|
Item
5.02.
|
Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
|
On
January 31, 2017, pursuant to the authority granted under the CombiMatrix Corporation 2006 Stock Incentive Plan, the Compensation
Committee of CombiMatrix Corporation (the “Company”) adopted a 2017 Executive Performance Bonus Plan (the “2017
Bonus Plan”), effective as of January 1, 2017, to provide certain members of the Company’s senior management the opportunity
to earn incentive bonuses based on the Company’s attainment of specific financial performance objectives for 2017. The Compensation
Committee determined that the Company’s Chief Executive Officer, Mark McDonough, and the Company’s Chief Financial
Officer, Scott Burell, are eligible to receive such awards under the 2017 Bonus Plan.
A
participant’s bonus under the 2017 Bonus Plan will consist of a cash incentive and will be based on the participant’s
achievement of three separate components as follows: (i) 30% tied to the achievement of the Company’s 2017 revenue target
as determined by the Company’s Compensation Committee; (ii) 30% tied to the Company’s 2017 EBITDA loss target as determined
by the Company’s Compensation Committee; and (iii) 40% tied to the Company’s 2017 operating cash burn target as determined
by the Company’s Compensation Committee. Also each component includes three levels of achievement in order to encourage
higher levels of performance.
If
the Company achieves 95% of the target revenue for the first half of 2017 and/or the second half of 2017, the target revenue portion
of the cash bonus for the CEO and CFO will equal $16,380 and $9,945, respectively, for each applicable measurement period. If
the Company achieves 100% of the target revenue for the first half of 2017 and/or the second half of 2017, the target revenue
portion of the cash bonus for the CEO and CFO will equal $32,760 and $19,890, respectively, for each applicable measurement period.
If the Company achieves 110% of the target revenue for the first half of 2017 and/or the second half of 2017, the target revenue
portion of the cash bonus for the CEO and CFO will equal $36,036 and $21,879, respectively, for each applicable measurement period
(and the target revenue portion of the cash bonus will be computed on a pro rata basis between 95% and 100% of the target achieved
and between 100% and 110% of the target achieved). If actual targets achieved exceed 110%, the applicable bonuses will remain
fixed at the 110% level.
If
the Company achieves 100% of the 2017 EBITDA loss target for the first half of 2017 and/or the second half of 2017, the EBITDA
loss target portion of the cash bonus for the CEO and CFO will equal $32,760 and $19,890, respectively, for each applicable measurement
period. If the Company achieves 95% of the 2017 EBITDA loss target for the first half of 2017 and/or the second half of 2017,
the EBITDA loss target portion of the cash bonus for the CEO and CFO will equal $34,398 and $20,885, respectively, for each applicable
measurement period. If the Company achieves 90% of the 2017 EBITDA loss target for the first half of 2017 and/or the second half
of 2017, the EBITDA loss target portion of the cash bonus for the CEO and CFO will equal $36,036 and $21,879, respectively, for
each applicable measurement period (and the EBITDA loss target portion of the cash bonus will be computed on a pro rata basis
between 100% and 95% of the target achieved and between 95% and 90% of the target achieved). If actual targets achieved are below
90%, the applicable bonuses will remain fixed at the 90% level.
If
the Company achieves 100% of the 2017 operating cash burn target for the first three quarters of 2017 and/or the fourth quarter
of 2017, the target operating cash burn portion of the cash bonus for the CEO and CFO will equal $43,680 and $26,520, respectively,
for each applicable measurement period.
Cash
bonus payments, if earned, will be paid once the Company’s auditors have completed their annual audit of the Company’s
consolidated financial statements, and will be paid out within seventy-five days following December 31, 2017. In order to receive
a bonus payment, the participant must be employed by the Company or its subsidiary at the time bonuses are computed and distributed.
The
foregoing information is qualified in its entirety by reference to the actual terms of the 2017 Bonus Plan attached hereto as
Exhibit 10.1 and which is incorporated herein by reference.