EXHIBIT 10.1

 

MARK MCDONOUGH COMPENSATION ARRANGEMENT

 

On March 29, 2013, the Compensation Committee of CombiMatrix Corporation (the
“Company”) approved a new compensation arrangement for Mark McDonough in
connection with his new role as the Company’s President and Chief Executive
Officer.

 

Under the new compensation arrangement, Mr. McDonough’s will receive an annual
base salary of $260,000, less all applicable withholding taxes and payable in
accordance with the Company’s standard payroll practices and policies. 
Mr. McDonough also will be entitled to receive a one-time cash bonus payment of
$10,000 when and if the Company achieves “break-even” for one fiscal quarter
within eighteen months following March 29, 2013 (the “Effective Date”), as
measured by the consolidated earnings of the Company and any subsidiaries of the
Company prior to any reduction in respect of interest, taxes, depreciation and
amortization determined in accordance with GAAP by the Company’s independent
accountants (“Break-Even EBITDA”), less all applicable withholding taxes and
payable in accordance with the Company’s standard payroll practices and
policies, which bonus will be paid to Mr. McDonough within 30 days after the end
of the fiscal quarter in which the Company achieves such Break-Even EBITDA,
provided that Mr. McDonough shall have been providing continuous service to the
Company through the end of such fiscal quarter.  Mr. McDonough will maintain the
2013 performance-based cash bonus plan (related to Company revenues) from his
previous compensation package as Chief Commercial Officer.

 

In addition, on the Effective Date, Mr. McDonough was granted an incentive stock
option under the Company’s 2006 Stock Incentive Plan (the “Plan”) to purchase up
to 73,450 shares of the Company’s Common Stock (the “Option”), with an exercise
price equal to the closing sales price of the Company’s Common Stock on the
Nasdaq Stock Market as of the Effective Date.  The Option has a maximum term of
10 years measured from the Effective Date, subject to earlier termination
pursuant to the provisions of the Plan and related agreements, and will vest in
four successive equal annual installments as Mr. McDonough completes each of
four years of continuous service measured from March 29, 2013.  The Option is
exercisable for vested shares only and is subject to all other terms and
conditions of the Plan.  Mr. McDonough also was granted, on the Effective Date,
a performance-based incentive stock option under the Plan to purchase up to
58,760 shares of the Company’s Common Stock (the “Performance Based Option”),
with an exercise price equal to the closing sales price of the Company’s Common
Stock on the Nasdaq Stock Market as of the Effective Date.  If this target is
not achieved within eighteen months following the Effective Date, the
Performance Based Option will expire.  The Performance Based Option has a
maximum term of 10 years measured from the Effective Date, subject to earlier
termination pursuant to the provisions of the Plan and related agreements, and
will vest in full when, and if, the Company achieves Break-Even EBITDA for one
fiscal quarter within eighteen months following the Effective Date.  The
Performance Based Option is exercisable for vested shares only and is subject to
all other terms and conditions of the Plan.  Mr. McDonough also will maintain
the relocation reimbursement and healthcare plan from his previous compensation
package as Chief Commercial Officer and this relocation offer will remain in
effect for two years from the Effective Date, provided that he continues to
provide service to the Company during such time.

 

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