Spartan Motors, Inc. 2019 Leadership Team Compensation Plan dated April 15, 2019

Exhibit 10.1

Spartan Motors, Inc.

2019 LEADERSHIP TEAM COMPENSATION PLAN

Approved by the Board of Directors April 15, 2019

This 2019 Leadership Team Compensation Plan (the “Plan”) of Spartan Motors, Inc. (the “Company” or “Spartan”) aims to provide competitive levels of compensation and incentives to drive strong long-term financial performance, maximize the Company’s market valuation, and provide for the long-term interests of its stakeholders.

The Plan is designed to achieve the following objectives:

Leadership team compensation is comprised of three components: base salary, annual cash-based incentive (“AIC”), and long-term equity-based incentive (“LTIC”). Base salary is a fundamental component of the Company’s compensation system, and competitive salary levels are necessary to attract and retain well-qualified executives. Base salaries are determined by evaluating the responsibilities of the position, the experience of the individual, the performance of the individual, and the competitive marketplace for similar management talent. The review process includes a comparison of base salaries for comparable positions at companies of similar type, size, and financial performance. Performance reviews and base salary reviews are both done on an annual basis.

Total compensation is established at levels comparable to market-median ranges.

In addition, there are equity holding requirements for the Leadership Team members. This Plan is established by the full Board after consideration of input from external sources and is reviewed annually.

Spartan believes that Leadership Team compensation should track with the Company’s overall financial performance. Compensation should be structured to be proportionately generous in periods when leadership’s performance is deemed to be superior.

This Plan applies to the CEO and each employee in Tiers 1-4 (collectively, the “Leadership Team”). Each executive eligible to participate in this Plan is referred to as a “Participant.”

A Participant is included in one of the tiers above upon the recommendation of the CEO and the approval of Human Resources & Compensation Committee (the “Comp Committee”) of the Spartan Board of Directors (the “Board”).

Participation in one year does not guarantee participation in subsequent years. Due to the varying nature of certain positions among business units, inclusion of a position at one organization will not necessarily mean a similarly titled position at another unit would be included in the Plan.

All proposed changes in eligibility and structure for the CEO and Leadership Team Tier 1 must be approved by the Comp Committee. All proposed changes in eligibility and structure for the Leadership Team Tiers 2 - 4 will be made and approved by the CEO, with oversight by the Comp Committee.

This Plan is effective upon approval of the Board and will continue indefinitely at the discretion of the Board. Upon approval by the Board, this Plan shall apply with respect to compensation for performance years starting January 1, 2019.

The CEO is responsible for the ongoing administration of the Plan. The Comp Committee shall annually review both the provisions of the Plan and review payouts hereunder to confirm that the payments are in compliance with the Plan document.

For any payment due under this Plan to a “Specified Employee,” as defined in Section 409A of the Internal Revenue Code, where such payment is not permitted to be made by Section 409A on the payment date, then no payment under this Plan may be paid before the date that is six months after the Participant’s “Separation from Service,” as defined in Section 409A. The payment to which the Participant would otherwise have been entitled during that six months will be paid on the first regular Friday payroll date after six months following the Participant’s Separation from Service. Any payments that are not permitted to be paid under this section shall be paid in a lump sum included with the first payment after the six month time period.

The Plan is an unfunded, nonqualified deferred compensation plan. Monies that become due to Participants are unsecured obligations of the Company.

¹ Corporate Vice Presidents may be included in Tier 1 or Tier 2.

The Company has the right to withhold and deduct from a Participant’s payments, including payments made in the form of Company stock, or make arrangements for the collection of, all amounts deemed necessary to satisfy federal, state and local withholding and employment-related tax requirements attributable to a Participant’s payments pursuant to this Plan.

This Plan may be amended or terminated at any time and without prior notice at the sole discretion of the Board, as permitted by Section 409A of the Internal Revenue Code.

Notwithstanding anything to the contrary in this Plan, the Comp Committee determines appropriate compensation, and this Plan does not represent a contractual obligation. The Board reserves discretionary authority to change this Plan as appropriate.

Awards will be retracted to the extent there is a material misrepresentation and should not have been granted.

The payments under this Plan are intended to be exempt from or to comply with the requirements of Section 409A of the Code and the regulations thereunder, and the Company shall interpret and administer this Plan in a manner consistent with Section 409A. However, Company makes no representation or warranty regarding compliance with Section 409A, and the Company shall have no liability to any Participant or any other person for any failure to comply with Section 409A.

The AIC component of the Plan rewards Participants based upon achievement of the top priorities for business performance which will include key metrics. Each year, the CEO will review the metrics and weightings based upon current business conditions and attain approval of the framework from the Comp Committee. Tier 1 Participants will have additional criteria based upon results of top priorities. Annually, the Comp Committee will approve the metrics and determine the appropriate weightings between the elements.

Each Participant’s annual AIC award is calculated by multiplying (x) the Participant’s current annual salary (see item a. below) by (y) his or her AIC Bonus Percentage (see item b. below) by (z) the X-Multiple (see item c. below).

Notwithstanding the foregoing, the final AIC Bonus Percentage for the CEO and each Tier 1 Participant is subject to annual review and approval by the Comp Committee.

Annually, the CEO will propose and the Comp Committee will evaluate and establish, based upon the current performance metrics, the incremental improvements required to attain an incremental X-Multiple (i.e., going from 0X to 1X to 2X). The 0X, 1X, and 2X targets for each performance metric within a target matrix will be published by the CEO.

The X-Multiple can be a fractional value based upon calculating the results within the target matrix, as determined by the Comp Committee.

There will be no AIC award for Participants in the event that Spartan loses money for the applicable performance year. For the sake of clarity, the Comp Committee will have oversight of the AIC component of the Plan and can make discretionary adjustments as it deems appropriate.

Should AIC bonuses be earned, they will be paid to all Participants employed by the Company at the time of payment subject to the section below entitled “Death, Disability, Retirement, and Changes in Control.” Payment shall be made no later than March 10th of the year following the end of the performance year. Although the AIC component of this Plan is designed to be cash-based, the Comp Committee retains the discretion to pay the annual payout in an equivalent amount of Company stock. The amount of the annual payout is one hundred percent (100%) of the AIC bonus earned for the current performance year.

An associate eligible to participate in this Plan who joins the Company during a performance period may be included in the AIC as a Participant by the decision of the CEO and approval of the Comp Committee. The new Participant will be entitled to a prorated share of an annual AIC bonus. The prorated bonus will be calculated by multiplying (x) the Participant’s AIC Bonus Percentage by (y) the X-Multiple by (z) the Participant’s current prorated salary. The current prorated salary is calculated as the weekly salary in effect on the date of hire multiplied by the number of weeks the Participant was a member of the Plan. If a Participant is hired mid-week, a full week will be credited for the partial week.

If during a performance year, an acquisition or disposition of a business unit occurs, the Comp Committee will determine and remove the effect of such business unit from the consolidated results in determining the X-Multiple.

Except as may be set forth in the Management Severance Plan (if applicable to a Participant), if a Participant has a termination of employment (either voluntarily or involuntarily) that meets the requirements of a Separation From Service with Spartan during any performance year, for reason other than death, disability, retirement, or a change in control (which are covered in Section B(6) below), the Participant will not be eligible to receive any AIC bonus for that year or any portion of that year.

the Participant will be eligible to receive a prorated AIC bonus for the performance year in which the event occurs. The prorated bonus will be calculated as (x) the Participant’s AIC Bonus Percentage multiplied by (y) the X-Multiple by (z) the Participant’s current prorated salary. The current prorated salary is calculated as the weekly salary in effect on the date of the event multiplied by the number of weeks the Participant was a Participant in the Plan prior to the event. If the event occurs mid-week, a full week will be credited for the partial week. Payment of such prorated AIC bonus will be made at the next regularly scheduled date for the payment of AIC bonuses.

This Section C applies only to those Participants who are Section 16 officers or Business Unit Presidents reporting to the CEO. When used in this Section C, “Participant” refers only to Participants who are Section 16 officers or Business Unit Presidents reporting to the CEO.

Each Participant’s “Target LTIC Award” for a performance year is equal to (x) the Participant’s current annual salary (see Section B(1)(a) above), multiplied by (y) his or her LTIC Bonus Percentage. A Participant’s “LTIC Bonus Percentage” is based on his or her level within the Plan, as follows:

Notwithstanding the foregoing, the final LTIC Bonus Percentage for the CEO and each Tier 1 Participant is subject to annual review and approval by the Comp Committee.

Each Participant’s Target LTIC Award for a performance year will be apportioned as follows:

The value of each annual LTIC award to be made in the form of RSUs will be equal to 30% of the Participant’s Target LTIC Award for a performance year. The award is generally to be made on March 30 of each year (or, if March 30 is not a business day, on the immediately preceding business day). The number of RSUs to be issued to the Participant for that performance year will be determined by using the average stock price over the preceding 30 calendar days. The RSUs shall vest ratably over a three-year period, subject to any exceptions set forth in the award agreement reflecting the grant of such RSUs.

In accordance with the requirements of the Stock Plan, the Company and each Participant shall enter into an award agreement reflecting this grant of RSUs. Any impact on the vesting schedule for such RSUs resulting from a change in control of the Company or the Participant’s death, disability, retirement, or other termination of service shall be as set forth in the award agreement and the Stock Plan.

The portion of each annual LTIC award to be made in the form of PSUs is designed to reward Participants based upon achievement of cumulative financial performance over a three-year period (with cliff vesting to occur at the end of such three-year performance period) starting with the performance year in which the annual LTIC award is granted. This cumulative financial performance is measured by two metrics:

GAAP Net Income shall be subject to such adjustments as approved by the Comp Committee in its sole discretion.

The number of PSUs earned with respect to a 3-year performance period shall be determined as follows:

Achievement between the stated percentages will be interpolated on a straight-line basis.

Achievement between the stated dollar amounts will be interpolated on a straight-line basis.

Depending on (1) the Company’s TSR over the 3-year performance period relative to the Index and (2) the Company’s cumulative GAAP Net Income over the 3-year performance period, the Participant may earn between 0% and 200% of the value of the Target LTIC Award made in PSUs (i.e., 70% of the overall Target LTIC Award).

In accordance with the requirements of the Stock Plan, the Company and each Participant shall enter into an award agreement reflecting this grant of PSUs. Any impact on the vesting schedule for such PSUs resulting from a change in control of the Company or the Participant's death, disability, retirement, or other termination of service shall be as set forth in the award agreement and the Stock Plan.

This Section D applies only to those Participants who are not Section 16 officers or Business Unit Presidents reporting to the CEO. When used in this Section D, “Participant” refers only to Participants who are not Section 16 officers or Business Unit Presidents reporting to the CEO.

This LTIC component of the Plan rewards Participants based upon achievement of long-term financial performance. Financial performance is measured by two metrics:

The combined performance of these two metrics will used to calculate the LTIC Multiple.

The Participant’s annual LTIC earned is calculated by multiplying the Participant’s current annual salary (see Section B(1)(a) above) by his or her Target Bonus (see 1 below) then multiplied by the LTIC Multiple (see 2 below).

A Participant is included in one of the levels above upon the approval of the CEO and, and in the case of Tier 1 Participants, the approval of the Comp Committee.

TSR Metric: Up to one-half of the annual LTIC award is based on Spartan’s TSR for the performance year as compared to the Index. The CEO will provide the data, the appropriate analysis, and make a recommendation as to the Company’s performance relative to the Index. The Comp Committee will make the final determination as to the appropriate score.

Spartan Financial Results: Up to one-half of the annual LTIC award is based on achievement of established financial metrics (adjusted EBITDA). On an annual basis, the CEO will propose to the Comp Committee the financial metrics (and measurement metrics) based upon priorities discussed and derived during the annual plan process.

Restricted stock that is earned as part of an LTIC award for a performance year shall be issued on March 30 following the end of such performance year (or, if March 30 is not a business day, on the immediately preceding business day). The number of shares of restricted stock to be issued will be determined by using the average stock price over the preceding 30 calendar days. All such shares of restricted stock awarded shall vest ratably over a three year period, subject to any exceptions set forth in the award agreement and/or Stock Plan. At the time of grant, and in accordance with the requirements of the Stock Plan, the Company and each Participant shall enter into an award agreement reflecting this grant of restricted stock. Any impact on the vesting schedule for such restricted stock resulting from a change in control of the Company or the Participant's death, disability, retirement, or other termination of service shall be as set forth in the award agreement and the Stock Plan.

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