EXHIBIT 10.21
        

ACUCELA INC.
2014 EQUITY INCENTIVE PLAN
(AS AMENDED)

1.PURPOSE. The purpose of this Plan is to provide incentives to attract, retain
and motivate eligible persons whose present and potential contributions are
important to the success of the Company, and any Parents and Subsidiaries that
exist now or in the future, by offering them an opportunity to participate in
the Company’s future performance through the grant of Awards. Capitalized terms
not defined elsewhere in the text are defined in Section 26.
2.    SHARES SUBJECT TO THE PLAN.
2.1.    Number of Shares Available. Subject to Sections 2.6 and 20 and any other
applicable provisions hereof, the total number of Shares reserved and available
for grant and issuance pursuant to this Plan as of the date of adoption of the
Plan by the Board, is 300,000 Shares plus (i) any reserved shares not issued or
subject to outstanding grants under the Company’s 2012 Equity Incentive Plan
(the “Prior Plan”) on the Effective Date (as defined below), (ii) shares that
are subject to stock options or other awards granted under the Prior Plan that
cease to be subject to such stock options or other awards by forfeiture or
otherwise after the Effective Date, (iii) shares issued under the Prior Plan
before or after the Effective Date pursuant to the exercise of stock options
that are, after the Effective Date, forfeited, (iv) shares issued under the
Prior Plan that are repurchased by the Company at the original issue price and
(v) shares that are subject to stock options or other awards under the Prior
Plan that are used to pay the exercise price of an option or withheld to satisfy
the tax withholding obligations related to any award.
2.2.    Lapsed, Returned Awards. Shares subject to Awards, and Shares issued
under the Plan under any Award, will again be available for grant and issuance
in connection with subsequent Awards under this Plan to the extent such Shares:
(a) are subject to issuance upon exercise of an Option or SAR granted under this
Plan but which cease to be subject to the Option or SAR for any reason other
than exercise of the Option or SAR; (b) are subject to Awards granted under this
Plan that are forfeited or are repurchased by the Company at the original issue
price; (c) are subject to Awards granted under this Plan that otherwise
terminate without such Shares being issued; or (d) are surrendered pursuant to
an Exchange Program. To the extent an Award under the Plan is paid out in cash
rather than Shares, such cash payment will not result in reducing the number of
Shares available for issuance under the Plan. Shares used to pay the exercise
price of an Award or withheld to satisfy the tax withholding obligations related
to an Award will become available for future grant or sale under the Plan. For
the avoidance of doubt, Shares that otherwise become available for grant and
issuance because of the provisions of this Section 2.2 shall not include Shares
subject to Awards that initially became available because of Section 20.2
hereof.
2.3.    Minimum Share Reserve. At all times the Company shall reserve and keep
available a sufficient number of Shares as shall be required to satisfy the
requirements of all outstanding Awards granted under this Plan.
2.4.    Automatic Share Reserve Increase. The number of Shares available for
grant and issuance under the Plan shall be increased on January 1, of each of
2015 through 2024, by the lesser of (i) four percent (4%) of the number of
Shares issued and outstanding on each December 31 immediately prior to the date
of increase or (ii) such number of Shares determined by the Board.

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2.5.    Limitations. No more than twenty million (20,000,000) Shares shall be
issued pursuant to the exercise of ISOs.
2.6.    Adjustment of Shares. If the number of outstanding Shares is changed by
a stock dividend, recapitalization, stock split, reverse stock split,
subdivision, combination, reclassification or similar change in the capital
structure of the Company, without consideration, then (a) the number of Shares
reserved for issuance and future grant under the Plan set forth in Section 2.1,
including shares reserved under sub-clauses (i)-(v) of Section 2.1, (b) the
Exercise Prices of and number of Shares subject to outstanding Options and SARs,
(c) the number of Shares subject to other outstanding Awards, (d) the maximum
number of shares that may be issued as ISOs set forth in Section 2.5, (e) the
maximum number of Shares that may be issued to an individual or to a new
Employee in any one calendar year set forth in Section 3 and (f) the maximum
number of Shares that may be granted to a Non-Employee Director in any one
calendar year set forth in Section 12, shall be proportionately adjusted,
subject to any required action by the Board or the stockholders of the Company
and in compliance with applicable securities laws; provided that fractions of a
Share will not be issued.
3.    ELIGIBILITY. ISOs may be granted only to Employees. All other Awards may
be granted to Employees, Consultants, Directors and Non-Employee Directors of
the Company or any Parent or Subsidiary of the Company; provided such
Consultants, Directors and Non-Employee Directors render bona fide services not
in connection with the offer and sale of securities in a capital-raising
transaction. No Participant will be eligible to receive more than two million
(2,000,000) Shares in any calendar year under this Plan pursuant to the grant of
Awards except that new Employees of the Company or of a Parent or Subsidiary of
the Company (including new Employees who are also officers and directors of the
Company or any Parent or Subsidiary of the Company) are eligible to receive up
to a maximum of four million (4,000,000) Shares in the calendar year in which
they commence their employment.
4.    ADMINISTRATION.
4.1.    Committee Composition; Authority. This Plan will be administered by the
Committee or by the Board acting as the Committee. Subject to the general
purposes, terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan, except,
however, the Board shall establish the terms for the grant of an Award to
Non-Employee Directors. The Committee will have the authority to:
(a)    construe and interpret this Plan, any Award Agreement and any other
agreement or document executed pursuant to this Plan;
(b)    prescribe, amend and rescind rules and regulations relating to this Plan
or any Award;
(c)    select persons to receive Awards;
(d)    determine the form and terms and conditions, not inconsistent with the
terms of the Plan, of any Award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Awards may vest and be exercised (which may be based on performance criteria) or
settled, any vesting acceleration or waiver of forfeiture restrictions, and any
restriction or limitation regarding any Award or the Shares relating thereto,
based in each case on such factors as the Committee will determine;
(e)    determine the number of Shares or other consideration subject to Awards;

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(f)    determine the Fair Market Value and interpret the applicable provisions
of this Plan and the definition of Fair Market Value in connection with
circumstances that impact the Fair Market Value, if necessary;
(g)    determine whether Awards will be granted singly, in combination with, in
tandem with, in replacement of, or as alternatives to, other Awards under this
Plan or any other incentive or compensation plan of the Company or any Parent or
Subsidiary of the Company;
(h)    grant waivers of Plan or Award conditions;
(i)    determine the vesting, exercisability and payment of Awards;
(j)    correct any defect, supply any omission or reconcile any inconsistency in
this Plan, any Award or any Award Agreement;
(k)    determine whether an Award has been earned;
(l)    determine the terms and conditions of any, and to institute any Exchange
Program;
(m)    reduce or waive any criteria with respect to Performance Factors;
(n)    adjust Performance Factors to take into account changes in law and
accounting or tax rules as the Committee deems necessary or appropriate to
reflect the impact of extraordinary or unusual items, events or circumstances to
avoid windfalls or hardships provided that such adjustments are consistent with
the regulations promulgated under Section 162(m) of the Code with respect to
persons whose compensation is subject to Section 162(m) of the Code;
(o)    adopt terms and conditions, rules and procedures (including the adoption
of any subplan under this Plan) relating to the operation and administration of
the Plan to accommodate requirements of local law and procedures outside of the
United States;
(p)    make all other determinations necessary or advisable for the
administration of this Plan; and
(q)    delegate any of the foregoing to a subcommittee consisting of one or more
executive officers pursuant to a specific delegation as permitted by applicable
law.
4.2.    Committee Interpretation and Discretion. Any determination made by the
Committee with respect to any Award shall be made in its sole discretion at the
time of grant of the Award or, unless in contravention of any express term of
the Plan or Award, at any later time, and such determination shall be final and
binding on the Company and all persons having an interest in any Award under the
Plan. Any dispute regarding the interpretation of the Plan or any Award
Agreement shall be submitted by the Participant or Company to the Committee for
review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and the Participant. The Committee may delegate to one or
more executive officers the authority to review and resolve disputes with
respect to Awards held by Participants who are not Insiders, and such resolution
shall be final and binding on the Company and the Participant.
4.3.    Section 162(m) of the Code and Section 16 of the Exchange Act. When
necessary or desirable for an Award to qualify as “performance-based
compensation” under Section 162(m) of the Code the Committee shall include at
least two persons who are “outside directors” (as defined under Section 162(m)
of the Code) and at least two (or a majority if more than two then serve on the
Committee) such “outside

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directors” shall approve the grant of such Award and timely determine (as
applicable) the Performance Period and any Performance Factors upon which
vesting or settlement of any portion of such Award is to be subject. When
required by Section 162(m) of the Code, prior to settlement of any such Award at
least two (or a majority if more than two then serve on the Committee) such
“outside directors” then serving on the Committee shall determine and certify in
writing the extent to which such Performance Factors have been timely achieved
and the extent to which the Shares subject to such Award have thereby been
earned. Awards granted to Participants who are subject to Section 16 of the
Exchange Act must be approved by two or more “non-employee directors” (as
defined in the regulations promulgated under Section 16 of the Exchange Act).
With respect to Participants whose compensation is subject to Section 162(m) of
the Code, and provided that such adjustments are consistent with the regulations
promulgated under Section 162(m) of the Code, the Committee may adjust the
performance goals to account for changes in law and accounting and to make such
adjustments as the Committee deems necessary or appropriate to reflect the
impact of extraordinary or unusual items, events or circumstances to avoid
windfalls or hardships, including without limitation (i) restructurings,
discontinued operations, extraordinary items, and other unusual or non-recurring
charges, (ii) an event either not directly related to the operations of the
Company or not within the reasonable control of the Company’s management, or
(iii) a change in accounting standards required by generally accepted accounting
principles.
4.4.    Documentation. The Award Agreement for a given Award, the Plan and any
other documents may be delivered to, and accepted by, a Participant or any other
person in any manner (including electronic distribution or posting) that meets
applicable legal requirements.
4.5.    Foreign Award Recipients. Notwithstanding any provision of the Plan to
the contrary, in order to comply with the laws in other countries in which the
Company and its Subsidiaries operate or have employees or other individuals
eligible for Awards, the Committee, in its sole discretion, shall have the power
and authority to: (i) determine which Subsidiaries shall be covered by the Plan;
(ii) determine which individuals outside the United States are eligible to
participate in the Plan; (iii) modify the terms and conditions of any Award
granted to individuals outside the United States; (iv) establish subplans and
modify exercise procedures and other terms and procedures, to the extent the
Committee determines such actions to be necessary or advisable (and such
subplans and/or modifications shall be attached to this Plan as appendices);
provided, however, that no such subplans and/or modifications shall increase the
share limitations contained in Section 2.1 hereof; and (v) take any action,
before or after an Award is made, that the Committee determines to be necessary
or advisable to obtain approval or comply with any local governmental regulatory
exemptions or approvals. Notwithstanding the foregoing, the Committee may not
take any actions hereunder, and no Awards shall be granted, that would violate
the Exchange Act or any other applicable United States securities law, the Code,
or any other applicable United States governing statute or law.
5.    OPTIONS. An Option is the right but not the obligation to purchase Shares,
subject to certain conditions, if applicable. The Committee may grant Options to
eligible Employees, Consultants and Directors of the Company or any Parent or
Subsidiary of the Company and will determine whether such Options will be
Incentive Stock Options within the meaning of the Code (“ISOs”) or Nonqualified
Stock Options (“NSOs”), the number of Shares subject to the Option, the Exercise
Price of the Option, the period during which the Option may vest and be
exercised, and all other terms and conditions of the Option, subject to the
following:
5.1.    Option Grant. Each Option granted under this Plan will identify the
Option as an ISO or an NSO. An Option may be, but need not be, awarded upon
satisfaction of such Performance Factors during any Performance Period as are
set out in advance in the Participant’s individual Award Agreement. If the
Option is being earned upon the satisfaction of Performance Factors, then the
Committee will: (x) determine the nature, length and starting date of any
Performance Period for each Option; and (y) select from among the Performance
Factors to be used to measure the performance, if any. Performance Periods may
overlap

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and Participants may participate simultaneously with respect to Options that are
subject to different performance goals and other criteria.
5.2.    Date of Grant. The date of grant of an Option will be the date on which
the Committee makes the determination to grant such Option, or a specified
future date. The Award Agreement will be delivered to the Participant within a
reasonable time after the granting of the Option.
5.3.    Exercise Period. Options may be vested and exercisable within the times
or upon the conditions as set forth in the Award Agreement governing such
Option; provided, however, that no Option will be exercisable after the
expiration of ten (10) years from the date the Option is granted; and provided
further that no ISO granted to a person who, at the time the ISO is granted,
directly or by attribution owns more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of any Parent or
Subsidiary of the Company (“Ten Percent Stockholder”) will be exercisable after
the expiration of five (5) years from the date the ISO is granted. The Committee
also may provide for Options to become exercisable at one time or from time to
time, periodically or otherwise, in such number of Shares or percentage of
Shares as the Committee determines.
5.4.    Exercise Price. The Exercise Price of an Option will be determined by
the Committee when the Option is granted; provided that: (i) the Exercise Price
of an Option will be not less than one hundred percent (100%) of the Fair Market
Value of the Shares on the date of grant and (ii) the Exercise Price of any ISO
granted to a Ten Percent Stockholder will not be less than one hundred ten
percent (110%) of the Fair Market Value of the Shares on the date of grant.
Payment for the Shares purchased may be made in accordance with Section 11 and
the Award Agreement and in accordance with any procedures established by the
Company.
5.5.    Method of Exercise. Any Option granted hereunder will be vested and
exercisable according to the terms of the Plan and at such times and under such
conditions as determined by the Committee and set forth in the Award Agreement.
An Option may not be exercised for a fraction of a Share. An Option will be
deemed exercised when the Company receives: (i) notice of exercise (in such form
as the Committee may specify from time to time) from the person entitled to
exercise the Option, and (ii) full payment for the Shares with respect to which
the Option is exercised (together with applicable withholding taxes). Full
payment may consist of any consideration and method of payment authorized by the
Committee and permitted by the Award Agreement and the Plan. Shares issued upon
exercise of an Option will be issued in the name of the Participant. Until the
Shares are issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder will exist with
respect to the Shares, notwithstanding the exercise of the Option. The Company
will issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 2.6 of the Plan. Exercising an Option in any manner will decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.
(a)    Termination of Service. If the Participant’s Service terminates for any
reason except for Cause or the Participant’s death or Disability, then the
Participant may exercise such Participant’s Options only to the extent that such
Options would have been exercisable by the Participant on the date Participant’s
Service terminates no later than twelve (12) months after the date Participant’s
Service terminates (or such shorter or longer time period as may be determined
by the Committee, with any exercise beyond three (3) months after the date
Participant’s Service terminates deemed to be the exercise of an NSO), but in
any event no later than the expiration date of the Options.
(b)    Death. If the Participant’s Service terminates because of the
Participant’s death (or the Participant dies within three (3) months after
Participant’s Service terminates other than for Cause or

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because of the Participant’s Disability), then the Participant’s Options may be
exercised only to the extent that such Options would have been exercisable by
the Participant on the date Participant’s Service terminates and must be
exercised by the Participant’s legal representative, or authorized assignee, no
later than twelve (12) months after the date Participant’s Service terminates
(or such shorter time period not less than six (6) months or longer time periods
as may be determined by the Committee), but in any event no later than the
expiration date of the Options.
(c)    Disability. If the Participant’s Service terminates because of the
Participant’s Disability, then the Participant’s Options may be exercised only
to the extent that such Options would have been exercisable by the Participant
on the date Participant’s Service terminates and must be exercised by the
Participant (or the Participant’s legal representative or authorized assignee)
no later than twelve (12) months after the date Participant’s Service terminates
(with any exercise beyond (a) three (3) months after the date Participant’s
Service terminates when the termination of Service is for a Disability that is
not a “permanent and total disability” as defined in Section 22(e)(3) of the
Code, or (b) twelve (12) months after the date Participant’s Service terminates
when the termination of Service is for a Disability that is a “permanent and
total disability” as defined in Section 22(e)(3) of the Code, deemed to be
exercise of an NSO), but in any event no later than the expiration date of the
Options.
(d)    Cause. If the Participant is terminated for Cause, then Participant’s
Options shall expire on such Participant’s date of termination of Service, or at
such later time and on such conditions as are determined by the Committee, but
in any no event later than the expiration date of the Options. Unless otherwise
provided in the Award Agreement, Cause shall have the meaning set forth in the
Plan.
5.6.    Limitations on Exercise. The Committee may specify a minimum number of
Shares that may be purchased on any exercise of an Option, provided that such
minimum number will not prevent any Participant from exercising the Option for
the full number of Shares for which it is then exercisable.
5.7.    Limitations on ISOs. With respect to Awards granted as ISOs, to the
extent that the aggregate Fair Market Value of the Shares with respect to which
such ISOs are exercisable for the first time by the Participant during any
calendar year (under all plans of the Company and any Parent or Subsidiary)
exceeds one hundred thousand dollars ($100,000), such Options will be treated as
NSOs. For purposes of this Section 5.7, ISOs will be taken into account in the
order in which they were granted. The Fair Market Value of the Shares will be
determined as of the time the Option with respect to such Shares is granted. In
the event that the Code or the regulations promulgated thereunder are amended
after the Effective Date to provide for a different limit on the Fair Market
Value of Shares permitted to be subject to ISOs, such different limit will be
automatically incorporated herein and will apply to any Options granted after
the effective date of such amendment.
5.8.    Modification, Extension or Renewal. The Committee may modify, extend or
renew outstanding Options and authorize the grant of new Options in substitution
therefor, provided that any such action may not, without the written consent of
a Participant, impair any of such Participant’s rights under any Option
previously granted. Any outstanding ISO that is modified, extended, renewed or
otherwise altered will be treated in accordance with Section 424(h) of the Code.
5.9.    No Disqualification. Notwithstanding any other provision in this Plan,
no term of this Plan relating to ISOs will be interpreted, amended or altered,
nor will any discretion or authority granted under this Plan be exercised, so as
to disqualify this Plan under Section 422 of the Code or, without the consent of
the Participant affected, to disqualify any ISO under Section 422 of the Code.
6.    RESTRICTED STOCK AWARDS. A Restricted Stock Award is an offer by the
Company to sell to an eligible Employee, Consultant, or Director of the Company
or any Parent or Subsidiary of the Company

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Shares that are subject to restrictions (“Restricted Stock”). The Committee will
determine to whom an offer will be made, the number of Shares the Participant
may purchase, the Purchase Price, the restrictions under which the Shares will
be subject and all other terms and conditions of the Restricted Stock Award,
subject to the Plan.
6.1.    Restricted Stock Purchase Agreement. All purchases under a Restricted
Stock Award will be evidenced by an Award Agreement. Except as may otherwise be
provided in an Award Agreement, a Participant accepts a Restricted Stock Award
by signing and delivering to the Company an Award Agreement with full payment of
the Purchase Price, within thirty (30) days from the date the Award Agreement
was delivered to the Participant. If the Participant does not accept such Award
within thirty (30) days, then the offer of such Restricted Stock Award will
terminate, unless the Committee determines otherwise.
6.2.    Purchase Price. The Purchase Price for a Restricted Stock Award will be
determined by the Committee and may be less than Fair Market Value on the date
the Restricted Stock Award is granted. Payment of the Purchase Price must be
made in accordance with Section 11 of the Plan, and the Award Agreement and in
accordance with any procedures established by the Company.
6.3.    Terms of Restricted Stock Awards. Restricted Stock Awards will be
subject to such restrictions as the Committee may impose or are required by law.
These restrictions may be based on completion of a specified number of years of
service with the Company or upon completion of Performance Factors, if any,
during any Performance Period as set out in advance in the Participant’s Award
Agreement. Prior to the grant of a Restricted Stock Award, the Committee shall:
(a) determine the nature, length and starting date of any Performance Period for
the Restricted Stock Award; (b) select from among the Performance Factors to be
used to measure performance goals, if any; and (c) determine the number of
Shares that may be awarded to the Participant. Performance Periods may overlap
and a Participant may participate simultaneously with respect to Restricted
Stock Awards that are subject to different Performance Periods and having
different performance goals and other criteria.
6.4.    Termination of Service. Except as may be set forth in the Participant’s
Award Agreement, vesting ceases on such date Participant’s Service terminates
(unless determined otherwise by the Committee).
7.    STOCK BONUS AWARDS. A Stock Bonus Award is an award to an eligible
Employee, Consultant, or Director of the Company or any Parent or Subsidiary of
the Company of Shares for Services to be rendered or for past Services already
rendered to the Company or any Parent or Subsidiary. All Stock Bonus Awards
shall be made pursuant to an Award Agreement. No payment from the Participant
will be required for Shares awarded pursuant to a Stock Bonus Award.
7.1.    Terms of Stock Bonus Awards. The Committee will determine the number of
Shares to be awarded to the Participant under a Stock Bonus Award and any
restrictions thereon. These restrictions may be based upon completion of a
specified number of years of service with the Company or upon satisfaction of
performance goals based on Performance Factors during any Performance Period as
set out in advance in the Participant’s Stock Bonus Agreement. Prior to the
grant of any Stock Bonus Award the Committee shall: (a) determine the nature,
length and starting date of any Performance Period for the Stock Bonus Award;
(b) select from among the Performance Factors to be used to measure performance
goals; and (c) determine the number of Shares that may be awarded to the
Participant. Performance Periods may overlap and a Participant may participate
simultaneously with respect to Stock Bonus Awards that are subject to different
Performance Periods and different performance goals and other criteria.
7.2.    Form of Payment to Participant. Payment may be made in the form of cash,
whole Shares, or a combination thereof, based on the Fair Market Value of the
Shares earned under a Stock Bonus Award on the date of payment, as determined in
the sole discretion of the Committee.

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7.3.    Termination of Service. Except as may be set forth in the Participant’s
Award Agreement, vesting ceases on such date Participant’s Service terminates
(unless determined otherwise by the Committee).
8.    STOCK APPRECIATION RIGHTS. A Stock Appreciation Right (“SAR”) is an award
to a Participant that may be settled in cash, or Shares (which may consist of
Restricted Stock), having a value equal to (a) the difference between the Fair
Market Value on the date of exercise over the Exercise Price multiplied by (b)
the number of Shares with respect to which the SAR is being settled (subject to
any maximum number of Shares that may be issuable as specified in an Award
Agreement). All SARs shall be made pursuant to an Award Agreement.
8.1.    Terms of SARs. The Committee will determine the terms of each SAR
including, without limitation: (a) the number of Shares subject to the SAR; (b)
the Exercise Price and the time or times during which the SAR may be settled;
(c) the consideration to be distributed on settlement of the SAR; and (d) the
effect of the Participant’s termination of Service on each SAR. The Exercise
Price of the SAR will be determined by the Committee when the SAR is granted,
and may not be less than Fair Market Value. A SAR may be awarded upon
satisfaction of Performance Factors, if any, during any Performance Period as
are set out in advance in the Participant’s individual Award Agreement. If the
SAR is being earned upon the satisfaction of Performance Factors, then the
Committee will: (x) determine the nature, length and starting date of any
Performance Period for each SAR; and (y) select from among the Performance
Factors to be used to measure the performance, if any. Performance Periods may
overlap and Participants may participate simultaneously with respect to SARs
that are subject to different Performance Factors and other criteria.
8.2.    Exercise Period and Expiration Date. A SAR will be exercisable within
the times or upon the occurrence of events determined by the Committee and set
forth in the Award Agreement governing such SAR. The SAR Agreement shall set
forth the expiration date; provided that no SAR will be exercisable after the
expiration of ten (10) years from the date the SAR is granted. The Committee may
also provide for SARs to become exercisable at one time or from time to time,
periodically or otherwise (including, without limitation, upon the attainment
during a Performance Period of performance goals based on Performance Factors),
in such number of Shares or percentage of the Shares subject to the SAR as the
Committee determines. Except as may be set forth in the Participant’s Award
Agreement, vesting ceases on the date Participant’s Service terminates (unless
determined otherwise by the Committee). Notwithstanding the foregoing, the rules
of Section 5.6 also will apply to SARs.
8.3.    Form of Settlement. Upon exercise of a SAR, a Participant will be
entitled to receive payment from the Company in an amount determined by
multiplying (i) the difference between the Fair Market Value of a Share on the
date of exercise over the Exercise Price; times (ii) the number of Shares with
respect to which the SAR is exercised. At the discretion of the Committee, the
payment from the Company for the SAR exercise may be in cash, in Shares of
equivalent value, or in some combination thereof. The portion of a SAR being
settled may be paid currently or on a deferred basis with such interest or
dividend equivalent, if any, as the Committee determines, provided that the
terms of the SAR and any deferral satisfy the requirements of Section 409A of
the Code.
8.4.    Termination of Service. Except as may be set forth in the Participant’s
Award Agreement, vesting ceases on such date Participant’s Service terminates
(unless determined otherwise by the Committee).
9.    RESTRICTED STOCK UNITS. A Restricted Stock Unit (“RSU”) is an award to an
eligible Employee, Consultant, or Director of the Company or any Parent or
Subsidiary of the Company covering a number of Shares that may be settled in
cash, or by issuance of those Shares (which may consist of Restricted Stock).
All RSUs shall be made pursuant to an Award Agreement.

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9.1.    Terms of RSUs. The Committee will determine the terms of an RSU
including, without limitation: (a) the number of Shares subject to the RSU; (b)
the time or times during which the RSU may be settled; (c) the consideration to
be distributed on settlement; and (d) the effect of the Participant’s
termination of Service on each RSU. An RSU may be awarded upon satisfaction of
such performance goals based on Performance Factors during any Performance
Period as are set out in advance in the Participant’s Award Agreement. If the
RSU is being earned upon satisfaction of Performance Factors, then the Committee
will: (x) determine the nature, length and starting date of any Performance
Period for the RSU; (y) select from among the Performance Factors to be used to
measure the performance, if any; and (z) determine the number of Shares deemed
subject to the RSU. Performance Periods may overlap and participants may
participate simultaneously with respect to RSUs that are subject to different
Performance Periods and different performance goals and other criteria.
9.2.    Form and Timing of Settlement. Payment of earned RSUs shall be made as
soon as practicable after the date(s) determined by the Committee and set forth
in the Award Agreement. The Committee, in its sole discretion, may settle earned
RSUs in cash, Shares, or a combination of both. The Committee may also permit a
Participant to defer payment under a RSU to a date or dates after the RSU is
earned provided that the terms of the RSU and any deferral satisfy the
requirements of Section 409A of the Code.
9.3.    Termination of Service. Except as may be set forth in the Participant’s
Award Agreement, vesting ceases on such date Participant’s Service terminates
(unless determined otherwise by the Committee).
10.    PERFORMANCE AWARDS. A Performance Award is an award to an eligible
Employee, Consultant, or Director of the Company or any Parent or Subsidiary of
the Company of a cash bonus or an award of Performance Shares denominated in
Shares that may be settled in cash, or by issuance of those Shares (which may
consist of Restricted Stock). Grants of Performance Awards shall be made
pursuant to an Award Agreement.
10.1.    Terms of Performance Shares. The Committee will determine, and each
Award Agreement shall set forth, the terms of each Performance Award including,
without limitation: (a) the amount of any cash bonus, (b) the number of Shares
deemed subject to an award of Performance Shares; (c) the Performance Factors
and Performance Period that shall determine the time and extent to which each
award of Performance Shares shall be settled; (d) the consideration to be
distributed on settlement, and (e) the effect of the Participant’s termination
of Service on each Performance Award. In establishing Performance Factors and
the Performance Period the Committee will: (x) determine the nature, length and
starting date of any Performance Period; (y) select from among the Performance
Factors to be used; and (z) determine the number of Shares deemed subject to the
award of Performance Shares. Prior to settlement the Committee shall determine
the extent to which Performance Awards have been earned. Performance Periods may
overlap and Participants may participate simultaneously with respect to
Performance Awards that are subject to different Performance Periods and
different performance goals and other criteria. No Participant will be eligible
to receive more than $10,000,000 in Performance Awards in any calendar year
under this Plan.
10.2.    Value, Earning and Timing of Performance Shares. Each Performance Share
will have an initial value equal to the Fair Market Value of a Share on the date
of grant. After the applicable Performance Period has ended, the holder of
Performance Shares will be entitled to receive a payout of the number of
Performance Shares earned by the Participant over the Performance Period, to be
determined as a function of the extent to which the corresponding Performance
Factors or other vesting provisions have been achieved. The Committee, in its
sole discretion, may pay earned Performance Shares in the form of cash, in
Shares (which have an aggregate Fair Market Value equal to the value of the
earned Performance Shares at the close of the applicable Performance Period) or
in a combination thereof.

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10.3.    Termination of Service. Except as may be set forth in the Participant’s
Award Agreement, vesting ceases on such date Participant’s Service terminates
(unless determined otherwise by the Committee).
11.    PAYMENT FOR SHARE PURCHASES. Payment from a Participant for Shares
purchased pursuant to this Plan may be made in cash or by check or, where
expressly approved for the Participant by the Committee and where permitted by
law (and to the extent not otherwise set forth in the applicable Award
Agreement):
(a)    by cancellation of indebtedness of the Company to the Participant;
(b)    by surrender of shares of the Company held by the Participant that have a
Fair Market Value on the date of surrender equal to the aggregate exercise price
of the Shares as to which said Award will be exercised or settled;
(c)    by waiver of compensation due or accrued to the Participant for services
rendered or to be rendered to the Company or a Parent or Subsidiary of the
Company;
(d)    by consideration received by the Company pursuant to a broker-assisted or
other form of cashless exercise program implemented by the Company in connection
with the Plan;
(e)    by any combination of the foregoing; or
(f)    by any other method of payment as is permitted by applicable law.
12.    GRANTS TO NON-EMPLOYEE DIRECTORS. Non-Employee Directors are eligible to
receive any type of Award offered under this Plan except ISOs. Awards pursuant
to this Section 12 may be automatically made pursuant to policy adopted by the
Board, or made from time to time as determined in the discretion of the Board.
The aggregate number of Shares subject to Awards granted to a Non-Employee
Director pursuant to this Section 12 in any calendar year shall not exceed
1,000,000, provided however, that this maximum number can later be increased by
the Board effective for the calendar year next commencing thereafter without
further stockholder approval.
12.1.    Eligibility. Awards pursuant to this Section 12 shall be granted only
to Non-Employee Directors. A Non-Employee Director who is elected or re-elected
as a member of the Board will be eligible to receive an Award under this Section
12.
12.2.    Vesting, Exercisability and Settlement. Except as set forth in Section
20, Awards shall vest, become exercisable and be settled as determined by the
Board. With respect to Options and SARs, the exercise price granted to
Non-Employee Directors shall not be less than the Fair Market Value of the
Shares at the time that such Option or SAR is granted.
12.3.    Election to receive Awards in Lieu of Cash. A Non-Employee Director may
elect to receive his or her annual retainer payments and/or meeting fees from
the Company in the form of cash or Awards or a combination thereof, as
determined by the Committee. Such Awards shall be issued under the Plan. An
election under this Section 12.3 shall be filed with the Company on the form
prescribed by the Company.
13.    WITHHOLDING TAXES.
13.1.    Withholding Generally. Whenever Shares are to be issued in satisfaction
of Awards granted under this Plan, the Company may require the Participant to
remit to the Company, or to the Parent or Subsidiary employing the Participant,
an amount sufficient to satisfy applicable U.S. federal, state, local and

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international withholding tax requirements or any other tax liability legally
due from the Participant prior to the delivery of Shares pursuant to exercise or
settlement of any Award. Whenever payments in satisfaction of Awards granted
under this Plan are to be made in cash, such payment will be net of an amount
sufficient to satisfy applicable U.S. federal, state, local and international
withholding tax requirements or any other tax liability legally due from the
Participant.
13.2.    Stock Withholding. The Committee, or its delegate(s), as permitted by
applicable law, in its sole discretion and pursuant to such procedures as it may
specify from time to time and to limitations of local law, may require or permit
a Participant to satisfy such tax withholding obligation or any other tax
liability legally due from the Participant, in whole or in part by (without
limitation) (i) paying cash, (ii) electing to have the Company withhold
otherwise deliverable cash or Shares having a Fair Market Value equal to the
minimum statutory amount required to be withheld, or (iii) delivering to the
Company already-owned Shares having a Fair Market Value equal to the minimum
amount required to be withheld. The Fair Market Value of the Shares to be
withheld or delivered will be determined as of the date that the taxes are
required to be withheld.
14.    TRANSFERABILITY.
14.1.    Transfer Generally. Unless determined otherwise by the Committee or
pursuant to Section 14.2, an Award may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by
the laws of descent or distribution. If the Committee makes an Award
transferable, including, without limitation, by instrument to an inter vivos or
testamentary trust in which the Awards are to be passed to beneficiaries upon
the death of the trustor (settlor) or by gift or by domestic relations order to
a Permitted Transferee, such Award will contain such additional terms and
conditions as the Committee deems appropriate. All Awards shall be exercisable:
(i) during the Participant’s lifetime only by (A) the Participant, or (B) the
Participant’s guardian or legal representative; (ii) after the Participant’s
death, by the legal representative of the Participant’s heirs or legatees; and
(iii) in the case of all awards except ISOs, by a Permitted Transferee.
14.2.    Award Transfer Program. Notwithstanding any contrary provision of the
Plan, the Committee shall have all discretion and authority to determine and
implement the terms and conditions of any Award Transfer Program instituted
pursuant to this Section 14.2 and shall have the authority to amend the terms of
any Award participating, or otherwise eligible to participate in, the Award
Transfer Program, including (but not limited to) the authority to (i) amend
(including to extend) the expiration date, post-termination exercise period
and/or forfeiture conditions of any such Award, (ii) amend or remove any
provisions of the Award relating to the Award holder’s continued service to the
Company or its Parent or any Subsidiary, (iii) amend the permissible payment
methods with respect to the exercise or purchase of any such Award, (iv) amend
the adjustments to be implemented in the event of changes in the capitalization
and other similar events with respect to such Award, and (v) make such other
changes to the terms of such Award as the Committee deems necessary or
appropriate in its sole discretion.
15.    PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.
15.1.    Voting and Dividends. No Participant will have any of the rights of a
stockholder with respect to any Shares until the Shares are issued to the
Participant, except for any dividend equivalent rights permitted by an
applicable Award Agreement. After Shares are issued to the Participant, the
Participant will be a stockholder and have all the rights of a stockholder with
respect to such Shares, including the right to vote and receive all dividends or
other distributions made or paid with respect to such Shares; provided, that if
such Shares are Restricted Stock, then any new, additional or different
securities the Participant may become entitled to receive with respect to such
Shares by virtue of a stock dividend, stock split or any other change in the
corporate or capital structure of the Company will be subject to the same
restrictions as the

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Restricted Stock; provided, further, that the Participant will have no right to
retain such stock dividends or stock distributions with respect to Shares that
are repurchased at the Participant’s Purchase Price or Exercise Price, as the
case may be, pursuant to Section 15.2.
15.2.    Restrictions on Shares. At the discretion of the Committee, the Company
may reserve to itself and/or its assignee(s) a right to repurchase (a “Right of
Repurchase”) a portion of any or all Unvested Shares held by a Participant
following such Participant’s termination of Service at any time within ninety
(90) days (or such longer or shorter time determined by the Committee) after the
later of the date Participant’s Service terminates and the date the Participant
purchases Shares under this Plan, for cash and/or cancellation of purchase money
indebtedness, at the Participant’s Purchase Price or Exercise Price, as the case
may be.
16.    CERTIFICATES. All Shares or other securities whether or not certificated,
delivered under this Plan will be subject to such stock transfer orders, legends
and other restrictions as the Committee may deem necessary or advisable,
including restrictions under any applicable U.S. federal, state or foreign
securities law, or any rules, regulations and other requirements of the SEC or
any stock exchange or automated quotation system upon which the Shares may be
listed or quoted and any non-U.S. exchange controls or securities law
restrictions to which the Shares are subject.
17.    ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a Participant’s
Shares, the Committee may require the Participant to deposit all certificates
representing Shares, together with stock powers or other instruments of transfer
approved by the Committee, appropriately endorsed in blank, with the Company or
an agent designated by the Company to hold in escrow until such restrictions
have lapsed or terminated, and the Committee may cause a legend or legends
referencing such restrictions to be placed on the certificates. Any Participant
who is permitted to execute a promissory note as partial or full consideration
for the purchase of Shares under this Plan will be required to pledge and
deposit with the Company all or part of the Shares so purchased as collateral to
secure the payment of the Participant’s obligation to the Company under the
promissory note; provided, however, that the Committee may require or accept
other or additional forms of collateral to secure the payment of such obligation
and, in any event, the Company will have full recourse against the Participant
under the promissory note notwithstanding any pledge of the Participant’s Shares
or other collateral. In connection with any pledge of the Shares, the
Participant will be required to execute and deliver a written pledge agreement
in such form as the Committee will from time to time approve. The Shares
purchased with the promissory note may be released from the pledge on a pro rata
basis as the promissory note is paid.
18.    SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award will not be
effective unless such Award is in compliance with all applicable U.S. and
foreign federal and state securities and exchange control laws, rules and
regulations of any governmental body, and the requirements of any stock exchange
or automated quotation system upon which the Shares may then be listed or
quoted, as they are in effect on the date of grant of the Award and also on the
date of exercise or other issuance. Notwithstanding any other provision in this
Plan, the Company will have no obligation to issue or deliver certificates for
Shares under this Plan prior to: (a) obtaining any approvals from governmental
agencies that the Company determines are necessary or advisable; and/or (b)
completion of any registration or other qualification of such Shares under any
state or federal or foreign law or ruling of any governmental body that the
Company determines to be necessary or advisable. The Company will be under no
obligation to register the Shares with the SEC or to effect compliance with the
registration, qualification or listing requirements of any foreign or state
securities laws, exchange control laws, stock exchange or automated quotation
system, and the Company will have no liability for any inability or failure to
do so.
19.    NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted under
this Plan will confer or be deemed to confer on any Participant any right to
continue in the employ of, or to continue any other relationship with, the
Company or any Parent or Subsidiary of the Company or limit in any way

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the right of the Company or any Parent or Subsidiary of the Company to terminate
Participant’s employment or other relationship at any time.
20.    CORPORATE TRANSACTIONS.
    
20.1.     Assumption or Replacement of Awards by Successor. In the event of a
Corporate Transaction any or all outstanding Awards may be assumed or replaced
by the successor corporation, which assumption or replacement shall be binding
on all Participants. In the alternative, the successor corporation may
substitute equivalent Awards or provide substantially similar consideration to
Participants as was provided to stockholders (after taking into account the
existing provisions of the Awards). The successor corporation may also issue, in
place of outstanding Shares of the Company held by the Participant,
substantially similar shares or other property subject to repurchase
restrictions no less favorable to the Participant. In the event such successor
or acquiring corporation (if any) refuses to assume, convert, replace or
substitute Awards, as provided above, pursuant to a Corporate Transaction, then
notwithstanding any other provision in this Plan to the contrary, such Awards
will expire on such transaction at such time and on such conditions as the Board
will determine; the Board (or, the Committee, if so designated by the Board)
may, in its sole discretion, accelerate the vesting of such Awards in connection
with a Corporate Transaction. In addition, in the event such successor or
acquiring corporation (if any) refuses to assume, convert, replace or substitute
Awards, as provided above, pursuant to a Corporate Transaction, the Committee
will notify the Participant in writing or electronically that such Award will be
exercisable for a period of time determined by the Committee in its sole
discretion, and such Award will terminate upon the expiration of such period.
Awards need not be treated similarly in a Corporate Transaction. Notwithstanding
the foregoing, and in the event Awards are assumed, converted, replaced or
substituted in connection with a Corporate Transaction, then, in the event a
Participant’s employment is Terminated by the Company or the successor
corporation without Cause or by the Participant for Good Reason within twelve
(12) months following the consummation of a Corporate Transaction (a “Qualifying
Termination”), then one hundred percent (100%) of the Participant’s time-based
Awards that are then unvested shall become vested and exercisable (to the extent
applicable) and any Performance Awards then held by Participant shall be deemed
to have vested at target (the “Acceleration”). The Acceleration is subject to
Participant executing and not revoking a general release of claims in favor of
the Company and the successor corporation. The release will be in a form
prescribed by the Company or the successor corporation. Partcipant must execute
and return the release on or before the date specified by the Company or the
successor coporation in the prescribed form (the “Release Deadline”). The
Release Deadline will in no event be later than sixty (60) days after
Partcipant’s Qualifying Termination. If Participant fails to return the release
on or before the Release Deadline, or if Participant revokes the release, then
Participant will not be entitled to the Acceleration.
20.2.    Assumption of Awards by the Company. The Company, from time to time,
also may substitute or assume outstanding awards granted by another company,
whether in connection with an acquisition of such other company or otherwise, by
either; (a) granting an Award under this Plan in substitution of such other
company’s award; or (b) assuming such award as if it had been granted under this
Plan if the terms of such assumed award could be applied to an Award granted
under this Plan. Such substitution or assumption will be permissible if the
holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(except that the Purchase Price or the Exercise Price, as the case may be, and
the number and nature of Shares issuable upon exercise or settlement of any such
Award will be adjusted appropriately pursuant to Section 424(a) of the Code). In
the event the Company elects to grant a new Option in substitution rather than
assuming an existing option, such new Option may be granted with a similarly
adjusted Exercise Price. Substitute Awards shall not reduce the number of Shares
authorized for grant under the Plan or authorized for grant to a Participant in
a calendar year.

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20.3.    Non-Employee Directors’ Awards. Notwithstanding any provision to the
contrary herein, in the event of a Corporate Transaction, the vesting of all
Awards granted to Non-Employee Directors shall accelerate and such Awards shall
become exercisable (as applicable) in full prior to the consummation of such
event at such times and on such conditions as the Committee determines.
21.    ADOPTION AND STOCKHOLDER APPROVAL. This Plan shall be submitted for the
approval of the Company’s stockholders, consistent with applicable laws, within
twelve (12) months before or after the date this Plan is adopted by the Board.
22.    TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided herein,
this Plan will become effective on the Effective Date and will terminate ten
(10) years from the date this Plan is adopted by the Board. This Plan and all
Awards granted hereunder shall be governed by and construed in accordance with
the laws of the State of Washington (excluding its conflict of laws rules).
23.    AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate or
amend this Plan in any respect, including, without limitation, amendment of any
form of Award Agreement or instrument to be executed pursuant to this Plan;
provided, however, that the Board will not, without the approval of the
stockholders of the Company, amend this Plan in any manner that requires such
stockholder approval; provided further, that a Participant’s Award shall be
governed by the version of this Plan then in effect at the time such Award was
granted.
24.    NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the
Board, the submission of this Plan to the stockholders of the Company for
approval, nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock awards and bonuses otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.
25.    INSIDER TRADING POLICY. Each Participant who receives an Award shall
comply with any policy adopted by the Company from time to time covering
transactions in the Company’s securities by Employees, officers and/or directors
of the Company.
26.    DEFINITIONS. As used in this Plan, and except as elsewhere defined
herein, the following terms will have the following meanings:
26.1.    “Award” means any award under the Plan, including any Option,
Restricted Stock, Stock Bonus, Stock Appreciation Right, Restricted Stock Unit
or award of Performance Shares.
26.2.    “Award Agreement” means, with respect to each Award, the written or
electronic agreement between the Company and the Participant setting forth the
terms and conditions of the Award, and country-specific appendix thereto for
grants to non-U.S. Participants, which shall be in substantially a form (which
need not be the same for each Participant) that the Committee (or in the case of
Award agreements that are not used for Insiders, the Committee's delegate(s))
has from time to time approved, and will comply with and be subject to the terms
and conditions of this Plan.
26.3.    “Award Transfer Program” means any program instituted by the Committee
which would permit Participants the opportunity to transfer any outstanding
Awards to a financial institution or other person or entity approved by the
Committee.
26.4.    “Board” means the Board of Directors of the Company.

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26.5.    “Cause” means (i) Participant’s willful failure substantially to
perform his or her duties and responsibilities to the Company or deliberate
violation of a Company policy; (ii) Participant’s commission of any act of
fraud, embezzlement, dishonesty or any other willful misconduct that has caused
or is reasonably expected to result in material injury to the Company; (iii)
unauthorized use or disclosure by Participant of any proprietary information or
trade secrets of the Company or any other party to whom the Participant owes an
obligation of nondisclosure as a result of his or her relationship with the
Company; or (iv) Participant’s willful breach of any of his or her obligations
under any written agreement or covenant with the Company. The determination as
to whether a Participant is being terminated for Cause shall be made in good
faith by the Company and shall be final and binding on the Participant. The
foregoing definition does not in any way limit the Company’s ability to
terminate a Participant’s employment or consulting relationship at any time as
provided in Section 19 above, and the term “Company” will be interpreted to
include any Subsidiary or Parent, as appropriate. Notwithstanding the foregoing,
the foregoing definition of “Cause” may, in part or in whole, be modified or
replaced in each individual employment agreement or Award Agreement with any
Participant, provided that such document supersedes the definition provided in
this Section 26.5.
26.6.    “Code” means the United States Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder.
26.7.     “Committee” means the Compensation Committee of the Board or those
persons to whom administration of the Plan, or part of the Plan, has been
delegated as permitted by law.
26.8.    “Common Stock” means the common stock of the Company.
26.9.    “Company” means Acucela Inc., or any successor corporation.
26.10.    “Consultant” means any person, including an advisor or independent
contractor, engaged by the Company or a Parent or Subsidiary to render services
to such entity.
26.11.    “Corporate Transaction” means the occurrence of any of the following
events: (i) any “person” (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of
the Exchange Act), directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the total voting power represented
by the Company’s then-outstanding voting securities; provided, however, that for
purposes of this subclause (i) the acquisition of additional securities by any
one Person who is considered to own more than fifty percent (50%) of the total
voting power of the securities of the Company will not be considered a Corporate
Transaction; (ii) the consummation of the sale or disposition by the Company of
all or substantially all of the Company’s assets; (iii) the consummation of a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or its parent) at least fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving
entity or its parent outstanding immediately after such merger or consolidation;
(iv) any other transaction which qualifies as a “corporate transaction” under
Section 424(a) of the Code wherein the stockholders of the Company give up all
of their equity interest in the Company (except for the acquisition, sale or
transfer of all or substantially all of the outstanding shares of the Company)
or (v) a change in the effective control of the Company that occurs on the date
that a majority of members of the Board is replaced during any twelve (12) month
period by member of the Board whose appointment or election is not endorsed by
as majority of the members of the Board prior to the date of the appointment or
election. For purpose of this subclause (v), if any Person is considered to be
in effective control of the Company, the acquisition of additional control of
the Company by the same Person will not be considered a Corporate Transaction.
For purposes of this definition, persons will be considered to be acting as a
group if they are owners of a corporation that enters into a merger,
consolidation, purchase or

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acquisition of stock, or similar business transaction with the Company.
Notwithstanding the foregoing, a transaction will not be deemed a Corporate
Transaction unless the transaction qualifies as a change in control event within
the meaning of Code Section 409A, as it has been and may be amended from time to
time, and any proposed or final Treasury Regulations and IRS guidance that has
been promulgated or may be promulgated thereunder from time to time.
26.12.    “Director” means a member of the Board.
26.13.    “Disability” means in the case of incentive stock options, total and
permanent disability as defined in Section 22(e)(3) of the Code and in the case
of other Awards, that the Participant is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months.
26.14.    “Effective Date” means the day immediately prior to the date of the
underwritten initial public offering of the Company’s Common Stock pursuant to a
registration statement that is declared effective by the SEC.
26.15.    “Employee” means any person, including Officers and Directors,
providing services as an employee to the Company or any Parent or Subsidiary of
the Company. Neither service as a Director nor payment of a director’s fee by
the Company will be sufficient to constitute “employment” by the Company.
26.16.    “Exchange Act” means the United States Securities Exchange Act of
1934, as amended.
26.17.    “Exchange Program” means a program pursuant to which (i) outstanding
Awards are surrendered, cancelled or exchanged for cash, the same type of Award
or a different Award (or combination thereof) or (ii) the exercise price of an
outstanding Award is increased or reduced.
26.18.    “Exercise Price” means, with respect to an Option, the price at which
a holder may purchase the Shares issuable upon exercise of an Option and with
respect to a SAR, the price at which the SAR is granted to the holder thereof.
26.19.    “Fair Market Value” means, as of any date, the value of a share of the
Company’s Common Stock determined as follows:
(a)    if such Common Stock is publicly traded and is then listed on a national
securities exchange, its closing price on the date of determination on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading as reported in The Wall Street Journal or such other source
as the Committee deems reliable;
(b)    if such Common Stock is publicly traded but is neither listed nor
admitted to trading on a national securities exchange, the average of the
closing bid and asked prices on the date of determination as reported in The
Wall Street Journal or such other source as the Committee deems reliable;
(c)    in the case of an Option or SAR grant made on the Effective Date, the
price per share at which shares of the Company’s Common Stock are initially
offered for sale to the public by the Company’s underwriters in the initial
public offering of the Company’s Common Stock pursuant to a registration
statement filed with the SEC under the Securities Act; or
(d)    if none of the foregoing is applicable, by the Board or the Committee in
good faith.

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26.20.    “Good Reason” means the occurrence of any of the following, in each
case taken without Participant’s written consent: (i) a material reduction in
Participant’s duties, authority or responsibilities, it being understood that a
reduction in Participant’s responsibilities or authority shall not constitute
Good Reason if there is no demotion in Participant’s title or position or
reduction of the scope of Participant’s duties within the Company; (ii) a
material reduction in Participant’s base salary (and for purposes hereof,
“material” means a reduction greater than 10% other than an equivalent
percentage reduction in annual base salaries that applies to similarly situated
employees of the Company); or (iii) the relocation of the Company’s principal
place of business to a location that is outside a 50 mile radius of the
Company’s principal place of business as of the date immediately prior to such
relocation. Notwithstanding the foregoing, Participant cannot terminate
Participant’s employment for Good Reason unless Participant (A) has provided
written notice to the Company of the existence of the circumstances providing
grounds for termination for Good Reason within thirty (30) calendar days of the
initial existence of such grounds, (B) the Company has failed to cure such
circumstances within thirty (30) calendar days after receipt of such notice, and
(C) Participant resigns employment within thirty (30) calendar days of such
30-day cure period. Notwithstanding the foregoing, the foregoing definition of
“Good Reason” may, in part or in whole, be modified or replaced in each
individual employment agreement or Award Agreement with any Participant,
provided that such document supersedes the definition provided in this Section
26.20.
26.21.    “Insider” means an officer or director of the Company or any other
person whose transactions in the Company’s Common Stock are subject to Section
16 of the Exchange Act.
26.22.    “IRS” means the United States Internal Revenue Service.
26.23.    “Non-Employee Director” means a Director who is not an Employee of the
Company or any Parent or Subsidiary.
26.24.    “Option” means an award of an option to purchase Shares pursuant to
Section 5.
26.25.    “Parent” means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if each of such corporations other
than the Company owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
26.26.    “Participant” means a person who holds an Award under this Plan.
26.27.    “Performance Award” means cash or stock granted pursuant to Section 10
or Section 12 of the Plan.
26.28.    “Performance Factors” means any of the factors selected by the
Committee and specified in an Award Agreement, from among the following
objective measures, either individually, alternatively or in any combination,
applied to the Company as a whole or any business unit or Subsidiary, either
individually, alternatively, or in any combination, on a GAAP or non-GAAP basis,
and measured, to the extent applicable on an absolute basis or relative to a
pre-established target, to determine whether the performance goals established
by the Committee with respect to applicable Awards have been satisfied:
(a)    Profit Before Tax;
(b)    Billings;
(c)    Revenue;

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(d)    Net revenue;
(e)    Earnings (which may include earnings before interest and taxes, earnings
before taxes, and net earnings);
(f)    Operating income;
(g)    Operating margin;
(h)    Operating profit;
(i)    Controllable operating profit, or net operating profit;
(j)    Net Profit;
(k)    Gross margin;
(l)    Operating expenses or operating expenses as a percentage of revenue;
(m)     Net income;
(n)    Earnings per share;
(o)    Total stockholder return;
(p)    Market share;
(q)    Return on assets or net assets;
(r)    The Company’s stock price;
(s)    Growth in stockholder value relative to a pre-determined index;
(t)    Return on equity;
(u)    Return on invested capital;
(v)    Cash Flow (including free cash flow or operating cash flows)
(w)    Cash conversion cycle;
(x)    Economic value added;
(y)    Individual confidential business objectives;
(z)    Contract awards or backlog;
(aa)    Overhead or other expense reduction;
(bb)    Credit rating;
(cc)    Strategic plan development and implementation;

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(dd)    Succession plan development and implementation;
(ee)    Improvement in workforce diversity;
(ff)    Customer indicators;
(gg)    New product invention or innovation;
(hh)    Attainment of research and development milestones;
(ii)    Improvements in productivity;
(jj)    Bookings;
(kk)    Attainment of objective operating goals and employee metrics; and
(ll)    Any other metric that is capable of measurement as determined by the
Committee.

The Committee may, in recognition of unusual or non-recurring items such as
acquisition-related activities or changes in applicable accounting rules,
provide for one or more equitable adjustments (based on objective standards) to
the Performance Factors to preserve the Committee’s original intent regarding
the Performance Factors at the time of the initial award grant. It is within the
sole discretion of the Committee to make or not make any such equitable
adjustments.
26.29.    “Performance Period” means the period of service determined by the
Committee during which years of service or performance is to be measured for the
Award.
26.30.    “Performance Share” means an Award granted pursuant to Section 10 or
Section 12 of the Plan.
26.31.    “Permitted Transferee” means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law (including adoptive relationships) of the Employee, any person
sharing the Employee’s household (other than a tenant or employee), a trust in
which these persons (or the Employee) have more than 50% of the beneficial
interest, a foundation in which these persons (or the Employee) control the
management of assets, and any other entity in which these persons (or the
Employee) own more than 50% of the voting interests.
26.32.    “Plan” means this Acucela, Inc. 2014 Equity Incentive Plan.
26.33.    “Purchase Price” means the price to be paid for Shares acquired under
the Plan, other than Shares acquired upon exercise of an Option or SAR.
26.34.    “Restricted Stock Award” means an award of Shares pursuant to Section
6 or Section 12 of the Plan, or issued pursuant to the early exercise of an
Option
26.35.     “Restricted Stock Unit” means an Award granted pursuant to Section 9
or Section 12 of the Plan.
26.36.    “SEC” means the United States Securities and Exchange Commission.
26.37.    “Securities Act” means the United States Securities Act of 1933, as
amended.

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26.38.    “Service” shall mean service as an Employee, Consultant, Director or
Non-Employee Director, to the Company or a Parent or Subsidiary of the Company,
subject to such further limitations as may be set forth in the Plan or the
applicable Award Agreement. An Employee will not be deemed to have ceased to
provide Service in the case of (i) sick leave, (ii) military leave, or (iii) any
other leave of absence approved by the Company; provided, that such leave is for
a period of not more than 90 days, unless reemployment upon the expiration of
such leave is guaranteed by contract or statute or unless provided otherwise
pursuant to formal policy adopted from time to time by the Company and issued
and promulgated to employees in writing. In the case of any Employee on an
approved leave of absence, the Committee may make such provisions respecting
suspension of vesting of the Award while on leave from the employ of the Company
or a Parent or Subsidiary of the Company as it may deem appropriate, except that
in no event may an Award be exercised after the expiration of the term set forth
in the applicable Award Agreement. In the event of military leave, if required
by applicable laws, vesting shall continue for the longest period that vesting
continues under any other statutory or Company approved leave of absence and,
upon a Participant’s returning from military leave (under conditions that would
entitle him or her to protection upon such return under the Uniform Services
Employment and Reemployment Rights Act), he or she shall be given vesting credit
with respect to Awards to the same extent as would have applied had the
Participant continued to provide services to the Company throughout the leave on
the same terms as he or she was providing services immediately prior to such
leave. Except as set forth in this Section 26.37, an employee shall have
terminated employment as of the date he or she ceases to provide services
(regardless of whether the termination is in breach of local employment laws or
is later found to be invalid) and employment shall not be extended by any notice
period or garden leave mandated by local law, provided however, that a change in
status from an employee to a consultant or advisor shall not terminate the
service provider’s Service, unless determined by the Committee, in its
discretion. The Committee will have sole discretion to determine whether a
Participant has ceased to provide Services and the effective date on which the
Participant ceased to provide Services.
26.39.    “Shares” means shares of the Company’s Common Stock and the common
stock of any successor security.
26.40.    “Stock Appreciation Right” means an Award granted pursuant to Section
8 or Section 12 of the Plan.
26.41.    “Stock Bonus” means an Award granted pursuant to Section 7 or Section
12 of the Plan.
26.42.    “Subsidiary” means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
26.43.    “Treasury Regulations” means regulations promulgated by the United
States Treasury Department.
26.44.     “Unvested Shares” means Shares that have not yet vested or are
subject to a right of repurchase in favor of the Company (or any successor
thereto).

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NOTICE OF STOCK OPTION GRANT
GLOBAL
ACUCELA INC. 2014 EQUITY INCENTIVE PLAN
Unless otherwise defined herein, the terms defined in the Acucela Inc. (the
“Company”) 2014 Equity Incentive Plan (the “Plan”) shall have the same meanings
in this Notice of Stock Option Grant and the electronic representation of this
Notice established and maintained by the Company (the “Notice”) and the Stock
Option Agreement (the “Option Agreement”). You have been granted an Option to
purchase shares of Common Stock of the Company under the Plan subject to the
terms and conditions of the Plan, this Notice and the Option Agreement,
including any applicable country-specific provisions in the appendix attached
hereto (the “Appendix”) which constitutes part of this Option Agreement.
Name:        
Address:        
Grant Number:        
Date of Grant:        
Vesting Commencement Date:        
Exercise price per Share:        
Total Number of Shares:        
Type of Option:    _____ Nonqualified Stock Option
_____ Incentive Stock Option
    
Expiration Date:
________ __, 20__; This Option expires if your Service terminates earlier, as
described in the Stock Option Agreement.

Vesting Schedule:
[Insert Vesting Schedule]

            
By accepting (whether in writing, electronically or otherwise) this Option, you
and the Company agree that this Option is granted under and governed by the
terms and conditions of the Plan, the Notice and the Option Agreement. You
acknowledge and agree that the Vesting Schedule may change prospectively in the
event that your service status changes between full and part time status in
accordance with Company policies relating to work schedules and vesting of
awards. You further acknowledge that the grant of this Option by the Company is
at the Company’s sole discretion, and does not entitle you to further grant(s)
of Option(s) or any other award(s) under the Plan or any other plan or program
maintained by the Company or any parent, subsidiary or affiliate of the Company.
You acknowledge that the vesting of the Option pursuant to this Notice is earned
only by continuing Service. By accepting this Option, you consent to electronic
delivery as set forth in the Option Agreement.
PARTICIPANT
ACUCELA INC.

Signature:
        By:    

Print Name:
        Its:     

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STOCK OPTION AGREEMENT
GLOBAL
ACUCELA INC. 2014 EQUITY INCENTIVE PLAN
You have been granted an Option by Acucela Inc. (the “Company”) under the 2014
Equity Incentive Plan (the “Plan”) to purchase Shares (the “Option”), subject to
the terms and conditions of the Plan, the Notice of Stock Option Grant (the
“Notice”) and this Stock Option Agreement (the “Agreement”). Unless otherwise
defined in this Agreement or the Notice, any capitalized terms used herein will
have the meaning ascribed to them in Plan.
1.Grant of Option. You have been granted an Option for the number of Shares set
forth in the Notice at the exercise price per Share in U.S. Dollars set forth in
the Notice (the “exercise price”). In the event of a conflict between the terms
and conditions of the Plan and the terms and conditions of this Agreement, the
terms and conditions of the Plan shall prevail. If designated in the Notice as
an Incentive Stock Option (“ISO”), this Option is intended to qualify as an
Incentive Stock Option under Section 422 of the Code. However, if this Option is
intended to be an ISO, to the extent that it exceeds the $100,000 rule of Code
Section 422(d) it shall be treated as a Nonqualified Stock Option (“NSO”).
2.    Termination Period.
(a)    General Rule. If your Service terminates for any reason except death or
Disability, and other than for Cause, then this Option will expire at the close
of business at Company headquarters on the date twelve (12) months after your
termination date (with any exercise beyond three (3) months after the date
Participant’s Service terminates deemed to be the exercise of an NSO). If your
Service is terminated for Cause, this Option will expire upon the date of such
termination. The Company determines when your Service terminates for all
purposes under this Agreement.
(b)    Death; Disability. If you die before your Service terminates, then this
Option will expire at the close of business at Company headquarters on the date
twelve (12) months after the date of death. If your Service terminates because
of your Disability, then this Option will expire at the close of business at
Company headquarters on the date twelve (12) months after your termination date.
(c)    No Notice. You are responsible for keeping track of these exercise
periods following your termination of Service for any reason. The Company will
not provide further notice of such periods. In no event shall this Option be
exercised later than the Expiration Date set forth in the Notice.
(d)    Termination. For purposes of this Option, your Service will be considered
terminated as of the date you are no longer providing services to the Company,
its Parent or one of its Subsidiaries (regardless of the reason for such
termination and whether or not later found to be invalid or in breach of
employment laws in the jurisdiction where you are employed or the terms of your
employment agreement, if any)(the “Termination Date”). The Committee shall have
the exclusive discretion to determine when you are no longer actively providing
services for purposes of your Option (including whether you may still be
considered to be providing services while on an approved leave of absence).
Unless otherwise provided in this Agreement or determined by the Company, your
right to vest in this Option under the Plan, if any, will terminate as of the
Termination Date and will not be extended by any notice period (e.g., your
period of services would not include any contractual notice period or any period
of “garden leave” or similar period mandated under employment laws in the
jurisdiction where you are employed or the terms of your employment agreement,
if any). Following the Termination Date, you may exercise the Option only as set
forth in the Notice and this Section, provided that the period (if any) during
which you may exercise the

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Option after the Termination Date, if any, will commence on the date you cease
to provide services and will not be extended by any notice period mandated under
employment laws in the jurisdiction where you are employed or terms of your
employment agreement, if any. If you do not exercise this Option within the
Termination Period set forth in the Notice or the termination periods set forth
below, the Option shall terminate in its entirety. In no event, may any Option
be exercised after the Expiration Date of the Option as set forth in the Notice.
3.    Exercise of Option.
(a)    Right to Exercise. This Option is exercisable during its term in
accordance with the Vesting Schedule set forth in the Notice and the applicable
provisions of the Plan and this Agreement. In the event of your death,
Disability, or other cessation of Service, the exercisability of the Option is
governed by the applicable provisions of the Plan, the Notice and this
Agreement. This Option may not be exercised for a fraction of a Share.
(b)    Method of Exercise. This Option is exercisable by delivery of an exercise
notice in a form specified by the Company (the “Exercise Notice”), which shall
state the election to exercise the Option, the number of Shares in respect of
which the Option is being exercised (the “Exercised Shares”), and such other
representations and agreements as may be required by the Company pursuant to the
provisions of the Plan. The Exercise Notice shall be delivered in person, by
mail, via electronic mail or facsimile or by other authorized method to the
Secretary of the Company or other person designated by the Company. The Exercise
Notice shall be accompanied by payment of the aggregate exercise price as to all
Exercised Shares together with any Tax Related Items (as defined in Section 7
below). This Option shall be deemed to be exercised upon receipt by the Company
of a fully executed Exercise Notice accompanied by the aggregate exercise price
and any applicable tax withholding due upon exercise of the Option. No Shares
will be issued pursuant to the exercise of this Option unless such issuance and
exercise complies with all relevant provisions of law and the requirements of
any stock exchange or quotation service upon which the Shares are then listed.
Assuming such compliance, for income tax purposes the Exercised Shares will be
considered transferred to you on the date the Option is exercised with respect
to such Exercised Shares.
(c)    Exercise by Another. If another person wants to exercise this Option
after it has been transferred to him or her, that person must prove to the
Company’s satisfaction that he or she is entitled to exercise this Option. That
person must also complete the proper Exercise Notice form (as described above)
and pay the exercise price (as described below) and any applicable tax
withholding due upon exercise of the Option (as described below).
4.    Method of Payment. Payment of the aggregate exercise price shall be by any
of the following, or a combination thereof, at your election:
(a)    your personal check, wire transfer, or a cashier’s check;
(b)    certificates for shares of Company stock that you own, along with any
forms needed to effect a transfer of those shares to the Company; the value of
the shares, determined as of the effective date of the Option exercise, will be
applied to the Option exercise price. Instead of surrendering shares of Company
stock, you may attest to the ownership of those shares on a form provided by the
Company and have the same number of shares subtracted from the Option shares
issued to you. However, you may not surrender, or attest to the ownership of,
shares of Company stock in payment of the exercise price of your Option if your
action would cause the Company to recognize compensation expense (or additional
compensation expense) with respect to this Option for financial reporting
purposes;

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(c)    cashless exercise through irrevocable directions to a securities broker
approved by the Company to sell all or part of the Shares covered by this Option
and to deliver to the Company from the sale proceeds an amount sufficient to pay
the Option exercise price and any withholding taxes. The balance of the sale
proceeds, if any, will be delivered to you. The directions must be given by
signing a special notice of exercise form provided by the Company; or
(d)    other method authorized by the Company.
5.    Non-Transferability of Option. In general, except as provided below, only
you may exercise this Option prior to your death. You may not transfer or assign
this Option, except as provided below. For instance, you may not sell this
Option or use it as security for a loan. If you attempt to do any of these
things, this Option will immediately become invalid. You may, however, dispose
of this Option in your will or in a beneficiary designation. However, if this
Option is designated as a NSO in the Notice, then the Committee may, in its sole
discretion, allow you to transfer this Option as a gift to one or more family
members. For purposes of this Agreement, “family member” means a child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in- law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law (including adoptive
relationships), any individual sharing your household (other than a tenant or
employee), a trust in which one or more of these individuals have more than 50%
of the beneficial interest, a foundation in which you or one or more of these
persons control the management of assets, and any entity in which you or one or
more of these persons own more than 50% of the voting interest. In addition, if
this Option is designated as a NSO in the Notice, then the Committee may, in its
sole discretion, allow you to transfer this Option to your spouse or former
spouse pursuant to a domestic relations order in settlement of marital property
rights. The Committee will allow you to transfer this Option only if both you
and the transferee(s) execute the forms prescribed by the Committee, which
include the consent of the transferee(s) to be bound by this Agreement. This
Option may not be sold, assigned, transferred, pledged, hypothecated, or
otherwise disposed of in any manner other than by will or by the laws of descent
or distribution or court order and may be exercised during the lifetime of you
only by you, your guardian, or legal representative, as permitted in the Plan.
The terms of the Plan and this Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of you.
6.    Term of Option. This Option shall in any event expire on the expiration
date set forth in the Notice, which date is 10 years after the Date of Grant
(five years after the grant date if this Option is designated as an ISO in the
Notice and Section 5.3 of the Plan applies).
7.    Tax Consequences. You should consult a tax advisor for tax consequences
relating to this Option in the jurisdiction in which you are subject to tax. You
acknowledge that, regardless of any action taken by the Company or, if
different, your employer (the “Employer”) the ultimate liability for all income
tax, social insurance, payroll tax, fringe benefits tax, payment on account or
other tax‑related items related to your participation in the Plan and legally
applicable to you (“Tax-Related Items”), is and remains your responsibility and
may exceed the amount actually withheld by the Company or the Employer. You
further acknowledge that the Company and/or the Employer (a) make no
representations or undertakings regarding the treatment of any Tax-Related Items
in connection with any aspect of the Option, including, but not limited to, the
grant, vesting or exercise of the Option, the subsequent sale of Shares acquired
pursuant to such exercise and the receipt of any dividends; and (b) do not
commit to and are under no obligation to structure the terms of the grant or any
aspect of the Option to reduce or eliminate your liability for Tax-Related Items
or achieve any particular tax result. Further, if you are subject to Tax-Related
Items in more than one jurisdiction between the Date of Grant and the date of
any relevant taxable or tax withholding event, as applicable, you acknowledge
that the Company and/or the Employer (or former employer, as applicable) may be
required to withhold or account for Tax-Related Items in more than one
jurisdiction. YOU SHOULD CONSULT A TAX ADVISER APPROPRIATELY QUALIFIED IN THE
COUNTRY OR COUNTRIES IN

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WHICH YOU RESIDE OR ARE SUBJECT TO TAXATION BEFORE EXERCISING THE OPTION OR
DISPOSING OF THE SHARES.
8.    Withholding Taxes and Stock Withholding.
(a)    Exercising the Option. Regardless of any action the Company or the
Employer takes with respect to any or all Tax Related Items, you acknowledge
that the ultimate liability for all Tax-Related Items legally due by you is and
remains your responsibility and that the Company and/or the Employer (i) make no
representations or undertakings regarding the treatment of any Tax-Related Items
in connection with any aspect of the Option grant, including the grant, vesting
or exercise of the Option, the subsequent sale of Shares acquired pursuant to
such exercise and the receipt of any dividends; and (ii) do not commit to
structure the terms of the grant or any aspect of the Option to reduce or
eliminate your liability for Tax-Related Items.
Prior to exercise of the Option, you shall pay or make adequate arrangements
satisfactory to the Company and/or the Employer to satisfy all withholding and
payment on account obligations of the Company and/or the Employer. In this
regard, you authorize the Company and/or the Employer to withhold all applicable
Tax-Related Items legally payable by you from your wages or other cash
compensation paid to you by the Company and/or the Employer. With the Company’s
consent, these arrangements may also include, if permissible under local law,
(i) withholding Shares that otherwise would be issued to you when you exercise
this Option, provided that the Company only withholds the amount of Shares
necessary to satisfy the minimum statutory withholding amount, (ii) having the
Company withhold taxes from the proceeds of the sale of the Shares, either
through a voluntary sale or through a mandatory sale arranged by the Company (on
your behalf pursuant to this authorization), or (iii) any other arrangement
approved by the Company. The Fair Market Value of these Shares, determined as of
the effective date of the Option exercise, will be applied as a credit against
the withholding taxes. Finally, you shall pay to the Company or the Employer any
amount of Tax-Related Items that the Company or the Employer may be required to
withhold as a result of your participation in the Plan or your purchase of
Shares that cannot be satisfied by the means previously described. The Company
may refuse to honor the exercise and refuse to deliver the Shares if you fail to
comply with your obligations in connection with the Tax-Related Items as
described in this Section.

Depending on the withholding method, the Company may withhold or account for
Tax-Related Items by considering applicable minimum statutory withholding
amounts or other applicable withholding rates, including maximum applicable
rates, in which case you will receive a refund of any over-withheld amount in
cash and will have no entitlement to the Common Stock equivalent. If the
obligation for Tax‑Related Items is satisfied by withholding in Shares, for tax
purposes, you are deemed to have been issued the full member of Shares issued
upon exercise of the Options; notwithstanding that a member of the Shares are
held back solely for the purpose of paying the Tax‑Related Items. The Fair
Market Value of these Shares, determined as of the effective date of the Option
exercise, will be applied as a credit against the Tax-Related Items withholding.

(b)    Notice of Disqualifying Disposition of ISO Shares. For U.S. taxpayers, if
you sell or otherwise disposes of any of the Shares acquired pursuant to an ISO
on or before the later of (i) two years after the grant date, or (ii) one year
after the exercise date, you will immediately notify the Company in writing of
such disposition. You agree that you may be subject to income tax withholding by
the Company on the compensation income recognized from such early disposition of
ISO Shares by payment in cash or out of the current earnings paid to the
Company.
9.    Acknowledgement. The Company and you agree that the Option is granted
under and governed by the Notice, this Agreement and by the provisions of the
Plan (incorporated herein by reference). You: (a) acknowledge receipt of a copy
of the Plan and the Plan prospectus, (b) represent that you have

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carefully read and is familiar with their provisions, and (c) hereby accept the
Option subject to all of the terms and conditions set forth herein and those set
forth in the Plan and the Notice. You hereby agree to accept as binding,
conclusive and final all decisions or interpretations of the Committee upon any
questions relating to the Plan, the Notice and the Agreement.
10.    Appendix. Notwithstanding any provisions in this Agreement, the Option
grant shall be subject to any special terms and conditions set forth in the
Appendix to this Agreement for your country (the “Appendix”) set forth as an
attachment to this Agreement. Moreover, if you relocate to one of the countries
included in the Appendix, the special terms and conditions for such country will
apply to you, to the extent the Company determines that the application of such
terms and conditions is necessary or advisable for legal or administrative
reasons. The Appendix constitutes part of this Agreement.
11.    Consent to Electronic Delivery of All Plan Documents and Disclosures;
Language. By your acceptance of this Option, you consent to the electronic
delivery of the Notice, this Agreement, the Plan, account statements, Plan
prospectuses required by the Securities and Exchange Commission, U.S. financial
reports of the Company, and all other documents that the Company is required to
deliver to its security holders (including, without limitation, annual reports
and proxy statements) or other communications or information related to the
Option. Electronic delivery may include the delivery of a link to a Company
intranet or the internet site of a third party involved in administering the
Plan, the delivery of the document via e-mail or such other delivery determined
at the Company’s discretion. You acknowledge that you may receive from the
Company a paper copy of any documents delivered electronically at no cost if you
contact the Company by telephone, through a postal service or electronic mail at
[insert e-mail address]. You further acknowledge that you will be provided with
a paper copy of any documents delivered electronically if electronic delivery
fails; similarly, you understand that you must provide on request to the Company
or any designated third party a paper copy of any documents delivered
electronically if electronic delivery fails. Also, you understand that your
consent may be revoked or changed, including any change in the electronic mail
address to which documents are delivered (if you have provided an electronic
mail address), at any time by notifying the Company of such revised or revoked
consent by telephone, postal service or electronic mail at [insert e-mail
address]. Finally, you understand that you are not required to consent to
electronic delivery. To the extent you have been provided with a copy of this
Agreement, Plan prospectuses required by the Securities and Exchange Commission,
or any other documents relating to the grant in a language other than English,
the English language documents will prevail in case of any ambiguities or
divergences as a result of translation.
12.    Compliance with Laws and Regulations. The Company will not permit anyone
to exercise this Option if the issuance of shares at that time would violate any
law or regulation, including without limitation all applicable state, federal
and foreign laws and regulations and all applicable requirements of any stock
exchange or automated quotation system on which the Company’s Common Stock may
be listed or quoted at the time of such issuance.
13.    Imposition of Other Requirements. The Company reserves the right to
impose other requirements on your participation in the Plan, on the Option and
on any Shares purchased upon exercise of the Option, to the extent the Company
determines it is necessary or advisable for legal or administrative reasons, and
to require you to sign any additional agreements or undertakings that may be
necessary to accomplish the foregoing.
14.    No Rights as Employee, Director or Consultant. Nothing in this Agreement
shall affect in any manner whatsoever the right or power of the Company, or a
Parent or Subsidiary of the Company, to terminate your Service, for any reason,
with or without cause.

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15.    Adjustment. In the event of a stock split, a stock dividend or a similar
change in Company stock, the number of Shares covered by this Option and the
exercise price per Share may be adjusted pursuant to the Plan.
16.    Lock-Up Agreement. In connection with the initial public offering of the
Company’s securities and upon request of the Company or the underwriters
managing any underwritten offering of the Company’s securities, you hereby agree
not to sell, make any short sale of, loan, grant any Option for the purchase of,
or otherwise dispose of any securities of the Company however and whenever
acquired (other than those included in the registration) without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (not to exceed one hundred eighty (180) days) from the
effective date of such registration as may be requested by the Company or such
managing underwriters and to execute an agreement reflecting the foregoing as
may be requested by the underwriters at the time of the public offering;
provided however that, if during the last seventeen (17) days of the restricted
period the Company issues an earnings release or material news or a material
event relating to the Company occurs, or prior to the expiration of the
restricted period the Company announces that it will release earnings results
during the sixteen (16)-day period beginning on the last day of the restricted
period, then, upon the request of the managing underwriter, to the extent
required by any FINRA rules, the restrictions imposed by this Section shall
continue to apply until the end of the third trading day following the
expiration of the fifteen (15)-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event. In no
event will the restricted period extend beyond two hundred sixteen (216) days
after the effective date of the registration statement.
17.    Data Privacy.
(a)    You hereby explicitly and unambiguously consent to the collection, use
and transfer, in electronic or other form, of your personal data as described in
this Agreement and any other Option grant materials by and among, as applicable,
the Employer, the Company and its Parent, and Subsidiaries for the exclusive
purpose of implementing, administering and managing your participation in the
Plan (“Data”).
(b)    You understand that the Company and the Employer may hold certain
personal information about you, including, but not limited to, your name, home
address and telephone number, date of birth, social insurance number or other
identification number, salary, nationality, job title, any shares of stock or
directorships held in the Company, details of all Options or any other
entitlement to Shares awarded, canceled, exercised, vested, unvested or
outstanding in your favor, for the exclusive purpose of implementing,
administering and managing the Plan.
(c)    You understand that Data may be transferred to a Company-designated Plan
broker or such other stock plan service provider as may be selected by the
Company in the future, which is assisting the Company with the implementation,
administration and management of the Plan. You understand that the recipients of
the Data may be located in the United States or elsewhere, and that the
recipient’s country (e.g., the United States) may have different data privacy
laws and protections than your country. You understand that you may request a
list with the names and addresses of any potential recipients of the Data by
contacting your local human resources representative. You authorize the Company,
its designated Plan broker and any other possible recipients which may assist
the Company (presently or in the future) with implementing, administering and
managing the Plan to receive, possess, use, retain and transfer the Data, in
electronic or other form, for the sole purposes of implementing, administering
and managing your participation in the Plan. You understand that Data will be
held only as long as is necessary to implement, administer and manage your
participation in the Plan. You understand that you may, at any time, view Data,
request additional information about the storage and processing of Data, require
any necessary amendments to Data or refuse or withdraw the consents herein, in
any case without cost, by contacting in writing your local human resources
representative. Further, you understand that you are providing the consents
herein

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on a purely voluntary basis. If you do not consent, or if you later seek to
revoke your consent, your employment status or service and career with the
Employer will not be adversely affected; the only adverse consequence of
refusing or withdrawing your consent is that the Company would not be able to
grant you options or other equity awards or administer or maintain such awards.
Therefore, you understand that refusing or withdrawing your consent may affect
your ability to participate in the Plan. For more information on the
consequences of your refusal to consent or withdrawal of consent, you understand
that you may contact your local human resources representative.
18.    Nature of Grant. In accepting the Option, you acknowledge, understand and
agree that:
(a)    the Plan is established voluntarily by the Company, it is discretionary
in nature, and may be amended, suspended or terminated by the Company at any
time, to the extent permitted by the Plan or applicable law;
(b)    the grant of the Option is voluntary and occasional and does not create
any contractual or other right to receive future grants of options, or benefits
in lieu of options, even if options have been granted in the past;
(c)    all decisions with respect to future Option or other grants, if any, will
be at the sole discretion of the Company;
(d)    the Option grant and your participation in the Plan shall not create a
right to employment or be interpreted as forming an employment or service
contract with the Company, the Employer or any Parent, or Subsidiary, and shall
not interfere with the ability of the Company, the Employer or any Parent, or
Subsidiary, as applicable, to terminate Your employment or service relationship
(if any);
(e)    you are voluntarily participating in the Plan;
(f)    the Option and any Shares acquired under the Plan are not intended to
replace any pension rights or compensation;
(g)    the Option and any Shares acquired under the Plan and the income and
value of same, are not part of normal or expected compensation for purposes of
calculating any severance, resignation, termination, redundancy, dismissal,
end-of-service payments, bonuses, long-service awards, pension or retirement or
welfare benefits or similar payments;
(h)    the future value of the Shares underlying the Option is unknown,
indeterminable, and cannot be predicted with certainty;
(i)    if the underlying Shares do not increase in value, the Option will have
no value;
(j)    if you exercise the Option and acquire Shares, the value of such Shares
may increase or decrease in value, even below the exercise price;
(k)    no claim or entitlement to compensation or damages shall arise from
forfeiture of the Option resulting from you ceasing to provide employment or
other services to the Company or the Employer (for any reason whatsoever,
whether or not later found to be invalid or in breach of employment laws in the
jurisdiction where you are employed or the terms of your employment agreement,
if any), and in consideration of the grant of the Option to which you are
otherwise not entitled, you irrevocably agree never to institute any claim
against the Company, its Parent, any of its Subsidiaries or the Employer, waive
your ability, if any, to bring any such claim, and release the Company, its
Parent, Subsidiaries and the

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Employer from any such claim; if, notwithstanding the foregoing, any such claim
is allowed by a court of competent jurisdiction, then, by participating in the
Plan, you shall be deemed irrevocably to have agreed not to pursue such claim
and agree to execute any and all documents necessary to request dismissal or
withdrawal of such claim;
(l)    unless otherwise provided in the Plan or by the Company in its
discretion, the Option and the benefits evidenced by this Agreement do not
create any entitlement to have the Option or any such benefits transferred to,
or assumed by, another company nor to be exchanged, cashed out or substituted
for, in connection with any corporate transaction affecting the Shares;
(m)    the Option and the Shares subject to the Option are not part of normal or
expected compensation or salary for any purpose; and
(n)    you acknowledge and agree that neither the Company, the Employer nor any
Parent, or Subsidiary shall be liable for any foreign exchange rate fluctuation
between your local currency and the United States Dollar that may affect the
value of the Option or of any amounts due to you pursuant to the exercise of the
Option or the subsequent sale of any Shares acquired upon exercise.
19.    Entire Agreement. This Agreement, the Plan and the Notice constitute the
entire agreement and understanding of the parties relating to the subject matter
herein and supersede all prior discussions between them. Any prior agreements,
commitments or negotiations concerning the purchase of the Shares hereunder are
superseded. No modification of or amendment to this Option Agreement, nor any
waiver of any rights under this Option Agreement, will be effective unless in
writing and signed by the parties to this Option Agreement. The failure by
either party to enforce any rights under this Option Agreement will not be
construed as a waiver of any rights of such party.
20.    Governing Law; Venue; Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, the parties agree
to renegotiate such provision in good faith. In the event that the parties
cannot reach a mutually agreeable and enforceable replacement for such
provision, then (a) such provision shall be excluded from this Agreement, (b)
the balance of this Agreement shall be interpreted as if such provision were so
excluded and (c) the balance of this Agreement shall be enforceable in
accordance with its terms. This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of
Washington, without giving effect to principles of conflicts of law. Any and all
disputes relating to, concerning or arising from this Option Agreement, or
relating to, concerning or arising from the relationship between the parties
evidenced by the Plan or this Option Agreement, will be brought and heard
exclusively in the United States District Court for the Western District of
Washington in Seattle, Washington. Each of the parties hereby represents and
agrees that such party is subject to the personal jurisdiction of said courts;
hereby irrevocably consents to the jurisdiction of such courts in any legal or
equitable proceedings related to, concerning or arising from such dispute, and
waives, to the fullest extent permitted by law, any objection which such party
may now or hereafter have that the laying of the venue of any legal or equitable
proceedings related to, concerning or arising from such dispute which is brought
in such courts is improper or that such proceedings have been brought in an
inconvenient forum.
BY ACCEPTING THIS OPTION, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED
ABOVE AND IN THE PLAN.

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APPENDIX

ACUCELA INC. 2014 EQUITY INCENTIVE PLAN
STOCK OPTION AWARD AGREEMENT

COUNTRY SPECIFIC PROVISIONS FOR EMPLOYEES OUTSIDE THE U.S.

[Note: Country specific terms to be drafted by non-US counsel.]

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