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                                                                    EXHIBIT 10.3

                             COMBIMATRIX CORPORATION
                             2000 STOCK AWARDS PLAN

                                   I. PURPOSE

        The purpose of the CombiMatrix Corporation 2000 Stock Awards Plan (the
"Plan") is to provide a means through which CombiMatrix Corporation, a Delaware
corporation (the "Company" or "CombiMatrix"), and its subsidiaries, may attract
able persons to the Company and to provide a means whereby those employees,
Directors and consultants, upon whom the responsibilities of the successful
administration and management of the Company rest, and whose present and
potential contributions to the welfare of the Company are of importance, can
acquire and maintain stock ownership, thereby strengthening their concern for
the welfare of the Company and their desire to remain in its employ or service.
A further purpose of the Plan is to provide such employees, Directors and
consultants with additional incentive and reward opportunities designed to
enhance the profitable growth of the Company. Accordingly, the Plan provides for
granting Incentive Stock Options, options which do not constitute Incentive
Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Performance
Awards, Phantom Stock Awards, or any combination of the foregoing, as is best
suited to the circumstances of the particular employee or consultant, as
provided herein.

                                 II. DEFINITIONS

        The following definitions shall be applicable throughout the Plan unless
specifically modified by any paragraph:

        (a) "Affiliates" means any "parent corporation" of the Company and any
"subsidiary" of the Company within the meaning of Code Sections 424(e) and (f),
respectively, and any entity which directly or indirectly through one or more
intermediaries controls, is controlled by, or is under common control with the
Company.

        (b) "Award" means, individually or collectively, any Option, Restricted
Stock Award, Phantom Stock Award, Performance Award or Stock Appreciation Right.

        (c) "Board" means the Board of Directors of the Company.

        (d) "Change of Control" means (i) any direct or indirect transfer,
assignment, sale or any other disposition (in each case, a "Disposition") or
series of related Dispositions to any transferee or related or affiliated
transferees of either substantially all of the assets of CombiMatrix or more
than 50% of the outstanding shares of the common stock of Acacia Research
Corporation or CombiMatrix, (ii) CombiMatrix is to be dissolved and liquidated
or (iii) as a result of or in connection with a contested election of Directors,
the persons who were Directors of CombiMatrix or Acacia Research before such
election shall cease to constitute a majority of their respective boards. An
initial public offering that is not followed by a change in control of the Board
of Directors of CombiMatrix or Acacia Research shall not constitute a "change of
control transaction" for purposes hereof.

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        (e) "Change of Control Value" shall mean (i) the per share price offered
to stockholders of the Company in any such merger, consolidation,
reorganization, sale of assets or dissolution transaction, (ii) the price per
share offered to stockholders of the Company in any tender offer or exchange
offer whereby a Change of Control takes place, or (iii) if such Change of
Control occurs other than pursuant to a tender or exchange offer, the Fair
Market Value per share of the shares into which Awards are exercisable, as
determined by the Committee, whichever is applicable. In the event that the
consideration offered to stockholders of the Company consists of anything other
than cash, the Committee shall determine the fair cash equivalent of the portion
of the consideration offered which is other than cash.

        (f) "Code" means the Internal Revenue Code of 1986, as amended.
Reference in the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to any section and any regulations under such
section.

        (g) "Committee" means the Compensation Committee of the Board which
shall be (i) constituted so as to permit the Plan to comply with Rule 16b-3 and
(ii) constituted solely of "outside Directors," within the meaning of section
162(m) of the Code and applicable interpretive authority thereunder.

        (h) "Company" means CombiMatrix Corporation and any of its Affiliates.

        (i) A "consultant" means an individual who performs services for the
Company or its Affiliates as an independent contractor.

        (j) "Director" means an individual elected to the Board by the
stockholders of the Company or by the Board under applicable corporate law who
is serving on the Board on the date the Plan is adopted by the Board or is
elected to the Board after such date.

        (k) An "employee" means any person (including an officer or a Director)
in an employment relationship with the Company or any parent or subsidiary
corporation (as defined in section 424 of the Code).

        (l) "1934 Act" means the Securities Exchange Act of 1934, as amended.

        (m) "Fair Market Value" means, as of any specified date, the closing
sale price of the Stock (i) reported by any interdealer quotation system on
which the Stock is quoted on that date or (ii) if the Stock is listed on a
national stock exchange, reported on the stock exchange composite tape on that
date; or, in either case, if no prices are reported on that date, on the last
preceding date on which such prices of the Stock are so reported. If the Stock
is traded over the counter at the time a determination of its fair market value
is required to be made hereunder, its fair market value shall be deemed to be
equal to (i) the closing sale price of the Stock on that date, if such price is
available, or (ii) if such price is not available, the average between the
reported high and low or closing bid and asked prices of Stock on the most
recent date on which Stock was publicly traded. In the event Stock is not
publicly traded at the time a determination of its value is required to be made
hereunder, the

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determination of its fair market value shall be made by the Committee in such
manner as it deems appropriate.

        (n) "Holder" means an employee, Director or consultant who has been
granted an Award.

        (o) "Incentive Stock Option" means an option that is designated as an
incentive stock option within the meaning of section 422(b) of the Code.

        (p) "Nonqualified Stock Option" means an option granted under Paragraph
VII of the Plan to purchase Stock which does not constitute an Incentive Stock
Option.

        (q) "Option" means an Award granted under Paragraph VII of the Plan and
includes both Incentive Stock Options to purchase Stock and Nonqualified Stock
Options to purchase Stock.

        (r) "Option Agreement" means a written agreement between the Company and
a Holder with respect to an Option.

        (s) "Performance Award" means an Award granted under Paragraph X of the
Plan.

        (t) "Performance Award Agreement" means a written agreement between the
Company and a Holder with respect to a Performance Award.

        (u) "Phantom Stock Award" means an Award granted under Paragraph XI of
the Plan.

        (v) "Phantom Stock Award Agreement" means a written agreement between
the Company and a Holder with respect to a Phantom Stock Award.

        (w) "Plan" means the CombiMatrix Corporation 2000 Stock Awards Plan, as
amended from time to time.

        (x) "Restricted Stock Agreement" means a written agreement between the
Company and a Holder with respect to a Restricted Stock Award.

        (y) "Restricted Stock Award" means an Award granted under Paragraph IX
of the Plan.

        (z) "Rule 16b-3" means SEC Rule 16b-3 promulgated under the 1934 Act, as
such may be amended from time to time, and any successor rule, regulation or
statute fulfilling the same or a similar function.

        (aa) "Spread" means, in the case of a Stock Appreciation Right, an
amount equal to the excess, if any, of the Fair Market Value of a share of Stock
on the date such right is exercised over the exercise price of such Stock
Appreciation Right.

        (bb) "Stock" means the common stock, $0.001 par value of the Company.

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        (cc) "Stock Appreciation Right" means an Award granted under Paragraph
VIII of the Plan.

        (dd) "Stock Appreciation Rights Agreement" means a written agreement
between the Company and a Holder with respect to an Award of Stock Appreciation
Rights.

                  III. EFFECTIVE DATE AND DURATION OF THE PLAN

        The Plan shall be effective upon the date of its adoption by the Board,
provided that the Plan is approved by the stockholders of the Company within
twelve months thereafter. No further Awards may be granted under the Plan after
the expiration of ten years from the date of its adoption by the Board. The Plan
shall remain in effect until all Awards granted under the Plan have been
satisfied or expired.

                               IV. ADMINISTRATION

        (a) Committee. The Plan shall be administered by the Committee.

        (b) Powers. Subject to the provisions of the Plan, the Committee shall
have sole authority, in its discretion, to determine which employees, Directors
and consultants shall receive an Award, the time or times when such Award shall
be made, whether an Incentive Stock Option, Nonqualified Option or Stock
Appreciation Right shall be granted, the number of shares of Stock which may be
issued under each Option, Stock Appreciation Right or Restricted Stock Award,
and the value of each Performance Award and Phantom Stock Award. In making such
determinations the Committee may take into account the nature of the services
rendered by the respective employees, Directors and consultants, their present
and potential contributions to the Company's success and such other factors as
the Committee in its discretion shall deem relevant.

        (c) Additional Powers. The Committee shall have such additional powers
as are delegated to it by the other provisions of the Plan. Subject to the
express provisions of the Plan, the Committee is authorized to construe the Plan
and the respective agreements executed thereunder, to prescribe such rules and
regulations relating to the Plan as it may deem advisable to carry out the Plan,
and to determine the terms, restrictions and provisions of each Award, including
such terms, restrictions and provisions as shall be requisite in the judgment of
the Committee to cause designated Options to qualify as Incentive Stock Options,
and to make all other determinations necessary or advisable for administering
the Plan. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in any agreement relating to an Award in the manner
and to the extent it shall deem expedient to carry it into effect. The
determinations of the Committee on the matters referred to in this Paragraph IV
shall be conclusive.

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                 V. GRANT OF OPTIONS, STOCK APPRECIATION RIGHTS,
                   RESTRICTED STOCK AWARDS, PERFORMANCE AWARDS
              AND PHANTOM STOCK AWARDS; SHARES SUBJECT TO THE PLAN

        (a) Stock Grant and Award Limits. The Committee may from time to time
grant Awards to one or more employees, Directors or consultants determined by it
to be eligible for participation in the Plan in accordance with the provisions
of Paragraph VI. Subject to Paragraph XII, the aggregate number of shares of
Stock that may be issued under the Plan shall not exceed 1,360,529 shares.
Shares of Stock shall be deemed to have been issued under the Plan only to the
extent actually issued and delivered pursuant to an Award. To the extent that an
Award lapses or the rights of its Holder terminate or the Award is paid in cash,
any shares of Stock subject to such Award shall again be available for the grant
of an Award. Separate stock certificates shall be issued by the Company for
those shares acquired pursuant the exercise of an Incentive Stock Option and for
those shares acquired pursuant to the exercise of a Nonqualified Stock Option.

        (b) Stock Offered. The stock to be offered pursuant to the grant of an
Award may be authorized but unissued Stock or Stock previously issued and
outstanding and reacquired by the Company.

                                 VI. ELIGIBILITY

        Awards may be granted only to persons who, at the time of grant, are
employees, Directors or consultants of the Company or its Affiliates. An Award
may be granted on more than one occasion to the same person, and, subject to the
limitations set forth in the Plan, such Award may include an Incentive Stock
Option or a Nonqualified Stock Option, a Stock Appreciation Right, a Restricted
Stock Award, a Performance Award, a Phantom Stock Award or any combination
thereof.

                               VII. STOCK OPTIONS

        (a) Option Period. The term of each Option shall be as specified by the
Committee at the date of grant; provided that, the term of an incentive stock
option cannot exceed ten years from the date of grant.

        (b) Limitations on Exercise of Option. An Option shall be exercisable in
whole or in such installments and at such times as determined by the Committee.

        (c) Special Limitations on Incentive Stock Options. No more than
1,360,529 shares of Stock may be subject to Incentive Stock Options. Incentive
Stock Options may only be granted to employees of the Company and its
Affiliates. To the extent that the aggregate Fair Market Value (determined at
the time the respective Incentive Stock Option is granted) of Stock with respect
to which Incentive Stock Options are exercisable for the first time by an
individual during any calendar year under all incentive stock option plans of
the Company and its parent and subsidiary corporations exceeds $100,000, such
Incentive Stock Options shall be treated as Nonqualified Stock Options as
determined by the Committee. The Committee shall determine, in accordance with
applicable provisions of the Code, Treasury Regulations and other administrative
pronouncements, which of an optionee's Incentive Stock Options will not
constitute Incentive Stock Options because of such

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limitation and shall notify the optionee of such determination as soon as
practicable after such determination. No Incentive Stock Option shall be granted
to an individual if, at the time the Option is granted, such individual owns
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company or of its parent or subsidiary corporation, within the
meaning of section 422(b)(6) of the Code, unless (i) at the time such Option is
granted the option price is at least 110% of the Fair Market Value of the Stock
subject to the Option and (ii) such Option by its terms is not exercisable after
the expiration of five years from the date of grant.

        (d) Option Agreement. Each Option shall be evidenced by an Option
Agreement in such form and containing such provisions not inconsistent with the
provisions of the Plan as the Committee from time to time shall approve,
including, without limitation, provisions to qualify an Incentive Stock Option
under section 422 of the Code. No individual may be granted in any calendar year
an Option to purchase more than 300,000 shares of Stock. The option price must
be paid in full at the time of each exercise in one or a combination of the
following methods (to the extent authorized and approved by the Committee or set
forth in the applicable Option Agreement): (a) cash or immediately available
funds (including wire transfer, personal check, cashier's check, postal or
express money order or bank draft), (b) with shares of Common Stock already
owned by the participant for at least six months, or (c) a promissory note (but
not a non-recourse promissory note) that bears a market rate of interest in a
form and on such terms as the Committee may approve. Additionally, in the
discretion of the Committee, payment for any shares subject to an Option may
also be made by a "cashless exercise" which shall include the following:
delivering a properly executed exercise notice to the Company, together with a
copy of irrevocable instructions to a broker to deliver promptly to the Company
the amount of sale or loan proceeds necessary to pay the purchase price, and, if
requested, the amount of any federal, state, local or foreign withholding taxes.
To facilitate the foregoing "cashless exercise", the Company may enter into
agreements for coordinated procedures with one or more brokerage firms. Each
Option Agreement shall specify the effect of termination of employment, the
cessation of serving on the Board or the cessation of performing services as a
consultant to the Company on the exercisability of the Option. Such Option
Agreement may also include, without limitation, provisions relating to (i)
vesting of Options, subject to the provisions hereof accelerating such vesting
on a Change of Control, (ii) tax matters (including provisions (y) permitting
the delivery of additional shares of Stock or the withholding of shares of Stock
from those acquired upon exercise to satisfy federal or state income tax
withholding requirements and (z) dealing with any other applicable employee wage
withholding requirements), and (iii) any other matters not inconsistent with the
terms and provisions of this Plan that the Committee shall in its sole
discretion determine. The terms and conditions of the respective Option
Agreements need not be identical.

        (e) Option Price and Payment. The price at which a share of Stock may be
purchased upon exercise of an Option shall be determined by the Committee, but
(i) such purchase price shall not be less than the Fair Market Value of Stock
subject to an Option on the date the Option is granted and (ii) such purchase
price shall be subject to adjustment as provided herein. The Option or portion
thereof may be exercised by delivery of an irrevocable notice of exercise to the
Company. The purchase price of the Option or portion thereof shall be paid in
full in the manner prescribed by the Committee.

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        (f) Stockholder Rights and Privileges. The Holder shall be entitled to
all the privileges and rights of a stockholder only with respect to such shares
of Stock as have been purchased under the Option and for which certificates of
stock have been registered in the Holder's name.

        (g) Options and Rights in Substitution for Stock Options Granted by
Other Corporations. Options and Stock Appreciation Rights may be granted under
the Plan from time to time in substitution for stock options held by individuals
employed by corporations who become employees as a result of a merger or
consolidation of the employing corporation with the Company or any subsidiary,
or the acquisition by the Company or a subsidiary of the assets of the employing
corporation, or the acquisition by the Company or a subsidiary of stock of the
employing corporation with the result that such employing corporation becomes a
subsidiary.

                         VIII. STOCK APPRECIATION RIGHTS

        (a) Stock Appreciation Rights. A Stock Appreciation Right is the right
to receive an amount equal to the Spread with respect to a share of Stock upon
the exercise of such Stock Appreciation Right. Stock Appreciation Rights may be
granted in connection with the grant of an Option, in which case the Option
Agreement will provide that exercise of Stock Appreciation Rights will result in
the surrender of the right to purchase the shares under the Option as to which
the Stock Appreciation Rights were exercised. Alternatively, Stock Appreciation
Rights may be granted independently of Options in which case each Award of Stock
Appreciation Rights shall be evidenced by a Stock Appreciation Rights Agreement
which shall contain such terms and conditions as may be approved by the
Committee. No individual may be granted in any calendar year more than 300,000
Stock Appreciation Rights. The Spread with respect to a Stock Appreciation Right
may be payable either in cash, shares of Stock with a Fair Market Value equal to
the Spread or in a combination of cash and shares of Stock. With respect to
Stock Appreciation Rights that are subject to Section 16 of the 1934 Act,
however, the Committee shall, except as provided in Paragraph XII(c), retain
sole discretion (i) to determine the form in which payment of the Stock
Appreciation Right will be made (i.e., cash, securities or any combination
thereof) or (ii) to approve an election by a Holder to receive cash in full or
partial settlement of Stock Appreciation Rights. Each Stock Appreciation Rights
Agreement shall specify the effect of termination of employment, the cessation
of serving on the Board or the cessation of performing services as a consultant
to the Company on the exercisability of the Stock Appreciation Rights.

        (b) Other Terms and Conditions. At the time of such Award, the
Committee, may in its sole discretion, prescribe additional terms, conditions or
restrictions relating to Stock Appreciation Rights, including, but not limited
to rules pertaining to termination of employment, the cessation of serving on
the Board or the cessation of performing services as a consultant to the Company
(by retirement, disability, death or otherwise) of a Holder prior to the
expiration of such Stock Appreciation Rights. Such additional terms, conditions
or restrictions shall be set forth in the Stock Appreciation Rights Agreement
made in conjunction with the Award. Such Stock Appreciation Rights Agreements
may also include, without limitation, provisions relating to (i) vesting of
Awards, subject to the provisions hereof accelerating vesting on a Change of
Control,(ii) tax matters (including provisions covering applicable wage
withholding requirements), and (iii) any other matters not inconsistent with the
terms and provisions of this Plan, that the Committee shall in its

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sole discretion determine. The terms and conditions of the respective
Appreciation Rights Agreements need not be identical.

        (c) Exercise Price. The exercise price of each Stock Appreciation Right
shall be determined by the Committee, but such exercise price (i) shall not be
less than the Fair Market Value of a share of Stock on the date the Stock
Appreciation Right is granted (or such greater exercise price as may be required
if such Stock Appreciation Right is granted in connection with an Incentive
Stock Option that must have an exercise price equal to 110% of the Fair Market
Value of the Stock on the date of grant pursuant to Paragraph VII(c)), and (ii)
shall be subject to adjustment as provided in Paragraph XII.

        (d) Exercise Period. The term of each Stock Appreciation Right shall be
as specified by the Committee at the date of grant.

        (e) Limitations on Exercise of Stock Appreciation Right. A Stock
Appreciation Right shall be exercisable in whole or in such installments and at
such times as determined by the Committee.

                           IX. RESTRICTED STOCK AWARDS

        (a) Forfeiture Restrictions to be Established by the Committee. Shares
of Stock that are the subject of a Restricted Stock Award shall be subject to
restrictions on disposition by the Holder and an obligation of the Holder to
forfeit and surrender the shares to the Company under certain circumstances (the
"Forfeiture Restrictions"). The Forfeiture Restrictions shall be determined by
the Committee in its sole discretion, and the Committee may provide that the
Forfeiture Restrictions shall lapse upon (i) the attainment of targets
established by the Committee that are based on (1) the price of a share of
Stock, (2) the Company's earnings per share, (3) the Company's revenue, (4) the
revenue of a business unit of the Company designated by the Committee, (5) the
return on stockholders' equity achieved by the Company, or (6) the Company's
pre-tax cash flow from operations, (ii) the Holder's continued service or
employment with the Company for a specified period of time, or (iii) a
combination of any two or more of the factors listed in clauses (i) and (ii) of
this sentence. Each Restricted Stock Award may have different Forfeiture
Restrictions, in the discretion of the Committee. The Forfeiture Restrictions
applicable to a particular Restricted Stock Award shall not be changed except as
permitted by Paragraph IX(b) or Paragraph XII.

        (b) Other Terms and Conditions. No individual may be awarded more than
300,000 shares of Stock that are subject to a Restricted Stock Award in any
calendar year. Stock awarded pursuant to a Restricted Stock Award shall be
represented by a stock certificate registered in the name of the Holder of such
Restricted Stock Award. The Holder shall have the right to receive dividends
with respect to Stock subject to a Restricted Stock Award, to vote Stock subject
thereto and to enjoy all other stockholder rights, except that (i) the Holder
shall not be entitled to delivery of the stock certificate until the Forfeiture
Restrictions shall have expired, (ii) the Company shall retain custody of the
Stock until the Forfeiture Restrictions shall have expired, (iii) the Holder may
not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the
Stock until the Forfeiture Restrictions shall have expired, and (iv) a breach of
the terms and conditions established by the Committee pursuant to the Restricted
Stock Agreement, shall cause a forfeiture of the Restricted

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Stock Award. At the time of such Award, the Committee may, in its sole
discretion, prescribe additional terms, conditions or restrictions relating to
Restricted Stock Awards, including, but not limited to, rules pertaining to the
termination of employment, the cessation of serving on the Board or the
cessation of performing services as a consultant to the Company (by retirement,
disability, death or otherwise) of a Holder prior to expiration of the
Forfeiture Restrictions. Such additional terms, conditions or restrictions shall
be set forth in a Restricted Stock Agreement made in conjunction with the Award.
Such Restricted Stock Agreement may also include, without limitation, provisions
relating to (i) subject to the provisions hereof accelerating vesting on a
Change of Control, vesting of Awards, (ii) tax matters (including provisions (y)
covering any applicable employee wage withholding requirements and (z)
prohibiting an election by the Holder under section 83(b) of the Code), and
(iii) any other matters not inconsistent with the terms and provisions of this
Plan that the Committee shall in its sole discretion determine. The terms and
conditions of the respective Restricted Stock Agreements need not be identical.

        (c) Payment for Restricted Stock. The Committee shall determine the
amount and form of any payment for Stock received pursuant to a Restricted Stock
Award, provided that in the absence of such a determination, a Holder shall not
be required to make any payment for Stock received pursuant to a Restricted
Stock Award, except to the extent otherwise required by law.

        (d) Agreements. At the time any Award is made under this Paragraph IX,
the Company and the Holder shall enter into a Restricted Stock Agreement setting
forth each of the matters as the Committee may determine to be appropriate. The
terms and provisions of the respective Restricted Stock Agreements need not be
identical.

                              X. PERFORMANCE AWARDS

        (a) Performance Period. The Committee shall establish, with respect to
and at the time of each Performance Award, a performance period over which the
performance of the Holder shall be measured.

        (b) Performance Awards. Each Performance Award shall have a maximum
value established by the Committee at the time of such Award, provided that no
individual may be granted a Performance Award in any calendar year where the
value of such award exceeds the Fair Market Value of 300,000 shares of Stock.

        (c) Performance Measures. A Performance Award shall be awarded to an
employee, Director or consultant contingent upon future performance of the
employee, Director or consultant, the Company or any subsidiary, division or
department thereof by or in which is he employed or for which he performs
services during the performance period. The Committee shall establish the
performance measures applicable to such performance prior to the beginning of
the performance period but subject to such later revisions as the Committee
shall deem appropriate to reflect significant, unforeseen events or changes.

        (d) Awards Criteria. In determining the value of Performance Awards, the
Committee shall take into account an employee's, Director's or consultant's
responsibility level, performance, potential, other Awards and such other
considerations as it deems appropriate.

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        (e) Payment. Following the end of the performance period, the Holder of
a Performance Award shall be entitled to receive payment of an amount, not
exceeding the maximum value of the Performance Award, based on the achievement
of the performance measures for such performance period, as determined by the
Committee. Payment of a Performance Award may be made in cash, Stock or a
combination thereof, as determined by the Committee. Payment shall be made in a
lump sum or in installments as prescribed by the Committee. Any payment to be
made in Stock shall be based on the Fair Market Value of the Stock on the
payment date. If a payment of cash is to be made on a deferred basis, the
Committee shall establish whether interest shall be credited, the rate thereof
and any other terms and conditions applicable thereto.

        (f) Termination of Employment, Cessation of Serving on Board or
Termination of Service . A Performance Award shall terminate if the Holder does
not remain continuously in the employ of the Company or fails to serve on the
Board or fails to perform services for the Company at all times during the
applicable performance period, except as may be determined by the Committee or
as may otherwise be provided in the Award at the time granted.

        (g) Agreements. At the time any Award is made under this Paragraph X,
the Company and the Holder shall enter into a Performance Award Agreement
setting forth each of the matters contemplated hereby, and, in addition such
matters are set forth in Paragraph IX(b) as the Committee may determine to be
appropriate. The terms and provisions of the respective agreements need not be
identical.

                            XI. PHANTOM STOCK AWARDS

        (a) Phantom Stock Awards. Phantom Stock Awards are rights to receive
shares of Stock (or cash in an amount equal to the Fair Market Value thereof),
or rights to receive an amount equal to any appreciation in the Fair Market
Value of Stock (or portion thereof) over a specified period of time, which vest
over a period of time or upon the occurrence of an event (including without
limitation a Change of Control) as established by the Committee, without payment
of any amounts by the Holder thereof (except to the extent otherwise required by
law) or satisfaction of any performance criteria or objectives. Each Phantom
Stock Award shall have a maximum value established by the Committee at the time
of such Award, provided that no individual may be granted a Phantom Stock Award
in any calendar year for more than 300,000 shares of Stock.

        (b) Award Period. The Committee shall establish, with respect to and at
the time of each Phantom Stock Award, a period over which or the event upon
which the Award shall vest with respect to the Holder.

        (c) Awards Criteria. In determining the value of Phantom Stock Awards,
the Committee shall take into account an employee's, Director's or consultant's
responsibility level, performance, potential, other Awards and such other
considerations as it deems appropriate.

        (d) Payment. Following the end of the vesting period for a Phantom Stock
Award, the Holder of a Phantom Stock Award shall be entitled to receive payment
of an amount, not exceeding the maximum value of the Phantom Stock Award, based
on the then vested value of the Award.

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Payment of a Phantom Stock Award may be made in cash, Stock or a combination
thereof as determine by the Committee. Payment shall be made in a lump sum or in
installments as prescribed by the Committee in its sole discretion. Any payment
to be made in Stock shall be based on the Fair Market Value of the Stock on the
payment date. Cash dividend equivalents may be paid during or after the vesting
period with respect to a Phantom Stock Award, as determined by the Committee. If
a payment of cash is to be made on a deferred basis, the Committee shall
establish whether interest shall be credited, the rate thereof and any other
terms and conditions applicable thereto.

        (e) Termination of Employment, Cessation of Serving on Board or
Termination of Service A Phantom Stock Award shall terminate if the Holder does
not remain continuously in the employ of the Company or fails to serve on the
Board or fails to perform services for the Company at all times during the
applicable vesting period, except as may be otherwise determined by the
Committee or as set forth in the Award at the time of grant.

        (f) Agreements. At the time any Award is made under this Paragraph XI,
the Company and the Holder shall enter into a Phantom Stock Award Agreement
setting forth each of the matters contemplated hereby and, in addition such
matters as are set forth in Paragraph IX(b) as the Committee may determine to be
appropriate. The terms and provisions of the respective agreements need not be
identical.

                     XII. RECAPITALIZATION OR REORGANIZATION

        (a) The shares with respect to which Awards may be granted are shares of
Stock as presently constituted, but if, and whenever, prior to the expiration of
an Award theretofore granted, the Company shall effect a subdivision or
consolidation by the Company, the number of shares of Stock with respect to
which such Award may thereafter be exercised or satisfied, as applicable, (i) in
the event of an increase in the number of outstanding shares shall be
proportionately increased, and the purchase price per share shall be
proportionately reduced, and (ii) in the event of a reduction in the number of
outstanding shares shall be proportionately reduced, and the purchase price per
share shall be proportionately increased.

        (b) If the Company recapitalizes or otherwise changes its capital
structure, thereafter upon any exercise or satisfaction, as applicable, of an
Award theretofore granted the Holder shall be entitled to (or entitled to
purchase, if applicable) under such Award, in lieu of the number of shares of
Stock then covered by such Award, the number and class of shares of stock and
securities to which the Holder would have been entitled pursuant to the terms of
the recapitalization if, immediately prior to such recapitalization, the Holder
had been the holder of record of the number of shares of Stock then covered by
such Award.

        (c) Upon the occurrence of a Change of Control, all outstanding Awards
shall immediately vest and become exercisable or satisfiable, as applicable. The
Committee, in its discretion, may determine that upon the occurrence of a Change
of Control, each Award other than an Option outstanding hereunder shall
terminate within a specified number of days after notice to the Holder, and such
Holder shall receive, with respect to each share of Stock subject to such Award,
cash in an amount equal to the excess, if any, of the Change of Control Value
over the exercise price. Further, in the event of a Change of Control, the
Committee, in its discretion shall act to effect one

                                      -11-
<PAGE>   12

or more of the following alternatives with respect to outstanding Options, which
may vary among individual Holders and which may vary among Options held by any
individual Holder: (1) determine a limited period of time for the exercise of
such Options on or before a specified date (before or after such Change of
Control) after which specified date all unexercised Options and all rights of
Holders thereunder shall terminate, (2) require the mandatory surrender to the
Company by selected Holders of some or all of the outstanding Options held by
such Holders (irrespective of whether such Options are then exercisable under
the provisions of the Plan) as of a date, before or after such Change of
Control, specified by the Committee, in which event the Committee shall
thereupon cancel such Options and the Company shall pay to each Holder an amount
of cash per share equal to the excess, if any, of the Change of Control Value of
the shares subject to such Option over the exercise price(s) under such Options
for such shares, (3) make such adjustments to Options then outstanding as the
Committee deems appropriate to reflect such Change of Control (provided,
however, that the Committee may determine in its sole discretion that no
adjustment is necessary to Options then outstanding) or (4) provide that
thereafter upon any exercise of an Option theretofore granted the Holder shall
be entitled to purchase under such Option, in lieu of the number of shares of
Stock then covered by such Option the number and class of shares of stock or
other securities or property (including, without limitation, cash) to which the
Holder would have been entitled pursuant to the terms of the agreement of
merger, consolidation or sale of assets and dissolution if, immediately prior to
such merger, consolidation or sale of assets and dissolution the Holder has been
the holder of record of the number of shares of Stock then covered by such
Option. The provisions contained in this paragraph shall be inapplicable to an
Award granted within six (6) months before the occurrence of a Change of Control
if the Holder of such Award is subject to the reporting requirements of Section
16(a) of the 1934 Act. The provisions contained in this paragraph shall not
alter any rights or terminate any rights of the Holder to further payments
pursuant to any other agreement with the Company following a Change of Control.

        (d) In the event of changes in the outstanding Stock by reason of
recapitalization, reorganizations, mergers, consolidations, combinations,
exchanges or other relevant changes in capitalization occurring after the date
of the grant of any Award and not otherwise provided for by this Paragraph XII,
any outstanding Awards and any agreements evidencing such Awards shall be
subject to adjustment by the Committee at its discretion as to the number and
price of shares of Stock or other consideration subject to such Awards. In the
event of any such change in the outstanding Stock, the aggregate number of
shares available under the Plan may be appropriately adjusted by the Committee,
whose determination shall be conclusive.

        (e) The existence of the Plan and the Awards granted hereunder shall not
affect in any way the right or power of the Board or the stockholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of debt or equity securities ahead of or
affecting Stock or the rights thereof, the dissolution or liquidation of the
Company or any sale, lease, exchange or other disposition of all or any part of
its assets or business or any other corporate act or proceeding.

        (f) Any adjustment provided for in Subparagraphs (a), (b), (c) or (d)
above shall be subject to any required stockholder action.

                                      -12-
<PAGE>   13

        (g) Except as hereinbefore expressly provided, the issuance by the
Company of shares of stock of any class or securities convertible into shares of
stock of any class, for cash, property, labor or services, upon direct sale,
upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares of obligations of the Company convertible into such shares
or other securities, and in any case whether or not for fair value, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares of Stock subject to Awards theretofore granted or the purchase
price per share, if applicable.

                   XIII. AMENDMENT AND TERMINATION OF THE PLAN

        The Board in its discretion may terminate the Plan at any time with
respect to any shares for which Awards have not theretofore been granted. The
Board shall have the right to alter or amend the Plan or any part thereof from
time to time; provided that no change in any Award theretofore granted may be
made which would impair the rights of the Holder without the consent of the
Holder (unless such change is required in order to cause the benefits under the
Plan to qualify as performance-based compensation within the meaning of section
162(m) of the Code and applicable interpretive authority thereunder), and
provided, further, that the Board may not, without approval of the stockholders,
amend the Plan:

        (a) to increase the maximum number of shares which may be issued on
exercise or surrender of an Award, except as provided in Paragraph XII;

        (b) to change the Option price;

        (c) to change the class of employees, Directors or consultants eligible
to receive Awards or materially increase the benefits accruing to employees,
Directors or consultants under the Plan;

        (d) to extend the maximum period during which Awards may be granted
under the Plan;

        (e) to modify materially the requirements as to eligibility for
participation in the Plan; or

        (f) to decrease any authority granted to the Committee hereunder in
contravention of Rule 16b-3.

                               XIV. MISCELLANEOUS

        (a) No Right to An Award. Neither the adoption of the Plan by the
Company nor any action of the Board or the Committee shall be deemed to give an
employee, Director or consultant any right to be granted an Award to purchase
Stock, a right to a Stock Appreciation Right, a Restricted Stock Award, a
Performance Award or a Phantom Stock Award or any of the rights hereunder except
as may be evidenced by an Award or by an Option Agreement, Stock Appreciation
Rights Agreement, Restricted Stock Agreement, Performance Award Agreement or
Phantom Stock Award Agreement on behalf of the Company, and then only to the
extent and on the terms and conditions expressly set forth therein. The Plan
shall be unfunded. The Company shall not be

                                      -13-
<PAGE>   14

required to establish any special or separate fund or to make any other
segregation of funds or assets to assure the payment of any Award.

        (b) No Employment or Service Rights Conferred. Nothing contained in the
Plan shall (i) confer upon any employee any right with respect to continuation
of employment or service with the Company or any subsidiary or (ii) interfere in
any way with the right of the Company or any subsidiary to terminate his or her
employment or service at any time.

        (c) Other Laws; Withholding. The Company shall not be obligated to issue
any Stock pursuant to any Award granted under the Plan at any time when the
shares covered by such Award have not been registered under the Securities Act
of 1933 and such other state and federal laws, rules or regulations as the
Company or the Committee deems applicable and, in the opinion of legal counsel
for the Company, there is no exemption from the registration requirements of
such laws, rules or regulations available for the issuance and sale of such
shares. No fractional shares of Stock shall be delivered, nor shall any cash in
lieu of fractional shares be paid. The Company shall have the right to deduct in
connection with all Awards any taxes required by law to be withheld and to
require any payments required to enable it to satisfy its withholding
obligations.

        (d) No Restriction on Corporate Action. Nothing contained in the Plan
shall be construed to prevent the Company or any subsidiary from taking any
corporate action which is deemed by the Company or such subsidiary to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any Award made under the Plan. No employee,
beneficiary or other person shall have any claim against the Company or any
subsidiary as a result of any such action.

        (e) Restrictions on Transfer. An Award shall not be transferable
otherwise than by will or the laws of descent and distribution or pursuant to a
"qualified domestic relations order" as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder, and shall be exercisable during the Holder's lifetime only by such
Holder or the Holder's guardian or legal representative.

        (f) Rule 16b-3. It is intended that the Plan and any grant of an Award
made to a person subject to Section 16 of the 1934 Act meet all of the
requirements of Rule 16b-3. If any provision of the Plan or any such Award would
disqualify the Plan or such Award under, or would otherwise not comply with,
Rule 16b-3, such provision or Award shall be construed or deemed amended to
conform to Rule 16b-3.

        (g) Section 162(m). If the plan is subject to 162(m) of the Code, it is
intended that the Plan comply fully with and meet all the requirements of
Section 162(m) of the Code so that Options and Stock Appreciation Rights granted
hereunder and, if determined by the Committee, Restricted Stock Awards, shall
constitute "performance-based" compensation within the meaning of such section.
If any provision of the Plan would disqualify the Plan or would not otherwise
permit the Plan to comply with Section 162(m) as so intended, such provision
shall be construed or deemed amended to conform to the requirements or
provisions of Section 162(m); provided that no such construction or amendment
shall have an adverse effect on the economic value to a Holder of any Award
previously granted hereunder.

                                      -14-
<PAGE>   15

        (h) Governing Law. This Plan shall be construed in accordance with the
laws of the State of Delaware.

                                      -15-<PAGE>   1
                                                                    EXHIBIT 10.4

                             COMBIMATRIX CORPORATION
                             GENERAL SEVERANCE PLAN

Any involuntary separation from employment with CombiMatrix Corporation or any
successor thereto ("CombiMatrix") by an employee for lack of work will entitle
the employee to:

-       Either a four (4) weeks' notice or a lump sum payment of four (4) weeks'
        salary in lieu of notice, at CombiMatrix's discretion, plus unused
        accrued benefits;

-       Two weeks' salary per year of service to a maximum of twenty six weeks
        (for a maximum total of thirty (30) weeks if the four (4) weeks as
        stated above are included);

-       CombiMatrix paid COBRA coverage of medical and dental benefits for a
        period equal to the time salary continuation is provided (with elective
        continued COBRA coverage); and

-       Continuation of life insurance for the same period medical and dental
        benefits are paid by CombiMatrix under COBRA.

<PAGE>   2
                             COMBIMATRIX CORPORATION
                            EXECUTIVE SEVERANCE PLAN

Executive officers of CombiMatrix Corporation or any successor thereto
("CombiMatrix") shall receive the greater of the benefits set forth below or
those provided for under the General CombiMatrix General Severance Plan. This
Executive Severance Plan may not be amended or modified in a manner that
adversely effects an employee who is a duly appointed executive officer of
CombiMatrix at the time of such proposed amendment or modification.

        1. TERMINATION NOT IN CONNECTION WITH A CHANGE OF CONTROL TRANSACTION

FOR EXECUTIVE OFFICERS WHO ARE VICE PRESIDENTS OR HIGHER. If CombiMatrix
terminates the employment of an employee who is a Vice President or higher of
CombiMatrix ("Officer") for other than Cause or on account of death or
disability, CombiMatrix shall (i) promptly pay to the Officer a lump sum amount
equal to the aggregate OF (a) Accrued Obligations ( i.e., the Officer's annual
base salary through the date of termination to the extent not theretofore paid
and any compensation previously deferred by the Officer (together with any
accrued interest or earnings thereon) and any accrued vacation pay, in each case
to the extent not theretofore paid) and (b) twelve months of the Officer's base
salary and target bonus and (ii) provide to the Officer CombiMatrix paid COBRA
coverage for medical and dental benefits for the appropriate COBRA coverage
period. Moreover, any stock options that are vested at the date of termination
shall not be forfeited.

For purposes of this Severance Plan, "CAUSE" shall mean that CombiMatrix, acting
in good faith based upon the information then known to CombiMatrix, determines
that the applicable employee has engaged in or committed: a criminal felony;
fraud; refusal or unwillingness to perform his duties, provided such refusal or
unwillingness is not based on the employee's good faith compliance with
applicable legal or ethical standards; sexual harassment; violation of any
fiduciary duty to CombiMatrix; violation of any duty of loyalty to CombiMatrix;
or any material uncured (after reasonable written notice and reasonable time to
cure) breach of any term of his or her conditions of employment.

        2. TERMINATION IN CONNECTION WITH A CHANGE OF CONTROL TRANSACTION

For purposes of this Severance Plan, a "CHANGE OF CONTROL TRANSACTION" shall
mean (i) any direct or indirect transfer, assignment, sale or any other
disposition (in each case, a "Disposition") or series of related Dispositions to
any transferee or related or affiliated transferees of either substantially all
of the assets of CombiMatrix or more than 50% of the outstanding shares of the
common stock of Acacia Research Corporation or CombiMatrix, (ii) CombiMatrix is
to be dissolved and liquidated or (iii) as a result of or in connection with a
contested election of directors, the persons who were directors of CombiMatrix
or Acacia Research Corporation before such election shall cease to constitute a
majority of their respective boards.

                                      -2-

<PAGE>   3

An Initial Public Offering that is not followed by a change in control of the
Board of Directors of CombiMatrix or Acacia Research Corporation shall not
constitute a "change of control transaction" for purposes hereof.

For purposes of this Severance Plan, "INITIAL PUBLIC OFFERING" shall mean an
underwritten public offering of common stock of CombiMatrix pursuant to a
registration statement filed under the Securities Act of 1933, as amended (the
"Securities Act"), after the date hereof; provided, however, that the term
"Initial Public Offering" shall not include any registration statement (1)
relating to warrants, options or shares of capital stock granted or to be
granted or sold primarily to employees, directors, or officers of CombiMatrix
and/or any of its subsidiaries, (2) filed pursuant to Rule 145 under the
Securities Act or any successor or similar provision, (3) relating to any
employee benefit plan or interests therein, or (4) relating solely to any
preferred stock or debt securities of CombiMatrix and/or any of its
subsidiaries.

FOR EXECUTIVE OFFICERS WHO ARE SENIOR VICE PRESIDENTS OR HIGHER. Upon the
"Constructive Termination" (as defined in EXHIBIT A attached hereto) of an
executive officer of CombiMatrix who is a Senior Vice President or higher
("Senior Executive") or upon CombiMatrix's termination of a Senior Executive's
employment with CombiMatrix ("Non-Voluntary Termination"), immediately preceding
or after a change of control transaction, the participating Senior Executive
shall receive the following or the benefits:

If Constructive Termination or Non-Voluntary Termination occurs and such
termination results from actions of CombiMatrix in anticipation of a change of
control transaction or occurs within two years after a change of control
transaction, the following shall be provided the Senior Executive: (i) within 30
days of such Constructive Termination or Non-Voluntary Termination, an amount of
cash in one lump sum payment equal to the sum of (A) Accrued Obligations plus
two years' base annual salary (calculated based upon annualized annual base
salary effective immediately prior to the change of control transaction), plus
(B) two years' bonus payments calculated based upon the bonus such Senior
Executive would have received had targeted level(s) of performance (for
CombiMatrix and its affiliated companies, and, if applicable the Senior
Executive and/or business units or persons on whom bonus performance is
measured) been achieved for the fiscal year in which the change of control
transaction occurred ("Target Bonus"), (ii) company paid COBRA coverage for
medical and dental benefits for the appropriate COBRA coverage period and (iii)
up to one year of office and secretarial support for the purpose of finding new
employment at a maximum cost of $1,000 per month (such benefit not being payable
in cash in lieu of the benefit).

If CombiMatrix is not readily traded on an established securities market as set
forth in Proposed Treasury Regulation 1.280G-1, A-6(2), CombiMatrix's Board of
Directors will use its good faith efforts to attempt to obtain the approval of
more than 75% of the voting power of all outstanding shares of common stock,
$0.001 par value ("Common Stock"), of CombiMatrix as set forth in Proposed
Treasury Regulation 1.280G-1, A-7, or its successor, for the accelerated vesting
of all stock options granted to all the Senior

                                      -3-

<PAGE>   4

Executives (not including the shares of stock of those executives in the 75%
calculation ) for the purpose of excluding the value of such previously
unaccelerated options from any federal excise tax calculations

Moreover, any stock options that are vested at the date of termination shall not
be forfeited.

FOR VICE PRESIDENTS. Upon the "Constructive Termination" (as defined in EXHIBIT
A attached hereto) of an executive officer of CombiMatrix who is a Vice
President higher ("VP") or upon CombiMatrix's termination of a VP's employment
with CombiMatrix ("Non-Voluntary Termination"), immediately preceding or after a
change of control transaction, the VP shall receive the following benefits:

If Constructive Termination or Non-Voluntary Termination occurs and such
termination results from actions of CombiMatrix in anticipation of a change of
control transaction or occurs within one year after a change of control
transaction, the following shall be provided: (i) within 30 days of such
Constructive Termination or Non-Voluntary Termination, an amount of cash in one
lump sum payment equal to the sum of (A) Accrued Obligations plus one years'
base annual salary (calculated based upon annualized annual base salary
effective immediately prior to the change of control transaction), plus (B) one
years' bonus payments calculated based upon the bonus such VP would have
received had targeted level(s) of performance (for CombiMatrix and its
affiliated companies, and, if applicable the VP and/or business units or persons
on whom bonus performance is measured) been achieved for the fiscal year in
which the change of control transaction occurred ("Target Bonus"), (ii) company
paid COBRA coverage for medical and dental benefits for the appropriate COBRA
coverage period and (iii) up to six months' of office and secretarial support
for the purpose of finding new employment at a maximum cost of $1,000 per month
(such benefit not being payable in cash in lieu of the benefit).

Moreover, any stock options that are vested at the date of termination shall not
be forfeited.

                                      -4-

<PAGE>   5
                                    EXHIBIT A

        "Constructive Termination" means after the occurrence of a change of
control transaction, any one or more of the following events has occurred:

        a)      the assignment by CombiMatrix or any successor thereto
                ("Company") to an executive officer ("Executive") of duties that
                are inconsistent with the position held by the Executive
                ("Position") at the time of the change of control transaction or
                the removal by the Company from Executive of those duties or
                responsibilities usually appertaining to the Position
                immediately prior to the change of control transaction (or as
                such duties or responsibilities may thereafter exist from time
                to time as a result of changes in such duties or
                responsibilities made with Executive's prior written consent);
                or

        b)      any removal of Executive from, or any failure to elect or
                reelect Executive to, the office held immediately prior to the
                change of control transaction, except in connection with
                Executive's promotion, with his prior written consent, to a
                higher office (if any) with the Company; or

        c)      the failure of the Company to continue to provide Executive with
                office space, related facilities and support personnel
                (including, but not limited to, administrative and secretarial
                assistance) that are both commensurate with the Position and
                Executive's responsibilities to and position with the Company
                immediately prior to the time of the occurrence of such change
                in control transaction and not materially dissimilar to the
                office space, related facilities and support personnel provided
                to other key executive officers of the Company; or

        d)      a reduction by the Company in the amount of Executive's total
                cash compensation, including base salary and Target Bonus (or as
                subsequently increased) and as in effect immediately prior to
                the time of the occurrence of such change in control
                transaction; or

        e)      the discontinuation or reduction by the Company of Executive's
                participation in any bonus or other employee benefit plan,
                program, arrangement, or policy substantially similar to that or
                those in which Executive is a participant immediately prior to
                the time of the occurrence of such change in control
                transaction; or

        f)      Executive's principal office space of the related facilities or
                support space or the related facilities or support personnel
                referred to in paragraph (c) cease to be located within the
                Company's principal executive offices, or for a period of more
                than 45 consecutive days Executive is required by the Company to
                perform a majority of his duties outside the Company's principal
                executive offices; or

                                      -5-

<PAGE>   6
        g)      the relocation, without Executive's prior written consent, of
                the Company's principal executive offices to a location outside
                the county in which such offices are located immediately prior
                to the occurrence of such change of control transaction; or

        h)      the failure of the Company to provide Executive annually with a
                number of paid vacation days and sick leave days at least equal
                to the number of paid vacation days to which Executive is
                entitled annually immediately prior to the occurrence of such
                change of control transaction; or

        i)      the failure by the Company to promptly reimburse Executive for
                any business expenses;

        j)      because of the policies, decisions or actions of the Board or
                the stockholders of the Company, Executive can no longer perform
                his duties to the Company in a manner which is consistent with
                the manner in which such duties were performed by Executive
                immediately prior to the occurrence of such change of control
                transaction; or

        k)      the removal of the Executive from the Office of the Chairman or
                Senior Staff, as the case may be, of the Company within six
                months prior to a change of control transaction.

                                      -6-

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