Exhibit 10.1

COMBINATORX, INCORPORATED
AMENDED AND RESTATED
2004 INCENTIVE PLAN

1.             DEFINED TERMS

Exhibit A, which is incorporated by reference, defines the terms used in the
Plan and sets forth certain operational rules related to those terms.

2.             PURPOSE

The Plan has been established to advance the interests of the Company by
providing for the grant to Participants of Stock-based and other incentive
Awards.

3.             ADMINISTRATION

THE ADMINISTRATOR HAS DISCRETIONARY AUTHORITY, SUBJECT ONLY TO THE EXPRESS
PROVISIONS OF THE PLAN, TO INTERPRET THE PLAN; DETERMINE ELIGIBILITY FOR AND
GRANT AWARDS; DETERMINE, MODIFY OR WAIVE THE TERMS AND CONDITIONS OF ANY AWARD;
PRESCRIBE FORMS, RULES AND PROCEDURES; AND OTHERWISE DO ALL THINGS NECESSARY TO
CARRY OUT THE PURPOSES OF THE PLAN. IN THE CASE OF ANY AWARD THAT IS INTENDED TO
BE ELIGIBLE FOR THE PERFORMANCE-BASED COMPENSATION EXCEPTION UNDER
SECTION 162(M), THE ADMINISTRATOR WILL EXERCISE ITS DISCRETION CONSISTENT WITH
QUALIFYING THE AWARD FOR THAT EXCEPTION. DETERMINATIONS OF THE ADMINISTRATOR
MADE UNDER THE PLAN WILL BE CONCLUSIVE AND WILL BIND ALL PARTIES.

4.             LIMITS ON AWARDS UNDER THE PLAN

(A)           NUMBER OF SHARES. THE MAXIMUM NUMBER OF SHARES OF STOCK OF THE
COMPANY THAT MAY BE DELIVERED IN SATISFACTION OF AWARDS GRANTED UNDER THE PLAN
SHALL BE: (I) 2,000,000, PLUS (II) THE NUMBER OF UNUSED PRIOR PLAN SHARES OF
STOCK, PLUS (III) AS OF THE FIRST DAY OF EACH OF FISCAL 2007 THROUGH 2011,
INCLUSIVE, AN ADDITIONAL NUMBER OF SHARES EQUAL TO THE LEAST OF (X) 2,000,000
SHARES OF STOCK, (Y) 4% OF THE NUMBER OF THEN OUTSTANDING SHARES OF STOCK, AND
(Z) SUCH LESSER NUMBER AS DETERMINED BY THE ADMINISTRATOR. NOTWITHSTANDING THE
PRECEDING SENTENCE, NO MORE THAN 10,000,000 SHARES OF STOCK MAY BE DELIVERED IN
SATISFACTION OF ISOS AWARDED UNDER THE PLAN. FOR PURPOSES OF THIS SECTION 4(A),
SHARES OF STOCK SHALL BE TREATED AS UNUSED PRIOR PLAN SHARES (I) IF THEY WERE
AVAILABLE FOR ISSUANCE UNDER THE PRIOR PLAN ON THE EFFECTIVE DATE (INCLUDING,
WITHOUT LIMITATION, SHARES OF STOCK UNDERLYING AWARDS OUTSTANDING UNDER THE
PRIOR PLAN ON THE EFFECTIVE DATE TO THE EXTENT THAT SUCH SHARES HAD NOT BEEN
DELIVERED PRIOR TO THE EFFECTIVE DATE), (II) IF THEY WERE SUBJECT TO AWARDS
UNDER THE PRIOR PLAN, OTHER THAN RESTRICTED STOCK AWARDS, THAT WERE OUTSTANDING
ON THE DAY PRECEDING THE EFFECTIVE DATE TO THE EXTENT SUCH PRIOR PLAN AWARDS ARE
EXERCISED OR ARE SATISFIED, OR TERMINATE OR EXPIRE, ON OR AFTER THE EFFECTIVE
DATE WITHOUT THE DELIVERY OF SUCH SHARES, OR (III) IF THEY WERE OUTSTANDING ON
THE DAY PRECEDING THE EFFECTIVE DATE AS RESTRICTED STOCK AWARDS UNDER THE PRIOR
PLAN AND ARE THEREAFTER FORFEITED. THE NUMBER OF SHARES OF STOCK DELIVERED IN
SATISFACTION OF AWARDS SHALL, FOR PURPOSES OF THE FIRST SENTENCE OF THIS
SECTION 4(A), BE DETERMINED NET OF SHARES OF STOCK (A) WITHHELD BY THE COMPANY
IN PAYMENT OF THE EXERCISE PRICE OF THE AWARD OR IN SATISFACTION OF TAX
WITHHOLDING REQUIREMENTS WITH RESPECT TO THE AWARD, OR (B) AWARDED UNDER THE
PLAN AS RESTRICTED STOCK BUT

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THEREAFTER FORFEITED, OR (C) MADE SUBJECT TO AN AWARD THAT IS EXERCISED OR
SATISFIED, OR THAT TERMINATES OR EXPIRES, WITHOUT THE DELIVERY OF SUCH SHARES.
THE LIMIT SET FORTH IN THIS SECTION 4(A) SHALL BE CONSTRUED TO COMPLY WITH
SECTION 422 OF THE CODE AND REGULATIONS THEREUNDER. TO THE EXTENT CONSISTENT
WITH THE REQUIREMENTS OF SECTION 422 OF THE CODE AND REGULATIONS THEREUNDER, AND
WITH OTHER APPLICABLE LEGAL REQUIREMENTS (INCLUDING APPLICABLE STOCK EXCHANGE OR
SIMILAR REQUIREMENTS), STOCK ISSUED UNDER AWARDS OF AN ACQUIRED COMPANY THAT ARE
CONVERTED, REPLACED, OR ADJUSTED IN CONNECTION WITH THE ACQUISITION SHALL NOT
REDUCE THE NUMBER OF SHARES AVAILABLE FOR AWARDS UNDER THE PLAN.

(B)           TYPE OF SHARES. STOCK DELIVERED BY THE COMPANY UNDER THE PLAN MAY
BE AUTHORIZED BUT UNISSUED STOCK OR PREVIOUSLY ISSUED STOCK ACQUIRED BY THE
COMPANY. NO FRACTIONAL SHARES OF STOCK WILL BE DELIVERED UNDER THE PLAN.

(C)           ADDITIONAL LIMITS. THE MAXIMUM NUMBER OF SHARES OF STOCK FOR WHICH
STOCK OPTIONS MAY BE GRANTED TO ANY PERSON IN ANY CALENDAR YEAR AND THE MAXIMUM
NUMBER OF SHARES OF STOCK SUBJECT TO SARS GRANTED TO ANY PERSON IN ANY CALENDAR
YEAR WILL EACH BE 1,657,142. THE MAXIMUM NUMBER OF SHARES OF STOCK SUBJECT TO
OTHER AWARDS GRANTED TO ANY PERSON IN ANY CALENDAR YEAR WILL BE 1,657,142
SHARES. THE MAXIMUM AMOUNT PAYABLE TO ANY PERSON IN ANY YEAR UNDER CASH AWARDS
WILL BE $5,000,000. THE FOREGOING PROVISIONS WILL BE CONSTRUED IN A MANNER
CONSISTENT WITH SECTION 162(M).

5.             ELIGIBILITY AND PARTICIPATION

THE ADMINISTRATOR WILL SELECT PARTICIPANTS FROM AMONG THOSE KEY EMPLOYEES AND
DIRECTORS OF, AND CONSULTANTS AND ADVISORS TO, THE COMPANY OR ITS AFFILIATES
WHO, IN THE OPINION OF THE ADMINISTRATOR, ARE IN A POSITION TO MAKE A
SIGNIFICANT CONTRIBUTION TO THE SUCCESS OF THE COMPANY AND ITS AFFILIATES.
ELIGIBILITY FOR ISOS IS LIMITED TO EMPLOYEES OF THE COMPANY OR OF A “PARENT
CORPORATION” OR “SUBSIDIARY CORPORATION” OF THE COMPANY AS THOSE TERMS ARE
DEFINED IN SECTION 424 OF THE CODE.

6.             RULES APPLICABLE TO AWARDS

(A)           ALL AWARDS

(1)  AWARD PROVISIONS. THE ADMINISTRATOR WILL DETERMINE THE TERMS OF ALL AWARDS,
SUBJECT TO THE LIMITATIONS PROVIDED HEREIN. BY ACCEPTING ANY AWARD GRANTED
HEREUNDER, THE PARTICIPANT AGREES TO THE TERMS OF THE AWARD AND THE PLAN.
NOTWITHSTANDING ANY PROVISION OF THIS PLAN TO THE CONTRARY, AWARDS OF AN
ACQUIRED COMPANY THAT ARE CONVERTED, REPLACED OR ADJUSTED IN CONNECTION WITH THE
ACQUISITION MAY CONTAIN TERMS AND CONDITIONS THAT ARE INCONSISTENT WITH THE
TERMS AND CONDITIONS SPECIFIED HEREIN AS DETERMINED BY THE ADMINISTRATOR.

(2)  TERM OF PLAN. NO AWARDS MAY BE MADE AFTER MAY 30, 2016, BUT PREVIOUSLY
GRANTED AWARDS MAY CONTINUE BEYOND THAT DATE IN ACCORDANCE WITH THEIR TERMS.

(3)  TRANSFERABILITY. NEITHER ISOS NOR, EXCEPT AS THE ADMINISTRATOR OTHERWISE
EXPRESSLY PROVIDES, OTHER AWARDS MAY BE TRANSFERRED OTHER THAN BY WILL OR BY THE
LAWS OF DESCENT AND DISTRIBUTION, AND DURING A PARTICIPANT’S LIFETIME ISOS (AND,
EXCEPT

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AS THE ADMINISTRATOR OTHERWISE EXPRESSLY PROVIDES, OTHER NON-TRANSFERABLE AWARDS
REQUIRING EXERCISE) MAY BE EXERCISED ONLY BY THE PARTICIPANT.

(4)  VESTING, ETC.  THE ADMINISTRATOR MAY DETERMINE THE TIME OR TIMES AT WHICH
AN AWARD WILL VEST OR BECOME EXERCISABLE AND THE TERMS ON WHICH AN AWARD
REQUIRING EXERCISE WILL REMAIN EXERCISABLE. WITHOUT LIMITING THE FOREGOING, THE
ADMINISTRATOR MAY AT ANY TIME ACCELERATE THE VESTING OR EXERCISABILITY OF AN
AWARD, REGARDLESS OF ANY ADVERSE OR POTENTIALLY ADVERSE TAX CONSEQUENCES
RESULTING FROM SUCH ACCELERATION. UNLESS THE ADMINISTRATOR EXPRESSLY PROVIDES
OTHERWISE, IMMEDIATELY UPON THE CESSATION OF THE PARTICIPANT’S EMPLOYMENT AN
AWARD REQUIRING EXERCISE WILL CEASE TO BE EXERCISABLE AND WILL TERMINATE, AND
ALL OTHER AWARDS TO THE EXTENT NOT ALREADY VESTED WILL BE FORFEITED, EXCEPT
THAT:

(A)  SUBJECT TO (B) AND (C) BELOW, ALL STOCK OPTIONS AND SARS HELD BY THE
PARTICIPANT OR THE PARTICIPANT’S PERMITTED TRANSFEREE, IF ANY, IMMEDIATELY PRIOR
TO THE CESSATION OF THE PARTICIPANT’S EMPLOYMENT, TO THE EXTENT THEN
EXERCISABLE, WILL REMAIN EXERCISABLE FOR THE LESSER OF (I) A PERIOD OF THREE
MONTHS OR (II) THE PERIOD ENDING ON THE LATEST DATE ON WHICH SUCH STOCK OPTION
OR SAR COULD HAVE BEEN EXERCISED WITHOUT REGARD TO THIS SECTION 6(A)(4), AND
WILL THEREUPON TERMINATE;

(B)  ALL STOCK OPTIONS AND SARS HELD BY A PARTICIPANT OR THE PARTICIPANT’S
PERMITTED TRANSFEREE, IF ANY, IMMEDIATELY PRIOR TO THE PARTICIPANT’S DEATH, TO
THE EXTENT THEN EXERCISABLE, WILL REMAIN EXERCISABLE FOR THE LESSER OF (I) THE
ONE YEAR PERIOD ENDING WITH THE FIRST ANNIVERSARY OF THE PARTICIPANT’S DEATH OR
(II) THE PERIOD ENDING ON THE LATEST DATE ON WHICH SUCH STOCK OPTION OR SAR
COULD HAVE BEEN EXERCISED WITHOUT REGARD TO THIS SECTION 6(A)(4), AND WILL
THEREUPON TERMINATE; AND

(C)  ALL STOCK OPTIONS AND SARS HELD BY A PARTICIPANT OR THE PARTICIPANT’S
PERMITTED TRANSFEREE, IF ANY, IMMEDIATELY PRIOR TO THE CESSATION OF THE
PARTICIPANT’S EMPLOYMENT WILL IMMEDIATELY TERMINATE UPON SUCH CESSATION IF THE
ADMINISTRATOR IN ITS SOLE DISCRETION DETERMINES THAT SUCH CESSATION OF
EMPLOYMENT HAS RESULTED FOR REASONS WHICH CAST SUCH DISCREDIT ON THE PARTICIPANT
AS TO JUSTIFY IMMEDIATE TERMINATION OF THE AWARD.

(5)  TAXES. THE ADMINISTRATOR WILL MAKE SUCH PROVISION FOR THE WITHHOLDING OF
TAXES AS IT DEEMS NECESSARY. THE ADMINISTRATOR MAY, BUT NEED NOT, HOLD BACK
SHARES OF STOCK FROM AN AWARD OR PERMIT A PARTICIPANT TO TENDER PREVIOUSLY OWNED
SHARES OF STOCK IN SATISFACTION OF TAX WITHHOLDING REQUIREMENTS (BUT NOT IN
EXCESS OF THE MINIMUM WITHHOLDING REQUIRED BY LAW).

(6)  DIVIDEND EQUIVALENTS, ETC. THE ADMINISTRATOR MAY PROVIDE FOR THE PAYMENT OF
AMOUNTS IN LIEU OF CASH DIVIDENDS OR OTHER CASH DISTRIBUTIONS WITH RESPECT TO
STOCK SUBJECT TO AN AWARD. ANY ENTITLEMENT TO DIVIDEND EQUIVALENTS OR SIMILAR
ENTITLEMENTS SHALL BE ESTABLISHED AND ADMINISTERED CONSISTENT EITHER WITH
EXEMPTION FROM, OR COMPLIANCE WITH, THE REQUIREMENTS OF SECTION 409A TO THE
EXTENT APPLICABLE.

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(7)  RIGHTS LIMITED. NOTHING IN THE PLAN WILL BE CONSTRUED AS GIVING ANY PERSON
THE RIGHT TO CONTINUED EMPLOYMENT OR SERVICE WITH THE COMPANY OR ITS AFFILIATES,
OR ANY RIGHTS AS A STOCKHOLDER EXCEPT AS TO SHARES OF STOCK ACTUALLY ISSUED
UNDER THE PLAN. THE LOSS OF EXISTING OR POTENTIAL PROFIT IN AWARDS WILL NOT
CONSTITUTE AN ELEMENT OF DAMAGES IN THE EVENT OF TERMINATION OF EMPLOYMENT FOR
ANY REASON, EVEN IF THE TERMINATION IS IN VIOLATION OF AN OBLIGATION OF THE
COMPANY OR AFFILIATE TO THE PARTICIPANT.

(8)  CERTAIN PERFORMANCE AWARDS. THIS SECTION 6(A)(8) APPLIES TO ANY PERFORMANCE
AWARD THAT IS INTENDED TO QUALIFY AS PERFORMANCE-BASED FOR THE PURPOSES OF
SECTION 162(M), OTHER THAN A STOCK OPTION OR SAR. IN THE CASE OF ANY PERFORMANCE
AWARD TO WHICH THIS SECTION 6(A)(8) APPLIES, THE PLAN AND SUCH AWARD WILL BE
CONSTRUED TO THE MAXIMUM EXTENT PERMITTED BY LAW IN A MANNER CONSISTENT WITH
QUALIFYING THE AWARD FOR SUCH EXCEPTION. WITH RESPECT TO SUCH PERFORMANCE
AWARDS, THE ADMINISTRATOR WILL PREESTABLISH, IN WRITING, ONE OR MORE SPECIFIC
PERFORMANCE CRITERIA NO LATER THAN 90 DAYS AFTER THE COMMENCEMENT OF THE PERIOD
OF SERVICE TO WHICH THE PERFORMANCE RELATES (OR AT SUCH EARLIER TIME AS IS
REQUIRED TO QUALIFY THE AWARD AS PERFORMANCE-BASED UNDER SECTION 162(M)). PRIOR
TO GRANT, VESTING OR PAYMENT OF THE PERFORMANCE AWARD, AS THE CASE MAY BE, THE
ADMINISTRATOR WILL CERTIFY WHETHER THE APPLICABLE PERFORMANCE CRITERIA HAVE BEEN
ATTAINED AND SUCH DETERMINATION WILL BE FINAL AND CONCLUSIVE.

(B)           AWARDS REQUIRING EXERCISE

(1)  TIME AND MANNER OF EXERCISE. UNLESS THE ADMINISTRATOR EXPRESSLY PROVIDES
OTHERWISE, AN AWARD REQUIRING EXERCISE BY THE HOLDER WILL NOT BE DEEMED TO HAVE
BEEN EXERCISED UNTIL THE ADMINISTRATOR RECEIVES A NOTICE OF EXERCISE (IN FORM
ACCEPTABLE TO THE ADMINISTRATOR) SIGNED BY THE APPROPRIATE PERSON AND
ACCOMPANIED BY ANY PAYMENT REQUIRED UNDER THE AWARD. IF THE AWARD IS EXERCISED
BY ANY PERSON OTHER THAN THE PARTICIPANT, THE ADMINISTRATOR MAY REQUIRE
SATISFACTORY EVIDENCE THAT THE PERSON EXERCISING THE AWARD HAS THE RIGHT TO DO
SO.

(2)  EXERCISE PRICE. THE ADMINISTRATOR WILL DETERMINE THE EXERCISE PRICE (OR THE
BASE VALUE FROM WHICH APPRECIATION IS TO BE MEASURED, IN THE CASE OF A SAR) OF
EACH AWARD REQUIRING EXERCISE. HOWEVER, THE EXERCISE PRICE OR BASE VALUE, AS THE
CASE MAY BE, MAY NOT BE LESS THAN THE FAIR MARKET VALUE OF THE STOCK SUBJECT TO
THE AWARD, DETERMINED AS OF THE DATE OF GRANT. FAIR MARKET VALUE SHALL BE
DETERMINED BY THE ADMINISTRATOR CONSISTENT WITH THE REQUIREMENTS OF SECTION 422,
WHERE APPLICABLE, AND SECTION 409A. NO SUCH AWARD, ONCE GRANTED, MAY BE REPRICED
OTHER THAN IN ACCORDANCE WITH THE APPLICABLE NASDAQ STOCKHOLDER APPROVAL
REQUIREMENTS.

(3)  PAYMENT OF EXERCISE PRICE. WHERE THE EXERCISE OF AN AWARD IS TO BE
ACCOMPANIED BY PAYMENT, THE ADMINISTRATOR MAY DETERMINE THE REQUIRED OR
PERMITTED FORMS OF PAYMENT, SUBJECT TO THE FOLLOWING:  ALL PAYMENTS WILL BE BY
CASH OR CHECK ACCEPTABLE TO THE ADMINISTRATOR, OR, IF SO PERMITTED BY THE
ADMINISTRATOR AND IF LEGALLY PERMISSIBLE, (I) THROUGH THE DELIVERY OF SHARES OF
STOCK THAT HAVE BEEN OUTSTANDING FOR AT LEAST SIX MONTHS (UNLESS THE
ADMINISTRATOR APPROVES A SHORTER PERIOD) AND THAT HAVE A FAIR MARKET VALUE EQUAL
TO THE EXERCISE PRICE, (II) BY DELIVERY TO THE COMPANY OF A PROMISSORY NOTE OF
THE PERSON EXERCISING THE AWARD, PAYABLE ON SUCH TERMS AS ARE SPECIFIED BY THE

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ADMINISTRATOR, (III) THROUGH A BROKER-ASSISTED EXERCISE PROGRAM ACCEPTABLE TO
THE ADMINISTRATOR, (IV) BY OTHER MEANS ACCEPTABLE TO THE ADMINISTRATOR, OR
(V) BY ANY COMBINATION OF THE FOREGOING PERMISSIBLE FORMS OF PAYMENT. THE
DELIVERY OF SHARES IN PAYMENT OF THE EXERCISE PRICE UNDER CLAUSE (A)(I) ABOVE
MAY BE ACCOMPLISHED EITHER BY ACTUAL DELIVERY OR BY CONSTRUCTIVE DELIVERY
THROUGH ATTESTATION OF OWNERSHIP, SUBJECT TO SUCH RULES AS THE ADMINISTRATOR MAY
PRESCRIBE.

(4)  SECTION 409A EXEMPTION. EXCEPT AS THE ADMINISTRATOR OTHERWISE DETERMINES,
NO AWARD REQUIRING EXERCISE SHALL HAVE DEFERRAL FEATURES, OR SHALL BE
ADMINISTERED IN A MANNER, THAT WOULD CAUSE SUCH AWARD TO FAIL TO QUALIFY FOR
EXEMPTION FROM SECTION 409A.

(C)           AWARDS NOT REQUIRING EXERCISE

Restricted Stock and Unrestricted Stock, whether delivered outright or under
Awards of Stock Units or other Awards that do not require exercise, may be made
in exchange for such lawful consideration, including services, as the
Administrator determines. Any Award resulting in a deferral of compensation
subject to Section 409A shall be construed to the maximum extent possible, as
determined by the Administrator, consistent with the requirements of
Section 409A.

7.             EFFECT OF CERTAIN TRANSACTIONS

(A)           MERGERS, ETC.

Except as otherwise provided in an Award, the following provisions shall apply
in the event of a Covered Transaction. In the event of a Covered Transaction in
which there is an acquiring or surviving entity, the Administrator may provide
for the assumption of some or all outstanding Awards, or for the grant of new
awards in substitution therefor, by the acquiror or survivor or an affiliate of
the acquiror or survivor, in each case on such terms and subject to such
conditions as the Administrator determines. In the event of a Covered
Transaction (whether or not there is an acquiring or surviving entity) where
there is no such assumption or substitution, each Stock Option, SAR and other
Award requiring exercise will become fully exercisable, and the delivery of
shares of Stock issuable under each outstanding Award of Stock Units (including
Restricted Stock Units) will be accelerated and such shares will be issued,
prior to the Covered Transaction, in each case on a basis that gives the holder
of the Award a reasonable opportunity, as determined by the Administrator,
following exercise of the Award or the issuance of the shares, as the case may
be, to participate as a stockholder in the Covered Transaction, and the Award
will terminate upon consummation of the Covered Transaction. Any shares of Stock
issued pursuant to the preceding sentence in satisfaction of an Award may, in
the discretion of the Administrator, contain such restrictions, if any, as the
Administrator deems appropriate to reflect any performance or other vesting
conditions to which the Award was subject. In the case of Restricted Stock, the
Administrator may require that any amounts delivered, exchanged or otherwise
paid in respect of such Stock in connection with the Covered Transaction be
placed in escrow or otherwise made subject to such restrictions as the
Administrator deems appropriate to carry out the intent of the Plan.

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(B)           CHANGES IN AND DISTRIBUTIONS WITH RESPECT TO THE STOCK

(1)  BASIC ADJUSTMENT PROVISIONS. IN THE EVENT OF A STOCK DIVIDEND, STOCK SPLIT
OR COMBINATION OF SHARES (INCLUDING A REVERSE STOCK SPLIT), RECAPITALIZATION OR
OTHER CHANGE IN THE COMPANY’S CAPITAL STRUCTURE, THE ADMINISTRATOR WILL MAKE
APPROPRIATE ADJUSTMENTS TO THE MAXIMUM NUMBER OF SHARES SPECIFIED IN
SECTION 4(A) THAT MAY BE DELIVERED UNDER THE PLAN, TO THE MAXIMUM NUMBER OF
SHARES SPECIFIED IN SECTION 4(A) THAT MAY BE ISSUED UPON THE EXERCISE OF ISOS,
AND TO THE MAXIMUM SHARE LIMITS DESCRIBED IN SECTION 4(C), AND WILL ALSO MAKE
APPROPRIATE ADJUSTMENTS TO THE NUMBER AND KIND OF SHARES OF STOCK OR SECURITIES
SUBJECT TO AWARDS THEN OUTSTANDING OR SUBSEQUENTLY GRANTED, ANY EXERCISE PRICES
RELATING TO AWARDS AND ANY OTHER PROVISION OF AWARDS AFFECTED BY SUCH CHANGE.

(2)  CERTAIN OTHER ADJUSTMENTS. THE ADMINISTRATOR MAY ALSO MAKE ADJUSTMENTS OF
THE TYPE DESCRIBED IN SECTION 7(B)(1) ABOVE TO TAKE INTO ACCOUNT DISTRIBUTIONS
TO STOCKHOLDERS OTHER THAN THOSE PROVIDED FOR IN SECTION 7(A) AND 7(B)(1), OR
ANY OTHER EVENT, IF THE ADMINISTRATOR DETERMINES THAT ADJUSTMENTS ARE
APPROPRIATE TO AVOID DISTORTION IN THE OPERATION OF THE PLAN AND TO PRESERVE THE
VALUE OF AWARDS MADE HEREUNDER, HAVING DUE REGARD FOR THE QUALIFICATION OF ISOS
UNDER SECTION 422, THE REQUIREMENTS OF SECTION 409A, AND THE PERFORMANCE-BASED
COMPENSATION RULES OF SECTION 162(M), WHERE APPLICABLE.

(3)  CONTINUING APPLICATION OF PLAN TERMS. REFERENCES IN THE PLAN TO SHARES OF
STOCK WILL BE CONSTRUED TO INCLUDE ANY STOCK OR SECURITIES RESULTING FROM AN
ADJUSTMENT PURSUANT TO THIS SECTION 7.

8.             LEGAL CONDITIONS ON DELIVERY OF STOCK

The Company will not be obligated to deliver any shares of Stock pursuant to the
Plan or to remove any restriction from shares of Stock previously delivered
under the Plan until: (i) the Company is satisfied that all legal matters in
connection with the issuance and delivery of such shares have been addressed and
resolved; (ii) if the outstanding Stock is at the time of delivery listed on any
stock exchange or national market system, the shares to be delivered have been
listed or authorized to be listed on such exchange or system upon official
notice of issuance; and (iii) all conditions of the Award have been satisfied or
waived. If the sale of Stock has not been registered under the Securities Act of
1933, as amended, the Company may require, as a condition to exercise of the
Award, such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such Act. The Company may require
that certificates evidencing Stock issued under the Plan bear an appropriate
legend reflecting any restriction on transfer applicable to such Stock, and the
Company may hold the certificates pending lapse of the applicable restrictions.

9.             AMENDMENT AND TERMINATION

The Administrator may at any time or times amend the Plan or any outstanding
Award for any purpose which may at the time be permitted by law, and may at any
time terminate the

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Plan as to any future grants of Awards; provided, that except as otherwise
expressly provided in the Plan the Administrator may not, without the
Participant’s consent, alter the terms of an Award so as to affect adversely the
Participant’s rights under the Award, unless the Administrator expressly
reserved the right to do so at the time of the Award. Amendment to the Plan
shall be conditioned upon stockholder approval only to the extent, if any, such
approval is required by law (including the Code and applicable stock exchange
requirements), as determined by the Administrator.

10.          OTHER COMPENSATION ARRANGEMENTS

The existence of the Plan or the grant of any Award will not in any way affect
the Company’s right to Award a person bonuses or other compensation in addition
to Awards under the Plan.

11.          MISCELLANEOUS

(A)           WAIVER OF JURY TRIAL.  BY ACCEPTING AN AWARD UNDER THE PLAN, EACH
PARTICIPANT WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THE PLAN AND ANY AWARD, OR UNDER ANY
AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR
WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, AND AGREES THAT
ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY. BY ACCEPTING AN AWARD UNDER THE PLAN, EACH PARTICIPANT
CERTIFIES THAT NO OFFICER, REPRESENTATIVE, OR ATTORNEY OF THE COMPANY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE COMPANY WOULD NOT, IN THE EVENT OF
ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS.

(b)           Limitation of Liability. Notwithstanding anything to the contrary
in the Plan, neither the Company nor the Administrator, nor any person acting on
behalf of the Company or the Administrator, shall be liable to any Participant
or to the estate or beneficiary of any Participant by reason of any acceleration
of income, or any additional tax, asserted by reason of the failure of an Award
to satisfy the requirements of Section 422 or Section 409A or by reason of
Section 4999 of the Code; provided, that nothing in this Section 11(b) shall
limit the ability of the Administrator or the Company to provide by express
agreement with a Participant for a gross-up payment or other payment in
connection with any such tax or additional tax.

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EXHIBIT A

Definition of Terms

The following terms, when used in the Plan, will have the meanings and be
subject to the provisions set forth below:

“Administrator”:  The Compensation Committee, except that the Compensation
Committee may delegate (i) to one or more of its members such of its duties,
powers and responsibilities as it may determine; (ii) to one or more officers of
the Company the power to grant rights or options to the extent permitted by
Section 157(c) of the Delaware General Corporation Law; (iii) to one or more
officers of the Company the authority to allocate other Awards among such
persons (other than officers of the Company) eligible to receive Awards under
the Plan as such delegated officer or officers determine consistent with such
delegation; provided, that with respect to any delegation described in this
clause (iii) the Compensation Committee (or a properly delegated member or
members of such Committee) shall have authorized the issuance of a specified
number of shares of Stock under such Awards and shall have specified the
consideration, if any, to be paid therefor; and (iv) to such Employees or other
persons as it determines such ministerial tasks as it deems appropriate. In the
event of any delegation described in the preceding sentence, the term
“Administrator” shall include the person or persons so delegated to the extent
of such delegation.

“Affiliate”:  Any corporation or other entity owning, directly or indirectly,
50% or more of the outstanding Stock of the Company, or in which the Company or
any such corporation or other entity owns, directly or indirectly, 50% of the
outstanding capital stock (determined by aggregate voting rights) or other
voting interests. Notwithstanding the preceding, for purposes of determining
eligibility for the grant of an Stock Option or SAR by reason of service with an
Affiliate, the term “Affiliate” shall be limited to persons that stand in a
relationship to the Company that would result in the Company and such person
being treated as an employer under Section 414(b) or Section 414(c) of the Code
except that “at least 50%” shall be substituted for “at least 80%” under
Section 1563(a)(1), (2), and (3) of the Code and Treas. Reg. Section 1.414(c)-2,
all in accordance with the definition of “service recipient” under Section 409A
of the Code.

“Award”:  Any or a combination of the following:

(i) Stock Options.

(ii) SARs.

(iii) Restricted Stock.

(iv) Unrestricted Stock.

(v)  Stock Units, including Restricted Stock Units.

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(vi) Performance Awards.

(vii) Cash Awards.

(viii)  Awards (other than Awards described in (i) through (vii) above) that are
convertible into or otherwise based on Stock.

“Board”:  The Board of Directors of the Company.

“Cash Award”:  An Award denominated in cash.

“Code”:  The U.S. Internal Revenue Code of 1986 as from time to time amended and
in effect, or any successor statute as from time to time in effect.

“Compensation Committee”:  The Compensation Committee of the Board; provided,
that until a Compensation Committee shall have been appointed, the Board shall
discharge the duties and shall exercise the authority of the Compensation
Committee hereunder and all references herein to the Compensation Committee
shall be deemed to refer to the Board.

“Company”:  Combinatorx, Incorporated.

“Covered Transaction”:  Any of (i) a consolidation, merger, or similar
transaction or series of related transactions, including a sale or other
disposition of stock, in which the Company is not the surviving corporation or
which results in the acquisition of all or substantially all of the Company’s
then outstanding common stock by a single person or entity or by a group of
persons and/or entities acting in concert, (ii) a sale or transfer of all or
substantially all the Company’s assets, or (iii) a dissolution or liquidation of
the Company. Where a Covered Transaction involves a tender offer that is
reasonably expected to be followed by a merger described in clause (i) (as
determined by the Administrator), the Covered Transaction shall be deemed to
have occurred upon consummation of the tender offer.

“Effective Date”:  The date on which the stockholders of the Company approve the
Plan.

“Employee”:  Any person who is employed by the Company or an Affiliate.

“Employment”:  A Participant’s employment or other service relationship with the
Company and its Affiliates. Employment will be deemed to continue, unless the
Administrator expressly provides otherwise, so long as the Participant is
employed by, or otherwise is providing services in a capacity described in
Section 5 to the Company or its Affiliates. If a Participant’s employment or
other service relationship is with an Affiliate and that entity ceases to be an
Affiliate, the Participant’s Employment will be deemed to have terminated when
the entity ceases to be an Affiliate unless the Participant transfers Employment
to the Company or its remaining Affiliates.

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“ISO”:  A Stock Option intended to be an “incentive stock option” within the
meaning of Section 422 of the Code. Each option granted pursuant to the Plan
will be treated as providing by its terms that it is to be a non-incentive
option unless, as of the date of grant, it is expressly designated as an ISO.

“Participant”:  A person who is granted an Award under the Plan.

“Performance Award”:  An Award subject to Performance Criteria. The Committee in
its discretion may grant Performance Awards that are intended to qualify for the
performance-based compensation exception under Section 162(m) and Performance
Awards that are not intended so to qualify.

“Performance Criteria”:  Specified criteria, other than the mere continuation of
Employment or the mere passage of time, the satisfaction of which is a condition
for the grant, exercisability, vesting or full enjoyment of an Award. For
purposes of Awards that are intended to qualify for the performance-based
compensation exception under Section 162(m), a Performance Criterion will mean
an objectively determinable measure of performance relating to any or any
combination of the following (measured either absolutely or by reference to an
index or indices and determined either on a consolidated basis or, as the
context permits, on a divisional, subsidiary, line of business, project or
geographical basis or in combinations thereof): sales; revenues; assets;
expenses; earnings before or after deduction for all or any portion of interest,
taxes, depreciation, or amortization, whether or not on a continuing operations
or an aggregate or per share basis; return on equity, investment, capital or
assets; one or more operating ratios; borrowing levels, leverage ratios or
credit rating; economic value created or added; market share; capital
expenditures; cash flow; stock price; stockholder return; successful hiring of
key individuals; introduction or development of new technologies; product
introduction or development, any clinical trial accomplishments, regulatory or
other filings or approvals, other product development milestones; geographic
business expansion; cost targets; employee satisfaction; information technology
development or acquisition; manufacturing or process development; resolution of
significant litigation; legal compliance or risk reduction; patent application
or patent issuances; sales of particular products or services; customer
acquisition or retention; acquisitions and divestitures (in whole or in part);
corporate development, including without limitation, joint ventures,
collaborations and strategic alliances; spin-offs, split-ups and the like;
reorganizations; or recapitalizations, restructurings, financings (issuance of
debt or equity) or refinancings. A Performance Criterion and any targets with
respect thereto determined by the Administrator need not be based upon an
increase, a positive or improved result or avoidance of loss. To the extent
consistent with the requirements for satisfying the performance-based
compensation exception under Section 162(m), to the extent applicable, the
Administrator may provide in the case of any Award intended to qualify for such
exception that one or more of the Performance Criteria applicable to such Award
will be adjusted in an objectively determinable manner to reflect events (for
example, but without limitation, acquisitions or dispositions) occurring during
the performance period that affect the applicable Performance Criterion or
Criteria.

“Plan”:  The Combinatorx, Incorporated 2004 Amended and Restated Incentive Plan
as from time to time amended and in effect.

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“Prior Plan”:  The Combinatorx, Incorporated 2004 Amended and Restated Incentive
Plan in effect prior to the Effective Date.

“Restricted Stock”:  An Award of Stock for so long as the Stock remains subject
to restrictions requiring that it be redelivered or offered for sale to the
Company if specified conditions are not satisfied.

“Restricted Stock Unit”:  A Stock Unit that is, or as to which the delivery of
Stock or cash in lieu of Stock is, subject to the satisfaction of specified
performance or other vesting conditions.

“Section 162(m)”:  Section 162(m) of the Code.

“Section 409A”: Section 409A of the Code.

“SARs”:  Rights entitling the holder upon exercise to receive cash or Stock, as
the Administrator determines, equal to a function (determined by the
Administrator using such factors as it deems appropriate) of the amount by which
the Stock has appreciated in value since the date of the Award.

“Stock”:  Common Stock of the Company, par value $.001 per share.

“Stock Unit”:  An unfunded and unsecured promise, denominated in shares of
Stock, to deliver Stock or cash measured by the value of Stock in the future.

“Stock Options”:  Options entitling the recipient to acquire shares of Stock
upon payment of the exercise price.

“Unrestricted Stock”:  An Award of Stock not subject to any restrictions under
the terms of the Award.

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