High contrast imaging, in the presence of a bright background, is a challenging problem encountered in diverse applications ranging from the daily chore of driving into a sun-drenched scene to in vivo use of biomedical imaging in various types of keyhole surgeries. Imaging in the presence of bright sources saturates the vision system, resulting in loss of scene fidelity, corresponding to low image contrast and reduced resolution. The problem is exacerbated in retro-reflective imaging systems where the light sources illuminating the object are unavoidably strong, typically masking the object features. This manuscript presents a novel theoretical framework, based on nonlinear analysis and adaptive focal plane transmittance, to selectively remove object domain sources of background light from the image plane, resulting in local and global increases in image contrast. The background signal can either be of a global specular nature, giving rise to parallel illumination from the entire object surface or can be represented by a mosaic of randomly orientated, small specular surfaces. The latter is more representative of real world practical imaging systems. Thus, the background signal comprises of groups of oblique rays corresponding to distributions of the mosaic surfaces. Through the imaging system, light from group of like surfaces, converges to a localized spot in the focal plane of the lens and then diverges to cast a localized bright spot in the image plane. Thus, transmittance of a spatial light modulator, positioned in the focal plane, can be adaptively controlled to block a particular source of background light. Consequently, the image plane intensity is entirely due to the object features. Experimental image data is presented to verify the efficacy of the methodology.