2004 Stock Incentive Plan


 EXHIBIT 10.2 
  

  
 MEDICINOVA, INC. 
  
 2004 STOCK INCENTIVE PLAN 
  
 (Adopted by the Board on November 11, 2004) 
  







 Table of Contents 
  

					
	 	  	 	  	Page


	SECTION 1. ESTABLISHMENT AND PURPOSE	  	1
		
	SECTION 2. DEFINITIONS	  	1
	        (a)	  	“Affiliate”	  	1
	        (b)	  	“Award”	  	1
	        (c)	  	“Board of Directors”	  	1
	        (d)	  	“Change in Control”	  	1
	        (e)	  	“Code”	  	2
	        (f)	  	“Committee”	  	2
	        (g)	  	“Company”	  	2
	        (h)	  	“Consultant”	  	3
	        (i)	  	“Employee”	  	3
	        (j)	  	“Exchange Act”	  	3
	        (k)	  	“Exercise Price”	  	3
	        (l)	  	“Fair Market Value”	  	3
	        (m)	  	“ISO”	  	3
	        (n)	  	“Nonstatutory Option” or “NSO”	  	3
	        (o)	  	“Offeree”	  	4
	        (p)	  	“Option”	  	4
	        (q)	  	“Optionee”	  	4
	        (r)	  	“Outside Director”	  	4
	        (s)	  	“Parent”	  	4
	        (t)	  	“Participant”	  	4
	        (u)	  	“Plan”	  	4
	        (v)	  	“Purchase Price”	  	4
	        (w)	  	“Restricted Share”	  	4
	        (x)	  	“Restricted Share Agreement”	  	4
	        (y)	  	“SAR”	  	4
	        (z)	  	“SAR Agreement”	  	4
	        (aa)	  	“Service”	  	4
	        (bb)	  	“Share”	  	4
	        (cc)	  	“Stock”	  	4
	        (dd)	  	“Stock Option Agreement”	  	4
	        (ee)	  	“Stock Unit”	  	5
	        (ff)	  	“Stock Unit Agreement”	  	5
	        (gg)	  	“Subsidiary”	  	5
		
	SECTION 3. ADMINISTRATION	  	5
	        (a)	  	Committee Composition	  	5
	        (b)	  	Committee for Non-Officer Grants	  	5
	        (c)	  	Committee Procedures	  	5

  

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	        (d)	  	Committee Responsibilities	  	5
		
	SECTION 4. ELIGIBILITY	  	7
	        (a)	  	General Rule	  	7
	        (b)	  	Automatic Grants to Outside Directors	  	7
	        (c)	  	Ten-Percent Stockholders	  	7
	        (d)	  	Attribution Rules	  	8
	        (e)	  	Outstanding Stock	  	8
		
	SECTION 5. STOCK SUBJECT TO PLAN	  	8
	        (a)	  	Basic Limitation	  	8
	        (b)	  	Option/SAR Limitation	  	8
	        (c)	  	Additional Shares	  	8
		
	SECTION 6. RESTRICTED SHARES	  	8
	        (a)	  	Restricted Stock Agreement	  	8
	        (b)	  	Payment for Awards	  	9
	        (c)	  	Vesting	  	9
	        (d)	  	Voting and Dividend Rights	  	9
	        (e)	  	Restrictions on Transfer of Shares	  	9
		
	SECTION 7. TERMS AND CONDITIONS OF OPTIONS	  	9
	        (a)	  	Stock Option Agreement	  	9
	        (b)	  	Number of Shares	  	9
	        (c)	  	Exercise Price	  	10
	        (d)	  	Withholding Taxes	  	10
	        (e)	  	Exercisability and Term	  	10
	        (f)	  	Exercise of Options Upon Termination of Service	  	10
	        (g)	  	Effect of Change in Control	  	10
	        (h)	  	Leaves of Absence	  	10
	        (i)	  	No Rights as a Stockholder	  	11
	        (j)	  	Modification, Extension and Renewal of Options	  	11
	        (k)	  	Restrictions on Transfer of Shares	  	11
	        (l)	  	Buyout Provisions	  	11
		
	SECTION 8. PAYMENT FOR OPTION SHARES	  	11
	        (a)	  	General Rule	  	11
	        (b)	  	Surrender of Stock	  	11
	        (c)	  	Exercise/Sale	  	12
	        (d)	  	Exercise/Pledge	  	12
	        (e)	  	Promissory Note	  	12
	        (f)	  	Other Forms of Payment	  	12
	        (g)	  	Limitations under Applicable Law	  	12
		
	SECTION 9. STOCK APPRECIATION RIGHTS	  	12

  

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	        (a)	  	SAR Agreement	  	12
	        (b)	  	Number of Shares	  	12
	        (c)	  	Exercise Price	  	12
	        (d)	  	Exercisability and Term	  	13
	        (e)	  	Effect of Change in Control	  	13
	        (f)	  	Exercise of SARs	  	13
	        (g)	  	Modification or Assumption of SARs	  	13
		
	SECTION 10. STOCK UNITS	  	13
	        (a)	  	Stock Unit Agreement	  	13
	        (b)	  	Payment for Awards	  	13
	        (c)	  	Vesting Conditions	  	13
	        (d)	  	Voting and Dividend Rights	  	14
	        (e)	  	Form and Time of Settlement of Stock Units	  	14
	        (f)	  	Death of Recipient	  	14
	        (g)	  	Creditors’ Rights	  	14
		
	SECTION 11. ADJUSTMENT OF SHARES	  	14
	        (a)	  	Adjustments	  	14
	        (b)	  	Dissolution or Liquidation	  	15
	        (c)	  	Reorganizations	  	15
	        (d)	  	Reservation of Rights	  	16
		
	SECTION 12. DEFERRAL OF AWARDS	  	16
		
	SECTION 13. AWARDS UNDER OTHER PLANS	  	16
		
	SECTION 14. PAYMENT OF DIRECTOR’S FEES IN SECURITIES	  	17
	        (a)	  	Effective Date	  	17
	        (b)	  	Elections to Receive NSOs, Restricted Shares or Stock Units	  	17
	        (c)	  	Number and Terms of NSOs, Restricted Shares or Stock Units	  	17
		
	SECTION 15. LEGAL AND REGULATORY REQUIREMENTS	  	17
		
	SECTION 16. WITHHOLDING TAXES	  	17
	        (a)	  	General	  	17
	        (b)	  	Share Withholding	  	17
		
	SECTION 17. TRANSFERABILITY	  	18
		
	SECTION 18. NO EMPLOYMENT RIGHTS	  	18
		
	SECTION 19. DURATION AND AMENDMENTS	  	18
	        (a)	  	Term of the Plan	  	18
	        (b)	  	Right to Amend or Terminate the Plan	  	18
	        (c)	  	Effect of Termination	  	18
		
	SECTION 20. EXECUTION	  	19

  

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 MEDICINOVA, INC. 
  
 2004 STOCK INCENTIVE PLAN

  
 SECTION 1. ESTABLISHMENT AND PURPOSE. 
  
 The Plan was adopted by the Board of Directors on November 11, 2004,
effective as of the date of the initial public offering of Stock to the public pursuant to a registration statement filed by the Company with the Securities and Exchange Commission and an application for listing filed with the Hercules market of the
Osaka Securities Exchange (the “Effective Date”). The purpose of the Plan is to promote the long-term success of the Company and the creation of stockholder value by (a) encouraging Employees, Outside Directors and Consultants to focus on
critical long-range objectives, (b) encouraging the attraction and retention of Employees, Outside Directors and Consultants with exceptional qualifications and (c) linking Employees, Outside Directors and Consultants directly to stockholder
interests through increased stock ownership. The Plan seeks to achieve this purpose by providing for Awards in the form of restricted shares, stock units, options (which may constitute incentive stock options or nonstatutory stock options) or stock
appreciation rights. 
  
 SECTION 2. DEFINITIONS. 
  
 (a) “Affiliate” shall mean any entity other than a
Subsidiary, if the Company and/or one of more Subsidiaries own not less than 50% of such entity. 
  
 (b) “Award” shall mean any award of an Option, a SAR, a Restricted Share or a Stock Unit under the Plan. 
  
 (c) “Board of Directors” shall mean the Board of Directors
of the Company, as constituted from time to time. 
  
 (d)
“Change in Control” shall mean the occurrence of any of the following events: 
  
 (i) A change in the composition of the Board of Directors occurs, as a result of which fewer than one-half of the incumbent directors are directors who either: 
  
 (A) Had been directors of the Company on the “look-back date” (as
defined below) (the “original directors”); or 
  
 (B)
Were elected, or nominated for election, to the Board of Directors with the affirmative votes of at least a majority of the aggregate of the original directors who were still in office at the time of the election or nomination and the directors
whose election or nomination was previously so approved (the “continuing directors”); or 
  
 (ii) Any “person” (as defined below) who by the acquisition or aggregation of securities, is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange 
  

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 Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the
Company’s then outstanding securities ordinarily (and apart from rights accruing under special circumstances) having the right to vote at elections of directors (the “Base Capital Stock”); except that any change in the relative
beneficial ownership of the Company’s securities by any person resulting solely from a reduction in the aggregate number of outstanding shares of Base Capital Stock, and any decrease thereafter in such person’s ownership of securities,
shall be disregarded until such person increases in any manner, directly or indirectly, such person’s beneficial ownership of any securities of the Company; or 
  
 (iii) The consummation of a merger or consolidation of the Company with or into another entity or any other corporate
reorganization, if persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the voting power of
the outstanding securities of each of (A) the continuing or surviving entity and (B) any direct or indirect parent corporation of such continuing or surviving entity; or 
  
 (iv) The sale, transfer or other disposition of all or substantially all of the Company’s assets. 
  
 For purposes of subsection (d)(i) above, the term “look-back” date
shall mean the later of (1) the Effective Date, or (2) the date 24 months prior to the date of the event that may constitute a Change in Control. 
  
 For purposes of subsection (d)(ii) above, the term “person” shall have the same meaning as when used in Sections 13(d) and 14(d) of the Exchange
Act but shall exclude (1) a trustee or other fiduciary holding securities under an employee benefit plan maintained by the Company or a Parent or Subsidiary and (2) a corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of the Stock. 
  
 Any other provision of this Section 2(d) notwithstanding, a transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be
owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction, and a Change in Control shall not be deemed to occur if the Company files a registration statement with the
Securities and Exchange Commission for the initial offering of Stock to the public. 
  
 (e) “Code” shall mean the Internal Revenue Code of 1986, as amended. 
  
 (f) “Committee” shall mean the Compensation Committee as designated by the Board of Directors, which is authorized to administer the
Plan, as described in Section 3 hereof. 
  
 (g)
“Company” shall mean MediciNova, Inc., a Delaware corporation. 
  

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 (h) “Consultant” shall mean a consultant or advisor who provides bona fide services to
the Company, a Parent, a Subsidiary or an Affiliate as an independent contractor or a member of the board of directors of a Parent or a Subsidiary who is not an Employee. 
  
 (i) “Employee” shall mean any individual who is a common-law employee of the Company, a Parent or a
Subsidiary. 
  
 (j) “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended. 
  
 (k)
“Exercise Price” shall mean, in the case of an Option, the amount for which one Share may be purchased upon exercise of such Option, as specified in the applicable Stock Option Agreement. “Exercise Price,” in the case of a
SAR, shall mean an amount, as specified in the applicable SAR Agreement, which is subtracted from the Fair Market Value of one Share in determining the amount payable upon exercise of such SAR. 
  
 (l) “Fair Market Value” with respect to a Share, shall mean
the market price of one Share, determined by the Committee as follows: 
  
 (i) If the Stock was traded over-the-counter on the date in question but was not traded on The Nasdaq Stock Market, then the Fair Market Value shall be equal to the last transaction price quoted for such date by the
OTC Bulletin Board or, if not so quoted, shall be equal to the mean between the last reported representative bid and asked prices quoted for such date by the principal automated inter-dealer quotation system on which the Stock is quoted or, if the
Stock is not quoted on any such system, by the Pink Sheets LLC; 
  
 (ii) If the Stock was traded on The Nasdaq Stock Market, then the Fair Market Value shall be equal to the last reported sale price quoted for such date by The Nasdaq Stock Market; 
  
 (iii) If the Stock was traded on a United States stock exchange on the date
in question, then the Fair Market Value shall be equal to the closing price reported for such date by the applicable composite-transactions report; and 
  
 (iv) If none of the foregoing provisions is applicable, then the Fair Market Value shall be determined by the Committee in good faith on such basis as it
deems appropriate. 
  
 In all cases, the determination of Fair Market Value by the
Committee shall be conclusive and binding on all persons. 
  
 (m) “ISO” shall mean an employee incentive stock option described in Section 422 of the Code. 
  
 (n) “Nonstatutory Option” or “NSO” shall mean an employee stock option that is not an ISO. 
  

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 (o) “Offeree” shall mean an individual to whom the Committee has offered the right to
acquire Shares under the Plan (other than upon exercise of an Option). 
  
 (p) “Option” shall mean an ISO or Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares. 
  
 (q) “Optionee” shall mean an individual or estate who holds an Option or SAR. 
  
 (r) “Outside Director” shall mean a member of the Board of
Directors who is not a common-law employee of, or paid consultant to, the Company or a Subsidiary. 
  
 (s) “Parent” shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of
the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after
the adoption of the Plan shall be a Parent commencing as of such date. 
  
 (t) “Participant” shall mean an individual or estate who holds an Award. 
  
 (u) “Plan” shall mean this 2004 Stock Incentive Plan of MediciNova, Inc., as amended from time to time. 
  
 (v) “Purchase Price” shall mean the consideration for which
one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Committee. 
  
 (w) “Restricted Share” shall mean a Share awarded under the Plan. 
  
 (x) “Restricted Share Agreement” shall mean the agreement between the Company and the recipient of a
Restricted Share which contains the terms, conditions and restrictions pertaining to such Restricted Shares. 
  
 (y) “SAR” shall mean a stock appreciation right granted under the Plan. 
  
 (z) “SAR Agreement” shall mean the agreement between the Company and an Optionee which contains the terms,
conditions and restrictions pertaining to his or her SAR. 
  
 (aa) “Service” shall mean service as an Employee, Consultant or Outside Director. 
  
 (bb) “Share” shall mean one share of Stock, as adjusted in accordance with Section 8 (if applicable). 
  
 (cc) “Stock” shall mean the Common Stock of the Company.

  
 (dd) “Stock Option Agreement” shall mean the
agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to his Option. 
  

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 (ee) “Stock Unit” shall mean a bookkeeping entry representing the equivalent of one
Share, as awarded under the Plan. 
  
 (ff) “Stock Unit
Agreement” shall mean the agreement between the Company and the recipient of a Stock Unit which contains the terms, conditions and restrictions pertaining to such Stock Unit. 
  
 (gg) “Subsidiary” shall mean any corporation, if the Company and/or one or more other Subsidiaries own not
less than 50% of the total combined voting power of all classes of outstanding stock of such corporation. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as
of such date. 
  
 SECTION 3. ADMINISTRATION. 
  
 (a) Committee Composition. The Plan shall be administered by the
Committee. The Committee shall consist of two or more directors of the Company, who shall be appointed by the Board. In addition, the composition of the Committee shall satisfy (i) such requirements as the Securities and Exchange Commission may
establish for administrators acting under plans intended to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange Act; and (ii) such requirements as the Internal Revenue Service may establish for outside directors acting under
plans intended to qualify for exemption under Section 162(m)(4)(C) of the Code. 
  
 (b) Committee for Non-Officer Grants. The Board may also appoint one or more separate committees of the Board, each composed of one or more directors of the Company who need not satisfy the requirements of
Section 3(a), who may administer the Plan with respect to Employees who are not considered officers or directors of the Company under Section 16 of the Exchange Act, may grant Awards under the Plan to such Employees and may determine all terms of
such grants. Within the limitations of the preceding sentence, any reference in the Plan to the Committee shall include such committee or committees appointed pursuant to the preceding sentence. The Board of Directors may also authorize one or more
officers of the Company to designate Employees, other than officers under Section 16 of the Exchange Act, to receive Awards and/or to determine the number of such Awards to be received by such persons; provided, however, that the Board of Directors
shall specify the total number of Awards that such officers may so award. 
  
 (c) Committee Procedures. The Board of Directors shall designate one of the members of the Committee as chairman. The Committee may hold meetings at such times and places as it shall determine. The acts of a
majority of the Committee members present at meetings at which a quorum exists, or acts reduced to or approved in writing by all Committee members, shall be valid acts of the Committee. 
  
 (d) Committee Responsibilities. Subject to the provisions of the Plan, the Committee shall have full authority and
discretion to take the following actions: 
  
 (i) To interpret
the Plan and to apply its provisions; 
  

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 (ii) To adopt, amend or rescind rules, procedures and forms relating to the Plan; 
  
 (iii) To authorize any person to execute, on behalf of the Company, any
instrument required to carry out the purposes of the Plan; 
  
 (iv) To determine when Awards are to be granted under the Plan; 
  
 (v) To select the Offerees and Optionees; 
  
 (vi) To determine the number of Shares to be made subject to each Award; 
  
 (vii) To prescribe the terms and conditions of each Award, including (without limitation) the Exercise Price and Purchase Price, and the vesting or
duration of the Award (including accelerating the vesting of Awards, either at the time of the Award or thereafter, without the consent of the Participant), to determine whether an Option is to be classified as an ISO or as a Nonstatutory Option,
and to specify the provisions of the agreement relating to such Award; 
  
 (viii) To amend any outstanding Award agreement, subject to applicable legal restrictions and to the consent of the Participant if the Participant’s rights or obligations would be materially impaired; 
  
 (ix) To prescribe the consideration for the grant of each Award or other
right under the Plan and to determine the sufficiency of such consideration; 
  
 (x) To determine the disposition of each Award or other right under the Plan in the event of a Participant’s divorce or dissolution of marriage; 
  
 (xi) To determine whether Awards under the Plan will be granted in replacement of other grants under an incentive or other
compensation plan of an acquired business; 
  
 (xii) To correct
any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award agreement; and 
  
 (xiii) To take any other actions deemed necessary or advisable for the administration of the Plan. 
  
 Subject to the requirements of applicable law, the Committee may designate persons other than
members of the Committee to carry out its responsibilities and may prescribe such conditions and limitations as it may deem appropriate, except that the Committee may not delegate its authority with regard to the selection for participation of or
the granting of Options or other rights under the Plan to persons subject to Section 16 of the Exchange Act. All decisions, interpretations and other actions of the Committee shall be final and binding on all Offerees, all Optionees, and all persons
deriving their rights from an Offeree or Optionee. No member of the Committee shall be liable for any action that he has taken or has failed to take in good faith with respect to the Plan, any Option, or any right to acquire Shares under the Plan.

  

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 SECTION 4. ELIGIBILITY. 
  

(a) General Rule. Only Employees shall be eligible for the grant of ISOs. Only Employees, Consultants and Outside Directors shall be eligible
for the grant of Restricted Shares, Stock Units, Nonstatutory Options or SARs. 
  
 (b) Automatic Grants to Outside Directors. 
  
 (i) Each Outside Director who first joins the Board of Directors on or after the Effective Date, and who was not previously an Employee, shall receive a Nonstatutory Option, subject to approval of the Plan by the
Company’s stockholders, to purchase 10,000 Shares (subject to adjustment under Section 11) on the date of his or her election to the Board of Directors. Each such Option shall be fully vested on the date of grant. 
  
 (ii) On the first business day following the conclusion of each regular
annual meeting of the Company’s stockholders, commencing with the annual meeting occurring after the adoption of the Plan, each Outside Director who was not elected to the Board for the first time at such meeting and who will continue serving
as a member of the Board of Directors thereafter shall receive an Option to purchase 10,000 Shares (subject to adjustment under Section 11), provided that such Outside Director has served on the Board of Directors for at least six months. Each
Option granted under the preceding sentence of this Section 4(b)(ii) shall fully vest and become exercisable on the date which is six months from the date of grant. Notwithstanding the foregoing, each Option granted under this Section 4(b)(ii) shall
become vested in full if a Change in Control occurs with respect to the Company during the Optionee’s Service. 
  
 (iii) The Exercise Price of all Nonstatutory Options granted to an Outside Director under this Section 4(b) shall be equal to 100% of the Fair Market
Value of a Share on the date of grant, payable in one of the forms described in Section 8(a), (b) or (c). 
  
 (iv) All Nonstatutory Options granted to an Outside Director under this Section 4(b) shall terminate on the earlier of (A) the day before the tenth
anniversary of the date of grant of such Options or (B) the date twelve months after the termination of such Outside Director’s Service for any reason; provided, however, that any such Options that are not vested upon the termination of the
Outside Director’s Service for any reason shall terminate immediately and may not be exercised. 
  
 (c) Ten-Percent Stockholders. An Employee who owns more than 10% of the total combined voting power of all classes of outstanding stock of the
Company, a Parent or Subsidiary shall not be eligible for the grant of an ISO unless such grant satisfies the requirements of Section 422(c)(5) of the Code. 
  

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 (d) Attribution Rules. For purposes of Section 4(c) above, in determining stock ownership, an
Employee shall be deemed to own the stock owned, directly or indirectly, by or for such Employee’s brothers, sisters, spouse, ancestors and lineal descendants. Stock owned, directly or indirectly, by or for a corporation, partnership, estate or
trust shall be deemed to be owned proportionately by or for its stockholders, partners or beneficiaries. 
  
 (e) Outstanding Stock. For purposes of Section 4(c) above, “outstanding stock” shall include all stock actually issued and outstanding
immediately after the grant. “Outstanding stock” shall not include shares authorized for issuance under outstanding options held by the Employee or by any other person. 
  
 SECTION 5. STOCK SUBJECT TO PLAN. 
  
 (a) Basic Limitation. Shares offered under the Plan shall be authorized but unissued Shares or treasury shares. The maximum aggregate number of
Shares authorized for issuance as Awards under the Plan shall not exceed 20,300,000 Shares, plus an annual increase on the first day of each fiscal year during the term of the Plan, with the first such increase occurring on January 1, 2006, in each
case in an amount equal to the lesser of (i) 1,000,000 Shares, (ii) 3% of the outstanding Shares on the last day of the immediately preceding year, or (iii) an amount determined by the Board. The limitations of this Section 5(a) shall be subject to
adjustment pursuant to Section 11. The number of Shares that are subject to Options or other Awards outstanding at any time under the Plan shall not exceed the number of Shares which then remain available for issuance under the Plan. The Company,
during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan. 
  
 (b) Option/SAR Limitation. Subject to the provisions of Section 11, no Participant may receive Options or SARs under the Plan in any calendar year
that relate to more than 2,030,000 Shares. 
  
 (c) Additional
Shares. If Restricted Shares or Shares issued upon the exercise of Options are forfeited, then such Shares shall again become available for Awards under the Plan. If Stock Units, Options or SARs are forfeited or terminate for any other reason
before being exercised, then the corresponding Shares shall again become available for Awards under the Plan. If Stock Units are settled, then only the number of Shares (if any) actually issued in settlement of such Stock Units shall reduce the
number available under Section 5(a) and the balance shall again become available for Awards under the Plan. If SARs are exercised, then only the number of Shares (if any) actually issued in settlement of such SARs shall reduce the number available
in Section 5(a) and the balance shall again become available for Awards under the Plan. 
  
 SECTION 6. RESTRICTED SHARES. 
  
 (a)
Restricted Stock Agreement. Each grant of Restricted Shares under the Plan shall be evidenced by a Restricted Stock Agreement between the recipient and the Company. Such Restricted Shares shall be subject to all applicable terms of the Plan and
may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Restricted Stock Agreements entered into under the Plan need not be identical. 
  

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 (b) Payment for Awards. Subject to the following sentence, Restricted Shares may be sold or
awarded under the Plan for such consideration as the Committee may determine, including (without limitation) cash, cash equivalents, full-recourse promissory notes, past services and future services. To the extent that an Award consists of newly
issued Restricted Shares, the Award recipient shall furnish consideration with a value not less than the par value of such Restricted Shares in the form of cash, cash equivalents, or past services rendered to the Company (or a Parent or Subsidiary),
as the Committee may determine. 
  
 (c) Vesting.
Each Award of Restricted Shares may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Stock Agreement. A Restricted Stock Agreement may provide for
accelerated vesting in the event of the Participant’s death, disability or retirement or other events. The Committee may determine, at the time of granting Restricted Shares of thereafter, that all or part of such Restricted Shares shall become
vested in the event that a Change in Control occurs with respect to the Company. 
  
 (d) Voting and Dividend Rights. The holders of Restricted Shares awarded under the Plan shall have the same voting, dividend and other rights as the Company’s other stockholders. A Restricted Stock
Agreement, however, may require that the holders of Restricted Shares invest any cash dividends received in additional Restricted Shares. Such additional Restricted Shares shall be subject to the same conditions and restrictions as the Award with
respect to which the dividends were paid. 
  
 (e) Restrictions
on Transfer of Shares. Restricted Shares shall be subject to such rights of repurchase, rights of first refusal or other restrictions as the Committee may determine. Such restrictions shall be set forth in the applicable Restricted Stock
Agreement and shall apply in addition to any general restrictions that may apply to all holders of Shares. 
  
 SECTION 7. TERMS AND CONDITIONS OF OPTIONS. 
  
 (a) Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms and
conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Committee deems appropriate for inclusion in a Stock Option Agreement. The Stock Option Agreement shall specify
whether the Option is an ISO or an NSO. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical. Options may be granted in consideration of a reduction in the Optionee’s other compensation.

  
 (b) Number of Shares. Each Stock Option Agreement shall
specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 11. 
  

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 (c) Exercise Price. Each Stock Option Agreement shall specify the Exercise Price. The Exercise
Price of an ISO shall not be less than 100% of the Fair Market Value of a Share on the date of grant, except as otherwise provided in Section 4(c), and the Exercise Price of an NSO shall not be less 85% of the Fair Market Value of a Share on the
date of grant. Notwithstanding the foregoing, a Stock Option Agreement may specify that the exercise price of an NSO may vary in accordance with a predetermined formula. Subject to the foregoing in this Section 7(c), the Exercise Price under any
Option shall be determined by the Committee at its sole discretion. The Exercise Price shall be payable in one of the forms described in Section 8. 
  
 (d) Withholding Taxes. As a condition to the exercise of an Option, the Optionee shall make such arrangements as the Committee may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such exercise. The Optionee shall also make such arrangements as the Committee may require for the satisfaction of any federal, state,
local or foreign withholding tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Option. 
  
 (e) Exercisability and Term. Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable.
The Stock Option Agreement shall also specify the term of the Option; provided that the term of an ISO shall in no event exceed 10 years from the date of grant (five years for Employees described in Section 4(c)). A Stock Option Agreement may
provide for accelerated exercisability in the event of the Optionee’s death, disability, or retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee’s Service.
Options may be awarded in combination with SARs, and such an Award may provide that the Options will not be exercisable unless the related SARs are forfeited. Subject to the foregoing in this Section 7(e), the Committee at its sole discretion shall
determine when all or any installment of an Option is to become exercisable and when an Option is to expire. 
  
 (f) Exercise of Options Upon Termination of Service. Each Stock Option Agreement shall set forth the extent to which the Optionee shall have the
right to exercise the Option following termination of the Optionee’s Service with the Company and its Subsidiaries, and the right to exercise the Option of any executors or administrators of the Optionee’s estate or any person who has
acquired such Option(s) directly from the Optionee by bequest or inheritance. Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Options issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination of Service. 
  
 (g) Effect of Change in Control. The Committee may determine, at the time of granting an Option or thereafter, that such Option shall become exercisable as to all or part of the Shares subject to such Option in the event that a
Change in Control occurs with respect to the Company. 
  
 (h)
Leaves of Absence. An Employee’s Service shall cease when such Employee ceases to be actively employed by, or a Consultant to, the Company (or any subsidiary) as determined in the sole discretion of the Board of Directors. For purposes of
Options, Service 
  

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 does not terminate when an Employee goes on a bona fide leave of absence, that was approved by the Company in writing, if
the terms of the leave provide for continued service crediting, or when continued service crediting is required by applicable law. However, for purposes of determining whether an Option is entitled to ISO status, an Employee’s Service will be
treated as terminating 90 days after such Employee went on leave, unless such Employee’s right to return to active work is guaranteed by law or by a contract. Service terminates in any event when the approved leave ends, unless such Employee
immediately returns to active work. The Company determines which leaves count toward Service, and when Service terminates for all purposes under the Plan. 
  
 (i) No Rights as a Stockholder. An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any Shares
covered by his Option until the date of the issuance of a stock certificate for such Shares. No adjustments shall be made, except as provided in Section 11. 
  
 (j) Modification, Extension and Renewal of Options. Within the limitations of the Plan, the Committee may modify, extend or renew outstanding
options or may accept the cancellation of outstanding options (to the extent not previously exercised), whether or not granted hereunder, in return for the grant of new Options for the same or a different number of Shares and at the same or a
different exercise price, or in return for the grant of the same or a different number of Shares. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, materially impair his or her rights or
obligations under such Option. 
  
 (k) Restrictions on Transfer
of Shares. Any Shares issued upon exercise of an Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Committee may determine. Such restrictions shall
be set forth in the applicable Stock Option Agreement and shall apply in addition to any general restrictions that may apply to all holders of Shares. 
  
 (l) Buyout Provisions. The Committee may at any time (a) offer to buy out for a payment in cash or cash equivalents an Option previously granted or
(b) authorize an Optionee to elect to cash out an Option previously granted, in either case at such time and based upon such terms and conditions as the Committee shall establish. 
  
 SECTION 8. PAYMENT FOR OPTION SHARES. 
  
 (a) General Rule. The entire Exercise Price of Shares issued upon the exercise of Options shall be payable in lawful money of the United States of
America at the time when such Shares are purchased, except as provided in Section 8(b) through Section 8(f) below. 
  
 (b) Surrender of Stock. To the extent permitted by the Committee in its sole discretion, payment may be made all or in part by surrendering, or
attesting to the ownership of, Shares which have already been owned by the Optionee or his representative. Such Shares shall be valued at their Fair Market Value on the date when the new Shares are purchased under the 
  

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 Plan. The Optionee shall not surrender, or attest to the ownership of, Shares in payment of the Exercise Price if such
action would cause the Company to recognize compensation expense (or additional compensation expense) with respect to the Option for financial reporting purposes. 
  
 (c) Exercise/Sale. To the extent permitted by the Committee in its sole discretion, payment may be made all or in
part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price. 
  
 (d) Exercise/Pledge. To the extent permitted by the Committee in its
sole discretion, payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities broker or lender to pledge Shares, as security for a loan, and to deliver all or part of the loan
proceeds to the Company in payment of the aggregate Exercise Price. 
  
 (e) Promissory Note. To the extent permitted by the Committee in its sole discretion, payment may be made all or in part by delivering (on a form prescribed by the Company) a full-recourse promissory note. However, the par value of
the Common Shares being purchased under the Plan, if newly issued, shall be paid in cash or cash equivalents. 
  
 (f) Other Forms of Payment. To the extent permitted by the Committee in its sole discretion, payment may be made in any other form that is
consistent with applicable laws, regulations and rules. 
  
 (g)
Limitations under Applicable Law. Notwithstanding anything herein or in a Stock Option Agreement to the contrary, payment may not be made in any form that is unlawful, as determined by the Committee in its sole discretion. 
  
 SECTION 9. STOCK APPRECIATION RIGHTS. 
  
 (a) SAR Agreement. Each grant of a SAR under the Plan shall be
evidenced by a SAR Agreement between the Optionee and the Company. Such SAR shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various SAR
Agreements entered into under the Plan need not be identical. SARs may be granted in consideration of a reduction in the Optionee’s other compensation. 
  
 (b) Number of Shares. Each SAR Agreement shall specify the number of Shares to which the SAR pertains and shall provide for the adjustment of such
number in accordance with Section 11. 
  
 (c) Exercise
Price. Each SAR Agreement shall specify the Exercise Price. A SAR Agreement may specify an Exercise Price that varies in accordance with a predetermined formula while the SAR is outstanding. 
  

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 (d) Exercisability and Term. Each SAR Agreement shall specify the date when all or any installment
of the SAR is to become exercisable. The SAR Agreement shall also specify the term of the SAR. A SAR Agreement may provide for accelerated exercisability in the event of the Optionee’s death, disability or retirement or other events and may
provide for expiration prior to the end of its term in the event of the termination of the Optionee’s service. SARs may be awarded in combination with Options, and such an Award may provide that the SARs will not be exercisable unless the
related Options are forfeited. A SAR may be included in an ISO only at the time of grant but may be included in an NSO at the time of grant or thereafter. A SAR granted under the Plan may provide that it will be exercisable only in the event of a
Change in Control. 
  
 (e) Effect of Change in Control. The
Committee may determine, at the time of granting a SAR or thereafter, that such SAR shall become fully exercisable as to all Common Shares subject to such SAR in the event that a Change in Control occurs with respect to the Company. 
  
 (f) Exercise of SARs. Upon exercise of a SAR, the Optionee (or any
person having the right to exercise the SAR after his or her death) shall receive from the Company (a) Shares, (b) cash or (c) a combination of Shares and cash, as the Committee shall determine. The amount of cash and/or the Fair Market Value of
Shares received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of surrender) of the Shares subject to the SARs exceeds the Exercise Price. 
  
 (g) Modification or Assumption of SARs. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding SARs or may accept the cancellation of outstanding SARs (whether granted by the Company or by another issuer) in return for the grant of new SARs for the same or a different number of
shares and at the same or a different exercise price. The foregoing notwithstanding, no modification of a SAR shall, without the consent of the holder, materially impair his or her rights or obligations under such SAR. 
  
 SECTION 10. STOCK UNITS. 
  
 (a) Stock Unit Agreement. Each grant of Stock Units under the Plan
shall be evidenced by a Stock Unit Agreement between the recipient and the Company. Such Stock Units shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions
of the various Stock Unit Agreements entered into under the Plan need not be identical. Stock Units may be granted in consideration of a reduction in the recipient’s other compensation. 
  
 (b) Payment for Awards. To the extent that an Award is granted in the
form of Stock Units, no cash consideration shall be required of the Award recipients. 
  
 (c) Vesting Conditions. Each Award of Stock Units may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Stock Unit
Agreement. A Stock Unit Agreement may provide for accelerated 
  

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 vesting in the event of the Participant’s death, disability or retirement or other events. The Committee may
determine, at the time of granting Stock Units or thereafter, that all or part of such Stock Units shall become vested in the event that a Change in Control occurs with respect to the Company. 
  
 (d) Voting and Dividend Rights. The holders of Stock Units shall have
no voting rights. Prior to settlement or forfeiture, any Stock Unit awarded under the Plan may, at the Committee’s discretion, carry with it a right to dividend equivalents. Such right entitles the holder to be credited with an amount equal to
all cash dividends paid on one Share while the Stock Unit is outstanding. Dividend equivalents may be converted into additional Stock Units. Settlement of dividend equivalents may be made in the form of cash, in the form of Shares, or in a
combination of both. Prior to distribution, any dividend equivalents which are not paid shall be subject to the same conditions and restrictions (including without limitation, any forfeiture conditions) as the Stock Units to which they attach.

  
 (e) Form and Time of Settlement of Stock Units.
Settlement of vested Stock Units may be made in the form of (a) cash, (b) Shares or (c) any combination of both, as determined by the Committee. The actual number of Stock Units eligible for settlement may be larger or smaller than the number
included in the original Award, based on predetermined performance factors. Methods of converting Stock Units into cash may include (without limitation) a method based on the average Fair Market Value of Shares over a series of trading days. Vested
Stock Units may be settled in a lump sum or in installments. The distribution may occur or commence when all vesting conditions applicable to the Stock Units have been satisfied or have lapsed, or it may be deferred to any later date. The amount of
a deferred distribution may be increased by an interest factor or by dividend equivalents. Until an Award of Stock Units is settled, the number of such Stock Units shall be subject to adjustment pursuant to Section 11. 
  
 (f) Death of Recipient. Any Stock Units Award that becomes payable
after the recipient’s death shall be distributed to the recipient’s beneficiary or beneficiaries. Each recipient of a Stock Units Award under the Plan shall designate one or more beneficiaries for this purpose by filing the prescribed form
with the Company. A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Award recipient’s death. If no beneficiary was designated or if no designated beneficiary survives the Award
recipient, then any Stock Units Award that becomes payable after the recipient’s death shall be distributed to the recipient’s estate. 
  
 (g) Creditors’ Rights. A holder of Stock Units shall have no rights other than those of a general creditor of the Company. Stock Units
represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Stock Unit Agreement. 
  
 SECTION 11. ADJUSTMENT OF SHARES. 
  
 (a) Adjustments. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration of a dividend
payable in a form other 
  

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 than Shares in an amount that has a material effect on the price of Shares, a combination or consolidation of the
outstanding Stock (by reclassification or otherwise) into a lesser number of Shares, a recapitalization, a spin-off or a similar occurrence, the Committee shall make such adjustments as it, in its sole discretion, deems appropriate in one or more
of: 
  
 (i) The number of Options, SARs, Restricted Shares and
Stock Units available for future Awards under Section 5; 
  
 (ii)
The limitations set forth in Section 5(a) and (b); 
  
 (iii) The
number of NSOs to be granted to Outside Directors under Section 4(b); 
  
 (iv) The number of Shares covered by each outstanding Option and SAR; 
  
 (v) The Exercise Price under each outstanding Option and SAR; or 
  
 (vi) The number of Stock Units included in any prior Award which has not yet been settled. 
  
 Except as provided in this Section 11, a Participant shall have no rights by reason of any issue by the Company of stock of any class or
securities convertible into stock of any class, any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class. 
  
 (b) Dissolution or Liquidation. To the extent not previously exercised
or settled, Options, SARs and Stock Units shall terminate immediately prior to the dissolution or liquidation of the Company. 
  
 (c) Reorganizations. In the event that the Company is a party to a merger or other reorganization, outstanding Awards shall be subject to the
agreement of merger or reorganization. Such agreement shall provide for: 
  
 (i) The continuation of the outstanding Awards by the Company, if the Company is a surviving corporation; 
  
 (ii) The assumption of the outstanding Awards by the surviving corporation or its parent or subsidiary; 
  
 (iii) The substitution by the surviving corporation or its parent or
subsidiary of its own awards for the outstanding Awards; 
  
 (iv)
Full exercisability or vesting and accelerated expiration of the outstanding Awards; or 
  

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 (v) Settlement of the full value of the outstanding Awards in cash or cash equivalents followed by
cancellation of such Awards. 
  
 (d) Reservation of Rights.
Except as provided in this Section 11, an Optionee or Offeree shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend or any other increase or decrease in the number of shares
of stock of any class. Any issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise
Price of Shares subject to an Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure,
to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. 
  
 SECTION 12. DEFERRAL OF AWARDS. 
  
 The Committee (in its sole discretion) may permit or require a Participant to: 
  
 (a) Have cash that otherwise would be paid to such Participant as a result of the exercise of a SAR or the settlement of Stock Units credited to a deferred compensation account established for such Participant by the
Committee as an entry on the Company’s books; 
  
 (b) Have
Shares that otherwise would be delivered to such Participant as a result of the exercise of an Option or SAR converted into an equal number of Stock Units; or 
  

(c) Have Shares that otherwise would be delivered to such Participant as a result of the exercise of an Option or SAR or the settlement of Stock Units
converted into amounts credited to a deferred compensation account established for such Participant by the Committee as an entry on the Company’s books. Such amounts shall be determined by reference to the Fair Market Value of such Shares as of
the date when they otherwise would have been delivered to such Participant. 
  
 A deferred compensation account established under this Section 12 may be credited with interest or other forms of investment return, as determined by the Committee. A Participant for whom such an account is
established shall have no rights other than those of a general creditor of the Company. Such an account shall represent an unfunded and unsecured obligation of the Company and shall be subject to the terms and conditions of the applicable agreement
between such Participant and the Company. If the deferral or conversion of Awards is permitted or required, the Committee (in its sole discretion) may establish rules, procedures and forms pertaining to such Awards, including (without limitation)
the settlement of deferred compensation accounts established under this Section 12. 
  
 SECTION 13. AWARDS UNDER OTHER PLANS. 
  
 The
Company may grant awards under other plans or programs. Such awards may be settled in the form of Shares issued under this Plan. Such Shares shall be treated for all purposes under the Plan like Shares issued in settlement of Stock Units and shall,
when issued, reduce the number of Shares available under Section 5. 
  

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 SECTION 14. PAYMENT OF DIRECTOR’S FEES IN SECURITIES. 
  
 (a) Effective Date. No provision of this Section 14 shall be
effective unless and until the Board has determined to implement such provision. 
  
 (b) Elections to Receive NSOs, Restricted Shares or Stock Units. An Outside Director may elect to receive his or her annual retainer payments and/or meeting fees from the Company in the form of cash, NSOs,
Restricted Shares or Stock Units, or a combination thereof, as determined by the Board. Such NSOs, Restricted Shares and Stock Units shall be issued under the Plan. An election under this Section 14 shall be filed with the Company on the prescribed
form. 
  
 (c) Number and Terms of NSOs, Restricted Shares or
Stock Units. The number of NSOs, Restricted Shares or Stock Units to be granted to Outside Directors in lieu of annual retainers and meeting fees that would otherwise be paid in cash shall be calculated in a manner determined by the Board. The
terms of such NSOs, Restricted Shares or Stock Units shall also be determined by the Board. 
  
 SECTION 15. LEGAL AND REGULATORY REQUIREMENTS. 
  
 Shares shall not be issued under the Plan unless the issuance and delivery of such Shares complies with (or is exempt from) all applicable requirements of law, including (without limitation) the Securities Act of
1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations and the regulations of any stock exchange on which the Company’s securities may then be listed, and the Company has obtained the approval
or favorable ruling from any governmental agency which the Company determines is necessary or advisable. 
  
 SECTION 16. WITHHOLDING TAXES. 
  
 (a) General. To the extent required by applicable federal, state, local or foreign law, a Participant or his or her successor shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations
that arise in connection with the Plan. The Company shall not be required to issue any Shares or make any cash payment under the Plan until such obligations are satisfied. 
  
 (b) Share Withholding. The Committee may permit a Participant to satisfy all or part of his or her withholding or
income tax obligations by having the Company withhold all or a portion of any Shares that otherwise would be issued to him or her or by surrendering all or a portion of any Shares that he or she previously acquired. Such Shares shall be valued at
their Fair Market Value on the date when taxes otherwise would be withheld in cash. In no event may a Participant have Shares withheld that would otherwise be issued to him or her in excess of the number necessary to satisfy the legally required
minimum tax withholding. 
  

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 SECTION 17. TRANSFERABILITY. 
  
 Unless the agreement evidencing an Award (or an amendment thereto authorized by the Committee) expressly provides otherwise,
no Award granted under this Plan, nor any interest in such Award, may be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner (prior to the vesting and lapse of any and all restrictions applicable to Shares
issued under such Award), other than by will or the laws of descent and distribution; provided, however, that an ISO may be transferred or assigned only to the extent consistent with Section 422 of the Code. Any purported assignment, transfer or
encumbrance in violation of this Section 17 shall be void and unenforceable against the Company. 
  
 SECTION 18. NO EMPLOYMENT RIGHTS. 
  
 No provision of the Plan, nor any right or Option granted under the Plan, shall be construed to give any person any right to become, to be treated as, or to remain an Employee. The Company and its Subsidiaries reserve
the right to terminate any person’s Service at any time and for any reason, with or without notice. 
  
 SECTION 19. DURATION AND AMENDMENTS. 
  
 (a) Term of the Plan. The Plan, as set forth herein, shall terminate automatically ten (10) years after its adoption by the Board. The Plan may be terminated on any earlier date pursuant to Subsection (b)
below. 
  
 (b) Right to Amend or Terminate the Plan. The
Board of Directors may amend the Plan at any time and from time to time. Rights and obligations under any Award granted before amendment of the Plan shall not be materially impaired by such amendment, except with consent of the Participant. An
amendment of the Plan shall be subject to the approval of the Company’s stockholders only to the extent required by applicable laws, regulations or rules. 
  

(c) Effect of Termination. No Awards shall be granted under the Plan after the termination thereof. The termination of the Plan shall not affect
any Award previously granted under the Plan. 
  
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 SECTION 20. EXECUTION. 
  

To record the adoption of the Plan by the Board of Directors on November 11, 2004, the Company has caused its authorized officer to execute the same.

  

			
	 MEDICINOVA, INC.

		
	 By:
	 	 /s/ Takashi Kiyoizumi


	 	 	 Takashi Kiyoizumi, M.D., Ph.D.

	 	 	 President and CEO



  

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