Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

Michael Coffee

This EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made as of June 14,
2010 by and between MEDICINOVA, INC, a Delaware corporation (“MediciNova”), and
Michael Coffee (“Executive”), with reference to the following facts:

A. The Board of Directors of MediciNova (the “Board”) has determined that it
would be in the best interests of MediciNova to enter into this Employment
Agreement on the terms herein set forth.

B. Executive is willing to serve as Chief Business Officer of MediciNova upon
the terms and conditions herein set forth. In respect of such employment,
Executive has also executed that certain Proprietary Information and Inventions
Agreement of even date herewith (the “Proprietary Information and Inventions
Agreement”) and that certain Severance Protection Agreement of even date
herewith (the “Severance Protection Agreement”), which are attached hereto as
Exhibits A and B, respectively, and incorporated herein by reference as though
fully set forth herein.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties agree as follows:

1. Definitions. For purposes of this Agreement, the following terms shall have
their respective meanings:

1.1 “Cause” shall mean (as shall reasonably be determined by the Board of
Directors of the MediciNova (the “Board”)): (i) any intentional failure to
perform the Executive’s obligations, services or duties under this Agreement or
any other agreement or arrangement between the Executive and the MediciNova
regarding employment or consulting services to be rendered by the Executive to
the MediciNova, other than an immaterial violation which is remedied upon
reasonable notice; (ii) failure to achieve performance levels for the MediciNova
consistent with the MediciNova’s goals, as determined by the Board in good faith
and following appropriate inquiry; (iii) any violation of MediciNova policy,
other than an immaterial violation which is remedied upon reasonable notice;
(iv) any willful neglect of the Executive’s duties to the MediciNova or gross
misconduct; (v) any failure to protect the MediciNova’s trade secrets; or
(vi) any commission of any crime or criminal offense involving moral turpitude.

1.2 “Total and Permanent Disability” shall have the meaning ascribed to such
term in Section 22 of the Internal Revenue Code of 1986, as amended (the
“Code”).

2. Duties. Subject to the terms and provisions of this Agreement, Executive is
employed by MediciNova as an executive employee of MediciNova. Executive’s
specific position shall be as Chief Business Officer; provided, however, that
the Executive may be reassigned by the Board to another executive position with
MediciNova (or another position of similar responsibility) at such time as the
Board (excluding Executive) reasonably agrees upon another Chief Business
Officer. Executive covenants to perform Executive’s employment duties in good
faith. Executive shall at all times during the performance of this Agreement
strictly adhere to and obey any and all rules and regulations now in effect or
as subsequently adopted and/or modified governing the conduct of MediciNova
employees and/or executives (the “Employment Policies”). In the event of any
conflict between the provisions of this Agreement and any of the Employment
Policies, the provisions of this Agreement shall control. A default under any of
the Employment Policies, except to the extent necessary or appropriate to comply
with the provisions of this Agreement, shall be a default under this Agreement.

 

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3. Exclusive Services. Executive’s entire business time, attention, energies,
skills, learning and best efforts shall be devoted to the business of
MediciNova; provided, however, that this Section 3 shall not be construed as
preventing Executive from (1) participating in social, civic or professional
associations or engaging in passive outside investment activities which may
require a limited portion of time and effort to manage, consistent with any
Employment Policies and (2) serving as an advisor to the Chief Executive Officer
of Adamas Pharmaceuticals, Inc, in each case so long as such activities do not
interfere with the performance of Executive’s duties nor compete, in any way,
with the products or services offered by or through MediciNova.

4. Term of Employment. The term of this Agreement shall continue until such time
as the employment of Executive is terminated pursuant to Section 7 below;
provided, however, that this Agreement shall automatically terminate upon the
death or Total and Permanent Disability of Executive.

5. Compensation. For all services rendered by Executive to MediciNova,
MediciNova shall pay/provide to Executive the following:

 

  •  

base compensation in the amount of $300,000 per annum (the “Base Compensation”);

 

  •  

periodic bonuses determined within the sole discretion of the Board (or any
committee of the Board which is appointed to consider matters relating to
executive compensation) but with reference to amounts paid to other executives
and/or employees of MediciNova;

 

  •  

grants of equity-based compensation within the sole discretion of the Board (or
any committee of the Board which is appointed to consider matters relative to
equity-based compensation); MediciNova will grant you 100,000 options as an
initial grant.

 

  •  

such group medical and life insurance and participation in other benefit plans
as shall be made available for executives of MediciNova (with amounts and levels
of participation therein determined with reference to other executives and/or
employees of MediciNova); and

 

  •  

an annual amount of vacation days consistent with amounts available for other
executives of MediciNova (but, in any event, no fewer than 10 days)
(collectively, the “Compensation Package”).

 

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6. Adjustments. The amount of Base Compensation may be adjusted on an annual
basis as Board and Executive shall mutually and reasonably agree. Compensation
under the Compensation Package shall be paid to Executive less required
deductions for Social Security, withholding taxes and other authorized
deductions and at times when executives of MediciNova normally receive their
compensation.

7. Termination. The employment of Executive may be terminated at any time by:

7.1 Mutual agreement of MediciNova and Executive evidenced in writing;

7.2 Action of the Board without prior notice to Executive if the Board
reasonably shall establish that (i) Executive is in material default in the
performance of Executive’s obligations, services or duties hereunder, or has
materially breached any provision of this Agreement, or (ii) MediciNova
otherwise has Cause to terminate Executive’s employment (although the right of
termination of Executive’s employment under this Section 7.2 shall not be in
limitation of any other right or remedy MediciNova may have under this Agreement
or otherwise);

7.3 Upon the death or Total and Permanent Disability of Executive; or

7.4 Upon three months’ written notice by either party to the other indicating
the desire of the notifying party, in its sole discretion, to terminate the
employment of Executive hereunder.

8. Compensation Upon Termination.

8.1 In the event that the employment of Executive is terminated pursuant to
Section 7 above, Executive shall be terminated without compensation other than
for accrued salary and other accrued amounts; provided, however, that if such
employment is terminated at MediciNova’s option pursuant to Section 7.4 above,
then Executive shall be entitled to such severance payment(s) as shall be
provided for (if any) by the Employment Policies in effect at that time; and
provided, further, that in lieu of the three months’ notice provided by
Section 7.4 above, MediciNova may provide Executive with an amount equal to
one-half (1/2) of annual Base Compensation which shall be applicable at the time
of Executive’s termination of employment with MediciNova, such amount, if any,
shall be paid in lump sum on or as soon as practicable following the Termination
Date (the “Termination Payment”). Notwithstanding the foregoing, and as provided
in Section 8.3, if after any such termination of employment, the Executive will
become a consultant in accordance with Section 9 and if the Termination Payment
is considered deferred compensation under Code Section 409A, then the parties
agree that the Termination Payment, if any, will be delayed until such time as
the Executive undergoes a separation of service in accordance with Section 8.3.
Except as provided in the immediately preceding sentence (if applicable),
Executive is entitled to no other compensation upon termination.

8.2 Notwithstanding any provision to the contrary in this Agreement, MediciNova
shall delay the commencement of payments or benefits coverage to which the
Executive would otherwise become entitled under the Agreement in connection with
his termination of employment until the earlier of (i) the expiration of the
six-month period measured from the date of the Executive’s “separation from
service” with MediciNova (as such term is defined in Treasury Regulations issued
under Section 409A of the Code) or (ii) the date of the Executive’s death, if
and only if MediciNova in good faith determines that the Executive is a
“specified employee” within the meaning of that term under Code Section 409A at
the time of such separation from service and that such delayed commencement is
otherwise required in order to avoid a prohibited distribution under
Section 409A(a)(2) of the Code. Upon the expiration of the applicable Code
Section 409A(a)(2) deferral period, all payments and benefits deferred pursuant
to this Section 8.2 (whether they would have otherwise been payable in a single
sum or in installments in the absence of such deferral) shall be paid or
reimbursed to the Executive in a lump sum, and any remaining payments and
benefits due under the Agreement shall be paid or provided in accordance with
the normal payment dates specified for them herein.

 

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8.3 The provisions of this Agreement which require commencement of payments or
benefits coverage subject to Section 409A upon a termination of employment shall
be interpreted to require that the Executive have a “separation from service”
with the Company (as such term is defined in Treasury Regulations issued under
Code Section 409A).

9. In the event that the employment of Executive is terminated pursuant to
Section 7 above, Executive shall be terminated without compensation other than
for accrued salary and other accrued amounts; provided, however, that if such
employment is terminated at MediciNova’s option pursuant to Section 7.4 above,
then Executive shall be entitled to such severance payment(s) as shall be
provided for (if any) by the Employment Policies in effect at that time; and
provided, further, that in lieu of the three months’ notice provided by
Section 7.4 above, MediciNova may provide Executive with an amount equal to
one-half (1/2) of annual Base Compensation which shall be applicable at the time
of Executive’s termination of employment with MediciNova. Except as provided in
the immediately preceding sentence (if applicable), Executive is entitled to no
other compensation upon termination.

10. Option to Hire Executive as Consultant. Upon any termination of Executive’s
employment under this Agreement, either pursuant to Section 7 above or
otherwise, MediciNova shall have the option (in MediciNova’s discretion) to
engage Executive as a consultant on a quarterly basis commencing on the
effective date of termination of Executive’s employment (the “Termination Date”)
and continuing for a period of up to one (1) year following the Termination Date
(or, if longer, the period terminating on the date which is three (3) years
after June 14, 2010). MediciNova’s rights under this Section 9 shall lapse if
MediciNova has not provided Executive with written notice of MediciNova’s intent
to exercise its rights hereunder prior to the later of (i) the Termination Date
(e.g., in the event of a voluntary termination under Section 7.4 above) and
(ii) 30 days following notice of such termination (e.g., in the event of an
involuntary termination under Section 7.2 above). As a consultant, Executive’s
duties shall include devoting attention to those matters reasonably requested by
the Board but which will not interfere (as to time required) with the
opportunity to maintain other employment consistent with this Section 9. During
the term of this Agreement (and subject to the provisions of the Proprietary
Information and Inventions Agreement) as well any period for which Executive is
engaged to perform consulting services for MediciNova under this Section 9,
Executive agrees that Executive shall not:

10.1 Carry on directly or indirectly, whether or not for compensation (as
proprietor, partner, stockholder (except that a less than one percent
(1%) ownership in a public corporation shall be permitted), officer, director,
agent, employee, consultant, trustee, affiliate or otherwise), any business
which is, or as a result of Executive’s engagement or participation would
become, competitive with or adverse to the business of MediciNova as it exists
from time to time;

 

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10.2 Permit Executive’s name to be used by any business competitive in any
respect with the business of MediciNova as it exists from time to time;

10.3 Solicit or divert, or attempt to call on, solicit or divert, any customer
of MediciNova with whom Executive became acquainted during Executive’s
employment or affiliation with MediciNova, either for Executive or for any other
person, firm or corporation; or

10.4 Induce or attempt to induce any person who is an employee, agent or
consultant of MediciNova to leave the employ of MediciNova.

Without limiting the other provisions of this Agreement, (i) Executive
acknowledges and agrees that it is impossible to measure in money the damages
which will befall MediciNova by reason of Executive’s failure to perform any of
the obligations set forth in this Section 9, (ii) Executive acknowledges that
MediciNova shall be entitled to enforce Executive’s obligations under this
Section 9 by court injunction (without the posting of a bond or other security),
specific performance or other appropriate equitable relief, (iii) Executive
agrees (to the maximum extent permitted by law) to have the provisions of this
Section 9 specifically enforced against Executive by any court of equity and
(iv) Executive consents to the entry of injunctive relief against Executive
enjoining or restraining any violation or threatened violation of the provisions
of this Section 9.

11. Compensation for Consulting Services. For each quarter (i.e., three-month
period) that Executive provides consulting services to MediciNova pursuant to
the option of MediciNova contained in Section 9 above, MediciNova shall pay
Executive a sum equal to fifteen percent (15%) of Executive’s annual Base
Compensation which shall be applicable at the time of Executive’s termination of
employment with MediciNova (prorated for any period of less than a quarter). The
parties expressly agree that when Executive is performing consulting services
for MediciNova, Executive is acting as an independent contractor. Therefore,
Executive shall be solely liable for Social Security and income taxes that
result from Executive’s compensation as a consultant. In addition, Executive
shall not be entitled to any other benefits including, without limitation, such
group medical, life and disability insurance and other benefits as may be
provided to employees and/or executives of MediciNova.

12. Dispute Resolution Procedure. Any dispute arising out of or related to the
employment relationship created hereby, including the termination of that
relationship and any allegations of unfair or discriminatory treatment arising
under state or federal law or otherwise, to the maximum extent permitted by law,
shall be resolved by final and binding arbitration, except where the law
specifically forbids the use of arbitration as a final and binding remedy, or
where Section 11.4 below specifically allows a different remedy. The following
dispute resolution procedure shall apply:

12.1 The party claiming to be aggrieved shall furnish to the other party a
written statement of the grievance identifying any witnesses or documents that
support the grievance and the relief requested or proposed.

 

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12.2 The responding party shall furnish a statement of the relief, if any, that
it is willing to provide, and the witnesses or documents that support its
position as to the appropriate action. The parties can mutually agree to waive
this step. If the matter is not resolved at this step, the parties shall submit
the dispute to non-binding mediation before a mediator to be jointly selected by
the parties. Employee shall pay the cost of the mediation.

12.3 If the mediation does not produce a resolution of the dispute, the parties
agree that the dispute shall be resolved by final and binding arbitration before
an arbitrator appointed by the Judicial Arbitration and Mediation Service
(JAMS), with the arbitration to be held in San Diego, California. Judgment upon
the award may be entered in any court having jurisdiction thereof. The
arbitrator, however, shall not have the authority to require MediciNova to
change any lawful policy or benefit plan. The hearing shall be transcribed.
Employee shall bear the costs of the arbitration.

Except as set forth in Section 9 hereof, arbitration shall be the exclusive
final remedy for any dispute between the parties, to the maximum extent
permitted by law, including but not limited to disputes involving claims for
discrimination or harassment (such as claims under the Fair Employment and
Housing Act, Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, or the Age Discrimination in Employment Act), wrongful
termination, breach of contract, breach of public policy, physical or mental
harm or distress or any other disputes, and the parties agree that no dispute
shall be submitted to arbitration where the party claiming to be aggrieved has
not complied with the preliminary steps provided for in Sections 11.1 and 11.2.

Notwithstanding the foregoing, either party may bring an action in a court of
competent jurisdiction regarding or related to matters involving MediciNova’s
confidential, proprietary or trade secret information, or regarding or related
to inventions that Executive may claim to have developed prior to joining
MediciNova or after joining MediciNova, pursuant to California Labor Code 2870.
The parties further agree that, for violations of Executive’s confidentiality,
proprietary information or trade secret obligations which the parties have
elected to submit to arbitration, MediciNova retains the right to seek
preliminary injunctive relief in court in order to preserve the status quo or
prevent irreparable injury before the matter can be heard in arbitration.

12.4 MediciNova reserves the right to modify, change or cancel this provision
upon 30 days written notice. However, such cancellation shall not affect matters
which have already been submitted to arbitration.

13. Confidentiality and Inventions. Executive recognizes that MediciNova has and
shall continue to have and develop information, knowledge and rights regarding
inventions, confidential information, products, services, future plans, business
affairs, processes, trade secrets, technical matters, customer lists,
experimental designs and items of intellectual property. Executive hereby
confirms and ratifies the Proprietary Information and Inventions Agreement
(which is incorporated herein by reference) and agrees to execute and deliver to
MediciNova any other similar agreement(s) presented to Executive by MediciNova
from time to time.

 

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14. Section Headings. The section headings or captions in this Agreement are for
convenience of reference only and do not form a part hereof, and do not in any
way modify, interpret or construe the intent of the parties or affect any of the
provisions of this Agreement.

15. Survival. The obligations and rights imposed upon the parties hereto by the
provisions of this Agreement which relate to acts or events subsequent to the
termination of this Agreement shall survive the termination of this Agreement
and shall remain fully effective thereafter.

16. Severability. Should any one or more of the provisions of this Agreement or
of any agreement entered into pursuant to this Agreement be determined to be
illegal or unenforceable in any relevant jurisdiction, then such illegal or
unenforceable provision shall be modified by the proper court, if possible, but
only to the extent necessary to make such provision enforceable, and such
modified provision and all other provisions of this Agreement and of each other
agreement entered into pursuant to this Agreement shall be given effect
separately from the provision or portion thereof determined to be illegal or
unenforceable and shall not be affected thereby; provided, however, that any
such modification shall apply only with respect to the operation of this
Agreement in the particular jurisdiction in which such determination of
illegality or unenforceability is made.

17. Waiver. The failure of either party to enforce any provision of this
Agreement shall not be construed as a waiver of any such provision, nor prevent
such party thereafter from enforcing such provision or any other provision of
this Agreement. The rights granted both parties herein are cumulative and the
election of one shall not constitute a waiver of such party’s right to assert
all other legal remedies available under the circumstances.

18. Parties in Interest. Nothing in this Agreement, whether express or implied,
is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties hereto and the successors,
assigns and affiliates of MediciNova, nor is anything in this Agreement intended
to relieve or discharge the obligation or liability of any third person to any
party to this Agreement, nor shall any provision give any third person any right
of subrogation or action over or against any party to this Agreement.

19. Assignment. MediciNova may, in its sole discretion, assign its rights and
obligations, in whole or in part, to any parent, subsidiary or affiliate of
MediciNova. This Agreement shall be binding upon the heirs, executors,
successors and assigns of Executive. This Agreement contemplates the rendition
of personal services by Executive and Executive may not assign this Agreement or
delegate Executive’s responsibilities hereunder.

20. Entire Agreement. Except for the Proprietary Information and Inventions
Agreement and the Severance Protection Agreement and any similar agreements
between MediciNova and Executive as may exist from time to time, this Agreement
contains the entire agreement of the parties with respect to the subject matter
hereof and no representation, inducement, promise or agreement, oral or
otherwise, between the parties not embodied herein shall be of any force or
effect. No modification, termination or attempted waiver shall be valid unless
in writing and signed by the party against whom or which such modification,
termination or waiver is sought to be enforced.

 

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21. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the 14th day
of June 2010.

 

MediciNova:

MediciNova, Inc.,

a Delaware corporation

By:  

/s/ Shintaro Asako

Name:   Shintaro Asako Title:   Chief Financial Officer

Executive:

By:  

/s/ Michael Coffee

Name:   Michael Coffee

 

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EXHIBIT A

[attached]

 

Exhibit A

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PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

Michael Coffee

MediciNova, Inc.

4350 La Jolla Village Dr., Suite 950

San Diego, California 92122

Ladies and Gentlemen:

I recognize that MediciNova, Inc., a Delaware corporation (“MediciNova”),
possesses a body of existing technology and intellectual property rights and is
engaged in a continuous program of research, development and production with
respect to its business (present and future).

I understand that:

A. As part of my employment by MediciNova (with the term “employment”, as used
herein, to include any consulting relationship), I am expected to make new
contributions and inventions of value to MediciNova.

B. I understand that my employment creates a relationship of confidence and
trust between me and MediciNova and that my position places me in a unique
position of access to the proprietary technology, trade secrets and research,
development and business information:

 

  (1) applicable to the business of MediciNova; or

 

  (2) applicable to the business of any client, partner or customer of
MediciNova,

which may be made known to me by MediciNova or by any client, partner or
customer of MediciNova, or learned by me during the period of my employment.

C. MediciNova possesses and will continue to possess information that has been
or will be created, discovered or developed, or has or will otherwise become
known to MediciNova (including, without limitation, information created,
discovered, developed or made known by or to me during the period of or arising
out of my employment by MediciNova), and/or in which property rights have been
or will be assigned or otherwise conveyed to MediciNova, which information has
commercial value in the business in which MediciNova is engaged. All of the
aforementioned information is hereinafter called “Confidential Information.” By
way of illustration, but not limitation, Confidential Information includes all
data, compilations, blueprints, plans, audio and/or video recordings and/or
devices, information on computer disks, software, tapes, printouts and other
printed, typewritten or handwritten documents, specifications, strategies,
systems, schemas, methods (including delivery, storage, receipt, transmission,
presentation and manufacture of audio, video, informational or other data or
content), business and marketing development plans, customer lists, research
projections, processes, techniques, designs, sequences, components, programs,
technology, ideas, know-how, improvements, inventions (whether or not patentable
or copyrightable), information about operations and maintenance, trade secrets,
formulae, models, patent disclosures and any other information concerning the
actual or anticipated business, research or development of MediciNova or its
actual or potential customers or partners or which is or has been generated or
received in confidence by or for MediciNova by or from any person; and all
tangible and intangible embodiments thereof of any kind whatsoever including,
where appropriate and without limitation, all compositions, machinery,
apparatus, records, reports, drawings, copyright applications, patent
applications, documents and samples, prototypes, models, products and the like.

 

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In consideration of my employment or continued employment, as the case may be,
and the compensation received by me from MediciNova from time to time, I hereby
agree as follows:

1. All Confidential Information shall be the sole property of MediciNova and its
assigns, and MediciNova and its assigns shall be the sole owner of all patents,
copyrights and other rights in connection therewith. I hereby assign to
MediciNova any rights I may have or acquire in all Confidential Information. At
all times during my employment by MediciNova and at all times after termination
of such employment, I will keep in confidence and trust all Confidential
Information, and I will not disclose, sell, use, lecture upon or publish any
Confidential Information or anything relating to it without the prior written
consent of MediciNova, except as may be necessary in the ordinary course of
performing my duties as an employee of (or consultant to) MediciNova.

2. Without limiting the terms of my employment with MediciNova, I agree that
during the period of my employment by MediciNova I will not engage in any
employment or activity in any business that is directly or indirectly
competitive with MediciNova.

3. All documents, data, records, apparatus, equipment, sequences, components,
programs and other physical property, whether or not pertaining to Confidential
Information, furnished to me by MediciNova or produced by myself or others in
connection with my employment shall be and remain the sole property of
MediciNova and shall be returned promptly to MediciNova as and when requested by
MediciNova. Should MediciNova not so request, I shall return and deliver all
such property upon termination of my employment by me or by MediciNova for any
reason (“Termination”) and I will not take with me any such property, any
reproduction of such property or any materials or products derived from such
property.

4. I shall promptly disclose any outside activities or interests, including any
ownership or participation in the development of prior inventions, that conflict
or may conflict with the interests of MediciNova. I understand that I am
required to make such disclosures promptly if the activity or interest is
related, either directly or indirectly, to (i) an area of research, development,
service, product or product line of MediciNova, (ii) a manufacturing,
development or research methodology or process of MediciNova or (iii) any
activity that I may be involved with on behalf of MediciNova.

5. I shall promptly disclose to MediciNova, or any persons designated by it, all
improvements, inventions, formulae, processes, programs, techniques, know-how
and data, whether or not patentable or copyrightable, made or conceived or
reduced to practice or learned by me, either alone or jointly with others,
during the period of my employment with MediciNova which are related to or
useful in the business of MediciNova, or result from tasks assigned me by
MediciNova, or result from use of premises owned, leased or contracted for by
MediciNova (all said improvements, inventions, formulae, processes, techniques,
know-how and data shall be collectively hereinafter called “Inventions”). Such
disclosure shall continue for one year after Termination with respect to
anything that would be an Invention if made, conceived, reduced to practice or
learned prior to Termination.

 

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6. I agree that all Inventions shall be the sole property of MediciNova and its
assigns, and MediciNova and its assigns shall be the sole owner of all patents,
copyrights and other rights in connection therewith and all Confidential
Information with respect thereto. I hereby assign to MediciNova any and all
rights I may have or acquire in all Inventions, including all rights that may be
known as or referred to as “moral rights.” I further agree as to all Inventions
to assist MediciNova in every proper way (but at MediciNova’s expense) to obtain
and from time to time enforce patents and copyrights on the Inventions in any
and all countries, and to that end I will execute all documents for use in
applying for and obtaining such patents and copyrights thereon and enforcing the
same, as MediciNova may desire, together with any assignments thereof to
MediciNova or persons designated by it. My obligation to assist MediciNova in
obtaining and enforcing patents and copyrights for the Inventions in any and all
countries shall continue beyond Termination, but MediciNova shall compensate me
at a reasonable rate after Termination for time actually spent by me at
MediciNova’s request on such assistance. In the event that MediciNova is unable
for any reason whatsoever to secure my signature to any lawful and necessary
document required to apply for or execute any patent or copyright application
with respect to Inventions (including renewals, extension, continuations,
divisions or continuations in part thereof), I hereby irrevocably designate and
appoint MediciNova and its duly authorized officers and agents, as my agents and
attorneys-in-fact to act for and in my behalf and instead of me, to execute and
file any such application and to do all other lawfully permitted acts to further
the prosecution and issuance of patents or copyrights thereon with the same
legal force and effect as if executed by me.

7. As a matter of record I have identified beneath by signature hereto a
complete list of all inventions or improvements relevant to the subject matter
of my employment by MediciNova which have been made or conceived or first
reduced to practice by me alone or jointly with others prior to my employment by
MediciNova (“Prior Inventions”) which I desire to remove from the operation of
this Agreement; and I covenant that such list is complete. If no such list is
identified, I represent that I have made no such Prior Inventions at the time of
the commencement of my employment by MediciNova. Notwithstanding the foregoing,
and without limiting the other provisions of this Agreement, I agree that
(i) any improvements or new inventions to the item(s) so identified on such list
(if any) shall be treated as Inventions for purposes of this Agreement if the
provisions of Section 5 above are otherwise applicable and (ii) if, in the
course of my employment with MediciNova, I incorporate a Prior Invention into a
MediciNova product, process, application, machine or invention, the MediciNova
is hereby granted and shall have a nonexclusive, royalty-free, irrevocable,
perpetual, worldwide license (with rights to sublicense through multiple tiers
of sublicensees) to make, have made, modify, use and sell such Prior Invention.
Notwithstanding the foregoing, I agree that I will not incorporate, or permit to
be incorporated, Prior Inventions in any MediciNova product, process,
application, machine or invention without MediciNova’s prior written consent.

8. I represent that my performance of all the terms of this Agreement and that
my employment by MediciNova does not and will not breach or constitute an event
of default under any agreement (i) obligating me to keep in confidence
proprietary information acquired by me in confidence or in trust prior to, or at
any point throughout, my employment by MediciNova, (ii) obligating me to assign
to or protect for the benefit of any third party any proprietary information or
any improvement, invention, formulae, process, program, technique, know-how or
data or (iii) that is designed in any way to limit my employment or activity in
any business in which I may compete, directly or indirectly, with any other
business, or which might by application have such an effect. I have not entered
into, and I agree that I will not enter into, any agreement (either written or
oral) in conflict herewith.

 

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9. I understand, acknowledge and agree that, as part of the consideration for my
employment or continued employment by MediciNova, I have not brought and will
not bring with me to MediciNova or use in the performance of my responsibilities
at or for MediciNova any equipment, supplies, facility or trade secret or other
proprietary information of any former employer which are not generally available
to the public, unless I have obtained (and provide herewith to MediciNova a copy
of) written authorization for their possession and use.

10. I also understand that, in my employment by MediciNova, I am not to breach
any obligation of confidentiality that I have to others, and I agree that I
shall fulfill all such obligations during my employment by MediciNova. A copy of
any document reflecting any such obligation, or a description thereof if no
document is available, is provided herewith to MediciNova.

11. I agree that during the term of my employment with MediciNova and for a
period of twelve (12) months after Termination, I will not directly or
indirectly: (i) induce or attempt to induce any employee or consultant of
MediciNova to leave the employ of MediciNova or to otherwise end such employee’s
or consultant’s relationships with MediciNova, or (ii) other than on behalf of
MediciNova, induce or attempt to induce any other person to terminate a
relationship with MediciNova.

12. I acknowledge that, due to the uniqueness of my relationship with
MediciNova, MediciNova would not have an adequate remedy at law for money
damages in the event that this Agreement is not fully performed in accordance
with its terms. I agree that in addition to any other rights and remedies
available to MediciNova for any breach by me of my obligations hereunder,
MediciNova shall be entitled to enforcement of my obligations hereunder by court
injunction (without the posting of a bond or other security), specific
performance or other appropriate equitable relief.

13. If any provision of this Agreement shall be declared invalid, illegal or
unenforceable, such provision shall be severed and all remaining provisions
shall continue in full force and effect.

14. If applicable, this Agreement does not apply to inventions which qualify
fully for protection under Section 2870 of the California Labor Code (which, if
applicable, could apply to ideas or inventions for which no equipment, supplies,
facility or trade secret information of MediciNova were used and which were
developed entirely on my own time, and (1) which do not relate at the time of
conception or reduction to practice of the invention (a) to the actual business
of MediciNova, or (b) to MediciNova’s actual or demonstrably anticipated
research or development, or (2) which do not result from any work performed by
me for MediciNova). Notwithstanding the foregoing, I shall disclose in
confidence to MediciNova any invention in order to permit MediciNova to make a
determination as to compliance by me with the terms and conditions of this
Agreement.

 

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15. This Agreement shall be effective as of the first day of my employment by
MediciNova. The term “employment” and the term or duration of my employment, as
used herein and for purposes of this Agreement, shall include, without
limitation, any consulting relationship between myself and MediciNova
(including, if applicable, any such relationship which may follow the
termination of my status as an employee of MediciNova or which may precede my
status as an employee of MediciNova). Accordingly, notwithstanding any other
provision of this Agreement to the contrary (and without limitation), a
“Termination” shall not be deemed to have occurred if a consulting relationship
persists following the termination of my status as an employee of MediciNova (if
applicable).

16. The term MediciNova, as used herein, shall include any subsidiary or
affiliate of MediciNova.

17. This Agreement shall be binding upon me, my heirs, executors, assigns and
administrators and shall inure to the benefit of MediciNova, its successors and
assigns.

18. This Agreement shall be governed by and construed in accordance with the
internal laws of the State of California, without regard to the conflicts of law
principles thereof.

 

Dated: June 14, 2010      

/s/ Michael Coffee

      Name: Michael Coffee Prior Inventions:      

Accepted and Agreed to

This 14th day of June 2010.

 

MediciNova, Inc. By:  

/s/ Shintaro Asako

Name:   Shintaro Asako Title:   Chief Financial Officer

 

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EXHIBIT B

[attached]

 

Exhibit B

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SEVERANCE PROTECTION AGREEMENT

SEVERANCE PROTECTION AGREEMENT dated June 14, 2010, by and between MEDICINOVA,
Inc., a Delaware corporation (the “Company”), and Michael Coffee (the
“Executive”).

PURPOSE

The Board of Directors of the Company (the “Board”) recognizes that the
possibility of a Change in Control (as hereinafter defined) of the Company
exists and that the threat or occurrence of a Change in Control may result in
the distraction of its key management personnel because of the uncertainties
inherent in such a situation.

The Board has determined that it is essential and in the best interests of the
Company and its stockholders to retain the services of the Executive in the
event of the threat or occurrence of a Change in Control and to ensure the
Executive’s continued dedication and efforts in such event without undue concern
for the Executive’s personal financial and employment security.

In order to induce the Executive to remain in the employ of the Company,
particularly in the event of the threat or occurrence of a Change in Control,
the Company desires to enter into this Agreement to provide the Executive with
certain benefits in the event the Executive’s employment is terminated as a
result of, or in connection with, a Change in Control.

NOW, THEREFORE, in consideration of the respective agreements of the parties
contained herein, it is agreed as follows:

SECTION 1. Definitions.

For purposes of this Agreement, the following terms have the meanings set forth
below:

“Accrued Compensation” means an amount which includes all amounts earned or
accrued by the Executive through and including the Termination Date but not paid
to the Executive on or prior to such date, including (a) all base salary,
(b) reimbursement for all reasonable and necessary expenses incurred by the
Executive on behalf of the Company during the period ending on the Termination
Date, (c) all vacation pay and (d) all bonuses and incentive compensation (other
than the Pro Rata Bonus).

“Base Salary Amount” means the greater of the Executive’s annual base salary
(a) at the rate in effect on the Termination Date and (b) at the highest rate in
effect at any time during the 180-day period prior to a Change in Control, and
will include all amounts of the Executive’s base salary that are deferred under
any qualified or non-qualified employee benefit plan of the Company or any other
agreement or arrangement.

“Beneficial Owner” has the meaning as used in Rule 13d-3 promulgated under the
Securities Exchange Act. The terms “Beneficially Owned” and “Beneficial
Ownership” each have a correlative meaning.

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

 

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“Bonus Amount” means the greater of (a) the annual bonus paid or payable to the
Executive pursuant to any annual bonus or incentive plan maintained by the
Company in respect of the fiscal year ending immediately prior to the fiscal
year in which the Termination Date occurs, (b) the average of the annual bonus
paid or payable to the Executive pursuant to any annual bonus or incentive plan
maintained by the Company in respect of each of the three fiscal years ending
immediately prior to the fiscal year in which the Termination Date occurs (or,
if higher, ending in respect of each of the three fiscal years ending
immediately prior to the year in which the Change in Control occurs) or (c) in
the event that the Executive was not employed by the Company for the entire
fiscal year ending immediately prior to the fiscal year in which the Termination
Date occurs, the annual target bonus established and payable to the Executive
pursuant to any annual bonus or incentive plan maintained by the Company in
respect of the fiscal year ending during the fiscal year in which the
Termination Date occurs. Bonus Amount includes only the short-term incentive
portion of the annual bonus and does not include restricted stock awards,
options or other long-term incentive compensation awarded to the Executive.

“Cause” for the termination of the Executive’s employment with the Company will
be deemed to exist if (a) the Executive has been convicted for committing an act
of fraud, embezzlement, theft or other act constituting a felony (other than
traffic related offenses or as a result of vicarious liability), (b) the
Executive willfully engages in illegal conduct or gross misconduct that is
significantly injurious to the Company; however, no act or failure to act, on
the Executive’s part shall be considered “willful” unless done or omitted to be
done, by the Executive not in good faith and without reasonable belief that his
or her action or omission was in the best interest of the Company or (c) failure
to perform his or her duties in a reasonably satisfactory manner after the
receipt of a notice from the Company detailing such failure if the failure is
incapable of cure, and if the failure is capable of cure, upon the failure to
cure such failure within 30 days of such notice or upon its recurrence.

“Change in Control” of the Company means, and shall be deemed to have occurred
upon, any of the following events:

(a) The acquisition by any Person of beneficial ownership (as defined in Rule
13d-3 of the General Rules and Regulations under the Securities Exchange Act) of
forty percent (40%) or more of the outstanding voting securities; provided,
however, that the following acquisitions shall not constitute a Change in
Control for purposes of this subparagraph (a): (A) any acquisition directly from
the Company; (B) any acquisition by the Company or any of its Subsidiaries;
(C) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its Subsidiaries; or (D) any acquisition by
any corporation pursuant to a transaction which complies with clauses (i),
(ii) and (iii) of subparagraph (c) below; or

(b) Individuals who, as of January 1, 2010, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual who becomes a director of the Company
subsequent to January 1, 2010, and whose election, or whose nomination for
election by the Company’s stockholders, to the Board was either (i) approved by
a vote of at least a majority of the directors then comprising the Incumbent
Board or (ii) recommended by a nominating committee comprised entirely of
directors who are then Incumbent Board members shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange
Act), other actual or threatened solicitation of proxies or consents or an
actual or threatened tender offer; or

 

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(c) Consummation of a reorganization, merger, or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (a
“Business Combination”), in each case unless following such Business
Combination, (i) all or substantially all of the Persons who were the Beneficial
Owners, respectively, of the outstanding shares and outstanding voting
securities immediately prior to such Business Combination own, directly or
indirectly, more than fifty percent (50%) of the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors of the Company, as the case may be, of the entity resulting from the
Business Combination (including, without limitation, an entity which as a result
of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination, of the outstanding voting securities (provided, however,
that for purposes of this clause (i) any shares of common stock or voting
securities of such resulting entity received by such Beneficial Owners in such
Business Combination other than as the result of such Beneficial Owners’
ownership of outstanding shares or outstanding voting securities immediately
prior to such Business Combination shall not be considered to be owned by such
Beneficial Owners for the purposes of calculating their percentage of ownership
of the outstanding common stock and voting power of the resulting entity);
(ii) no Person (excluding any entity resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or such entity
resulting from the Business Combination) beneficially owns, directly or
indirectly, forty percent (40%) or more of the combined voting power of the then
outstanding voting securities of such entity resulting from the Business
Combination unless such Person owned forty percent (40%) or more of the
outstanding shares or outstanding voting securities immediately prior to the
Business Combination; and (iii) at least a majority of the members of the Board
of the entity resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or the
action of the Board, providing for such Business Combination; or

(d) Approval by the Company’s stockholders of a complete liquidation or
dissolution of the Company.

For purposes of clause (c), any Person who acquires outstanding voting
securities of the entity resulting from the Business Combination by virtue of
ownership, prior to such Business Combination, of outstanding voting securities
of both the Company and the entity or entities with which the Company is
combined shall be treated as two Persons after the Business Combination, who
shall be treated as owning outstanding voting securities of the entity resulting
from the Business Combination by virtue of ownership, prior to such Business
Combination of, respectively, outstanding voting securities of the Company, and
of the entity or entities with which the Company is combined.

“Code” means the Internal Revenue Code of 1986, as amended.

 

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“Company” means MEDICINOVA, INC., a Delaware corporation, provided that in
recognition of the fact that the Executive may be employed by a direct or
indirect Subsidiary of MEDICINOVA, INC., the term “Company” when referring to
the employment relationship and the compensation or benefits related thereto
shall include the employer of Executive as the context requires.

“Continuation Period” has the meaning set forth in Section 3.1(b)(iii).

“Disability” means the status of disability determined conclusively by the
Company based upon certification of disability by the Social Security
Administration or upon such other proof as the Company may reasonably require,
effective upon receipt of such certification or other proof by the Company.

“Full Release” means a written release, timely executed so that it is fully
effective as of the date of payment pursuant to Section 3.1(b)(ii), in a form
satisfactory to the Company and counsel pursuant to which the Executive fully
and completely releases the Company from any and all claims that the Executive
may have against the Company or its affiliates (other than any claims that may
or have arisen under this Agreement).

“Good Reason” means the occurrence of any of the events or conditions described
in clauses (a) through (e) hereof, without the Executive’s prior written
consent:

(a) (i) any material adverse change in the Executive’s status, position or
responsibilities (including reporting responsibilities) from the Executive’s
status, position or responsibilities as in effect at any time within 180 days
preceding the date of the Change in Control or at any time thereafter, (ii) any
assignment to the Executive of duties or responsibilities which are materially
and adversely inconsistent with the Executive’s status, position or
responsibilities as in effect at any time within 180 days preceding the date of
the Change in Control or at any time thereafter or (iii) in the case of an
Executive who is an executive officer of the Company a significant portion of
whose responsibilities relate to the Company’s status as a public company, the
failure of such Executive to continue to serve as an executive officer of a
public company, in each case except in connection with the termination of the
Executive’s employment for Disability, Cause, as a result of the Executive’s
death or by the Executive other than for Good Reason;

(b) a material reduction in Executive’s base salary;

(c) the imposition of a requirement that the Executive be based at any place
outside a 50-mile radius from the Executive’s principal place of employment
immediately prior to the Change in Control, except for reasonably required
travel on Company business which is not materially greater in frequency or
duration than prior to the Change in Control;

(d) any material breach by the Company of any provision of this Agreement or any
other agreement to which the Company and the Executive are parties; or

(e) the failure of the Company to obtain, as contemplated in Section 7, an
agreement, reasonably satisfactory to the Executive, from any Successor to
assume and agree to perform this Agreement.

 

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Notwithstanding anything to the contrary in this Agreement, no termination will
be deemed to be for Good Reason hereunder if it results from an action not taken
by the Company in bad faith and which is remedied by the Company within 30 days
after receipt of notice thereof given by the Executive.

“Notice of Termination” means a written notice from the Company or the Executive
of the termination of the Executive’s employment which indicates the specific
termination provision in this Agreement relied upon and which sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated. Any
such notice given by Executive of a termination for Good Reason shall be given
within 90 days of the occurrence giving rise to such termination for Good
Reason.

“Person” has the meaning as defined in Section 3(a)(9) of the Securities
Exchange Act and used in Section 13(d) or 14(d) of the Securities Exchange Act,
and will include any “group” as such term is used in such sections.

“Pro Rata Bonus” means an amount equal to the Bonus Amount multiplied by a
fraction, the numerator of which is the number of days elapsed in the then
fiscal year through and including the Termination Date and the denominator of
which is 365.

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Subsidiary” means any corporation with respect to which another specified
corporation has the power under ordinary circumstances to vote or direct the
voting of sufficient securities to elect a majority of the directors.

“Successor” means a corporation or other entity acquiring all or substantially
all the assets and business of the Company, whether by operation of law, by
assignment or otherwise.

“Termination Date” means (a) in the case of the Executive’s death, the
Executive’s date of death, (b) in the case of the termination of the Executive’s
employment with the Company by the Executive for Good Reason, five days after
the date the Notice of Termination is received by the Company, and (c) in all
other cases, the date specified in the Notice of Termination; provided that if
the Executive’s employment is terminated by the Company for Cause or due to
Disability, the date specified in the Notice of Termination will be at least 30
days after the date the Notice of Termination is given to the Executive.

SECTION 2. Term of Agreement.

The term of this Agreement (the “Term”) will commence on June 14, 2010, and will
continue in effect until December 31, 2010; provided that on December 31, 2010
and each anniversary of such date thereafter, the Term shall automatically be
extended for one additional year unless, not later than October 1 of such year,
the Company or the Executive shall have given notice not to extend the Term; and
further provided that in the event a Change in Control occurs during the Term,
the Term will be extended to the date 24 months after the date of the occurrence
of such Change in Control.

Notwithstanding the foregoing and subject to Section 3.2, the Term shall be
deemed to have immediately expired without any further action and this Agreement
will immediately terminate and be of no further effect if any of the following
events occurs prior to a Change in Control:

(a) the Executive’s employment with the Company is terminated (whether by the
Company or the Executive) for any reason;

 

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(b) the Executive’s employment is not terminated but there is a change in his or
her status, position or responsibilities (including reporting responsibilities)
from that which applied to Executive on the date of this Agreement; or

(c) the Executive reaches the mandatory retirement age applicable to the
Company’s executive officers under any stated policy of the Company, as may be
adopted and revised from time to time by the Board.

SECTION 3. Termination of Employment.

3.1. If, during the Term, the Executive’s employment with the Company is
terminated within 12 months following a Change in Control, the Executive will be
entitled to the following compensation and benefits:

(a) If the Executive’s employment with the Company is terminated (i) by the
Company for Cause or Disability, (ii) by reason of the Executive’s death or
(iii) by the Executive other than for Good Reason, the Company will pay to the
Executive the Accrued Compensation and, if such termination is other than by the
Company for Cause, a Pro Rata Bonus, such amount will be paid in a single lump
sum cash payment by the Company to the Executive within five days after the
Termination Date.

(b) If the Executive’s employment with the Company is terminated (whether by the
Company or the Executive) for any reason other than as specified in
Section 3.1(a), the Executive will be entitled to the following:

(i) the Company will pay the Executive all Accrued Compensation and a Pro Rata
Bonus, such amounts will be paid in a single lump sum cash payment by the
Company to the Executive within five days after the Termination Date;

(ii) subject to Section 18, and subject to the Executive providing the Company
with (and not revoking) a Full Release within such period as the Company may
require (but not in excess of 60 days following the Termination Date, taking
into account any applicable period for revocation), the Company will pay the
Executive as severance pay, and in lieu of any further compensation for periods
subsequent to the Termination Date, in a single payment an amount in cash equal
to two (2) times the sum of (A) the Base Salary Amount and (B) the Bonus Amount,
such amount will be paid in a single lump sum cash payment by the Company to the
Executive on the 60th day following the Termination Date;

 

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(iii) subject to Section 18, and subject to the Executive providing the Company
with (and not revoking) a Full Release and complying with his or her obligations
under Section 6, the Company will, for a period of 24 months (the “Continuation
Period”), at its expense provide to the Executive and the Executive’s dependents
and beneficiaries the same or equivalent life insurance, disability, medical,
dental, and hospitalization benefits (the “Continuation Period Benefits”)
provided at Company expense to other similarly situated executives who continue
in the employ of the Company during the Continuation Period (“similarly situated
executives”). The obligations of the Company to provide the Executive and the
Executive’s dependents and beneficiaries with the Continuation Period Benefits
shall not restrict or limit the Company’s right to terminate or modify the
benefits made available by the Company to its similarly situated executives or
other employees and following any such termination or modification, the
Continuation Period Benefits that Executive (and the Executive’s dependents and
beneficiaries) shall be entitled to receive shall be so terminated or modified.
The Company’s obligation hereunder with respect to the foregoing benefits will
be limited to the extent that the Executive obtains any such benefits pursuant
to a subsequent employer’s benefit plans, in which case the Company may reduce
the coverage of any benefits it is required to provide the Executive hereunder
as long as the coverages and benefits of the combined benefit plans are no less
favorable to the Executive than the coverages and benefits required to be
provided hereunder. This Section 3.1(b)(iii) will not be interpreted so as to
limit any benefits to which the Executive or the Executive’s dependents or
beneficiaries may be entitled under any of the Company’s employee benefit plans,
programs or practices following the Executive’s termination of employment;

(iv) the Company shall provide the Executive with reasonable outplacement
services suitable to the Executive’s position for a period of 12 months or, if
earlier, until the first acceptance by the Executive of an offer of employment;
and

(v) such other acceleration of vesting and other benefits provided in other
Company plans or agreements regarding options to purchase Company stock,
restricted stock, deferral of stock or other equity compensation awards granted
to or otherwise applicable to Executive.

(c) To the extent necessary to comply with Code Section 409A, any such payment,
reimbursements or in-kind benefits to be paid or provided to the Executive under
Section 3.1(b)(iii) and/or Section 3.1(b)(iv), shall be paid or provided as soon
as practical following submission by the Executive of a reimbursement request
but no later than the end of the third calendar year following the calendar year
in which the Termination Date occurs and no benefit will be paid or provided if
the Executive incurs such cost after the end of the second calendar year
following the calendar year in which the Termination Date occurs.

(d) The Executive will not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, and no
such payment will be offset or reduced by the amount of any compensation or
benefits provided to the Executive in any subsequent employment, except as
specifically provided in Section 3.1(b)(iii) and 3.1(b)(iv).

3.2. Notwithstanding anything in this Agreement to the contrary, if, within the
30 days immediately preceding a Change in Control, (i) the Executive’s
employment is terminated (whether by the Company or the Executive) for any
reason other than as specified in Section 3.1(a), or (ii) (A) there is a
material adverse change in the Executive’s status, position or responsibilities
(including reporting responsibilities) from that which applied to Executive on
the date of this Agreement, and (B) the Executive’s employment with the Company
is subsequently terminated within 24 months following a Change in Control
(whether by the Company or the Executive) for any reason other than as specified
in Section 3.1(a), the Executive shall be entitled to receive the benefits
provided in Section 3.1(b), as subject to Section 18.

 

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3.3. Except as otherwise noted herein, the compensation to be paid to the
Executive pursuant to Sections 3.1(a), 3.1(b)(i) and 3.1(b)(ii) of this
Agreement (whether by reason of Section 3.1(c) or Section 3.2) will be in lieu
of any similar severance or termination compensation (i.e., compensation based
directly on the Executive’s annual salary or annual salary and bonus) to which
the Executive may be entitled under any other Company severance or termination
agreement, plan, program, policy, practice or arrangement. With respect to any
other compensation and benefit to be paid or provided to the Executive pursuant
to this Section 3, the Executive will have the right to receive such
compensation or benefit as herein provided or, if determined by the Executive to
be more advantageous to the Executive, similar compensation or benefits to which
the Executive may be entitled under any other Company severance or termination
agreement, plan, program, policy, practice or arrangement. The Executive’s
entitlement to any compensation or benefits of a type not provided in this
Agreement will be determined in accordance with the Company’s employee benefit
plans and other applicable programs, policies and practices as in effect from
time to time.

SECTION 4. Notice of Termination. Following a Change in Control, any purported
termination of the Executive’s employment by the Company will be communicated by
a Notice of Termination to the Executive. For purposes of this Agreement, no
such purported termination will be effective without such Notice of Termination.

SECTION 5. Excise Tax Adjustments.

5.1. In the event Executive becomes entitled to receive the benefits provided
pursuant to Sections 3.1(b) or 3.2 herein, and the Company determines that such
benefits (the “Total Payments”) will be subject to the tax (the “Excise Tax”)
imposed by Section 4999 of the Code, or any similar tax that may hereafter be
imposed, the Company shall compute the “Net After-Tax Amount,” and the “Reduced
Amount,” and shall adjust the Total Payments as described below. The Net
After-Tax Amount shall mean the present value of all amounts payable to the
Executive hereunder, net of all federal income, excise and employment taxes
imposed on the Executive by reason of such payments. The Reduced Amount shall
mean the largest aggregate amount of the Total Payments that if paid to the
Executive would result in the Executive receiving a Net After-Tax Amount that is
equal to or greater than the Net After-Tax Amount that the Executive would have
received if all of the Total Payments had been made. If the Company determines
that there is a Reduced Amount, the Total Payments will be reduced to the
Reduced Amount. With respect to any such reduction, payments and benefits will
be reduced in the following order: first against the latest scheduled cash
payments (if necessary, to zero), then against any current cash payments and
benefits (if necessary, to zero), then against any equity or equity derivative
payments and benefits (if necessary, to zero) and then to non-cash payments and
benefits (other than equity or equity derivative related payments).

 

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5.2. For purposes of determining whether the Total Payments will be subject to
the Excise Tax and the amounts of such Excise Tax and for purposes of
determining the Reduced Amount and the Net After-Tax Amount:

(a) Any other payments or benefits received or to be received by the Executive
in connection with a Change in Control of the Company or the Executive’s
termination of employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement, or agreement with the Company, or with any
individual, entity, or group of individuals or entities (individually and
collectively referred to in this subsection (a) as “Persons”) whose actions
result in a change in control of the Company or any Person affiliated with the
Company or such Persons) shall be treated as “parachute payments” within the
meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments”
within the meaning of Section 280G(b)(1) of the Code shall be treated as subject
to the Excise Tax, unless in the opinion of a tax advisor selected by the
Company and reasonably acceptable to the Executive (“Tax Counsel”), such other
payments or benefits (in whole or in part) should be treated by the courts as
representing reasonable compensation for services actually rendered (within the
meaning of Section 280G(b)(4)(B) of the Code), or otherwise not subject to the
Excise Tax;

(b) The amount of the Total Payments that shall be treated as subject to the
Excise Tax shall be equal to the lesser of (i) the total amount of the Total
Payments; or (ii) the amount of excess parachute payments within the meaning of
Section 280G(b)(1) of the Code (after applying clause (a) above);

(c) In the event that the Executive disputes any calculation or determination
made by the Company, the matter shall be determined by Tax Counsel, the fees and
expenses of which shall be borne solely by the Company; and

(d) The Executive shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation in the calendar year in which the Total
Payments are to be made (or if applicable, to be commenced), and state and local
income taxes at the highest marginal rate of taxation in the state and locality
of the Executive’s residence on the effective date of employment, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes, taking into account the reduction in itemized
deduction under Section 68 of the Code.

SECTION 6. Covenants of the Executive. During the Continuation Period following
any Change in Control pursuant to which the Executive receives the benefits
pursuant to Section 3.1(b)(iii), the Executive covenants and agrees as follows:

(a) the Executive agrees to comply with his or her obligations under the
Proprietary Information and Inventions Agreement that he or she entered into
with the Company; and

(b) the Executive acknowledges that the Executive has knowledge of confidential
and proprietary information concerning the current salary, benefits, skills, and
capabilities of Company employees and that it would be improper for the
Executive to use such Company proprietary information in any manner adverse to
the Company’s interests. The Executive agrees that he or she will not recruit or
solicit for employment, directly or indirectly, any employee of the Company
during the Continuation Period.

 

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SECTION 7. Successors; Binding Agreement.

This Agreement will be binding upon and will inure to the benefit of the Company
and its Successors, and the Company will require any Successors to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession or
assignment had taken place. Neither this Agreement nor any right or interest
hereunder will be assignable or transferable by the Executive or by the
Executive’s beneficiaries or legal representatives, except by will or by the
laws of descent and distribution. This Agreement will inure to the benefit of
and be enforceable by the Executive’s legal representatives.

SECTION 8. Fees and Expenses.

The Company will pay as they become due all legal fees and related expenses
(including the costs of experts) incurred by the Executive, in good faith, in
(a) contesting or disputing, any such termination of employment and (b) seeking
to obtain or enforce any right or benefit provided by this Agreement or by any
other plan or arrangement maintained by the Company under which the Executive is
or may be entitled to receive benefits. Any such reimbursements under this
Section 8 shall be made as soon as practicable following submission of a
reimbursement request, but no later than the end of the year following the year
during which the underlying expense was incurred. If the dispute is resolved by
a final decision of an arbitrator pursuant to Section 15 in the favor of the
Company, the Executive shall reimburse the Company for all such legal fees and
related expenses (including costs of experts) paid by the Company on behalf of
the Executive.

SECTION 9. Notice.

For the purposes of this Agreement, notices and all other communications
provided for in the Agreement (including the Notice of Termination) will be in
writing and will be deemed to have been duly given when personally delivered or
sent by certified mail, return receipt requested, postage prepaid, addressed to
the respective addresses last given by each party to the other, provided that
all notices to the Company will be directed to the attention of the Board with a
copy to the Secretary of the Company. All notices and communications will be
deemed to have been received on the date of delivery thereof or on the third
business day after the mailing thereof, except that notice of change of address
will be effective only upon receipt.

SECTION 10. Dispute Concerning Termination.

If prior to the Date of Termination (as determined without regard to this
Section 10), the party receiving the Notice of Termination notifies the other
party that a dispute exists concerning the termination, the Date of Termination
shall be extended until the earlier of (i) the date on which the Term ends or
(ii) the date on which the dispute is finally resolved, either by mutual written
agreement of the parties or by a final judgment, order or decree of an
arbitrator or a court of competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has expired and no appeal has
been perfected); provided, however, that the Date of Termination shall be
extended by a notice of dispute given by the Executive only if such notice is
given in good faith and the Executive pursues the resolution of such dispute
with reasonable diligence.

 

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SECTION 11. Compensation During Dispute.

If a purported termination occurs following a Change in Control and during the
Term and the Date of Termination is extended in accordance with Section 10
hereof, the Company shall continue to pay the Executive the full compensation in
effect when the notice giving rise to the dispute was given (including, but not
limited to, salary) and continue the Executive as a participant in all
compensation, benefit and insurance plans in which the Executive was
participating when the Notice of Termination was given, until the Date of
Termination, as determined in accordance with Section 10 hereof. Amounts paid
under this Section 11 are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement or otherwise.

SECTION 12. Nonexclusivity of Rights.

Nothing in this Agreement will prevent or limit the Executive’s continuing or
future participation in any benefit, bonus, incentive or other plan or program
provided by the Company for which the Executive may qualify, nor will anything
herein limit or reduce such rights as the Executive may have under any other
agreements with the Company (except for any severance or termination provision
included in any Employment Agreement covering the Executive, which in
circumstances under which amounts become payable under Section 3.1(b) hereof
shall be deemed superseded completely by this Agreement and of no further force
and effect). Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan or program of the Company will be
payable in accordance with such plan or program, except as specifically modified
by this Agreement.

SECTION 13. No Set-Off.

The Company’s obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder will not be affected by any
circumstances, including any right of set-off, counterclaim, recoupment, defense
or other right which the Company may have against the Executive or others.

SECTION 14. Miscellaneous.

No provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by the
Executive and the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party will be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreement or representation, oral or otherwise,
express or implied, with respect to the subject matter hereof has been made by
either party which is not expressly set forth in this Agreement.

SECTION 15. Governing Law and Binding Arbitration.

This Agreement will be governed by and construed and enforced in accordance with
the laws of the State of Delaware without giving effect to the conflict of laws
principles thereof. All disputes relating to this Agreement, including its
enforceability, shall be resolved by final and binding arbitration before an
arbitrator appointed by the Judicial Arbitration and Mediation Service (JAMS),
with the arbitration to be held in San Diego, California. Judgment upon the
award may be entered in any court having jurisdiction thereof.

 

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SECTION 16. Severability.

The provisions of this Agreement will be deemed severable and the invalidity or
unenforceability of any provision will not affect the validity or enforceability
of the other provisions hereof.

SECTION 17. Entire Agreement.

This Agreement constitutes the entire agreement between the parties hereto and
supersedes all prior agreements, if any, understandings and arrangements, oral
or written, between the parties hereto with respect to severance protection in
connection with a Change in Control.

SECTION 18. Section 409A.

18.1. Notwithstanding any provision to the contrary in this Agreement, the
Company shall delay the commencement of payments or benefits coverage to which
the Executive would otherwise become entitled under the Agreement in connection
with his termination of employment until the earlier of (i) the expiration of
the six-month period measured from the date of the Executive’s “separation from
service” with the Company (as such term is defined in Treasury Regulations
issued under Section 409A of the Code) or (ii) the date of the Executive’s
death, if and only if the Company in good faith determines that the Executive is
a “specified employee” within the meaning of that term under Code Section 409A
at the time of such separation from service and that such delayed commencement
is otherwise required in order to avoid a prohibited distribution under
Section 409A(a)(2) of the Code. Upon the expiration of the applicable Code
Section 409A(a)(2) deferral period, all payments and benefits deferred pursuant
to this Section 18 (whether they would have otherwise been payable in a single
sum or in installments in the absence of such deferral) shall be paid or
reimbursed to the Executive in a lump sum, and any remaining payments and
benefits due under the Agreement shall be paid or provided in accordance with
the normal payment dates specified for them herein.

18.2. The provisions of this Agreement which require commencement of payments or
benefits coverage subject to Section 409A upon a termination of employment shall
be interpreted to require that the Executive have a “separation from service”
with the Company (as such term is defined in Treasury Regulations issued under
Code Section 409A).

18.3. The provisions of this Section 18 are intended to assure that any benefits
provided to Executive hereunder shall comply with Code Section 409A and this
Agreement shall be interpreted consistent with such section in all respects.

 

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IN WITNESS WHEREOF, the undersigned have executed the above agreement as of the
date set forth first above.

 

MEDICINOVA, INC., A Delaware Corporation By:  

/s/ Shintaro Asako

  Shintaro Asako   Chief Financial Officer

 

EXECUTIVE

/s/ Michael Coffee

Michael Coffee

 

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