DESCRIPTION OF INTERLINK ELECTRONICS, INC.
                 MANAGEMENT INCENTIVE COMPENSATION PROGRAM

     Interlink  Electronics,  Inc. (the  "Company")  currently has one cash
bonus plan  covering the  executive  officers of the  Company.  Performance
objectives  for the Company as a whole are  determined  at the beginning of
each fiscal year during the annual  budgeting  process and are  approved by
the Board of Directors.  These performance objectives are established based
upon  competitive   conditions  and  general  economic  circumstances  then
prevailing in the industries in which the Company does business.

     Eligibility of an executive officer for a bonus is generally dependent
upon the  achievement of the  predetermined  performance  objectives of the
bonus plan.  Target  bonus  amounts  are  established  by the  Compensation
Committee of the Board of Directors  (the  "Committee")  for each executive
officer at the  beginning  of each  fiscal  year,  as a  percentage  of the
executive officer's base salary. If the predetermined performance goals are
met, a preliminary bonus amount is calculated under the bonus formula up to
a maximum of the target  bonus  amount.  The final bonus  amount paid to an
eligible  executive  officer  is  determined  by the  Committee,  which has
discretion  to increase  or  decrease  the  formula-derived  figure  within
certain limits based upon the  Committee's  assessment of the  individual's
performance,  and to pay special bonuses in extraordinary  circumstances as
judged by the Committee.