Exhibit 10.3

KALA PHARMACEUTICALS, INC.

RESTRICTED STOCK UNIT AWARD

Kala Pharmaceuticals, Inc. (the “Company”) hereby grants the following
Restricted Stock Units pursuant to its 2017 Equity Incentive Plan (the “Plan”).
 The terms of the grant are set forth in the attached Restricted Stock Unit
Award Agreement (the “Agreement”).  

NOTICE OF GRANT

Participant:[____]

Date of Grant:[____]

Number of Restricted Stock Units:[____]

Vesting Commencement Date: [____]

Vesting:[____]

All vesting is dependent on the Participant continuing to be employed by, or
provide services to, the Company, as provided herein, through the relevant
vesting date.  

The above is a summary description of certain provisions of the Agreement and is
not intended to be complete.  In the event any aspect of this summary conflicts
with the terms of the Agreement, the terms of the Agreement shall govern.

Kala Pharmaceuticals, Inc.

By:

Title:

I hereby accept the Restricted Stock Units described in the Agreement, and I
agree to be bound by the terms of the Plan and the Agreement. I hereby further
agree that all the decisions and determinations of the Committee shall be final
and binding.

Participant:

--------------------------------------------------------------------------------

Date:

--------------------------------------------------------------------------------

KALA PHARMACEUTICALS, INC.

2017 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

This RESTRICTED STOCK UNIT AWARD AGREEMENT (the “Agreement”), dated as of date
set forth on the Notice of Grant attached hereto (the “Date of Grant”), is
delivered by Kala Pharmaceuticals, Inc. (the “Company”) to the individual named
on the Notice of Grant attached hereto (the “Participant”).

RECITALS

A.The Kala Pharmaceuticals Inc. 2017 Equity Incentive Plan (the “Plan”) provides
for the grant of stock-based awards with respect to shares of Common Stock of
the Company, in accordance with the terms and conditions of the Plan. The
Company has decided to make a Restricted Stock Unit award as an inducement for
the Participant to promote the best interests of the Company and its
stockholders.

B.The terms and conditions of the Restricted Stock Units should be construed and
interpreted in accordance with the terms and conditions of this Agreement and
the Plan. The Plan is administered and interpreted by the Compensation Committee
of the Board of Directors of the Company (the “Board”) (or a subcommittee
thereof), or such other committee of the Board (including, without limitation,
the full Board) to which the Board has delegated power to act under or pursuant
to the provisions of the Plan (the “Committee”). The Committee may delegate
authority to one or more subcommittees as it deems appropriate.  If a
subcommittee is appointed, all references in this Agreement to the “Committee”
shall be deemed to refer to the committee. Capitalized terms that are used but
not defined herein shall have the respective meanings accorded to such terms in
the Plan. For purposes of this Agreement, “Company” shall mean the Company and
any of its Subsidiaries where applicable.

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound
hereby, agree as follows:

1.Grant of Restricted Stock Units.  Subject to the terms and conditions set
forth in this Agreement and the Plan, the Company hereby awards to the
Participant the number of Restricted Stock Units (as defined in the Plan) under
the Plan as set forth on the Notice of Grant attached hereto.  The Participant
accepts the Restricted Stock Units and agrees to be bound by the terms and
conditions of this Agreement and the Plan with respect to the award. Each vested
Restricted Stock Unit entitles the Participant to receive the one share of
Common Stock, as described in Paragraph 2 below.

--------------------------------------------------------------------------------

2.Vesting of Award/Payment of Shares.
(a)The Restricted Stock Units shall vest according to the following vesting
schedule, if the Participant continues to be employed by, or provide service to,
the Company (or one of its Subsidiaries) until the applicable vesting date
(each, a “Vesting Date”):

Number of Restricted Stock Units Subject to Vesting Condition

Vesting Commencement Date

Vesting Condition/Date

% of Restricted Stock Units Subject to Condition Vested

(b)If and when the Restricted Stock Units vest, the Company will issue to the
Participant one share of Company Common Stock for each whole Restricted Stock
Unit that has vested, subject to satisfaction of the Participant’s tax
withholding obligations as described in Section 5 below.  In the event that the
percentage listed above would result in the vesting of partial shares, the
number of Restricted Stock Units that vest on the applicable Vesting Date shall
be rounded down to the nearest share. The shares of Common Stock will be issued
to the Participant as soon as practicable following the Vesting Date, but in any
event within 30 days of such date. The Restricted Stock Units shall cease to be
outstanding upon such issuance of shares.
(c)Unless otherwise provided in a Company-sponsored plan, policy or arrangement,
or any agreement to which the Company is a party, the Participant shall forfeit
the unvested Restricted Stock Units in the event the Participant ceases to be
employed by, or provide service to, the Company (or one of its Subsidiaries)
prior to the Vesting Date.
(d)[Notwithstanding the foregoing, upon the consummation of a Change in Control
Event (as defined below) prior to a Vesting Date, the Restricted Stock Units
shall immediately vest.]1
(e)[For purposes of this Agreement a “Change in Control Event” is the occurrence
of any of the following events: (i) the acquisition by an individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (the “Exchange Act”)) (a “Person”) of beneficial ownership
of any capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 under the Exchange Act)
fifty percent (50%) or more of either (x) the then-outstanding shares of common
stock of the Company (the “Outstanding Company Common Stock”) or (y) the
combined voting power of the then-outstanding securities of the Company entitled
to vote generally in the election of directors

1 Include only in RSU agreement for executive officers
4

--------------------------------------------------------------------------------

(the “Outstanding Company Voting Securities”); provided, however, that for
purposes of this subsection (i), the following acquisitions shall not constitute
a Change in Control Event: (1) any acquisition directly from the Company or
(2) any acquisition by any entity pursuant to a Business Combination (as defined
below) which complies with clauses (x) and (y) of subsection (iii) of this
definition; or (ii) a change in the composition of the Board that results in the
Continuing Directors (as defined below) no longer constituting a majority of the
Board (or, if applicable, the Board of Directors of a successor corporation to
the Company), where the term “Continuing Director” means at any date a member of
the Board (x) who was a member of the Board on the date of the initial adoption
of the Plan by the Board or (y) who was nominated or elected subsequent to such
date by at least a majority of the directors who were Continuing Directors at
the time of such nomination or election or whose election to the Board was
recommended or endorsed by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election; provided,
however, that there shall be excluded from this clause (y) any individual whose
initial assumption of office occurred as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents, by or on behalf of a
person other than the Board; or (iii) the consummation of a merger,
consolidation, reorganization, recapitalization or share exchange involving the
Company, or a sale or other disposition of all or substantially all of the
assets of the Company (a “Business Combination”), unless, immediately following
such Business Combination, each of the following two (2) conditions is
satisfied: (x) all or substantially all of the individuals and entities who were
the beneficial owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than fifty percent (50%) of the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
directors, respectively, of the resulting or acquiring corporation in such
Business Combination (which shall include, without limitation, a corporation
which as a result of such transaction owns the Company or substantially all of
the Company’s assets either directly or through one (1) or more subsidiaries)
(such resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”) in substantially the same proportions as their ownership of the
Outstanding Company Common Stock and Outstanding Company Voting Securities,
respectively, immediately prior to such Business Combination and (y) no Person
(excluding any employee benefit plan (or related trust) maintained or sponsored
by the Company or by the Acquiring Corporation) beneficially owns, directly or
indirectly, fifty percent (50%) or more of the then-outstanding shares of common
stock of the Acquiring Corporation, or of the combined voting power of the
then-outstanding securities of such corporation entitled to vote generally in
the election of directors (except to the extent that such ownership existed
prior to the Business Combination); or (iv) the liquidation or dissolution of
the Company.]2

3.No Stockholder Rights Prior to Settlement; Issuance of Certificates. The
Participant shall have no rights as a stockholder with respect to any shares of
Common Stock represented by the Restricted Stock Units until the date of
issuance of the shares of Common Stock (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the Company),
if applicable.  Except as otherwise required by the Plan, no adjustment shall be
made for dividends, distributions, or other rights for which the record date is
prior to the date, if any, that shares of Common Stock are issued.

2 Include only in RSU agreement for executive officers

5

--------------------------------------------------------------------------------

4.Withholding. All obligations of the Company under this Agreement shall be
subject to the rights of the Company as set forth in the Plan to withhold
amounts required to be withheld for any taxes, if applicable. The Participant
acknowledges and agrees that the Company has the right to deduct from payments
of any kind otherwise due to the Participant any federal, state, local or other
taxes of any kind required by law to be withheld which arise  in connection with
the Participant’s Restricted Stock Units (the “Withholding Taxes”).
 [ALTERNATIVE 1: Additionally, (a) the Company may, in its sole discretion,
satisfy all or any portion of the Withholding Taxes obligation relating to the
Participant’s Restricted Stock Units by requiring the Participant to tender a
cash payment, and (b) unless otherwise determined by the Board or Committee, the
Participant may elect to satisfy all or any portion of the Withholding Taxes
obligation by (i) entering into a “same day sale” commitment with a
broker-dealer that is a member of the Financial Industry Regulatory Authority (a
“FINRA Dealer”) whereby the Participant irrevocably elects to sell a portion of
the shares to be delivered under the Agreement to satisfy the Withholding Taxes
and whereby the FINRA Dealer irrevocably commits to forward the proceeds
necessary to satisfy the Withholding Taxes directly to the Company; or
(ii) electing to have shares of Common Stock withheld by the Company from the
shares of Common Stock issued or otherwise issuable to the Participant in
connection with the Restricted Stock Units with a fair market value (valued in
the manner determined by (or in a manner approved by) the Company) equal to the
amount of such Withholding Taxes; provided, however, that the number of such
shares of Common Stock so withheld shall not exceed the amount necessary to
satisfy the Company’s required tax withholding obligations up to the maximum
statutory withholding rates for federal, state, local and foreign tax purposes,
including payroll taxes, that are applicable to supplemental taxable income.]
[ALTERNATIVE 2: At such such time as the Participant is not aware of any
material nonpublic information about the Company or the Common Stock and is not
prohibited from doing so by the Company’s insider trading policy or otherwise,
the Participant shall execute the instructions set forth in Schedule A attached
hereto (the “Automatic Sale Instructions”) as the means of satisfying the
Withholding Taxes. If the Participant does not execute the Automatic Sale
Instructions prior to an applicable vesting date, then the Participant agrees
that if under applicable law the Participant will owe taxes at such vesting date
on the portion of the award then vested the Company shall be entitled to
immediate payment from the Participant of the amount of any tax required to be
withheld by the Company.] [ALTERNATIVE 3: The Participant acknowledges and
agrees that the withholding shall be satisfied by the Company retaining from the
number of shares of Common Stock otherwise issuable to the Participant on the
applicable vesting date or event a number of shares of Common Stock having a
fair market value (valued in the manner determined by (or in a manner approved
by) the Company) equal to the amount of such Withholding Taxes; provided,
however, that the number of such shares of Common Stock so withheld shall not
exceed the amount necessary to satisfy the Company’s required tax withholding
obligations up to the maximum statutory withholding rates for federal, state,
local and foreign tax purposes, including payroll taxes, that are applicable to
supplemental taxable income.]  Unless the tax withholding obligations of the
Company are satisfied, the Company shall have no obligation to deliver to the
Participant any Common Stock.  In the event the Company’s obligation to withhold
arises prior to the delivery to the Participant of Common Stock or it is
determined after the delivery of Common Stock to the Participant that the amount
of the Company’s withholding obligation was greater than the amount withheld by
the Company, the Participant agrees to indemnify and hold the Company harmless
from any failure by the Company to withhold the proper amount.

6

--------------------------------------------------------------------------------

5.Adjustments or Reorganization Event.  The provisions of the Plan applicable to
adjustments or a Reorganization Event (as described in Section 9 of the Plan) or
other corporate transaction, shall apply to the Restricted Stock Units.
Notwithstanding anything in the Plan to the contrary, in no event shall the
Committee exercise its discretion to accelerate the payment or settlement of the
Restricted Stock Units where such payment or settlement constitutes deferred
compensation within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”) unless, and solely to the extent that, such
accelerated payment or settlement is permissible under Treasury Regulation
section 1.409A-3(j)(4) or any successor provision.
6.Grant Subject to Plan Provisions.  This grant is made pursuant to the Plan,
the terms of which are incorporated herein by reference, and in all respects
shall be interpreted in accordance with the Plan.  The Restricted Stock Units
are subject to interpretations, regulations and determinations concerning the
Plan established from time to time by the Committee in accordance with the
provisions of the Plan.  The Committee shall have the authority to interpret and
construe the Restricted Stock Units pursuant to the terms of the Plan, and its
decisions shall be conclusive as to any questions arising hereunder.
7.No Employment or Other Rights.  The grant of the Restricted Stock Units shall
not confer upon the Participant any right to be retained by or in the employ or
service of the Company (or any of its Subsidiaries) and shall not interfere in
any way with the right of the Company (or any of its Subsidiaries) to terminate
the Participant’s employment or service at any time.  The right of the Company
(or any of its Subsidiaries) to terminate at will the Participant’s employment
or service at any time for any reason is specifically reserved.
8.Delivery Subject to Legal Requirements. The obligation of the Company to
deliver stock shall be subject to the condition that if at any time the Board
shall determine in its discretion that the listing, registration or
qualification of the shares upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with, the issue of
shares, the shares may not be issued in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board.  The issuance of
shares to the Participant pursuant to this Agreement is subject to any
applicable taxes and other laws or regulations of the United States or of any
state having jurisdiction thereof.
9.Clawback. In accepting the grant of Restricted Stock Units, the Participant
agrees to be bound by any clawback policy that the Company may currently have in
place or may adopt in the future.
10.Assignment and Transfers.  The rights and interests of the Participant under
this Agreement may not be sold, assigned, encumbered or otherwise transferred
except, in the event of the death of the Participant, by will or by the laws of
descent and distribution.  In the event of any attempt by the Participant to
alienate, assign, pledge, hypothecate, or otherwise dispose of the Restricted
Stock Units or any right hereunder, or in the event of the levy or any
attachment, execution or similar process upon the rights or interests hereby
conferred, the Company may terminate the Restricted Stock Units by notice to the
Participant, and the Restricted Stock Units and all rights hereunder shall
thereupon become null and void.  The rights and protections of the Company
hereunder shall extend to any successors or assigns of the Company and to the

7

--------------------------------------------------------------------------------

Company’s parents, Subsidiaries, and affiliates.  This Agreement may be assigned
by the Company without the Participant’s consent.  
11.Applicable Law.  The validity, construction, interpretation and effect of
this Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware, without giving effect to the conflict of laws provisions
thereof.  
12.Notice.  Any notice to the Company provided for in this Agreement shall be
addressed to the Company in care of the Committee, and any notice to the
Participant shall be addressed to such Participant at the current address shown
on the payroll of the Company, or to such other address as the Participant may
designate to the Company in writing.  Any notice shall be delivered by hand,
sent by telecopy or enclosed in a properly sealed envelope addressed as stated
above, deposited, postage prepaid, in a post office regularly maintained by the
United States Postal Service.
13.Section 409A.  This Agreement and the Restricted Stock Units granted
hereunder are intended to fit within the “short-term deferral” exemption from
Section 409A of the Code, as set forth in Treasury Regulation Section
1.409A-1(b)(4) or any successor provision, or to comply with, or otherwise be
exempt from, Section 409A of the Code.  This Agreement and the Restricted Stock
Units shall be administered, interpreted and construed in a manner consistent
with Section 409A of the Code.  Each amount payable under this Agreement is
designated as a separate identified payment for purposes of Section 409A of the
Code.  
14.Counterparts. This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement.  Facsimile or other electronic transmission of any signed original
document or retransmission of any signed facsimile or other electronic
transmission will be deemed the same as delivery of an original.
15.Complete Agreement.  Except as otherwise provided for herein, this Agreement
and those agreements and documents expressly referred to herein embody the
complete agreement and understanding among the parties and supersede and preempt
any prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
 The terms of this Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Participant.
16.Committee Authority.  By entering into this Agreement the Participant agrees
and acknowledges that all decisions and determinations of the Committee shall be
final and binding on the Participant, his or her beneficiaries and any other
person having or claiming an interest in the Award.  

Schedule A

Automatic Sale Instructions3

3 To be included solely if Alternative 2 in Section 4 is selected.

8

--------------------------------------------------------------------------------

The undersigned hereby consents and agrees that any taxes due on a vesting date
as a result of the vesting of Restricted Stock Units on such date shall be paid
through an automatic sale of shares as follows:

(a) Upon any vesting of Restricted Stock Units pursuant to Section 2 hereof, the
Company shall arrange for the sale of such number of shares of Common Stock
issuable with respect to the Restricted Stock Units that vest pursuant to
Section 2 as is sufficient to generate net proceeds sufficient to satisfy the
Company’s minimum statutory withholding obligations with respect to the income
recognized by the Participant upon the vesting of the RSUs (based on minimum
statutory withholding rates for all tax purposes, including payroll and social
security taxes, that are applicable to such income), and the net proceeds of
such sale shall be delivered to the Company in satisfaction of such tax
withholding obligations.

(b) The Participant hereby appoints the Chief Executive Officer, the Chief
Financial Officer and the Chief Legal Officer, and any of them acting alone and
with full power of substitution, to serve as his or her attorneys in fact to
arrange for the sale of the Participant’s Common Stock in accordance with this
Schedule A. The Participant agrees to execute and deliver such documents,
instruments and certificates as may reasonably be required in connection with
the sale of the shares pursuant to this Schedule A.

(c) The Participant represents to the Company that, as of the date hereof, he or
she is not aware of any material nonpublic information about the Company or the
Common Stock and is not prohibited from entering into these Automatic Sale
Instructions by the Company’s insider trading policy or otherwise. The
Participant and the Company have structured this Agreement, including this
Schedule A, to constitute a “binding contract” relating to the sale of Common
Stock, consistent with the affirmative defense to liability under Section 10(b)
of the Securities Exchange Act of 1934 under Rule 10b5-1(c) promulgated under
such Act.

The Company shall not deliver any shares of Common Stock to the Participant
until it is satisfied that all required withholdings have been made.

 

 

Participant Name: ____________________________

Date: ______________________________________

9

--------------------------------------------------------------------------------