EXHIBIT 10.8

 

2011 EXECUTIVE PERFORMANCE BONUS PLAN

 

Purpose

 

Pursuant to the authority granted under Section VIII.B of Article Five of the
CombiMatrix Corporation 2006 Stock Incentive Plan (the “2006 Plan”), the
Compensation Committee (the “Committee”) of CombiMatrix Corporation (the
“Company” or “our”) has adopted this 2011 Executive Performance Bonus Plan (the
“Plan”) effective as of February 23, 2011.  The purpose of this Plan is to
motivate executives to achieve the Company’s objectives and to minimize turnover
for participants.  The Plan is intended to permit the payment of bonuses that
qualify as performance-based compensation under Internal Revenue Code
Section 162(m).

 

Structure

 

The performance bonus shall be tied exclusively to the achievement of our 2011
net revenue target as determined by the Committee.  The bonus at this level of
achievement will be 20% of the participant’s salary. The following table shows
the target bonus as a percentage of the participant’s salary, based on the
achievement of our 2011 revenue target.  The range is between 90% - 200% of the
2011 target.  Anything below 90% will not qualify for bonus payout; anything
above 200% will be paid out at that level.

 

% of

 

 

 

Budgeted

 

% of Salary

 

Revenue

 

Paid in

 

Achieved

 

Bonus

 

 

 

 

 

90

%

10

%

 

 

 

 

100

%

20

%

 

 

 

 

110

%

28

%

 

 

 

 

130

%

40

%

 

 

 

 

150

%

50

%

 

 

 

 

200

%

80

%

 

There shall be no pro rata increase in bonus payout between the 90% and 100%
target level achieved, but the bonus payments will be computed on a pro rata
basis between 101% and 200% of the target achieved.  The potential bonus payout
shall be capped at the 200% target evil.

 

Eligible Executives

 

The following four executives of the Company are eligible under the Plan:

 

Judd Jessup

CEO

 

Dan Forche

Sr. VP Sales and Marketing

Scott Burell

CFO

 

Lony Lim

VP Operations

 

1

--------------------------------------------------------------------------------

 

Payments

 

In order to receive a bonus, the participant must be employed by CombiMatrix or
CombiMatrix Diagnostics at the time bonuses are distributed.  Bonus distribution
will occur once the Company’s auditors have completed their annual audit and the
2011 net revenues are known.  The following schedule provides an example of what
the payouts would be based on the Company achieving 100% of the 2011 revenue
target:

 

 

 

% of
Budgeted

 

Bonus Payout
(20% of Salary)

 

Participant

 

Revenue
Achieved

 

Cash

 

Stock
Options

 

 

 

 

 

 

 

 

 

R. Judd Jessup

 

100

%

$

42,000

 

40,000

(1)

 

 

 

 

 

 

 

 

Scott R. Burell

 

100

%

$

20,000

 

19,048

(1)

 

 

 

 

 

 

 

 

Daniel R. Forche

 

100

%

$

22,800

 

21,714

(1)

 

 

 

 

 

 

 

 

Lony Lim

 

100

%

$

17,500

 

16,667

(1)

 

In the event the Company achieved 200% of the revenue target or above, the
maximum potential payouts would be:

 

 

 

% of
Budgeted

 

Bonus Payout
(80% of Salary)

 

Participant

 

Revenue
Achieved

 

Cash

 

Stock
Options

 

 

 

 

 

 

 

 

 

R. Judd Jessup

 

200

%

$

168,000

 

160,000

(1)

 

 

 

 

 

 

 

 

Scott R. Burell

 

200

%

$

80,000

 

76,190

(1)

 

 

 

 

 

 

 

 

Daniel R. Forche

 

200

%

$

91,200

 

86,857

(1)

 

 

 

 

 

 

 

 

Lony Lim

 

200

%

$

70,000

 

66,667

(1)

 

--------------------------------------------------------------------------------

(1)     Amount of stock options calculated is based on the Black-Sholes model,
assuming an exercise price of $2.28 (the closing price on February 23, 2011) an
option valuation of $1.05 per option and an assumed term of 4 years. 
Measurement of whether the 2011 revenue target is achieved will be when the
Company’s auditors sign-off on revenues during their audit of our 2011 financial
statements, which is expected to be sometime in February of 2012.  Assuming the
target is achieved, one-third of the award will become vested; one-third will
vest on the second anniversary date of the award (i.e., February 23, 2013) and
the final one-third on the third anniversary of the award (i.e., February 23,
2014).

 

2

--------------------------------------------------------------------------------