Exhibit 10.7
OCULUS INNOVATIVE SCIENCES, INC.
2006 Stock Incentive Plan
NOTICE OF STOCK UNIT AWARD
     You have been granted Stock Units representing shares of Common Stock of
Oculus Innovative Sciences, Inc. (the “Company”) on the following terms and
pursuant to such other terms and conditions as are set forth in the Stock Unit
Agreement (the “Agreement”) and the Oculus Innovative Sciences, Inc. 2006 Stock
Incentive Plan (the “Plan”), both of which are attached to and made a part of
this document. Certain capitalized terms used in this Notice of Stock Unit Award
are defined in the Plan.

           Name of Participant:   Robert Miller            Total Number of Stock
Units Granted:   60,000            Settlement Dates:   30,000 on January 15,
2009               30,000 on January 15, 2010            Date of Grant:  
April 26, 2007

     By signing this document, you acknowledge receipt of a copy of the Plan,
and agree that (a) these Stock Units are granted under and governed by the terms
and conditions of the Plan and the Stock Unit Agreement; (b) you have carefully
read, fully understand and agree to all of the terms and conditions described in
the attached Stock Unit Agreement and the Plan; (c) you understand and agree
that the Stock Unit Agreement, including its cover sheet and attachments,
constitutes the entire understanding between you and the Company regarding this
Award, and that any prior agreements, commitments or negotiations concerning
this Award are replaced and superseded; and (d) you have been given an
opportunity to consult legal counsel with respect to all matters relating to
this Award prior to signing this cover sheet and that you have either consulted
such counsel or voluntarily declined to consult such counsel.

          ROBERT MILLER   OCULUS INNOVATIVE SCIENCES, INC.
 
       
/s/ Robert Miller
  By:   /s/ Hojabr Alimi
 
       
 
       
 
  Its:   President & CEO

 

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OCULUS INNOVATIVE SCIENCES, INC.
2006 STOCK INCENTIVE PLAN
STOCK UNIT AGREEMENT

     
Vesting
  Your Stock Units are fully vested on the Date of Grant set forth in the Notice
of Stock Unit Award.
 
   
Settlement of Stock Units
  Upon the applicable settlement date for your Stock Units, as set forth in the
Notice of Stock Unit Award, you will receive one share of the Company’s Common
Stock for each Stock Unit; provided, however, that:
 
   
 
  (a) The number of shares you receive will be reduced by that number of shares
having an aggregate Fair Market Value on that date equal to $3.00 for each Stock
Unit to be settled on that date, unless you pay such amount to the Company, in
cash or by check, prior to such settlement date;
 
   
 
  (b) The number of shares you receive will be subject to reduction for payment
of withholding taxes, as set forth below; and
 
   
 
  (c) No fractional Share will be issued or delivered pursuant to the Plan or
this Agreement, and the Committee will determine whether cash will be paid in
lieu of any fractional Share or whether such fractional Share and any rights
thereto will be canceled, terminated or otherwise eliminated.
 
   
 
  Subject to the foregoing, no cash payment is required to be made by you in
consideration of the Stock Unit Award.
 
   
Acceleration of Settlement Upon Change in Control or Death
  In the event of a Change in Control or your death prior to a scheduled
settlement date, the outstanding Stock Units will be settled upon such Change in
Control or as soon as practicable following the date of death; provided,
however, that in the case of a Change in Control, the events constituting the
Change in Control qualify as a permitted payment event under Section 409A of the
Code and applicable guidance thereunder.
 
   
Termination of Service
  This Award does not terminate if your Service terminates prior to settlement
of the Award.
 
   
Nature of Stock Units
  Your Stock Units are mere bookkeeping entries. They represent only the
Company’s unfunded and unsecured promise to issue shares of Common Stock (or
distribute cash for fractional shares) on a future date. As a holder of Stock
Units, you have no rights other than the rights of a general creditor of the
Company.

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No Voting Rights or Dividends
  Your Stock Units carry neither voting rights nor rights to dividends. You, or
your estate or heirs, have no rights as a stockholder of the Company unless and
until your Stock Units are settled by issuing shares of the Company’s Common
Stock (or cash for fractional shares). No adjustments will be made for dividends
or other rights if the applicable record date occurs before your stock
certificate is issued, except as described in the Plan.
 
   
Stock Units Nontransferable
  You may not sell, transfer, assign, pledge or otherwise dispose of any Stock
Units. For instance, you may not use your Stock Units as security for a loan.
 
   
Withholding Taxes and Stock Withholding
  No stock certificates will be distributed to you unless any withholding taxes
that may be due as a result of this Award have been paid. By signing this
Agreement, you authorize the Company or your actual employer to withhold all
applicable withholding taxes legally payable by you. The Company, in its sole
discretion, will withhold shares of Common Stock that otherwise would be
distributed to you when the Stock Units are settled to satisfy the withholding
obligation, but not in excess of the amount of shares necessary to satisfy the
minimum withholding amount. The Fair Market Value of these shares, determined as
of the date when taxes otherwise would have been withheld in cash, will be
applied to the withholding taxes. You also authorize the Company, or your actual
employer, to satisfy all withholding obligations of the Company or your actual
employer from your wages or other cash compensation payable to you by the
Company or your actual employer.
 
   
Restrictions on Resale
  By signing this Agreement, you agree not to sell any shares of the Company’s
Common Stock issued upon settlement of the Stock Units at a time when applicable
laws or Company policies prohibit a sale.
 
   
No Retention Rights
  Neither your Award nor this Agreement gives you the right to be retained by
the Company or a subsidiary of the Company in any capacity. The Company and its
subsidiaries reserve the right to terminate your Service at any time, with or
without cause.
 
   
Adjustments
  In the event of a stock split, a stock dividend or a similar change in Company
stock, the number of Stock Units covered by this Award (and the cash settlement
amount per Stock Unit) shall be adjusted pursuant to the Plan.
 
   
Beneficiary Designation
  You may dispose of your Stock Units in a written beneficiary designation. A
beneficiary designation must be filed with the Company on the proper form. It
will be recognized only if it has been received at the Company’s headquarters
before your death. If you file no beneficiary designation or if none of your
designated beneficiaries survives you, then your estate will receive any Stock
Units that you hold at the time of your death.

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Applicable Law
  This Agreement will be interpreted and enforced under the laws of the State of
California (without regard to choice-of-law provisions).
 
   
The Plan and Other Agreements
  The text of the Plan is incorporated in this Agreement by reference. All
capitalized terms in this Agreement shall have the meanings assigned to them in
the Plan. This Agreement and the Plan constitute the entire understanding
between you and the Company regarding this Award. Any prior agreements,
commitments or negotiations concerning this Award are superseded. This Agreement
may be amended only by another written agreement, signed by both parties.

BY SIGNING THE COVER SHEET OF THIS AGREEMENT,
YOU AGREE TO ALL OF THE TERMS AND CONDITIONS
DESCRIBED ABOVE AND IN THE PLAN.

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