Exhibit 10.2

 

COMBIMATRIX CORPORATION
RESTATED EXECUTIVE CHANGE OF CONTROL SEVERANCE PLAN

 

CombiMatrix Corporation, a Delaware corporation (the “Company”) has adopted this
Executive Change of Control Severance Plan (the “Plan”), effective as of
November 10, 2009, restated on August 10, 2010 and restated further on
December 7, 2015, for the benefit of certain key employees of the Participating
Company Group.

 

The Company considers it essential to the best interests of its stockholders to
take reasonable steps to retain its key management personnel.  Further, the
Board of Directors of the Company (the “Board”) recognizes that the uncertainty
and questions which might arise among management in the context of a Change of
Control of the Company could result in the departure or distraction of
management personnel to the detriment of the Company and its stockholders.

 

The Board has determined, therefore, that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of its members of
management of the Company to their assigned duties without distraction in the
face of potentially disturbing circumstances arising from any possible Change of
Control of the Company.

 

The Company hereby adopts this Plan for the benefit of its employees who are
eligible as provided in the Plan.

 

Section 1.                                           Definitions.

 

1.1                                                       “Accounting Firm”
means the accounting firm engaged by the Company for general audit purposes
immediately prior to the Change of Control Date or, if such firm is unable or
unwilling to perform the calculations required under this Plan, such other
national accounting firm as shall be designated by agreement between the
Participant to whom Section 4.1 applies and the Company.

 

1.2                                                       “Base Salary” means
the Participant’s annual base salary as in effect during the last regularly
scheduled payroll period immediately preceding such Participant’s Date of
Termination.  Base Salary does not include any bonuses, commissions, fringe
benefits, overtime, car allowances, other irregular payments or any other
compensation except base salary.

 

1.3                                                       “Board” means the
Board of Directors of the Company.

 

1.4                                                       “Cause” means a
(i) felony conviction; or (ii) willful disclosure of material trade secrets or
other material confidential information related to the business of a
Participating Company; or (iii) willful and continued failure to substantially
perform the same duties as in effect prior to the Change of Control for the
Participating Company (other than any such failure resulting from physical or
mental incapacity or any actual or anticipated failure resulting from a
resignation for Good Reason) after a written demand for substantial performance
is delivered by the Company, which demand identifies the specific actions which
the Company believes constitute willful and continued failure substantially to
perform duties, and which performance is not substantially corrected within ten
(10) days of receipt of such demand.  For purposes of the previous sentence, no
act or failure to act shall be deemed “willful” unless done, or omitted to be
done, with willful malfeasance or gross negligence and without reasonable belief
that action or omission was not materially adverse to the best interest of the
Participating Company Group.

 

1.5                                                       “Change of Control”
means a Change of Control of the Company of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act, whether or not the Company is then subject
to such reporting requirement; provided, however, that anything in this Plan to
the contrary notwithstanding, a Change of Control shall be deemed to have
occurred if:

 

(a)           any individual, partnership, firm, corporation, association,
trust, unincorporated organization or other entity or person, or any syndicate
or group deemed to be a person under Section 14(d)(2) of the Exchange Act, is or
becomes the “beneficial owner” (as defined in Rule 13d-3 of the General
Rules and Regulations under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined voting power
of the Company’s then outstanding securities entitled to vote in the election of
directors of the Company;

 

(b)                                 individuals who at the Effective Date
constituted the Board and any new directors, whose election by the Board or
nomination for election by the Company’s stockholders was approved by a vote of
at least a majority of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved (the “Incumbent Directors”), cease for any
reason to constitute a majority thereof;

 

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(c)           there occurs a reorganization, merger, consolidation or other
corporate transaction involving the Company (a “Transaction “), in each case
with respect to which the stockholders of the Company immediately prior to such
Transaction do not, immediately after the Transaction, own securities
representing more than 50% of the combined voting power of the Company, a parent
of the Company or other corporation resulting from such Transaction (counting,
for this purpose, only those securities held by the Company’s stockholders
immediately after the Transaction that were received in exchange for, or
represent their continuing ownership of, securities of the Company held by them
immediately prior to the Transaction);

 

(d)                                 all or substantially all of the assets of
the Company are sold, liquidated or distributed; or

 

(e)                                  there is a “Change of Control” or a “change
in the effective control” of the Company within the meaning of Section 280G of
the Code and the Regulations.

 

1.6                                                       “Change of Control
Date” means the date on which the Change of Control occurs.  Notwithstanding the
first sentence of this definition, if a Participant’s employment with the
Participating Company Group terminates prior to the Change of Control Date and
it is reasonably demonstrated that such termination (a) was at the request of
the third party who has taken steps reasonably calculated to effect the Change
of Control or (b) otherwise arose in connection with or in anticipation of the
Change of Control, then “Change of Control Date” means the date immediately
prior to the date of such Participant’s termination of employment.

 

1.7                                                       “Code” means the
Internal Revenue Code of 1986, as amended, and any successor provisions thereto.

 

1.8                                                       “Common Stock” means
the common stock of the Company.

 

1.9                                                       “Company” means
CombiMatrix Corporation, a Delaware Corporation, and, except in determining
under Section 1.5 hereof whether or not any Change of Control has occurred,
shall include any successor to its business and/or assets.

 

1.10                                                “Date of Termination” means
the date of a Participant’s termination of employment with the Participating
Company Group as determined in accordance with Section 3.6.

 

1.11                                                “Disability” means a
Participant’s (a) incapacity due to physical or mental illness which causes such
Participant’s absence from the full-time performance of his or her duties with
the Participating Company Group for six (6) consecutive months and (b) such
Participant’s failure to return to full -time performance of his or her duties
for the Participating Company Group within thirty (30) days after written Notice
of Termination due to Disability is given to a Participant.  Any question as to
the existence of Disability upon which a Participant and the Participating
Company Group cannot agree shall be determined by a qualified independent
physician selected by the Participant (or, if such Participant is not able to
select a physician, such selection shall be made by any adult member of the
Participant’s immediate family), and approved by the Participating Company
Group.  The determination of such physician made in writing to the Participating
Company Group shall be final and conclusive for all purposes of this Plan

 

1.12                                                “Effective Date” means
November 10, 2009.

 

1.13                                                “Equity Awards” means
options, stock appreciation rights, stock purchase rights, restricted stock,
stock bonuses and other awards which consist of, or relate to, equity securities
of the Company, in each case which have been granted to a Participant under the
Equity Plans.  For purposes of this Plan, Equity Awards shall also include any
shares of common stock or other securities issued pursuant to the terms of an
Equity Award.

 

1.14                                                “Equity Plans” means the
CombiMatrix Corporation 2006 Stock Incentive Plan, and any other equity-based
incentive plan or arrangement adopted or assumed by the Company, and any future
equity-based incentive plan or arrangement adopted or assumed by the Company,
but shall not include any Employee Stock Purchase Plan or any other plan
intended to be qualified under Section 423 of the Code.

 

1.15                                                “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended.

 

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1.16                                                “Exchange Act” means the
Securities Exchange Act of 1934, as amended, and any successor provisions
thereto.

 

1.17                                                “Good Reason” means a
Participant’s resignation of employment during the Term as a result of any of
the following without the Participant’s consent:

 

(a)           A meaningful and detrimental diminution in such Participant’s
position, titles, or the nature or status of responsibilities (including
reporting responsibilities) from those in effect immediately prior to the Change
of Control Date;

 

(b)                                 A reduction by the Participating Company
Group in such Participant’s Base Salary as in effect immediately prior to the
Change of Control Date or as the same may be increased from time to time
thereafter;

 

(c)                                  The relocation of the office of the
Participating Company where such Participant is primarily employed immediately
prior to the Change of Control Date (the “COC Location”) to a location which is
more than twenty-five (25) miles away from the COC Location or the Participating
Company’s requiring such Participant to be based more than twenty-five
(25) miles away from the COC Location (except for required travel on the
Participating Company’s business to an extent substantially consistent with the
Participant’s customary business travel obligations in the ordinary course of
business prior to the Change of Control Date);

 

(d)                                 The failure by the Participating Company
Group to pay or provide to such Participant with any material item of
compensation or benefits promptly when due;

 

(e)                                  The failure of the Participating Company
Group to obtain an agreement from any successor to assume and agree to perform
the obligations of this Plan, as contemplated in Section 9.1 hereof or, if the
business for which such Participant’s services are principally performed is sold
at any time after a Change of Control, the failure of the Participating Company
Group to obtain such an agreement from the purchaser of such business;

 

(f)                                   A material breach by the Participating
Company Group of the provisions of this Plan;

 

provided, however, that Good Reason shall not exist unless (i) such Participant
provides written notice to the Company within 60 days after the date of the
occurrence of any event that such Participant knows or should reasonably have
known constitutes Good Reason for voluntary termination, and such notice shall
identify such Participant and set forth in reasonable detail the facts and
circumstances claimed by such Participant to constitute Good Reason; (ii) the
Company fails to cure the condition within 30 days of such notice (including
full retroactive correction with respect to any monetary matter); and (iii) if
not timely cured, such Participant resigns within 30 days after failure to cure.

 

1.18                                                RESERVED

 

1.19                                                RESERVED

 

1.20                                                “Involuntary Termination”
means (i) a Participant’s involuntary termination of employment with the
Participating Company Group during the Term other than for death, Disability or
Cause or (ii) a Participant’s resignation of employment with the Participating
Company Group during the Term for Good Reason.

 

1.21                                                “Notice of Termination”
means the notice specified in Section 3.6.

 

1.22                                                “Participant” means (A) the
Chief Executive Officer of the Company on the change of Control Date, so long as
he is not a party to any other retention and/or severance agreement (other than
the Company’s Transaction Bonus Plan) with the Participating Company Group that
is not otherwise waived in accordance with section 3.9 (the “Group I
Participant”), and (B) each senior management-level employee of a Participating
Company who (i) is not a party to any other retention and/or severance agreement
(other than the Company’s Transaction Bonus Plan) with the Participating Company
Group that is not otherwise waived in accordance with Section 3.9, (ii) is not
the Chief Executive Officer of the Company and (iii) who, on the Change of
Control Date, was a Section 16 Officer (each, a “Group II Participant”).

 

1.23                                                “Participating Company
Group” means the Company and any present or future United States parent and/or
United States direct or indirect subsidiary corporations of the Company that
have been designated by the Board as a “Participating Company” for purposes of
this Plan (all of which along with the Company being individually referred to as
a “Participating Company” and collectively referred to as the “Participating
Company Group”).  For purposes of this Plan, a parent or subsidiary corporation
shall be defined in Sections 424(e) and 424(f) of the Code and shall include
entities related to the Company by similar ownership levels that are not
corporations.

 

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1.24                                                “Plan” means this Restated
CombiMatrix Corporation Executive Change of Control Severance Plan.

 

1.25                                                “Reference Salary” means the
greater of (a) the annual rate of a Participant’s Base Salary from the
Participating Company Group in effect immediately prior to the date of such
Participant’s Involuntary Termination or (b) the annual rate of a Participant’s
Base Salary from the Participating Company Group in effect at any point during
the three-year period ending on the Change of Control Date.

 

1.26                                                “Regulations” means the
proposed, temporary and final regulations under Section 280G of the Code or any
successor provision thereto.

 

1.27                                                “Section 16 Officer” means
an executive of the Company who has been designated by the Company or is
otherwise required to report under Rule 16(a) of the Exchange Act.

 

1.28                                                “Severance Benefits” means
those benefits provided to a Participant under this Plan on account of a Change
of Control, as determined in accordance with Section 3.2, 3.3 and 3.4 after the
execution of a release of claims as required by Section 10.

 

1.29                                                “Severance Multiple” means
(a) with respect to Group I Participants, one (1), and (b) with respect to Group
II Participants, one-half (0.5).

 

1.30                                                “Term” means the period of a
Participant’s employment that commences on the Change of Control Date and shall
continue until the second anniversary of the Change of Control Date.

 

Section 2.                                           Employment During the
Term.  During the Term, the following terms and conditions shall apply to a
Participant’s employment with the Participating Company Group:

 

2.1                                                       Titles; Reporting and
Duties.  A Participant’s position, title, nature and status of responsibilities
and reporting obligations shall be no less favorable than those that such
Participant enjoyed immediately prior to the Change of Control Date.

 

2.2                                                       Base Salary.  A
Participant’s Base Salary may not be reduced, and such Participant’s Base Salary
shall be periodically reviewed and increased in the manner commensurate with
increases awarded to other similarly situated employees of the Participating
Company Group.

 

2.3                                                       Incentive
Compensation.  A Participant shall be eligible to participate in each long-term
incentive plan or arrangement established by the Participating Company Group for
its employees at such Participant’s level of seniority in accordance with the
terms and provisions of such plan or arrangement and at a level consistent with
the Participating Company Group’s practices applicable to other similarly
situated employees of the Participating Company Group.

 

2.4                                                       Benefits.  A
Participant shall be eligible to participate in all retirement, welfare and
fringe benefit plans and arrangements that the Participating Company Group
provides to its employees in accordance with the terms of such plans and
arrangements, which shall be no less favorable to such Participant, in the
aggregate, than the terms and provisions available to other similarly situated
employees of the Participating Company Group.

 

2.5                                                       Location.  The COC
Location shall not be relocated to a location which is more than twenty-five
(25) miles away from the COC Location and the Participating Company shall not
require the Participant to be based more than twenty-five (25) miles away from
the COC Location (except for required travel on the Participating Company’s
business to an extent substantially consistent with the Participant’s customary
business travel obligations in the ordinary course of business prior to the
Change of Control Date).

 

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Section 3.                                           Severance Benefits.  In the
event of a Participant’s Involuntary Termination, the terminated Participant
shall be entitled to the following:

 

3.1                                                       Payment of Wages and
Accrued Vacation.  The Company shall pay to such terminated Participant within
five (5) days of the date of such Involuntary Termination the full amount of any
earned but unpaid Base Salary through the Date of Termination at the rate in
effect at the time of the Notice of Termination, plus a cash payment (calculated
on the basis of such Participant’s Reference Salary) for all unused vacation
time which such Participant may have accrued as of the Date of Termination.

 

3.2                                                       Payment of Cash
Severance.  Subject to execution of a release of claims as described in
Section 10 below, the Company shall pay to such terminated Participant an amount
equal to the product of (a) such terminated Participant’s Reference Salary,
multiplied by (b) such terminated Participant’s Severance Multiple.  This
severance payment shall be in lieu of any other cash severance payments which
such terminated Participant is entitled to receive under any other notice or
severance pay and/or retention plan or arrangement sponsored by any
Participating Company.  Except as otherwise provided in Sections 3.10 and 4.1
below, these cash payments will be made in a lump sum on the day following the
Release Effective Date.

 

3.3                                                       Vesting and Exercise
of Equity Awards.  Subject to execution of a release of claims as described in
Section 10 below, and notwithstanding anything to the contrary contained in an
applicable Equity Award agreement, all Equity Awards held by a terminated
Participant shall vest in full and, as applicable, shall become fully
exercisable, as of the Date of Termination, except as otherwise provided in
Sections 3.10 and 4.1 below.  Notwithstanding anything in this Plan to the
contrary, in no event shall the vesting and exercisability provisions applicable
to a terminated Participant under the terms of an Equity Award be less favorable
to such Participant than the terms and provisions of such awards in effect on
the Change of Control Date.

 

3.4                                                       Benefits
Continuation.  Subject to execution of a release of claims as described in
Section 10 below, and subject to the terminated Participant and/or his or her
eligible dependents electing continued medical insurance coverage in accordance
with the applicable provisions of state and federal law (commonly referred to as
“COBRA”), the Company shall pay the terminated Participant’s COBRA premiums for
the duration of such COBRA coverage, or for the period of years equal to the
Participant’s Severance Multiple, whichever is less.  If the terminated
Participant’s medical coverage immediately prior to the Date of Termination
included the terminated Participant’s dependents, the Company paid COBRA
premiums shall include the premiums necessary for such dependents as have
elected COBRA coverage.  Notwithstanding the above, in the event the terminated
Participant becomes covered under another employer’s group health plan (other
than a plan which imposes a preexisting condition exclusion unless the
preexisting condition exclusion does not apply) or otherwise ceases to be
eligible for COBRA during the period provided in this Section 3.4, the Company
shall cease payment of the COBRA premiums.

 

3.5                                                       Other Benefit Plans. 
A terminated Participant’s participation and rights in other benefit plans as
may be provided by the Participating Company Group at the time of his/her
Involuntary Termination shall be governed solely by the terms and conditions of
such plans, if any.

 

3.6                                                       Date and Notice of
Termination.  Any termination of a Participant’s employment by a Participating
Company or by such Participant during the Term shall be communicated by a notice
of termination to the other party hereto (the “Notice of Termination”).  The
Notice of Termination shall indicate the specific termination provision in this
Plan relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Participant’s
employment under the provision so indicated.  The date of a Participant’s
termination of employment with the Participating Company Group shall be
determined as follows:  (i) if employment is terminated by the Participating
Company Group in an Involuntary Termination, five (5) days after the date the
Notice of Termination is provided by the Participating Company Group, (ii) if
employment is terminated by the Participating Company Group for Cause, the later
of the date specified in the Notice of Termination or ten (10) days following
the date such notice is received by the Participant, and (iii) if the basis of a
Participant’s Involuntary Termination is such Participant’s resignation for Good
Reason, the Date of Termination shall be ten (10) days after the date such
Participant’s Notice of Termination is received by the Company.

 

3.7                                                       No Mitigation or
Offset.  A terminated Participant shall not be required to mitigate the amount
of any payment provided for in this Plan by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Plan be reduced (except as set forth in Section 3.4 above) by any compensation
earned by such a terminated Participant as the result of employment by another
employer or by retirement benefits paid by the Participating Company Group or
another employer after the Date of Termination or otherwise.

 

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3.8                                                       Withholding.  Amounts
paid to a Participant hereunder shall be subject to all applicable federal,
state and local withholding taxes.

 

3.9                                                       Waiver of Any Other
Participating Company Retention/Severance Agreement.  A terminated Participant
may elect, in his or her sole discretion, to waive each and every prior
retention and/or severance agreement entered into between a Participating
Company and such terminated Participant (the “Other Severance Benefits”) in
order to participate and receive the Severance Benefits provided under this
Plan.  Such waiver shall be in writing in such form as may reasonably be
specified by the Plan Administrator and shall be filed with the Company in
accordance with such rules and procedures as may be reasonably established by
the Plan Administrator.  The Participant may elect to waive the Other Severance
Benefits at any time prior to receiving a payment under such benefits.

 

3.10                                                Application of
Section 409A.  Notwithstanding any other provision of this Plan, to the extent
that (i) one or more of the payments or benefits received or to be received by a
Participant pursuant to this Plan would constitute deferred compensation subject
to the requirements of Code Section 409A, and (ii) the Participant is a
“specified employee” within the meaning of Code Section 409A, then such payment
or benefit (or portion thereof) will be delayed until the earliest date
following the Participant’s “separation from service” with the Participating
Company Group within the meaning of Code Section 409A on which the Company can
provide such payment or benefit to the Participant without the Participant’s
incurrence of any additional tax or interest pursuant to Code Section 409A, with
all remaining payments or benefits due thereafter occurring in accordance with
the original schedule.  In addition, this Plan and the payments and benefits to
be provided hereunder are intended to comply in all respects with the applicable
provisions of Code Section 409A.

 

Section 4.                                           Limitation on Payment of
Benefits.

 

4.1                                                       Parachute Payments. 
In the event that it is determined by the Accounting Firm that any amount
payable to a Participant under this Plan, alone or when aggregated with any
other amount payable or benefit provided to such Participant pursuant to any
other plan or arrangement of the Participating Company Group, would constitute
an “excess parachute payment” within the meaning of Section 280G of the Code,
then notwithstanding the other provisions of this Plan, the amounts payable will
not exceed the amount which produces the greatest after-tax benefit to the
Participant.  For purposes of the foregoing, the greatest after-tax benefit will
be determined within thirty (30) days of the occurrence of the event giving rise
to such payment to the Participant.  The Company shall request a determination
in writing by the Accounting Firm of whether the full amount of the payments to
the Participant, or a lesser amount, will result in the greatest after-tax
benefit to the Participant.  As soon as practicable thereafter, the Accounting
Firm shall determine and report to the Company and the Participant the amount of
such payments and benefits which would produce the greatest after-tax benefit to
the Participant.  For the purposes of such determination, the Accounting Firm
may rely on reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code.

 

The Company and the Participant shall furnish to the Accounting Firm such
information and documents as the Accounting Firm may reasonably request in order
to make their required determination.  The Company shall bear all fees and
expenses the Accounting Firm may reasonably charge in connection with its
services contemplated by this Section.  If a reduced amount of the payments will
give rise to the greatest after tax benefit, the reduction in the payments and
benefits shall occur in the following order unless the Participant elects in
writing a different order prior to the last day of the year preceding the date
on which the event that triggers the payment occurs:  (i) reduction of cash
payments; (ii) cancellation of accelerated vesting of equity awards other than
stock options; (iii) cancellation of accelerated vesting of stock options; and
(iv) reduction of other benefits paid to the Participant.  In the event that
acceleration of compensation from the Participant’s equity awards is to be
reduced, such acceleration of vesting shall be canceled in the reverse order of
the date of grant unless the Participant elects in writing a different order for
cancellation prior to the last day of the year preceding the date on which the
event that triggers the payment occurs.

 

4.2                                                       Non-Duplication of
Benefits.  Notwithstanding any other provision in the Plan to the contrary, the
benefits provided hereunder shall be in lieu of any other severance plan and/or
retention agreement benefits provided by any Participating Company and the
Severance Benefits and other benefits provided under this Plan shall be reduced
by any severance paid or provided to a Participant by a Participating Company
under any other plan or arrangement.

 

4.3                                                       Indebtedness of
Participant.  If a Participant is indebted to the Participating Company Group at
his or her Date of Termination, the Company reserves the right to offset any
benefits under this Plan by the amount of such indebtedness.

 

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Section 5.                                           Plan Administration,
Amendment and Termination.

 

5.1                                                       Administration of the
Plan.  The Plan shall be administered by the Plan Administrator.

 

5.2                                                       Composition of Plan
Administrator.

 

(a)                                 Prior to the Change of Control Date, the
“Plan Administrator” shall be the Compensation Committee of the Board.

 

(b)                                 After the Change of Control Date, except as
otherwise provided in Section 5.2(c) below, the “Plan Administrator” shall be
composed of those individuals at the Company who held the titles of Chief
Executive Officer and Chief Financial Officer, or titles functionally equivalent
thereto immediately prior to the Change of Control Date, regardless of whether
such members’ job titles have changed or they have left the Company.  The
designation of an individual as holding such title or position shall constitute
automatic appointment to the Plan Administrator.  The members of the Plan
Administrator may appoint additional members to the Plan Administrator

 

(c)                                  After the Change of Control Date, in the
event that a member of the Plan Administrator is unwilling or unable to continue
to serve as a member of the Plan Administrator, the members of the Plan
Administrator shall, by majority vote, elect sufficient additional members, so
that they replace all departing members or at least have a minimum of two
members.  Such additional members should be persons who were employed by the
Company prior to the Change of Control to the extent reasonably possible.

 

5.3                                                       The members of the
Plan Administrator shall not receive compensation for their services on the Plan
Administrator.  The Participating Company Group shall indemnify and hold
harmless members of the Plan Administrator from and against all liabilities,
claims, demands and costs, including reasonable attorneys’ fees and expenses of
legal proceedings, incurred by the members of the Plan Administrator which arise
as a result of membership on the Plan Administrator.

 

5.4                                                       Powers and
Responsibilities.  The Plan Administrator shall have all powers necessary to
enable it properly to carry out its duties with respect to the complete control
of the administration of the Plan.

 

Not in limitation, but in amplification of the foregoing, the Plan Administrator
shall have the power and authority in its discretion to:

 

(a)                                 Determine which employees of the
Participating Company Group shall participate under the Plan and their level of
participation;

 

(b)                                 Construe the Plan to determine all questions
that shall arise as to interpretations of the Plan’s provisions, including
determination of which individuals are eligible for Severance Benefits, the
amount of Severance Benefits to which any employee may be entitled, and all
other matters pertaining to the Plan;

 

(c)                                  Adopt amendments to the Plan document which
are deemed necessary or desirable bring these documents into compliance with all
applicable laws and regulations, including but not limited to Code Section 409A
and the guidance thereunder; and

 

(d)                                 Establish procedures for determining who the
members of the Plan Administrator shall be after a Change of Control and/or for
electing additional members of the Plan Administrator pursuant to Section 5.2.

 

5.5                                                       Decisions of the Plan
Administrator.  Decisions of the Plan Administrator made in good faith upon any
matter within the scope of its authority shall be final, conclusive and binding
upon all persons, including Participants and their legal representatives.  Any
discretion granted to the Plan Administrator shall be exercised in accordance
with such rules and policies as may be established by the Plan Administrator
from time to time.

 

5.6                                                       Plan Amendment.  The
Plan Administrator may amend or terminate the Plan and the benefits provided
hereunder at any time prior to the Change in Control Date.  After the Change in
Control Date, the Plan may not be amended or terminated, without the prior
written consent of each Participant, with respect to that Participant’s
participation under the Plan.

 

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5.7                                                       Plan Termination. 
This Plan shall commence on the Effective Date and continue for five (5) years
after the Effective Date.  This Plan shall automatically renew for successive
one (1) year periods thereafter unless terminated by the Company upon twelve
(12) months’ prior written notice; provided, however, that if a Change of
Control shall have occurred prior to the end of a renewal period, the Plan shall
terminate following the later of the date which is at least twenty-four
(24) months after the occurrence of a Change of Control or the payment of all
Severance Benefits due under the Plan.

 

Section 6.                                           Claims for Benefits.  Any
person who believes he or she is entitled to benefits under this Plan may submit
a claim for benefits.  The claim must be in writing and should state the
claimant’s reasons for claiming these benefits.  The claims should be sent to
the Plan Administrator.  If the claim is denied, in whole or in part, written
notice of the denial will be provided within ninety (90) days of initial receipt
of the claim.  Such notice will include an explanation of the factors on which
the denial is based and what, if any, additional information is needed to
support the claim.  Further review of the claim may be obtained by filing a
written request for review.  An individual whose claim for benefits is denied
may file a request for review with the Plan Administrator within sixty
(60) days.  After receiving a request for review, the Plan Administrator will
render a final decision within sixty (60) days, unless circumstances require an
extension of an additional sixty (60) days for the review.  In this case, the
Plan Administrator will notify the claimant in writing of the need for an
extension.  The Plan Administrator’s decision will be in writing, setting forth
the specific reasons for the decision, as well as specific references to the
Plan provisions upon which the decision is based.

 

Section 7.                                           Legal Fees and Expenses. 
The Company shall pay or reimburse a Participant for all costs and expenses
(including, without limitation, court costs and reasonable legal fees and
expenses which reflect common practice with respect to the matters involved)
incurred by such Participant as a result of any bona fide claim, action or
proceeding (a) contesting, disputing or enforcing any right, benefits or
obligations under this Plan or (b) arising out of or challenging the validity,
advisability or enforceability of this Plan or any provision thereof.  The
payments or reimbursements provided for herein shall be paid by the
Participating Company Group promptly (but in no event more than five
(5) business days) following receipt of a written request for payment or
reimbursement, as the case may be.  It is intended that each installment of
payments under this Section 7 is a separate “payment” for purposes of
Section 409A.

 

For the avoidance of doubt, it is intended that the payments under this
Section 7 satisfy, to the greatest extent possible, the exemptions from the
application of Code Section 409A provided under Treasury Regulation
1.409A-1(b)(11).

 

Section 8.                                           Miscellaneous.

 

8.1                                                       No Contract of
Employment.  Nothing in this Plan shall be construed as giving any Participant
any right to be retained in the employ of the Participating Company Group or
shall affect the terms and conditions of a Participant’s employment with the
Participating Company Group prior to the commencement of the Term.

 

8.2                                                       ERISA Plan.  This Plan
is intended to be (a) an employee welfare plan as defined in Section 3(1) of
ERISA and (b) a “top-hat” plan maintained for the benefit of a select group of
management or highly compensated employees of the Participating Company Group.

 

8.3                                                       Source of Payments. 
All payments provided under this Plan, other than payments made pursuant to any
other Participating Company Group employee benefit plan which provides
otherwise, shall be paid in cash from the general funds of the Participating
Company Group, and no special or separate fund shall be established, and no
other segregation of assets made, to assure payment.  To the extent that any
person acquires a right to receive payments from the Participating Company Group
hereunder, such right shall be no greater than the right of an unsecured
creditor of the Participating Company Group.

 

8.4                                                       Notice.  For the
purpose of this Plan, notices and all other communications provided for in this
Plan shall be in writing and shall be deemed to have been duly given when
delivered or mailed by overnight courier or United States registered mail,
return receipt requested, postage prepaid, addressed to the Plan Administrator,
CombiMatrix Corporation, 310 Goddard, Suite 150, Irvine, CA 92618, with a copy
to the Chief Financial Officer of the Company, or to a Participant at the
address set forth in the Participating Company Group’s payroll records or to
such other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.

 

8.5                                                       Nonalienation of
Benefits.  No benefit under the Plan may be assigned, transferred, pledged as
security for indebtedness or otherwise encumbered by any Participant or subject
to any legal process for the payment of any claim against a Participant.

 

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8.6                                                       Validity.  The
invalidity or unenforceability of any provision of this Plan shall not affect
the validity or enforceability of any other provision of this Plan, which shall
remain in full force and effect.

 

8.7                                                       Headings.  The
headings contained in this Plan are intended solely for convenience of reference
and shall not affect the rights of the parties to this Plan.

 

8.8                                                       Governing Law.  This
Plan shall be governed by and construed in accordance with the laws of the State
of California to the extent such laws are not preempted by ERISA.

 

Section 9.                                           Successors; Binding
Agreement.

 

9.1                                                       Assumption by
Successor.  The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of the Company expressly to assume and to agree to
perform the obligations under this Plan in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place; provided, however, that no such assumption shall relieve the
Company of its obligations hereunder.  As used in this Section 9, the “Company”
shall include the Company as defined in Section 1.9 and any successor to its
business and/or assets which assumes and agrees to perform the obligations
arising under this Plan by operation of law or otherwise.

 

9.2                                                       Enforceability;
Beneficiaries.  This Plan shall be binding upon and inure to the benefit of each
Participant (and such Participant’s personal representatives and heirs) and the
Company and any organization which succeeds to substantially all of the business
or assets of the Company, whether by means of merger, consolidation, acquisition
of all or substantially all of the assets of the Company or otherwise,
including, without limitation, as a result of a Change of Control or by
operation of law.

 

This Plan shall inure to the benefit of and be enforceable by each Participant’
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.  If a Participant should die while any
amount would still be payable hereunder if such Participant had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Plan to such Participant’s devisee, legatee or
other designee or, if there is no such designee, to such Participant’s estate.

 

Section 10.                                    Release of Claims.  As a
condition to the receipt of Severance Benefits, each Participant must execute
and allow to become effective a release of claims in a form satisfactory to the
Plan Administrator , with such execution occurring not prior to the Date of
Termination and not later than 45 days after the Participant’s receipt thereof. 
The date on which such release becomes effective is the “Release Effective
Date”.  No Severance Benefits shall be paid to a Participant under this Plan
prior to the Release Effective Date.  The form of release shall not cause the
Participant to waive or release any claims or rights a Participant may have to
be indemnified by the Company under applicable law or the terms of any
then-effective indemnification agreement or obligation.  The form of the release
shall follow the example attached as Exhibits A and B, updated as necessary for
any changes in the law.

 

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EXHIBIT

 

A RELEASE AGREEMENT
(For Employees Age 40 or Older)

 

I understand and agree completely to the terms set forth in the CombiMatrix
Corporation Restated Executive Change of Control Severance Plan (the “Plan”). 
Certain capitalized terms used in this Release Agreement are defined in the
Plan.

 

I hereby confirm my obligations under the Company’s proprietary information and
inventions agreement.

 

[I acknowledge that I have read and understand Section 1542 of the California
Civil Code which reads as follows:  “A general release does not extend to claims
which the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his
settlement with the debtor.”  I hereby expressly waive and relinquish all rights
and benefits under that section and any law of any jurisdiction of similar
effect with respect to my release of any claims I may have against the Company.]

 

In exchange for the benefits I am receiving under the Plan to which I am
otherwise not entitled, I hereby generally and completely release the Company
and its directors, officers, employees, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns from any and all claims, liabilities and obligations,
both known and unknown, that arise out of or are in any way related to events,
acts, conduct, or omissions occurring prior to my signing this Agreement.  This
general release includes, but is not limited to:  (1) all claims arising out of
or in any way related to my employment with the Company or the termination of
that employment; (2) all claims related to my compensation or benefits from the
Company, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company; (3) all claims for breach of contract,
wrongful termination, and breach of the implied covenant of good faith and fair
dealing; (4) all tort claims, including claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) all federal,
state, and local statutory claims, including claims for discrimination,
harassment, retaliation, attorneys’ fees, or other claims arising under the
federal Civil Rights Act of 1964 (as amended), the federal Americans with
Disabilities Act of 1990, the federal Age Discrimination in Employment Act of
1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act
(as amended).  This release shall not include any indemnification obligations
the Company may have to me.

 

I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under ADEA.  I also acknowledge that the consideration given
under the Plan for the waiver and release in the preceding paragraph hereof is
in addition to anything of value to which I was already entitled.  I further
acknowledge that I have been advised by this writing, as required by the ADEA,
that:  (A) my waiver and release do not apply to any rights or claims that may
arise on or after the date I execute this Release Agreement; (B) I have the
right to consult with an attorney prior to executing this Release Agreement;
(C) I have twenty-one (21) days to consider this Release Agreement (although I
may choose to voluntarily execute it earlier); (D) I have seven (7) days
following my execution of this Release Agreement to revoke it; and (E) this
Release Agreement shall not be effective until the date upon which the
revocation period has expired, which shall be the eighth (8th) day after I
execute this Release Agreement.

 

 

 

EMPLOYEE

 

 

 

 

 

Name:

 

 

 

 

 

Date:

 

 

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EXHIBIT B

 

RELEASE AGREEMENT
(For Employees Under Age 40)

 

I understand and agree completely to the terms set forth in the CombiMatrix
Corporation Restated Executive Change of Control Severance Plan (the “Plan”). 
Certain capitalized terms used in this Release Agreement are defined in the
Plan.

 

I hereby confirm my obligations under the Company’s proprietary information and
inventions agreement.

 

[I acknowledge that I have read and understand Section 1542 of the California
Civil Code which reads as follows:  “A general release does not extend to claims
which the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his
settlement with the debtor.”  I hereby expressly waive and relinquish all rights
and benefits under that section and any law of any jurisdiction of similar
effect with respect to my release of any claims I may have against the Company.]

 

In exchange for the benefits I am receiving under the Plan to which I am
otherwise not entitled, I hereby generally and completely release the Company
and its directors, officers, employees, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns from any and all claims, liabilities and obligations,
both known and unknown, that arise out of or are in any way related to events,
acts, conduct, or omissions occurring prior to my signing this Agreement.  This
general release includes, but is not limited to:  (1) all claims arising out of
or in any way related to my employment with the Company or the termination of
that employment; (2) all claims related to my compensation or benefits from the
Company, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company; (3) all claims for breach of contract,
wrongful termination, and breach of the implied covenant of good faith and fair
dealing; (4) all tort claims, including claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) all federal,
state, and local statutory claims, including claims for discrimination,
harassment, retaliation, attorneys’ fees, or other claims arising under the
federal Civil Rights Act of 1964 (as amended), the federal Americans with
Disabilities Act of 1990, and the California Fair Employment and Housing Act (as
amended).  This release shall not include any indemnification obligations the
Company may have to me.

 

I understand that I have seven (7) days to consider this Release Agreement
(although I may voluntarily execute it earlier).

 

 

 

EMPLOYEE

 

 

 

 

 

Name:

 

 

 

 

 

Date:

 

 

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