (90) days following such Change in
Control.

 

3.             Severance Payments.  Except as otherwise provided in Section 4
and subject to Section 6 and Section 19, if the
Executive’s employment with the Company is terminated other than by reason of a
Nonqualifying Termination, then the Company shall pay or provide the Executive
(or the Executive’s beneficiary or estate) with the following payments or
benefits:

 

(a)           a lump-sum cash amount within thirty (30)
days following the Date of Termination equal to the sum of: (i) the
Executive’s base salary through the Date of Termination, and any accrued
vacation, in each case to the extent not theretofore paid; (ii) any unpaid
bonus accrued with respect to the fiscal year ending on or preceding the Date
of Termination; and (iii) subject to presentment of appropriate
documentation, any unreimbursed expenses incurred through the Date of
Termination in accordance with Company policy (collectively, the “Accrued Amounts”);

 

(b)           a lump-sum cash amount within the
calendar year next following the calendar year during which the Date of
Termination occurs equal to the product of (i) the annual bonus the
Executive would have been paid based on the achievement of actual performance
goals and (ii) a fraction, the numerator of which is the number of days in
the fiscal year in which the Date of Termination occurs through the Date of
Termination and the denominator of which is three hundred sixty-five (365) (the
“Pro-Rata Bonus”);

 

(c)           a lump-sum cash amount within thirty (30)
days following the Date of Termination equal to one times the sum of (A) the
Executive’s annual base salary and (B) the greatest of (1) the
Executive’s target bonus for the fiscal year in which the Executive’s Date of
Termination occurs and (2) the average of the actual bonuses earned by the
Executive in respect of the two (2) preceding fiscal years of the Company
immediately preceding the fiscal year in which the Date of Termination occurs;

 

(d)           subject to (A) the Executive’s
timely election of continuation coverage under the Consolidated Budget Omnibus
Reconciliation Act of 1985, as amended (“COBRA”), (B) the
Executive’s continued co-payment of the employee portion of any contribution or
premium at the same level and cost to the Executive as if the Executive were an
employee of the Company (excluding, for purposes of calculating cost, an
employee’s ability to pay premiums with pre-tax dollars) and (C) the
Executive’s continued eligibility for COBRA continuation coverage, the Company
will pay for a period of up to twelve (12) months following the Date of
Termination the portion of the Executive’s COBRA premium equivalent to what the
Company would have paid if the Executive were an employee of the Company.  Notwithstanding the foregoing, in the event
the Executive fails to pay any required contribution or premium or becomes
employed with another employer and becomes eligible to receive substantially
similar or 

 

 

6

 

improved medical,
dental or vision benefits from such employer (whether or not the Executive
accepts such benefits), the Company’s obligations under this Section 3(d) shall
immediately cease, except that the Company’s obligation to continue to make
available continuation coverage under COBRA at the full COBRA rates shall be
determined in accordance with COBRA.  The
Executive will notify the Company of the Executive’s eligibility for medical,
dental or vision benefits from a subsequent employer within thirty (30) days of
such eligibility; and

 

(e)           with respect to outstanding equity awards
held by the Executive as of the Date of Termination, all stock options and
stock appreciation rights that would become vested and exercisable if the Executive
had continued to be employed with the Company during the twelve (12) month
period commencing on the Date of Termination shall vest and become exercisable
and the restrictions on all restricted stock awards, restricted stock units and
other equity or incentive awards that would have lapsed if the Executive had
continued to be employed with the Company during the twelve (12) month period
commencing on the Date of Termination shall lapse and such awards shall become
immediately payable; and

 

(f)            all other payments, benefits or fringe
benefits to which the Executive shall be entitled under the terms of any
applicable compensation arrangement or benefit, equity or fringe benefit plan
or program or grant (the “Other Benefits”).

 

4.             Change in Control Severance Payments.  If a Change in Control occurs and the
Executive’s employment with the Company is terminated (x) other than by
reason of a Nonqualifying Termination (1) during the Change in Control
Termination Period or (2) prior to the Change in Control Termination
Period and the Executive reasonably demonstrates that such termination was at
the request of a third party who had indicated an intention or taken steps
reasonably calculated to effect such Change in Control and who effectuates such
Change in Control (or such termination was otherwise in anticipation of such
Change in Control) or (y) by the Executive for any reason during the
Window Period, then, subject to Section 6 and Section 19
the Company shall pay or provide the Executive (or the Executive’s beneficiary
or estate) with the following payments or benefits:

 

(a)           a lump-sum cash amount within thirty (30)
days following the Date of Termination (or, if later, the date of the Change in
Control) equal to the sum of the Accrued Amounts;

 

(b)           a lump-sum cash amount within the
calendar year next following the calendar year during which the Date of
Termination occurs equal to the Pro-Rata Bonus;

 

(c)           a lump-sum cash amount within thirty (30)
days following the Date of Termination (or, if later, the date of the Change in
Control) equal to one and one-half times the sum of: (A) the Executive’s
highest rate of annual base salary during the 12-

 

7

 

month period prior
to the Date of Termination; and (B) the greatest of (1) the Executive’s
target bonus for the fiscal year in which the Executive’s Date of Termination
occurs, (2) the Executive’s target bonus for the fiscal year in which the
Change in Control occurs and (3) the average of the actual bonuses earned
by the Executive in respect of the two (2) preceding fiscal years of the
Company immediately preceding the fiscal year in which the Change in Control
occurs;

 

(d)           COBRA continuation coverage pursuant to Section 3(d),
except that the Company will pay the portion of the Executive’s COBRA premium
equivalent to what the Company would have paid if the Executive were an
employee of the Company for a period of up to eighteen (18) months following
the Date of Termination instead of for up to twelve (12) months;

 

(e)           with respect to outstanding equity awards
held by the Executive as of the Date of Termination, all stock options and
stock appreciation rights shall vest and become exercisable and the
restrictions on all restricted stock awards, restricted stock units and other
equity or incentive awards shall lapse and such awards shall become immediately
payable; and

 

(f)            the Other Benefits.

 

Notwithstanding
anything herein to the contrary, if the Executive becomes entitled to,  and receives, payments and benefits pursuant to Section 3 and thereafter
becomes entitled to payments and benefits pursuant to this Section 4,
payments and benefits
due under this Section 4  shall be reduced by any amounts received pursuant to Section 3.

 

5.             Payments Upon Non-Qualifying Termination of Employment.  If the Executive’s employment with the
Company shall terminate by reason of a Nonqualifying Termination, then the
Company shall pay to the Executive (or the Executive’s beneficiary or estate)
within thirty (30) days following the Date of Termination, a lump-sum cash
amount equal to the Accrued Amounts (other than the amount described in Section 3(a)(ii))
and provide the Other Benefits.

 

6.             Release
Required; Resignations.  Any amounts payable pursuant
to this Agreement (other than Accrued Amounts and Other
Benefits) shall only be payable if the Executive executes and delivers to the
Company (and does not revoke) a general release of claims in a form
substantially in the form of Exhibit A attached hereto.  In addition, upon any termination of the Executive’s
employment with the Company, the Executive shall promptly resign from any
position as an officer, director or fiduciary of any Company-related entity.

 

7.             Certain Additional Payments by the Company.  (a)  Anything in this Agreement to the
contrary notwithstanding, in the event it shall be determined that any payment,
award, benefit or distribution (or any acceleration of any payment, award, 

 

8

 

benefit
or distribution) by the Company (or any of its affiliated entities) or any
entity which effectuates a Change in Control (or any of its affiliated
entities) to or for the benefit of the Executive (whether pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments required under this Section 7) (a “Payment”) would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986,
as amended (the “Code”), or
any interest or penalties are incurred by the Executive with respect to such
excise tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), then the Company shall pay the Executive an
additional payment (a “Gross-Up Payment”)
in an amount such that, after payment by the Executive of all taxes (including
any interest or penalties imposed with respect to such taxes) including,
without limitation, any income and employment taxes (and any interest and
penalties imposed with respect thereto) and any Excise Tax imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Payments. 
For purposes of determining the amount of the Gross-Up Payment, the Executive
shall be deemed to (i) pay federal income taxes at the highest marginal
rates of federal income taxation for the calendar year in which the Gross-Up
Payment is to be made, and (ii) pay applicable state and local income
taxes at the highest marginal rate of taxation for the calendar year in which
the Gross-Up Payment is to be made, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local
taxes.

 

(b)           Subject to the provisions of Section 7(a),
all determinations required to be made under this Section 7,
including whether and when a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at such
determinations, shall be made by the public accounting firm that is retained by
the Company as of the date immediately prior to the Change in Control (the “Accounting Firm”) which shall
provide detailed supporting calculations both to the Company and the Executive
within fifteen (15) business days of the receipt of notice from the Company or
the Executive that there has been a Payment, or such earlier time as is
requested by the Company (collectively, the “Determination”).  Notwithstanding the foregoing, in the event (i) the
Board shall determine prior to the Change in Control that the Accounting Firm
is precluded from performing such services under applicable auditor
independence rules, (ii) the Audit Committee of the Board determines that
it does not want the Accounting Firm to perform such services because of
auditor independence concerns or (iii) the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the Change
in Control, the Board shall appoint another nationally recognized public
accounting firm to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder).  All fees and expenses of the Accounting Firm
shall be borne solely by the Company and the Company shall enter into any
agreement requested by the Accounting Firm in connection with the performance
of the services hereunder.  The Gross-Up
Payment under this Section 7 with respect to any Payments shall be
made no later than thirty (30) days following such 

9

 

Payment and, in no
event, later than the calendar year next following the calendar year in which
the Executive remits the taxes to which such Gross-Up Payment relates.  If the Accounting Firm determines that no
Excise Tax is payable by the Executive, it shall furnish the Executive with a
written opinion to such effect, and to the effect that failure to report the
Excise Tax, if any, on the Executive’s applicable federal income tax return
will not result in the imposition of a negligence or similar penalty.  The Determination by the Accounting Firm
shall be binding upon the Company and the Executive.  As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the Determination,
it is possible that Gross-Up Payments which will not have been made by the
Company should have been made (“Underpayment”)
or Gross-Up Payments are made by the Company which should not have been made (“Overpayment”), consistent with the
calculations required to be made hereunder. 
In the event that the Executive thereafter is required to make payment
of any additional Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred and any such Underpayment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall
be promptly paid by the Company to or for the benefit of the Executive.  In the event the amount of the Gross-Up
Payment exceeds the amount necessary to reimburse the Executive for the
Executive’s Excise Tax, the Accounting Firm shall determine the amount of the
Overpayment that has been made and any such Overpayment (together with interest
at the rate provided in Section 1274(b)(2)(B) of the Code) shall be
promptly paid by the Executive to or for the benefit of the Company.  The Executive shall cooperate, to the extent
the Executive’s expenses are reimbursed by the Company, with any reasonable
requests by the Company in connection with any contests or disputes with the
Internal Revenue Service in connection with the Excise Tax.

 

(c)           Nothing in this Section 7 is
intended to violate the Sarbanes-Oxley Act and to the extent that any advance
hereunder would do so, such obligation shall be modified so as to make the
advance a nonrefundable payment to the Executive.

 

8.             Restrictive Covenants.

 

(a)           Non-Compete.  While employed
by the Company and during the twelve (12) month period after the Date of
Termination (the “Restricted Period”),
the Executive shall not directly or indirectly (without the prior written
consent of the Company):

 

(i)            hold
a 5% or greater equity (including stock options whether or not exercisable),
voting or profit participation interest in a Competitive Enterprise, or

 

(ii)           associate
(including as an officer, employee, partner, consultant, agent or advisor) with
a Competitive Enterprise and in connection with the Executive’s association
engage, or directly or indirectly manage or supervise personnel engaged, in any
activity:

10

 

(A)          that
is substantially related to any activity that the Executive was engaged in with
the Company or any of its affiliated entities during the twelve (12) months
prior to the Date of Termination (excluding as a director),

 

(B)           that
is substantially related to any activity for which the Executive had direct or
indirect managerial or supervisory responsibility with the Company or any of
its affiliated entities during the twelve (12) months prior to the Date of
Termination, or

 

(C)           that
calls for the application of specialized knowledge or skills substantially
related to those used by the Executive in the Executive’s activities with the
Company or any of its affiliated entities during the twelve (12) months prior
to the Date of Termination.

 

For purposes of this Agreement, “Competitive
Enterprise” means any business enterprise anywhere worldwide
that either (A) engages in the manufacture and sale of blast- and
ballistic- protected wheeled vehicles for the US or foreign militaries or (B) holds
a 5% or greater equity, voting or profit participation interest in any
enterprise that engages in such a competitive activity.

 

(b)           Non-Solicit.  During the
Restricted Period, the Executive shall not, in any manner, directly or
indirectly (without the prior written consent of the Company):  (i) Solicit any Client to transact
business with a Competitive Enterprise or to reduce or refrain from doing any
business with the Company or any of its affiliated entities, (ii) transact
business with any Client that would cause the Executive to be engaged in a
Competitive Enterprise, (iii) interfere with or damage any relationship
between the Company or any of its affiliated entities and a Client or (iv) Solicit
anyone who is then an employee of the Company or any of its affiliated entities
to resign from the Company or affiliated entity or to apply for or accept
employment with any other business or enterprise.

 

(c)           For purposes of this Agreement, a “Client” means any client or
prospective client of the Company or any of its affiliated entities to whom the
Executive provided services, or for whom the Executive transacted business, or
whose identity became known to the Executive in connection with the Executive’s
relationship with or employment with the Company, and “Solicit”
means any direct or indirect communication of any kind, regardless of who initiates
it, that in any way invites, advises, encourages or requests any person to take
or refrain from taking any action.

 

(d)           Confidential Information.  The Executive
hereby acknowledges that, as an employee of the Company, the Executive will
have access to confidential information 

 

11

 

of a special and
unique nature and value relating to the Company and its strategic plan and
financial operations.  The Executive
further recognizes and acknowledges that all such confidential information is
the exclusive property of the Company, is material and confidential, and is
critical to the successful conduct of the business of the Company.  Accordingly, the Executive hereby covenants
and agrees not to, at any time, directly or indirectly, divulge, reveal or
communicate any such confidential information to any person, firm, corporation
or entity whatsoever, or use any such confidential information for the
Executive’s own benefit or for the benefit of others.  Notwithstanding the foregoing, the Executive
shall be authorized to disclose confidential information (i) as may be
required by law or legal process after providing the Company with prior written
notice and an opportunity to respond to such disclosure (unless such notice is
prohibited by law), (ii) in any criminal proceeding against the Executive
after providing the Company with prior written notice and an opportunity to
seek protection for such confidential information, and (iii) with the
prior written consent of the Company.

 

(e)           Return of Company Property.  On the Date of
Termination (or at any time prior thereto at the Company’s request), the
Executive shall return all property (both tangible and intellectual) belonging
to the Company or any of its affiliated entities (including, but not limited
to, files, monthly management financial booklets, projections, forecasts,
balance sheets, income statements, audited financial statements, total cost
development budgets, actual or prospective purchaser or customer lists, written
proposals and studies, plans, drawings, specifications, reports to creditors,
books, accounts, reports to directors, minutes, resolutions, certificates, bank
account numbers, passwords, rolodexes, identification cards, credit cards,
computers, fax machines, cellular or other telephones, Blackberries, beepers,
PDA’s, keys, card access keys to any building of the Company or any of its
affiliated entities, deeds, contracts, office equipment and supplies, records,
computer disks and any other documents or things received or acquired in
connection with the Executive’s employment with the Company) without retaining
any copies or extracts thereof.

 

(f)            Nondisparagement.  The Executive
agrees not to make negative comments or otherwise disparage the Company or any
of its affiliated entities or its or their officers, directors, employees,
shareholders, agents or products, in any manner likely to be harmful to them or
their business, business reputation or personal reputation.

 

(g)           Cooperation.  Upon the
receipt of reasonable notice from the Company (including outside counsel), the
Executive agrees that while employed by the Company and thereafter, the
Executive will respond and provide information with regard to matters in which
the Executive has knowledge as a result of the Executive’s employment with the
Company, and will provide reasonable assistance to the Company, its affiliated
entities and their respective representatives in defense of any claims that may
be made against the Company or any of its affiliated entities, and will assist
the Company and its affiliated entities in the prosecution of any claims that
may be made by the Company or any of its affiliated entities, to the extent
that such claims may relate to the period of the 

 

12

 

Executive’s
employment with the Company.  The
Executive agrees to promptly inform the Company if the Executive becomes aware
of any lawsuits involving such claims that may be filed or threatened against
the Company or any of its affiliated entities. 
The Executive also agrees to promptly inform the Company (to the extent
that the Executive is legally permitted to do so) if the Executive is asked to
assist in any investigation of the Company or any of its affiliated entities
(or their actions), regardless of whether a lawsuit or other proceeding has
then been filed against the Company or any of its affiliated entities with
respect to such investigation, and shall not do so unless legally required.

 

(h)           Survival.  The
obligations contained in this Section 8 shall survive the
termination of the Executive’s employment with the Company and shall be fully
enforceable thereafter.

 

(i)            Validity.  The terms and
provisions of this Section 8 are intended to be separate and
divisible provisions and if, for any reason, any one or more of them is held to
be invalid or unenforceable, neither the validity nor the enforceability of any
other provision of this Agreement shall thereby be affected.  The parties hereto acknowledge that the
potential restrictions on the Executive’s future employment imposed by this Section 8
are reasonable in both duration and geographic scope and in all other
respects.  If for any reason any court of
competent jurisdiction shall find any provisions of this Section 8
unreasonable in duration or geographic scope or otherwise, the Executive and
the Company agree that the restrictions and prohibitions contained herein shall
be effective to the fullest extent allowed under applicable law in such
jurisdiction.

 

(j)            Tolling.  In the event
of any violation of the provisions of this Section 8 on or after
the Date of Termination, the Executive acknowledges and agrees that the
post-termination restrictions contained in this Section 8 shall be
extended by a period of time equal to the period of such violation, it being
the intention of the parties hereto that the running of the applicable
post-termination restriction period shall be tolled during any period of such
violation.

 

9.             Withholding Taxes.  The Company may withhold from all payments
due to the Executive (or the Executive’s beneficiary or estate) hereunder all
taxes which, by applicable federal, state, local or other law or regulation,
the Company is required to withhold therefrom.

 

10.           Reimbursement of Expenses.

 

(a)           If any contest or dispute shall arise
under this Agreement involving the termination of the Executive’s employment
with the Company (including the covenants contained in Section 8)
or involving the failure or refusal of the Company to perform fully in
accordance with the terms hereof (a “Dispute”)
and the Executive
prevails on the material issues in such Dispute, the Company shall, upon presentment of
appropriate documentation (which submission shall be made within forty-five
(45) days after the 

 

13

 

resolution of such
Dispute),
promptly pay or reimburse the Executive, for all reasonable legal fees and
expenses (including costs of the arbitrators) incurred by the Executive in
connection with such Dispute.

 

(b)           Notwithstanding
the provisions of Section 10(a), the Company shall, on a quarterly basis, upon
presentment of appropriate documentation (which submission shall be made within
forty-five (45) days after the end of such quarter), reimburse the Executive
for all legal fees and expenses (including costs of the arbitrators), if any,
incurred by the Executive in connection with a Dispute arising on or after a Change
in Control (or otherwise related
to a Change in
Control), except that the
Executive shall reimburse the Company (to the extent permitted under applicable
law) for the fees and expenses advanced (i) in the event the Executive’s
claims are determined to have been advanced by the Executive in bad faith or
were frivolous, or (ii) to the extent that such legal fees and expenses
are determined to be unreasonable.

 

11.           Termination of Agreement.  This Agreement shall be effective on the
Effective Date and shall terminate one year after the date of any written
notification from the Company to the Executive terminating this Agreement; provided,
however, that if a Change in Control occurs
while this Agreement is still operative, any written notification
to the Executive terminating this Agreement
(including any written notification given prior to such Change in Control), shall not be
effective prior to the end of the Change in Control Termination Period; and provided,
further, that this Agreement shall continue in effect following any
termination that is not a Nonqualifying Termination which occurs prior to such
termination with respect to all rights and obligations accruing as a result of
such termination.

 

12.           Scope of Agreement.  Nothing in this Agreement shall be deemed to
alter the “at-will” nature of the Executive’s employment or entitle the
Executive to continued employment with the Company.

 

13.           Successors; Binding Agreement.

 

(a)           This Agreement shall not be terminated by
any Reorganization.  In the event of any
Reorganization, the provisions of this Agreement shall be binding upon the
surviving or resulting corporation or the person or entity to which such assets
are transferred.

 

(b)           The Company agrees that concurrently with
any Reorganization that does not constitute a Non-Control Transaction, it will
cause any successor or transferee unconditionally to assume, by written
instrument delivered to the Executive (or the Executive’s beneficiary or
estate), all of the obligations of the Company hereunder.  Failure of the Company to obtain such
assumption prior to the effectiveness of any such Reorganization, shall be a
material breach of this Agreement and shall constitute Good Reason hereunder
and shall entitle the Executive to compensation and other benefits from 

 

14

 

the Company in the
same amount and on the same terms as the Executive would be entitled hereunder
if the Executive’s employment were terminated following a Change in Control
other than by reason of a Nonqualifying Termination.  For purposes of implementing the foregoing,
the date on which any such Reorganization becomes effective shall be deemed the
date Good Reason occurs, and shall be the Date of Termination, if requested by
the Executive.

 

(c)           This Agreement is personal to the
Executive and without the prior written consent of the Company shall not be
assignable by the Executive.  This
Agreement shall inure to the benefit of, and be enforceable by, the Executive’s
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. 
If the Executive shall die while any amounts would be payable to the
Executive hereunder had the Executive continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to such person or persons appointed in writing by the Executive
to receive such amounts or, if no person is so appointed, to the Executive’s
estate.

 

14.           Notices. 
(a)  For purposes of this Agreement, all notices and other
communications required or permitted hereunder (each, a “Notice”) shall be in writing and shall
be sent by either party by personal delivery, e-mail, fax (with a Notice
contemporaneously given by another method specified in this Section 14), recognized overnight
commercial courier or United States mail (certified and return receipt
requested, postage prepaid) and shall be deemed to have been duly given when
delivered or five (5) days after deposit in the United States mail,
addressed as follows:

 

	
   

  	
  If to
  the Company:

  	
  Force
  Protection, Inc.

  
	
   

  	
   

  	
  9801
  Highway 78, Building No. 1

  
	
   

  	
   

  	
  Ladson,
  South Carolina 29456-3802

  
	
   

  	
   

  	
  Attention:
  Co-General Counsel

  
	
   

  	
   

  	
  Facsimile:
  (843) 553.1311

  
	
   

  	
   

  	
   

  
	
   

  	
  If to
  the Executive:

  	
  To
  the Executive’s last address (or to the last

  
	
   

  	
   

  	
  facsimile
  number) shown on the records

  
	
   

  	
   

  	
  of
  the Company

  

 

or to
such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt (or refusal of receipt).

 

(b)           A written notice of the Executive’s Date
of Termination by the Company or the Executive, as the case may be, to the
other, shall (i) indicate the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated and (iii) specify
the 

15

 

termination date
(which date shall be not less than thirty (30) nor more than sixty (60) days
after the giving of such notice).  The
failure by the Executive or the Company to set forth in such notice any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company hereunder or preclude the
Executive or the Company from asserting such fact or circumstance in enforcing
the Executive’s or the Company’s rights hereunder.

 

15.           Full Settlement; No Mitigation.  The Company’s obligation to make any payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall be in lieu of and in full settlement of all other severance or
similar payments to the Executive under any other severance or employment
agreement between the Executive and the Company, any severance plan of the
Company and any statutory entitlement (including notice of termination,
termination pay and/or severance pay). 
The Company’s obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action
which the Company may have against the Executive or others.  In no event shall the Executive be obligated
to seek other employment or take other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement
and, except as provided in Section 3(d), such amounts
shall not be reduced whether or not the Executive obtains other employment.

 

16.           Employment with Subsidiaries.  Employment with the Company for purposes of
this Agreement shall include employment with any Subsidiary or affiliate
entity.

 

17.           GOVERNING LAW; VALIDITY.  THE INTERPRETATION, CONSTRUCTION AND
PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF SOUTH CAROLINA WITHOUT
REGARD TO THE PRINCIPLE OF CONFLICTS OF LAWS. 
THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION OF THIS AGREEMENT
SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION OF THIS
AGREEMENT, WHICH OTHER PROVISIONS SHALL REMAIN IN FULL FORCE AND EFFECT.

 

18.           Disputes.

 

(a)           Mandatory Arbitration.  Subject to the
provisions of this Section 18, any Dispute will be finally settled
by arbitration in Charleston, South Carolina administered by the American
Arbitration Association (the “AAA”) under
its Commercial Arbitration Rules then in effect.  However, the AAA’s Commercial Arbitration Rules will
be modified in the following ways:  (i) the
decision must not be a compromise but must be the adoption of the submission by
one of the parties; (ii) the dispute shall be decided by a panel of three (3) arbitrators,
one appointed by each of the parties and the third appointed 

 

16

 

by the other two (2) arbitrators
or, if the arbitrators do not agree, appointed by the AAA; (iii) each
arbitrator will agree to treat as confidential evidence and other information
presented to them; (iv) there will be no authority to award punitive
damages (and the Executive and the Company agree not to request any such award);
(v) the optional Rules for Emergency Measures of Protections will
apply; (vi) there will be no authority to amend or modify the terms of
this Agreement except as provided in Section 21 (and the Executive
and the Company agree not to request any such amendment or modification); and (vii) a
decision must be rendered within ten (10) business days of the parties’
closing statements or submission of post-hearing briefs.

 

(b)           Injunctions and
Enforcement of Arbitration Awards.  The Executive or the Company may bring an
action or special proceeding in a state or federal court of competent
jurisdiction sitting in Charleston, South Carolina to enforce any arbitration
award under Section 18(a). 
Also, the Company may bring such an action or proceeding, in addition to
its rights under Section 18(a) and whether or not an
arbitration proceeding has been or is ever initiated, to temporarily,
preliminarily or permanently enforce any part of Section 8.  The Executive agrees that (i) violating
any part of Section 8 would cause damage to the Company that cannot
be measured or repaired and that the Company’s remedies at law for a breach or
threatened breach of any of the provisions of Section 8 would be
inadequate, (ii) the Company therefore is entitled to an injunction,
restraining order or other equitable relief restraining any actual or
threatened violation of Section 8 in addition to any remedies at
law, (iii) no bond will need to be posted for the Company to receive such
an injunction, order or other relief and (iv) no proof will be required
that monetary damages for violations of Section 8 would be
difficult to calculate and that remedies at law would be inadequate.  In addition, in the event of a violation by
the Executive of Section 8, any severance payments or benefits being
paid to the Executive pursuant to this Agreement or otherwise shall immediately
cease and any severance previously paid to the Executive shall be immediately
repaid to the Company.

 

(c)           Jurisdiction and Choice of
Forum. 
The Executive and the Company irrevocably submit to the exclusive
jurisdiction of any state or federal court located in Charleston, South
Carolina over any Dispute that is not otherwise arbitrated or resolved
according to Section 18(a). 
This includes any action or proceeding to compel arbitration or to
enforce an arbitration award.  Both the
Executive and the Company (i) acknowledge that the forum stated in this Section 18(c) has
a reasonable relation to this Agreement and to the relationship between the
Executive and the Company and that the submission to the forum will apply even
if the forum chooses to apply non-forum law, (ii) waive, to the extent
permitted by law, any objection to personal jurisdiction or to the laying of
venue of any action or proceeding covered by this Section 18(c) in
the forum stated in this Section 18(c), (iii) agree not to
commence any such action or proceeding in any forum other than the forum stated
in this Section 18(c) and (iv) agree that, to the extent
permitted by law, a final and non-appealable judgment in any such action or
proceeding in any such court will be conclusive and binding on the Executive
and the Company.  However, nothing in
this Agreement precludes the Executive or the Company from bringing any action
or 

17

 

proceeding in any
court for the purpose of enforcing the provisions of Section 18(a) and
this Section 18(c).

 

19.           Section 409A of the Code.  The parties agree that this Agreement is
intended to comply with the requirements of Section 409A of the Code and
the regulations and other guidance promulgated thereunder (“Section 409A”) or an exemption
from Section 409A.  Notwithstanding
anything in this Agreement to the contrary, if the Executive is a “specified
employee” (as described in Section 409A) on the Date of Termination, any
amount to which the Executive would otherwise be entitled during the first six
months following a separation of service that constitutes nonqualified deferred
compensation within the meaning of Section 409A and that is therefore not
exempt from Section 409A as involuntary separation pay or a short-term
deferral will be accumulated and paid in a single lump sum cash payment
(without interest) on the earlier of (i) the first business day of the
seventh month following the date of such “separation from service” (as defined
under Section 409A) or (ii) the date of the Executive’s death, and
any remaining payments and benefits due under this Agreement shall be paid or
provided in accordance with the normal payment dates specified for them
herein.  For purposes of this Agreement,
each amount to be paid or benefit to be provided hereunder shall be construed
as a separate identified payment for purposes of Section 409A.

 

20.           Counterparts.  This Agreement may be executed (including by facsimile transmission confirmed
promptly thereafter by actual delivery of executed counterparts) in counterparts, each of which shall be deemed to be
an original and all of which together shall constitute one and the same
instrument.

 

21.           Miscellaneous.  No provision of this Agreement may be
modified or waived unless such modification or waiver is agreed to in writing
and signed by the Executive and by a duly authorized officer of the Company.  No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
or any prior or subsequent time.  Failure
by the Executive or the Company to insist upon strict compliance with any
provision of this Agreement or to assert any right the Executive or the Company
may have hereunder, including, without limitation, the right of the Executive
to terminate employment for Good Reason or the Company to terminate employment
for Cause, shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement. 
This Agreement together with all exhibits hereto sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein.  No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this
Agreement.  Except as otherwise
specifically provided for herein, the rights of, and benefits payable to, the
Executive or the Executive’s estate or beneficiaries pursuant to this Agreement
are in addition to any rights of, or benefits 

 

18

 

payable
to, the Executive or the Executive’s estate or beneficiaries under any other
employee benefit plan or compensation program of the Company.

 

22.           Section Headings.  The section headings used in this Agreement
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.

 

[Signatures on next page]

 

19

 

                IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by a duly authorized officer of the Company and the Executive has
executed this Agreement on the Effective Date.

 

 

FORCE
PROTECTION, INC.

 

 

	
  By:

  	
   /s/ Michael Moody

  
	
   

  	
  Name:
  Michael Moody

  
	
   

  	
  Title:
  Chief Executive Officer and President

  

 

 

“EXECUTIVE”

 

 

	
   /s/ Lenna Ruth Macdonald

  
	
  Name:
  Lenna Ruth Macdonald

  

 

20

 

Exhibit A

 

Form of General Release

 

This General
Release, dated as of the [•] day of [•] 20[•], is delivered by [•] (the “Executive”)
to and for the benefit of the Released Parties (as defined below).  The Executive acknowledges that this General
Release is being executed in accordance with Section 6 of the Severance
Agreement dated [•],
200[•]
(the “Severance Agreement”).

 

1.             General Release.  (a)  The
Executive, for himself and for the Executive’s heirs, dependents, assigns,
agents, executors, administrators, trustees and legal representatives
(collectively, the “Releasors”)
hereby forever releases, waives and discharges the Released Parties (as defined
below) from each and every claim, demand, cause of action, fee, liability or right of any sort (based upon legal
or equitable theory, whether contractual, common-law, statutory, federal,
state, local or otherwise), known or unknown, which Releasors ever had, now
have, or hereafter may have against the Released Parties by reason of any
actual or alleged act, omission, transaction, practice, policy, procedure,
conduct, occurrence, or other matter from the beginning of the world up to and
including the Effective Date (as defined below), including, without limitation,
those in connection with, or in any way related to or arising out of, the
Executive’s employment or termination of employment or any other agreement,
understanding, relationship, arrangement, act, omission or occurrence, with the
Released Parties.

 

(b)           Without
limiting the generality of the previous paragraph, this General Release is intended to and shall release the
Released Parties from
any and all claims, whether known or unknown, which Releasors ever had, now
have, or may hereafter have against the Released Parties including, but not
limited to:  (1) any claim of
discrimination or retaliation under the Age Discrimination in Employment Act,
Title VII of the Civil Rights Act, the Americans with Disabilities Act, the
Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974,
as amended (excluding claims for accrued, vested benefits under any employee benefit
or pension plan of the Released Parties subject to the terms and conditions of
such plan and applicable law) and the Family and Medical Leave Act; (2) any
claim under the South Carolina Human Affairs Law and the South Carolina Wage
Payment Statute; (3) any other claim (whether based on federal, state or
local law or ordinance, statutory or decisional) relating to or arising out of
the Executive’s employment, the terms and conditions of such employment, the
termination of such employment and/or any of the events relating directly or
indirectly to or surrounding the termination of such employment, including, but
not limited to, breach of contract (express or implied), tort, wrongful
discharge, detrimental reliance, defamation, emotional distress or compensatory
or punitive damages; and (4) any claim for attorney’s fees, costs,
disbursements and the like.

 

 

(c)           The foregoing release does not in any way
affect: (1) the
Executive’s rights of indemnification to which the Executive was entitled
immediately prior to the Date of Termination (as defined in the Severance Agreement); and (2) the right of the Executive
to take whatever steps may be necessary to enforce the terms of the Severance Agreement.

 

(d)           For
purposes of this General Release, the “Released Parties”
means Force Protection, Inc. (the “Company”),
all current and former parents, subsidiaries, related companies, partnerships,
joint ventures and employee benefit programs (and the trustees, administrators,
fiduciaries and insurers of such programs), and, with respect to each of them,
their predecessors and successors, and, with respect to each such entity, all
of its past, present, and future employees, officers, directors, members,
stockholders, owners, representatives, assigns, attorneys, agents, insurers,
and any other person acting by, through, under or in concert with any of the
persons or entities listed in this paragraph, and their successors (whether
acting as agents for such entities or in their individual capacities).

 

2.             No Existing Suit. 
The Executive
represents and warrants that, as of the Effective Date of this General Release, the Executive has not filed or
commenced any suit, claim, charge, complaint, action, arbitration, or legal
proceeding of any kind against the Company or its subsidiaries or
affiliates.  The Executive acknowledges
that this General Release does
not prohibit the Executive from filing a charge of discrimination with the
Equal Employment Opportunity Commission.

 

3.             Knowing and
Voluntary Waiver.  By signing this General Release, the Executive expressly acknowledges
and agrees that: (a) the Executive has carefully read it and fully
understands what it means; (b) the Executive has discussed this General Release with an attorney of the Executive’s
choosing before signing it; (c) the Executive has been given at least
twenty-one (21) calendar days to consider this General Release; (d) the Executive has agreed to
this General Release
knowingly and voluntarily and was not subjected to any undue influence or
duress; (e) the consideration provided the Executive under Severance Agreement is sufficient to support the releases
provided by the Executive under this General Release; (f) the Executive may revoke the
Executive’s execution of this General Release within seven (7) days after the
Executive signs it by sending written notice of revocation as set forth below;
and (g) on the eighth day after the Executive executes this General Release
(the “Effective Date”), this General Release becomes effective and enforceable,
provided that the Executive does not revoke this Agreement during the
revocation period.  Any revocation of the
Executive’s execution of this General Release must be submitted, in writing, to Force
Protection, Inc. 9801 Highway 78, Building No. 1, Ladson, South
Carolina 29456-3802, to the attention of the Co-General Counsel, stating “I
hereby revoke my execution of the General Release.” 
The revocation must be personally delivered to the General Counsel or
mailed to the General Counsel and postmarked within seven (7) days of the
Executive’s execution of this General Release. 
If the last day of the revocation period is a Saturday, Sunday or 

 

A-2

 

legal holiday,
then the revocation period will be extended to the following day which is not a
Saturday, Sunday or legal holiday.  The
Executive agrees that if the Executive does not execute this General Release or, in the event of revocation, the
Executive will not be entitled to receive any of the payments or benefits under
the Severance Agreement (other than the Accrued Amounts and the Other
Benefits).  The Executive must execute this General Release on or
before [•],
20[•].

 

This
General Release is final and binding and may not be changed or modified.

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Lenna
  Ruth Macdonald

  

 

 

A-3EXHIBIT 10.2

 

EMPLOYMENT AGREEMENT

 

This
EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of
the 19th day of March, 2008, by and between Force Protection, Inc., a
Nevada corporation (the “Company”),
and Michael Moody (the “Executive”).

 

WHEREAS, the
Executive is willing to continue to serve the Company, and the Company is
willing to continue to employ the Executive, on the terms and conditions set
forth below;

 

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 

1.                                       Employment Period.  The
Company hereby agrees to employ the Executive, and the Executive hereby agrees
to work in the employ of the Company, subject to the terms and conditions of
this Agreement, for the period commencing on March 1, 2008 (the “Effective Date”)
and ending on the first anniversary of the Effective Date (as it may be
extended from time to time, the “Employment
Period”).  On each
anniversary of the Effective Date, the Employment Period shall be automatically
extended for a one year period unless either the Company or the Executive shall
give the other party not less than ninety (90)  days
prior written notice of the intention to not extend this Agreement (a “Non-Renewal Notice”).  Notwithstanding the foregoing, the Executive’s
employment hereunder may be terminated earlier in accordance with Section 3
hereof, subject to Section 4 hereof.

 

2.                                       Terms of Employment.

 

(a)                                  Position and
Duties.

 

(i)                                     During the Employment Period, the Executive
shall serve as Chief Executive Officer reporting to the Company’s Board of
Directors (the “Board”)
with the appropriate authority, duties and responsibilities attendant to such
position and any other duties and responsibilities that may be assigned by the
Board that are not inconsistent with the Executive’s position as Chief
Executive Officer.  The Company shall use
its best efforts to cause the Executive to be nominated for re-election to the
Board during the Employment Period.

 

(ii)                                  During the Employment Period, and excluding
any periods of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote substantially all of his business attention and time
to the business and affairs of the Company and to use the Executive’s best
efforts to perform the Executive’s duties and responsibilities with the
Company.  During the Employment Period it
shall not be a violation of this Agreement for the Executive to (A) serve
on civic, charitable or, with prior approval of the Board, corporate boards or
committees, (B) manage passive personal investments or (C) participate
in charitable, civic, educational, community or industry affairs, so long as
such activities in the aggregate do not interfere or conflict with the
performance of the Executive’s duties and responsibilities as an employee of
the 

 

 

Company in accordance with this
Agreement or create a potential business or fiduciary conflict.

 

2

 

(b)                                 Compensation.

 

(i)                                     Annual Base Salary. 
During the Employment Period, the Executive shall receive a base salary
at an annual rate of not less than $560,000 (base salary as determined from
time to time, the “Annual
Base Salary”), payable in accordance with the regular payroll
practices of the Company.  Annual Base
Salary shall not be reduced at any time (including after any increase).

 

(ii)                                  Annual Bonus. 
During the Employment Period, the Executive shall be eligible to receive
an annual cash bonus (“Annual
Bonus”) with a target bonus opportunity of no more than 75% of
Annual Base Salary, upon the attainment of one or more pre-established performance
goals established by the Compensation Committee of the Board (the “Compensation Committee”) after
good-faith consultation with the Executive.

 

(iii)                               Equity Awards.  If an
equity-based compensation plan (the “Equity Plan”)
is approved by the stockholders of the Company at the 2008 Annual Meeting of
Stockholders, the Executive will be eligible to receive equity and other
long-term incentive awards under such plan for which other senior officers of
the Company are generally eligible.  The
level of the Executive’s participation in any such plan, if any, shall be
determined in the sole discretion of the Compensation Committee from time to
time.  Any awards granted to the
Executive shall be granted pursuant to and, to the extent not contrary to the
terms of this Agreement, shall be subject to all of the terms and conditions
imposed under Company’s form of equity award agreement and the Equity Plan.

 

(c)                                  Employee
Benefits.

 

(i)                                     Employee Benefit Plans. 
During the Employment Period, except as otherwise expressly provided
herein, the Executive shall be entitled to participate in all employee benefit
and other plans, practices, policies and programs and fringe benefits provided
to other senior officers of the Company, subject to satisfying the applicable
eligibility requirements. 
Notwithstanding the foregoing, the Company may modify or terminate any
employee benefit or other plan or arrangement at any time in accordance with
the terms thereof.

 

(ii)                                  Vacations.  The
Executive shall be entitled to three (3) weeks of paid vacation per
calendar year in accordance with the Company’s policy on accrual and use
applicable to senior officers of the Company as in effect from time to time,
which vacation may be taken at such times as the Executive elects with due
regard to the needs of the Company.

 

(iii)                               Business and Entertainment
Expenses.  Upon presentation of appropriate documentation, the Executive shall be
reimbursed in accordance with the Company’s expense reimbursement policy, for
all reasonable business and entertainment expenses incurred in connection with
the performance of the Executive’s duties hereunder and the Company’s policies
with regard thereto.

 

3

 

3.                                       Termination of Employment.

 

(a)                                  Death or
Disability.  The Executive’s
employment and the Employment Period shall terminate automatically upon the
Executive’s death during the Employment Period. 
If the Company determines in good faith that the Disability of the
Executive has occurred during the Employment Period, it may give to the
Executive written notice of its intention to terminate the Executive’s
employment and the Employment Period.  In
such event, the Executive’s employment and the Employment Period with the
Company shall terminate effective on the thirtieth (30th) day after
receipt of such notice by the Executive (the “Disability Effective Date”), provided that, within
the thirty (30) days after such receipt, the Executive shall not have returned
to full-time performance of the Executive’s duties with reasonable
accommodation.  For purposes of this
Agreement, “Disability” shall mean the inability
of the Executive to perform the Executive’s duties with the Company on a
full-time basis for one hundred thirty (130) business days during any
consecutive twelve month period as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a physician
selected by the Company and acceptable to the Executive or the Executive’s
legal representative or by the insurance company which insures the Company’s
long-term disability plan in which the Executive is eligible to participate.

 

(b)                                 With or Without
Cause.  The Company may
terminate the Executive’s employment and the Employment Period during the
Employment Period with or without Cause. 
For purposes of this Agreement, “Cause” shall mean (i) the
Executive’s material breach of the Executive’s duties and responsibilities
(other than as a result of the Executive’s Disability) which is (A) demonstrably
willful and deliberate on the Executive’s part, (B) committed in bad faith
or without reasonable belief that such breach is in the best interests of the
Company and (C) not remedied within ten (10) days after receipt of
written notice from the Company specifying such breach; (ii) the Executive’s
indictment for, conviction of, or plea of nolo contendere to, a felony; or (iii) the Executive’s gross
negligence or any act of theft, fraud, misappropriation, malfeasance or
dishonesty by the Executive in connection with the performance of the Executive’s
duties to the Company which is demonstrably willful and deliberate on Executive’s
part.

 

Cause
shall not exist unless and until the Company has delivered to the Executive a
copy of a resolution duly adopted by a majority of the entire Board at any duly
called meeting of the Board (after reasonable notice to the Executive and an
opportunity for the Executive, together with counsel, to be heard before the
Board), finding that in the good faith opinion of the Board an event set forth
in clauses (i), (ii) or (iii) has occurred and specifying the
particulars thereof in detail.

 

The
Company must notify the Executive of any event constituting Cause within ninety
(90) days following the Board’s (excluding, if applicable, the Executive)
knowledge of its existence or such event shall not constitute Cause under this
Agreement.

 

(c)                                  With or Without
Good Reason.  The Executive’s
employment and the Employment Period may be terminated by the Executive with or
without Good Reason.  For purposes of
this Agreement, “Good Reason” shall mean without the
Executive’s express written consent, the occurrence of any of the following
events following a Change in Control:

 

(i)                                     (A) any change in the authority, duties
or responsibilities that is inconsistent in any material and adverse respect
with the Executive’s authority, position(s), duties, responsibilities or status
with the Company immediately prior to such 

 

4

 

Change in
Control (including any material and adverse diminution of such duties or
responsibilities) or (B) a material and adverse change in the Executive’s
reporting responsibilities, titles or offices with the Company as in effect
immediately prior to such Change in Control;

 

(ii)           a material reduction by the Company in the Executive’s rate of Annual
Base Salary or annual target bonus opportunity (including any material and
adverse change in the formula for such annual bonus target) as in effect
immediately prior to such Change in Control or as the same may be increased
from time to time thereafter;

 

(iii)          any requirement of the Company that the Executive be based anywhere
more than fifty (50) miles from the place of business where the Executive is
located at the time of the Change in Control;

 

(iv)          the failure of the Company to continue in effect any employee benefit
plan or compensation plan in which the Executive is participating immediately
prior to such Change in Control and which is material to the Executive’s
overall compensation, unless the Executive is permitted to participate in other
plans providing the Executive with benefits or compensation which are not
materially less, or the taking of any action by the Company which would
materially and adversely affect the Executive’s participation in or materially
and adversely reduce the Executive’s benefits under any such plan; or

 

(v)           a material breach by the Company of this Agreement or any other
material agreement in effect between the Executive and the Company.

 

Any
event described in this Section 3(c) which occurs prior to a
Change in Control, but was at the request of a third party who had indicated an
intention or taken steps reasonably calculated to effect a Change in Control
and who effectuates a Change in Control, shall constitute Good Reason following
a Change in Control for purposes of this Agreement (treating the date of such
event as the date of the Change in Control) notwithstanding that it occurred
prior to the Change in Control.  For
purposes of this Agreement, any good faith determination of Good Reason made by
the Executive shall be conclusive; provided, however, that an
isolated, insubstantial and inadvertent action taken in good faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive shall not constitute Good Reason. 
The Executive must provide a Notice of Termination within ninety (90)
days of the Executive’s knowledge of an event constituting Good Reason or such
event shall not constitute Good Reason under this Agreement.  The Company shall have thirty (30) days
following its receipt of a Notice of Termination from the Executive to remedy
the condition the Executive claimed to provide a basis for such termination in
the Notice of Termination.

 

Notwithstanding the
foregoing, placing the Executive on a paid leave for up to ninety (90) days,
pending the determination of whether there is a basis to terminate the
Executive for Cause, shall not constitute a “Good Reason” event; provided,
further, that, if the Executive is subsequently terminated for Cause, then the
Executive shall repay any amounts paid by the Company to the Executive during
such paid leave period.

 

5

 

(d)                                 Notice of
Termination.  Any termination by
the Company or by the Executive shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 11.  For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under
the provision so indicated and (iii) if the Date of Termination (as
defined below) is other than the date of receipt of such notice, specifies the
Date of Termination (which date shall be not less than thirty (30) nor more
than sixty (60) days after the giving of such notice).  The failure by the Executive or the Company
to set forth in such notice any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive or
the Company hereunder or preclude the Executive or the Company from asserting
such fact or circumstance in enforcing the Executive’s or the Company’s rights
hereunder.

 

(e)                                  Date of
Termination.  “Date of Termination” means (i) if the Executive’s employment is terminated
by the Company other than for Disability, the date of receipt of the Notice of
Termination or any later date specified therein within sixty (60) days of such
notice, (ii) if the Executive’s employment is terminated by the Executive,
thirty (30) days after receipt of the Notice of Termination (provided, that,
the Company may accelerate the Date of Termination to an earlier date by
providing the Executive with notice of such action) and (iii) if the
Executive’s employment is terminated by reason of death or Disability, the Date
of Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.

 

4.                                       Obligations
of the Company upon Termination.

 

(a)                                  Nonqualifying
Termination.  If, during the
Employment Period, the Executive’s employment with the Company shall be
terminated (w) by the Company for Cause, (x) by the Executive for any
reason other than for Good Reason during the Change in Control Termination
Period (as defined below) or for any reason during the thirty (30) day period
immediately following the six (6) month anniversary of a Change in Control
(the “Window Period”), (y) as a
result of the Executive’s death, or (z) by the Company due to the
Executive’s Disability (collectively, a “Nonqualifying Termination”),
then the Company shall pay or provide the Executive (or the Executive’s
beneficiary or estate) with the following payments or benefits:

 

(i)                                     a lump-sum cash amount within thirty (30)
days following the Date of Termination equal to the sum of: (A) the
Executive’s Annual Base Salary through the Date of Termination, and any accrued
vacation, in each case to the extent not theretofore paid; (B) other than
in connection with any termination by the Company for Cause, any unpaid bonus
accrued with respect to the fiscal year ending on or preceding the Date of
Termination; (C) subject to presentment of appropriate documentation, any
unreimbursed expenses incurred through the Date of Termination in accordance
with Company policy; and (D) a one-time relocation benefit of $30,000
(collectively, the “Accrued Amounts”);
and

 

(ii)                                  all other payments, benefits or fringe benefits
to which the Executive shall be entitled under the terms of any applicable
compensation arrangement or benefit, equity or fringe benefit plan or program
or grant (the “Other Benefits”).

 

6

 

(b)                                 Other Than for
Cause; For Good Reason; Delivery of Non-Renewal Notice.  If, during the Employment Period, the
Executive’s employment with the Company is terminated (x) other than by
reason of a Nonqualifying Termination or (y) as a result of the Company’s
delivery of a Non-Renewal Notice pursuant to Section 1 hereof
(collectively, a “Qualifying Termination”),
then, except as otherwise provided in Section 4(c) and subject
to Section 5 and Section 15, the Company shall pay or
provide the Executive (or the Executive’s beneficiary or estate) with the
following payments or benefits:

 

(i)                                     a lump-sum cash amount within thirty (30)
days following the Date of Termination equal to the sum of the Accrued Amounts;

 

(ii)                                  the Other Benefits;

 

(iii)                               a lump-sum cash amount within the calendar
year next following the calendar year during which the Date of Termination
occurs equal to the product of (A) the annual bonus the Executive would
have been paid based on the achievement of actual performance goals and (ii) a
fraction, the numerator of which is the number of days in the fiscal year in
which the Date of Termination occurs through the Date of Termination and the
denominator of which is three hundred sixty-five (365) (the “Pro-Rata Bonus”);

 

(iv)                              a lump-sum cash amount within thirty (30)
days following the Date of Termination equal to one times the sum of (A) the
Executive’s Annual Base Salary and (B) the greatest of (1) the
Executive’s target bonus for the fiscal year in which the Executive’s Date of
Termination occurs and (2) the average of the actual bonuses earned by the
Executive in respect of the two (2) preceding fiscal years of the Company
immediately preceding the fiscal year in which the Date of Termination occurs;

 

(v)                                 subject to (A) Executive’s timely
election of continuation coverage under the Consolidated Budget Omnibus
Reconciliation Act of 1985, as amended (“COBRA”), (B) Executive’s
continued co-payment of the employee portion of any contribution or premium at
the same level and cost to Executive as if Executive were an employee of the
Company (excluding, for purposes of calculating cost, an employee’s ability to
pay premiums with pre-tax dollars) and (C) Executive’s continued
eligibility for COBRA continuation coverage, the Company will pay for a period
of up to twelve (12) months following the Date of Termination the portion of Executive’s COBRA premium equivalent to what the Company
would have paid if Executive were an employee of the Company.  Notwithstanding the foregoing, in the event
Executive fails to pay any required contribution or premium or becomes employed
with another employer and becomes eligible to receive substantially similar or
improved medical, dental or vision benefits from such employer (whether or not
Executive accepts such benefits), the Company’s obligations under this Section 4(b)(v) shall
immediately cease, except that the Company’s obligation to continue to make
available continuation coverage under COBRA at the full COBRA rates shall be
determined in accordance with COBRA. 
Executive will notify the Company of Executive’s eligibility for
medical, dental or vision benefits from a subsequent employer within thirty
(30) days of such eligibility; and

 

(vi)                              with respect to outstanding equity awards
held by the Executive as of the Date of Termination, all stock options and
stock appreciation rights that would become vested and exercisable if the
Executive had continued to be employed with the Company during the twelve (12)
month period commencing on the

 

7

 

Date of
Termination shall vest and become exercisable and the restrictions on all
restricted stock awards, restricted stock units and other equity or incentive
awards that would have lapsed if the Executive had continued to be employed
with the Company during the twelve (12) month period commencing on the Date of
Termination shall lapse and such awards shall become immediately payable.

 

(c)                                  Other than for
Cause or for Good Reason following a Change in Control; Delivery of Non-Renewal
Notice following a Change in Control; By Executive During the Window Period.  If, during the Employment Period, the
Executive’s employment with the Company is terminated (x) by reason of a
Qualifying Termination (1) during the period of time beginning with a
Change in Control and ending at the end of the Window Period  (the “Change in Control
Termination Period”) or (2) prior to the Change in Control
Termination Period and the Executive reasonably demonstrates that such
termination was at the request of a third party who had indicated an intention
or taken steps reasonably calculated to effect such Change in Control and who
effectuates such Change in Control (or such termination was otherwise in
anticipation of such Change in Control) or (y) by the Executive for any
reason during the Window Period, then, subject to Section 5 and Section 15,
the Company shall pay or provide the Executive (or the Executive’s beneficiary
or estate) with the following payments or benefits:

 

(i)            a lump-sum cash amount within thirty (30)
days following the Date of Termination (or, if later, the date of the Change in
Control) equal to the Accrued Amounts;

 

(ii)           the Other Benefits;

 

(iii)          a lump-sum cash amount within the calendar year next following the
calendar year during which the Date of Termination occurs equal to the Pro-Rata
Bonus;

 

(iv)          a lump-sum cash amount within thirty (30) days following the Date of
Termination (or, if later, the date
of the Change in Control) equal to two times the sum of: (A) Executive’s
highest rate of Annual Base Salary during the 12-month period prior to the Date
of Termination; and (B) the greatest of (1) the Executive’s target
bonus for the fiscal year in which the Executive’s Date of Termination occurs, (2) the
Executive’s target bonus for the fiscal year in which the Change in Control
occurs and (3) the average of the actual bonuses earned by the Executive
in respect of the two (2) preceding fiscal years of the Company
immediately preceding the fiscal year in which the Change in Control occurs;
and

 

(v)           COBRA continuation coverage pursuant to Section 4(b)(v) ̧except
that such continuation coverage shall be for up to eighteen (18) months instead
of for up to twelve (12) months; and

 

(vi)          with respect to outstanding equity awards held by the Executive as of
the Date of Termination, all stock options and stock appreciation rights shall
vest and become exercisable and the restrictions on all restricted stock
awards, restricted stock units and other equity or incentive awards shall lapse
and such awards shall become immediately payable.

 

8

 

Notwithstanding
anything herein to the contrary, if the Executive becomes entitled to, and receives, payments and benefits pursuant to Section 4(b) and thereafter
becomes entitled to payments and benefits pursuant to this Section 4(c),
payments and benefits due under this Section 4(c) shall be reduced by any amounts received pursuant to Section 4(b).

 

(d)           For purposes of this Agreement, “Change in
Control” means the occurrence of any one of the following
events:

 

(i)            any “person” (as such term is defined in Section 3(a)(9) of
the Securities Exchange Act of 1934 (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 the Company
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 (i) shall
not be deemed to be a Change in Control by virtue of any of the following
acquisitions:  (A) by the Company or
any corporation
or other entity in which the Company has a direct or indirect ownership
interest of 50% or more of the total combined voting power of the then
outstanding securities or interests of such corporation or other entity
entitled to vote generally in the election of directors or in which the Company
has the right to receive 50% or more of the distribution of profits or 50% of
the assets on liquidation or dissolution (a “Subsidiary”);
(B) by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Subsidiary; (C) by any underwriter
temporarily holding securities pursuant to an offering of such securities; (D) pursuant
to a Non-Control Transaction (as defined in paragraph (iii) below); or (E) a
transaction (other than one described in paragraph (iii) below) in which
Company Voting Securities are acquired from the Company, if a majority of the
Incumbent Board (as defined in paragraph (ii) below) approves a resolution
providing expressly that the acquisition pursuant to this clause (E) does
not constitute a Change in Control under this paragraph (i);

 

(ii)           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 the Company 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 the
Company 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;

 

(iii)          the consummation of a merger, consolidation,
share exchange or similar form of corporate transaction involving the Company
or any of its Subsidiaries that requires the approval of the Company’s
stockholders (whether for such transaction or the issuance of securities in the
transaction or otherwise) (a “Reorganization”),
unless immediately following such Reorganization:  (A) more than 60% of the total voting
power of (x) the corporation resulting from such Reorganization 

 

9

 

(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; (B) 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 (C) 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 (A), (B) and (C) above shall be deemed to
be a “Non-Control Transaction”);

 

(iv)          the stockholders of the Company approve a
plan of complete liquidation or dissolution; or

 

(v)           the consummation of a sale (or series of
sales) of all or substantially all of the assets of the Company and its
Subsidiaries to an entity that is not an affiliate of the Company.

 

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 of Company Voting Securities outstanding; provided,
that, if after such acquisition by the Company 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.

 

5.             Release Required;
Resignations.  Any amounts payable pursuant to Section 4
and Section 6 (other than Accrued Amounts and Other Benefits) shall only be payable if the Executive executes
and delivers to the Company (and does not revoke) a general release of claims
in a form substantially in the form of Exhibit A attached hereto.  In addition, upon any termination of the
Executive’s employment with the Company, the Executive shall promptly resign
from the Board and any other position as an officer, director or fiduciary of
any Company-related entity.

 

6.             Certain Additional Payments by the Company.  (a) 
Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that any payment, award, benefit or distribution (or any
acceleration of any payment, award, benefit or distribution) by the Company (or
any of its affiliated entities) or any entity which effectuates a Change in
Control (or any of its affiliated entities) to or for the benefit of the
Executive (whether pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section 6)
(a “Payment”) would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986,
as amended (the “Code”), or 

 

10

 

any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”),
then the Company shall pay the Executive an additional payment (a “Gross-Up Payment”) in an amount
such that, after payment by the Executive of all taxes (including any interest
or penalties imposed with respect to such taxes) including, without limitation,
any income and employment taxes (and any interest and penalties imposed with
respect thereto) and any Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.  For purposes
of determining the amount of the Gross-Up Payment, the Executive shall be
deemed to (i) pay federal income taxes at the highest marginal rates of
federal income taxation for the calendar year in which the Gross-Up Payment is
to be made, and (ii) pay applicable state and local income taxes at the
highest marginal rate of taxation for the calendar year in which the Gross-Up
Payment is to be made, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes.

 

(b)           Subject to the provisions of Section 6(a),
all determinations required to be made under this Section 6,
including whether and when a Gross-Up Payment is required and the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at such
determinations, shall be made by the public accounting firm that is retained by
the Company as of the date immediately prior to the Change in Control (the “Accounting Firm”) which shall
provide detailed supporting calculations both to the Company and the Executive
within fifteen (15) business days of the receipt of notice from the Company or
the Executive that there has been a Payment, or such earlier time as is
requested by the Company (collectively, the “Determination”).  Notwithstanding the foregoing, in the event (i) the
Board shall determine prior to the Change in Control that the Accounting Firm
is precluded from performing such services under applicable auditor
independence rules, (ii) the Audit Committee of the Board determines that
it does not want the Accounting Firm to perform such services because of
auditor independence concerns or (iii) the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the Change
in Control, the Board shall appoint another nationally recognized public
accounting firm to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder).  All fees and expenses of the Accounting Firm
shall be borne solely by the Company and the Company shall enter into any
agreement requested by the Accounting Firm in connection with the performance
of the services hereunder.  The Gross-Up
Payment under this Section 6 with respect to any Payments shall be
made no later than thirty (30) days following such Payment and, in no event,
later than the calendar year next following the calendar year in which the
Executive remits the taxes to which such Gross-Up Payment relates.  If the Accounting Firm determines that no
Excise Tax is payable by the Executive, it shall furnish the Executive with a
written opinion to such effect, and to the effect that failure to report the
Excise Tax, if any, on the Executive’s applicable federal income tax return
will not result in the imposition of a negligence or similar penalty.  The Determination by the Accounting Firm
shall be binding upon the Company and the Executive.  As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the Determination,
it is possible that Gross-Up Payments which will not have been made by the
Company should have been made (“Underpayment”)
or Gross-Up Payments are made by the Company which should not have been made (“Overpayment”), consistent with the
calculations required to be made hereunder. 
In the event that the Executive thereafter is required to make payment
of any additional Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred and any such Underpayment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code)
shall be promptly paid by the Company to or for the benefit of the
Executive.  In the event the amount of
the Gross-Up Payment exceeds the amount necessary to reimburse the Executive
for the 

 

11

 

Executive’s Excise Tax, the
Accounting Firm shall determine the amount of the Overpayment that has been
made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of
the Code) shall be promptly paid by the Executive to or for the benefit of the
Company.  The Executive shall cooperate,
to the extent the Executive’s expenses are reimbursed by the Company, with any
reasonable requests by the Company in connection with any contests or disputes
with the Internal Revenue Service in connection with the Excise Tax.

 

(c)           Nothing in this Section 6 is intended to
violate the Sarbanes-Oxley Act and to the extent that any advance hereunder
would do so, such obligation shall be modified so as to make the advance a
nonrefundable payment to the Executive.

 

7.             Restrictive Covenants.

 

(a)           Non-Compete.  During the
Employment Period and for a twelve (12) month period after the Date of
Termination (the “Restricted Period”),
the Executive shall not directly or indirectly (without the prior written
consent of the Company):

 

(i)            hold a 5% or greater equity (including stock
options whether or not exercisable), voting or profit participation interest in
a Competitive Enterprise, or

 

(ii)           associate (including as an officer, employee,
partner, consultant, agent or advisor) with a Competitive Enterprise and in
connection with the Executive’s association engage, or directly or indirectly
manage or supervise personnel engaged, in any activity:

 

(A)          that is substantially related to any activity that the Executive was
engaged in with the Company or any of its affiliated entities during the twelve
(12) months prior to the Date of Termination (excluding as a director),

 

(B)           that is substantially related to any activity for which the Executive
had direct or indirect managerial or supervisory responsibility with the
Company or any of its affiliated entities during the twelve (12) months prior
to the Date of Termination, or

 

(C)           that calls for the application of specialized knowledge or skills
substantially related to those used by the Executive in his activities with the
Company or any of its affiliated entities during the twelve (12)  months prior to the Date of Termination.

 

For
purposes of this Agreement, “Competitive Enterprise” means any business
enterprise anywhere worldwide that either (A) engages in the manufacture
and sale of blast- and ballistic- protected wheeled vehicles for the US or
foreign militaries or (B) holds a 5% or greater equity, voting or profit
participation interest in any enterprise that engages in such a competitive
activity.

 

(b)           Non-Solicit.  During the
Restricted Period, the Executive shall not, in any manner, directly or
indirectly (without the prior written consent of the Company):  (i) Solicit any Client to transact
business with a Competitive Enterprise or to reduce or refrain from doing any
business with the Company or any of its affiliated entities, (ii) transact
business with any Client that would cause the Executive to be engaged in a
Competitive Enterprise, (iii)

 

12

 

interfere with or damage any
relationship between the Company or any of its affiliated entities and a Client
or (iv) Solicit anyone who is then an employee of the Company or any of
its affiliated entities to resign from the Company or affiliated entity or to
apply for or accept employment with any other business or enterprise.

 

(c)           For purposes of this Agreement, a “Client” means any client or
prospective client of the Company or any of its affiliated entities to whom the
Executive provided services, or for whom the Executive transacted business, or
whose identity became known to the Executive in connection with his
relationship with or employment by the Company or any of its affiliated
entities, and “Solicit”
means any direct or indirect communication of any kind, regardless of who
initiates it, that in any way invites, advises, encourages or requests any
person to take or refrain from taking any action.

 

(d)           Confidential Information.  The Executive hereby acknowledges that, as an
employee of the Company, he will have access to confidential information of a
special and unique nature and value relating to the Company and its strategic
plan and financial operations.  The
Executive further recognizes and acknowledges that all such confidential
information is the exclusive property of the Company, is material and confidential,
and is critical to the successful conduct of the business of the Company.  Accordingly, the Executive hereby covenants
and agrees that he shall not at any time, directly or indirectly, divulge,
reveal or communicate any such confidential information to any person, firm,
corporation or entity whatsoever, or use any such confidential information for
his own benefit or for the benefit of others. 
Notwithstanding the foregoing, the Executive shall be authorized to disclose
confidential information (i) as may be required by law or legal process
after providing the Company with prior written notice and an opportunity to
respond to such disclosure (unless such notice is prohibited by law), (ii) in
any criminal proceeding against him after providing the Company with prior
written notice and an opportunity to seek protection for such confidential
information, and (iii) with the prior written consent of the Company.

 

(e)           Return of Company Property.  On the Date of Termination (or at any time
prior thereto at the Company’s request), the Executive shall return all
property (both tangible and intellectual) belonging to the Company or any of
its affiliated entities (including, but not limited to, files, monthly
management financial booklets, projections, forecasts, balance sheets, income
statements, audited financial statements, total cost development budgets,
actual or prospective purchaser or customer lists, written proposals and
studies, plans, drawings, specifications, reports to creditors, books,
accounts, reports to directors, minutes, resolutions, certificates, bank
account numbers, passwords, rolodexes, identification cards, credit cards,
computers, fax machines, cellular or other telephones, Blackberries, beepers,
PDA’s, keys, card access keys to any building of the Company or any of its
affiliated entities, deeds, contracts, office equipment and supplies, records,
computer disks and any other documents or things received or acquired in
connection with the Executive’s employment with the Company) without retaining
any copies or extracts thereof.

 

(f)            Nondisparagement.  The Executive agrees
not to make negative comments or otherwise disparage the Company or any of its
affiliated entities or its or their officers, directors, employees,
shareholders, agents or products, in any manner likely to be harmful to them or
their business, business reputation or personal reputation.

 

13

 

(g)           Cooperation.  Upon the receipt of
reasonable notice from the Company (including outside counsel), the Executive
agrees that while employed by the Company and thereafter, the Executive will
respond and provide information with regard to matters in which the Executive
has knowledge as a result of the Executive’s employment with the Company, and
will provide reasonable assistance to the Company, its affiliated entities and
their respective representatives in defense of any claims that may be made
against the Company or any of its affiliated entities, and will assist the
Company and its affiliated entities in the prosecution of any claims that may
be made by the Company or any of its affiliated entities, to the extent that
such claims may relate to the period of the Executive’s employment with the
Company.  The Executive agrees to
promptly inform the Company if the Executive becomes aware of any lawsuits
involving such claims that may be filed or threatened against the Company or
any of its affiliated entities.  The
Executive also agrees to promptly inform the Company (to the extent that the
Executive is legally permitted to do so) if the Executive is asked to assist in
any investigation of the Company or any of its affiliated entities (or their
actions), regardless of whether a lawsuit or other proceeding has then been
filed against the Company or any of its affiliated entities with respect to
such investigation, and shall not do so unless legally required.

 

(h)           Survival.  The obligations
contained in this Section 7 shall survive the termination of the
Executive’s employment and the Employment Period and shall be fully enforceable
thereafter.

 

(i)            Validity.  The terms and
provisions of this Section 7 are intended to be separate and
divisible provisions and if, for any reason, any one or more of them is held to
be invalid or unenforceable, neither the validity nor the enforceability of any
other provision of this Agreement shall thereby be affected.  The parties hereto acknowledge that the
potential restrictions on the Executive’s future employment imposed by this Section 7
are reasonable in both duration and geographic scope and in all other
respects.  If for any reason any court of
competent jurisdiction shall find any provisions of this Section 7
unreasonable in duration or geographic scope or otherwise, the Executive and
the Company agree that the restrictions and prohibitions contained herein shall
be effective to the fullest extent allowed under applicable law in such
jurisdiction.

 

(j)            Tolling.  In the event of any
violation of the provisions of this Section 7, the Executive
acknowledges and agrees that the post-termination restrictions contained in
this Section 7 shall be extended by a period of time equal to the
period of such violation, it being the intention of the parties hereto that the
running of the applicable post-termination restriction period shall be tolled
during any period of such violation.

 

8.             Withholding Taxes.  The
Company may withhold from all payments due to the Executive (or the Executive’s
beneficiary or estate) hereunder all taxes which, by applicable federal, state,
local or other law or regulation, the Company is required to withhold
therefrom.

 

9.             Reimbursement of Expenses.

 

(a)           If any contest or dispute
shall arise under this Agreement involving any aspect of the Executive’s
employment with the Company or the termination of that employment (including
the covenants contained in Section 7 and the equity awards under Section 2(b)(iii))
or involving the failure or refusal of the Company to perform fully in
accordance with the terms hereof (a “Dispute”)
and the
Executive prevails on the material issues in such 

 

14

 

Dispute,
the Company shall, upon presentment of appropriate documentation (which
submission shall be made within forty-five (45) days after the resolution of
such Dispute), promptly pay
or reimburse the Executive, for all reasonable legal fees and expenses
(including costs of the arbitrators) incurred by the Executive in connection
with such Dispute.

 

(b)           Notwithstanding the
provisions of Section 9(a), the Company shall, on a quarterly basis, upon
presentment of appropriate documentation (which submission shall be made within
forty-five (45) days after the end of such quarter), reimburse the Executive
for all legal fees and expenses (including costs of the arbitrators), if any,
incurred by the Executive in connection with a Dispute
arising on or after a Change in Control (or otherwise related to a Change in Control), except that the Executive
shall reimburse the Company (to the extent permitted under applicable law) for
the fees and expenses advanced (i) in the event the Executive’s claims are
determined to have been advanced by the Executive in bad faith or were
frivolous or (ii) to the extent that such legal fees and expenses are
determined to be unreasonable.

 

10.           Successors; Binding Agreement.

 

(a)           This Agreement shall not be terminated by any
Reorganization.  In the event of any
Reorganization, the provisions of this Agreement shall be binding upon the
surviving or resulting corporation or the person or entity to which such assets
are transferred.

 

(b)           The Company agrees that concurrently with any
Reorganization that does not constitute a Non-Control Transaction, it will
cause any successor or transferee unconditionally to assume, by written
instrument delivered to the Executive (or the Executive’s beneficiary or
estate), all of the obligations of the Company hereunder.  Failure of the Company to obtain such
assumption prior to the effectiveness of any such Reorganization shall be a
material breach of this Agreement and shall constitute Good Reason hereunder
and shall entitle the Executive to compensation and other benefits from the
Company in the same amount and on the same terms as the Executive would be
entitled hereunder if the Executive’s employment were terminated following a
Change in Control by reason of a Qualifying Termination.  For purposes of implementing the foregoing,
the date on which any such Reorganization becomes effective shall be deemed the
date Good Reason occurs, and shall be the Date of Termination, if requested by
the Executive.

 

(c)           This Agreement is personal
to the Executive and without the prior written consent of the Company shall not
be assignable by the Executive.  This Agreement shall inure
to the benefit of, and be enforceable by, the Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.  If the Executive
shall die while any amounts would be payable to the Executive hereunder had the
Executive continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to such
person or persons appointed in writing by the Executive to receive such amounts
or, if no person is so appointed, to the Executive’s estate.

 

11.           Notices.  For purposes of this Agreement, all notices and other communications
required or permitted hereunder (each, a “Notice”)
shall be in writing and shall be sent by either party by personal delivery,
e-mail, fax (with a Notice contemporaneously given by another method specified
in this Section 11),
recognized
overnight commercial courier or
United States mail (certified and return receipt requested, postage prepaid)
and shall be 

 

15

 

deemed to have been duly given
when delivered or five (5) days after deposit in the United States mail,
addressed as follows:

 

	
  If to the Company:

  	
   

  	
  Force
  Protection, Inc.

  
	
   

  	
   

  	
  9801
  Highway 78, Building No. 1

  
	
   

  	
   

  	
  Ladson,
  South Carolina 29456-3802

  
	
   

  	
   

  	
  Attention:
  Co-General Counsel & Secretary

  
	
   

  	
   

  	
  Facsimile:
  (843) 553.1311

  
	
   

  	
   

  	
   

  
	
  If to the Executive:

  	
   

  	
  To
  the Executive’s last address (or to the last

  
	
   

  	
   

  	
  facsimile
  number) shown on the records

  
	
   

  	
   

  	
  of
  the Company

  
	
   

  	
   

  	
   

  

or
to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt (or refusal of receipt).

 

12.           Full Settlement; No Mitigation.  The Company’s obligation to make any payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall be in lieu of and in full settlement of all other severance or
similar payments to the Executive under any other severance or employment
agreement between the Executive and the Company, any severance plan of the
Company and any statutory entitlement (including notice of termination,
termination pay and/or severance pay). 
The Company’s obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action
which the Company may have against the Executive or others.  In no event shall the Executive be obligated
to seek other employment or take other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement
and, except as provided in Section 4(b)(v), such amounts shall not
be reduced whether or not the Executive obtains other employment.

 

13.           Governing Law; Validity.  The interpretation, construction and
performance of this Agreement shall be governed by and construed and enforced
in accordance with the internal laws of the State of South Carolina without
regard to the principle of conflicts of laws. 
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which other provisions shall remain in full force and effect.

 

14.           Disputes.

 

(a)           Mandatory Arbitration.  Subject to the provisions of this Section 14,
any Dispute will be finally settled by arbitration in Charleston, South
Carolina administered by the American Arbitration Association (the “AAA”) under its Commercial
Arbitration Rules then in effect. 
However, the AAA’s Commercial Arbitration Rules will be modified in
the following ways:  (i) the decision
must not be a compromise but must be the adoption of the submission by one of
the parties; (ii) the dispute shall be decided by a panel of three (3) arbitrators,
one appointed by each of the parties and the third appointed by the other two (2) arbitrators
or, if the arbitrators do not agree, appointed by the AAA; (iii) each
arbitrator will agree to treat as confidential evidence and other information
presented to them; (iv) there will be no authority to award punitive
damages (and the Executive and the Company agree not to request any such
award); (v) the optional Rules for Emergency Measures of Protections
will apply; (vi) there will be no authority to amend or modify the terms
of this Agreement except as provided in Section 17

 

16

 

(and the Executive and the
Company agree not to request any such amendment or modification); and (vii) a
decision must be rendered within ten (10) business days of the parties’
closing statements or submission of post-hearing briefs.

 

(b)           Injunctions and Enforcement of Arbitration Awards.  The Executive or the Company may bring an
action or special proceeding in a state or federal court of competent
jurisdiction sitting in Charleston, South Carolina to enforce any arbitration award
under Section 14(a).  Also,
the Company may bring such an action or proceeding, in addition to its rights
under Section 14(a) and whether or not an arbitration
proceeding has been or is ever initiated, to temporarily, preliminarily or
permanently enforce any part of Section 7.  The Executive agrees that (i) violating
any part of Section 7 would cause damage to the Company that cannot
be measured or repaired and that the Company’s remedies at law for a breach or
threatened breach of any of the provisions of Section 7 would be
inadequate, (ii) the Company therefore is entitled to an injunction,
restraining order or other equitable relief restraining any actual or
threatened violation of Section 7 in addition to any remedies at
law, (iii) no bond will need to be posted for the Company to receive such
an injunction, order or other relief and (iv) no proof will be required
that monetary damages for violations of Section 7 would be
difficult to calculate and that remedies at law would be inadequate.  In addition, in the event of a violation by
the Executive of Section 7, any severance payments or benefits
being paid to the Executive pursuant to this Agreement or otherwise shall
immediately cease and any severance previously paid to the Executive shall be
immediately repaid to the Company.

 

(c)           Jurisdiction  and  Choice  of  Forum. 
The
Executive
and
the
Company
irrevocably
submit
to
the
exclusive
jurisdiction
of
any
state
or
federal
court
located
in
Charleston,
South
Carolina
over
any
Dispute
that
is
not
otherwise
arbitrated
or
resolved
according
to
Section
14(a).  This  includes
any
action
or
proceeding
to
compel
arbitration
or
to
enforce
an
arbitration
award.  Both  the  Executive
and
the
Company
(i)
acknowledge
that
the
forum
stated
in
this
Section
14(c) has  a  reasonable
relation
to
this
Agreement
and
to
the
relationship
between
the
Executive
and
the
Company
and
that
the
submission
to
the
forum
will
apply
even
if
the
forum
chooses
to
apply
non-forum
law,
(ii)
waive,
to
the
extent
permitted
by
law,
any
objection
to
personal
jurisdiction
or
to
the
laying
of
venue
of
any
action
or
proceeding
covered
by
this
Section
14(c) in  the  forum  stated  in  this  Section
14(c),  (iii)  agree  not  to  commence
any
such
action
or
proceeding
in
any
forum
other
than
the
forum
stated
in
this
Section
14(c)
and
(iv)
agree
that,
to
the
extent
permitted
by
law,
a
final
and
non-appealable
judgment
in
any
such
action
or
proceeding
in
any
such
court
will
be
conclusive
and
binding
on
the
Executive
and
the
Company.  However,  nothing  in  this  Agreement
precludes
the
Executive
or
the
Company
from
bringing
any
action
or
proceeding
in
any
court
for
the
purpose
of
enforcing
the
provisions
of
Section
14(a)
and
this
Section
14(c).

 

15.           Section 409A of the Code.  The parties agree that this Agreement is
intended to comply with the requirements of Section 409A of the Code and
the regulations and other guidance promulgated thereunder (“Section 409A”) or an exemption
from Section 409A.  Notwithstanding
anything in this Agreement to the contrary, if the Executive is a “specified
employee” (as described in Section 409A) on the Date of Termination, any
amount to which the Executive would otherwise be entitled during the first six
months following a separation of service that constitutes nonqualified deferred
compensation within the meaning of Section 409A and that is therefore not
exempt from Section 409A as involuntary separation pay or a short-term
deferral will be accumulated and paid in a single lump sum cash payment
(without interest) on the earlier of (i) the first business day of the
seventh month following the date of such “separation from service” (as defined
under Section 409A) or (ii) the date of the Executive’s death, and
any remaining payments and benefits due under this Agreement shall be paid or 

 

17

 

provided in accordance with the
normal payment dates specified for them herein. 
For purposes of this Agreement, each amount to be paid or benefit to be
provided hereunder shall be construed as a separate identified payment for
purposes of Section 409A.

 

16.           Counterparts.  This
Agreement may be executed (including by facsimile
transmission confirmed promptly
thereafter by actual delivery of executed counterparts) in counterparts, each of which shall be
deemed to be an original and all of which together shall constitute one and the
same instrument.

 

17.           Miscellaneous.  No
provision of this Agreement may be modified or waived unless such modification
or waiver is agreed to in writing and signed by the Executive and by a duly
authorized officer of the Company.  No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or any prior or subsequent
time.  Failure by the Executive or the
Company to insist upon strict compliance with any provision of this Agreement
or to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason or the Company to terminate employment for Cause,
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement. 
This Agreement together with all exhibits hereto sets forth the entire
agreement of the parties hereto in respect of the subject matter contained
herein.  No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly
set forth in this Agreement.  Except as
otherwise specifically provided for herein, the rights of, and benefits payable
to, the Executive or the Executive’s estate or beneficiaries pursuant to this
Agreement are in addition to any rights of, or benefits payable to, the
Executive or the Executive’s estate or beneficiaries under any other employee
benefit plan or compensation program of the Company.

 

18.           Representations.  The Executive represents and warrants to the Company that (a) the
Executive has the legal right to enter into this Agreement and to perform all
of the obligations on the Executive’s part to be performed hereunder in
accordance with its terms, and (b) the Executive is not a party to any
agreement or understanding, written or oral, which could prevent the Executive
from entering into this Agreement or performing all of the Executive’s duties
and obligations hereunder.

 

19.           Section Headings.  The section
headings used in this Agreement are included solely for convenience and shall
not affect, or be used in connection with, the interpretation of this
Agreement.

 

18

 

IN WITNESS WHEREOF,
the Company has caused this Agreement to be executed by a duly authorized
officer of the Company and the Executive has executed this Agreement on the
Effective Date.

 

 

	
  FORCE
  PROTECTION, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/ Jack A. Davis

  	 

	
   

  	
  Name: Jack A. Davis

  	
   

  
	
   

  	
  Title: Chair -Compensation Committee

  	
   

  
	
   

  	
   

  	
   

  
	
  “EXECUTIVE”

  	
   

  
	
   

  	
   

  	
   

  
	
   /s/ Michael Moody

  	
   

  
	
  Name:
  Michael Moody

  	
   

  

 

19

 

Exhibit A

 

Form of General Release

 

This General Release, dated as of the [•] day of [•] 20[•], is delivered
by [•]
(the “Executive”) to and for the benefit
of the Released Parties (as defined below). 
The Executive acknowledges that this General Release is being executed
in accordance with Section 5 of the Employment Agreement dated [•], 200[•] (the “Employment Agreement”).

 

1.             General
Release.  (a)  the Executive, for himself and for
the Executive’s heirs, dependents, assigns, agents, executors, administrators,
trustees and legal representatives (collectively, the “Releasors”)
hereby forever releases, waives and discharges the Released Parties (as defined
below) from each and every claim, demand, cause of action, fee, liability or right of any sort (based upon legal or
equitable theory, whether contractual, common-law, statutory, federal, state,
local or otherwise), known or unknown, which Releasors ever had, now have, or
hereafter may have against the Released Parties by reason of any actual or
alleged act, omission, transaction, practice, policy, procedure, conduct,
occurrence, or other matter from the beginning of the world up to and including
the Effective Date (as defined below), including, without limitation, those in
connection with, or in any way related to or arising out of, the Executive’s
employment or termination of employment or any other agreement, understanding,
relationship, arrangement, act, omission or occurrence, with the Released
Parties.

 

(b)           Without limiting the generality of the
previous paragraph, this General Release is intended to and shall release the Released Parties from any and all claims, whether known or
unknown, which Releasors ever had, now have, or may hereafter have against the
Released Parties including, but not limited to: 
(1) any claim of discrimination or retaliation under the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act, the
Americans with Disabilities Act, the Fair Labor Standards Act, the Employee
Retirement Income Security Act of 1974, as amended (excluding claims for
accrued, vested benefits under any employee benefit or pension plan of the
Released Parties subject to the terms and conditions of such plan and
applicable law) and the Family and Medical Leave Act; (2) any claim under
the South Carolina Human Affairs Law and the South Carolina Wage Payment
Statute; (3) any other claim (whether based on federal, state or local law
or ordinance, statutory or decisional) relating to or arising out of the
Executive’s employment, the terms and conditions of such employment, the
termination of such employment and/or any of the events relating directly or
indirectly to or surrounding the termination of such employment, including, but
not limited to, breach of contract (express or implied), tort, wrongful
discharge, detrimental reliance, defamation, emotional distress or compensatory
or punitive damages; and (4) any claim for attorney’s fees, costs,
disbursements and the like.

 

(c)           The foregoing release does not in any way affect: (1) the Executive’s rights of
indemnification to which the Executive was entitled immediately prior to the Date of Termination (as defined in the Employment Agreement); and (2) the right of the Executive to
take whatever steps may be necessary to enforce the terms of the Employment
Agreement.

 

(d)           For purposes of this General Release, the “Released Parties”
means Force Protection, Inc. (the “Company”),
all current and former parents, subsidiaries, related companies, partnerships,
joint ventures and employee benefit programs (and the trustees, administrators,
fiduciaries and insurers of such programs), and, with respect to each of them,
their predecessors and successors, and, with respect to each such entity, all
of its past, present, and future employees, officers, directors, members,
stockholders, owners, representatives, 

 

A-1

 

assigns, attorneys, agents,
insurers, and any other person acting by, through, under or in concert with any
of the persons or entities listed in this paragraph, and their successors
(whether acting as agents for such entities or in their individual capacities).

 

2.             No Existing Suit.  The Executive represents and warrants that, as of the Effective Date of this General Release, the Executive has not filed or commenced
any suit, claim, charge, complaint, action, arbitration, or legal proceeding of
any kind against the Company or its subsidiaries or affiliates.  The Executive acknowledges that this General Release does not prohibit the Executive from filing a
charge of discrimination with the Equal Employment Opportunity Commission.

 

3.             Knowing and Voluntary Waiver. 
By signing this General Release, the Executive expressly acknowledges and
agrees that: (a) the Executive has carefully read it and fully understands
what it means; (b) the Executive has discussed this General Release with an attorney of the Executive’s choosing
before signing it; (c) the Executive has been given at least twenty-one
(21) calendar days to consider this General Release; (d) the Executive has agreed to this General Release knowingly and voluntarily and was not subjected
to any undue influence or duress; (e) the consideration provided the
Executive under the Employment Agreement is
sufficient to support the releases provided by the Executive under this General Release; (f) the Executive may revoke the
Executive’s execution of this General Release within seven (7) days after the
Executive signs it by sending written notice of revocation as set forth below;
and (g) on the eighth day after the Executive executes this General Release (the “Effective Date”), this General Release becomes effective and enforceable, provided that the Executive does
not revoke this Agreement during the revocation period.  Any revocation of the Executive’s execution of this General Release must be submitted, in writing, to Force Protection, Inc. 9801
Highway 78, Building No. 1, Ladson, South Carolina 29456-3802, to the
attention of the Co-General Counsel, stating “I hereby revoke my execution of the General Release.”  The revocation must be
personally delivered to the General Counsel or mailed to the General Counsel
and postmarked within seven (7) days of the Executive’s execution of this General Release.  If
the last day of the revocation period is a Saturday, Sunday or legal holiday,
then the revocation period will be extended to the following day which is not a
Saturday, Sunday or legal holiday.  The
Executive agrees that if the Executive does not execute this General Release or, in the event of revocation, the
Executive will not be entitled to receive any of the payments or benefits under
the
Employment Agreement (other than the Accrued Amounts and the Other
Benefits).  The Executive must execute this General Release on or
before [•],
20[•].

 

This General Release is
final and binding and may not be changed or modified.

 

	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Michael
  Moody

  

 

A-2

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