Unassociated Document


    
      
        

      

    

    
      	
               Notice
                of Grant of Stock 

            	
              InSite
                Vision Incorporated

            
	
              Option

            	
              ID:
                [____________]

            
	
              and
                Terms and Conditions of 

              Stock
                Option

            	
              965
                Atlantic Avenue

              Alameda,
                CA 94501

            
	 	 
	 	 


    

    


    
      	
              Grantee:

            	
              [Name]

            	 	
              Option
                Number:

            	
              [_______]

            
	 	
              [Address]

            	 	
              Plan:

            	
              2007

            
	 	
              [Address]

            	 	
              ID:

            	
              [__________]

            
	  



    

    


    Effective
      [___________]
      (the
“Award Date”), you (the “Grantee”) have been granted an incentive stock option
      (the “Option”) to buy [________]
      shares
      of
      Common Stock of InSite Vision Incorporated (the “Corporation”) at a price of
      $[_______]
      per
      share1
      (the
“Exercise Price”). 

    


    The
      aggregate Exercise Price of the shares subject to the Option is $[__________].1

    [The
      Option will become vested as to 25% of the total number of shares of Common
      Stock subject to the Option on the first anniversary of the Award Date. The
      remaining 75% of the total number of shares of Common Stock subject to the
      Option shall become vested in substantially equal daily installments, with
      the
      first installment vesting on the first day following the first anniversary
      of
      the Award Date and an additional installment vesting on each day thereafter
      until the fourth anniversary of the Award Date.1,
      ] 

    


    The
      Option will expire on [_________]
      (the “Expiration Date”).1,
      2

     

    
      

    

     

     

    


    By
      your
      signature and the Corporation’s signature below, you and the Corporation agree
      that the Option is granted under and governed by the terms and conditions of
      the
      Corporation's 2007 Performance Incentive Plan (the “Plan”) and the Terms and
      Conditions of Incentive Stock Option (the “Terms”), which are attached and
      incorporated herein by this reference. This Notice of Grant of Stock Option,
      together with the Terms, will be referred to as your Option Agreement. The
      Option has been granted to you in addition to, and not in lieu of, any other
      form of compensation otherwise payable or to be paid to you. Capitalized terms
      are defined in the Plan if not defined herein or in the Terms. You acknowledge
      receipt of a copy of the Terms, the Plan and the Prospectus for the Plan.


    


    
      
        

      



    
      	 	 	 

	
              InSite
                Vision Incorporated

            	 	
              Date 

            
	 	 	
               

            
	 	 	  

	
              [____________]

            	 	
              Date

            
	__________________________	 	 


    

    1
      Subject to adjustment under Section 7.1 of the Plan.

    2
      Subject to early termination under Section 5 of the Terms and Section
      7.2
      of the Plan.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    


    INSITE
      VISION INCORPORATED

    2007
      PERFORMANCE INCENTIVE PLAN

    TERMS
      AND CONDITIONS OF INCENTIVE STOCK OPTION 

     

    
      	
              1.

            	
              General.

            


    

     

    These
      Terms and Conditions of Incentive Stock Option (these “Terms”)
      apply
      to a particular stock option (the “Option”)
      if
      incorporated by reference in the Notice of Grant of Stock Option (the
“Grant
      Notice”)
      corresponding to that particular grant. The recipient of the Option identified
      in the Grant Notice is referred to as the “Grantee.”
The
      per share exercise price of the Option as set forth in the Grant Notice is
      referred to as the “Exercise
      Price.”
The
      effective date of grant of the Option as set forth in the Grant Notice is
      referred to as the “Award
      Date.”
The
      exercise price and the number of shares covered by the Option are subject to
      adjustment under Section 7.1 of the Plan.

     

    The
      Option was granted under and subject to the InSite Vision Incorporated 2007
      Performance Incentive Plan (the “Plan”).
      Capitalized terms are defined in the Plan if not defined herein. The Option
      has
      been granted to the Grantee in addition to, and not in lieu of, any other form
      of compensation otherwise payable or to be paid to the Grantee. The Grant Notice
      and these Terms are collectively referred to as the “Option Agreement”
applicable to the Option. 

     

    
      	
              2.

            	
              Vesting;
                Limits on Exercise.

            


    

     

    The
      Option shall vest and become exercisable in percentage installments of the
      aggregate number of shares subject to the Option as set forth on the Grant
      Notice. The Option may be exercised only to the extent the Option is vested
      and
      exercisable.

     

    
      	·  	
              Cumulative
                Exercisability.
                To the extent that the Option is vested and exercisable, the Grantee
                has
                the right to exercise the Option (to the extent not previously exercised),
                and such right shall continue, until the expiration or earlier termination
                of the Option.

            


    

     

    
      	·  	
              No
                Fractional Shares.
                Fractional share interests shall be disregarded, but may be
                cumulated.

            


    

     

    
      	·  	
              Minimum
                Exercise.
                No fewer than 100 shares of Common Stock (subject to adjustment under
                Section 7.1 of the Plan) may be purchased at any one time, unless
                the
                number purchased is the total number at the time exercisable under
                the
                Option.

            


    

     

    
      	·  	
              ISO
                Value Limit.
                If the aggregate fair market value of the shares with respect to
                which
                ISOs (whether granted under the Option or otherwise) first become
                exercisable by the Grantee in any calendar year exceeds $100,000,
                as
                measured on the applicable Award Dates, the limitations of Section
                5.1.2
                of the Plan shall apply and to such extent the Option will be rendered
                a
                nonqualified stock option.

            


    

     

    
      	
              3.

            	
              Continuance
                of Employment/Service Required; No Employment/Service
                Commitment.

            


    

     

    The
      vesting schedule applicable to the Option requires continued employment or
      service through each applicable vesting date as a condition to the vesting
      of
      the applicable installment of the Option and the rights and benefits under
      this
      Option Agreement. Employment or service for only a portion of the vesting
      period, even if a substantial portion, will not entitle the Grantee to any
      proportionate vesting or avoid or mitigate a termination of rights and benefits
      upon or following a termination of employment or services as provided in Section
      5 below or under the Plan.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Nothing
      contained in this Option Agreement or the Plan constitutes a continued
      employment or service commitment by the Corporation or any of its Subsidiaries,
      affects the Grantee’s status, if he or she is an employee, as an employee at
      will who is subject to termination without cause, confers upon the Grantee
      any
      right to remain employed by or in service to the Corporation or any Subsidiary,
      interferes in any way with the right of the Corporation or any Subsidiary at
      any
      time to terminate such employment or service, or affects the right of the
      Corporation or any Subsidiary to increase or decrease the Grantee’s other
      compensation.

     

    
      	
              4.

            	
              Method
                of Exercise of Option.

            


    

     

    The
      Option shall be exercisable by the delivery to the Secretary of the Corporation
      (or such other person as the Administrator may require pursuant to such
      administrative exercise procedures as the Administrator may implement from
      time
      to time) of:

     

    
      	·  	
              a
                written notice stating the number of shares of Common Stock to be
                purchased pursuant to the Option or by the completion of such other
                administrative exercise procedures as the Administrator may require
                from
                time to time,

            


    

     

    
      	·  	
              payment
                in full for the Exercise Price of the shares to be purchased in cash,
                check or by electronic funds transfer to the Corporation, or (subject
                to
                compliance with all applicable laws, rules, regulations and listing
                requirements and further subject to such rules as the Administrator
                may
                adopt as to any non-cash payment) in shares of Common Stock already
                owned
                by the Grantee, valued at their fair market value (as determined
                under the
                Plan) on the exercise date;

            


    

     

    
      	·  	
              any
                written statements or agreements required pursuant to Section 8.1
                of the
                Plan; and

            


    

     

    
      	·  	
              satisfaction
                of the tax withholding provisions of Section 8.5 of the
                Plan.

            


    

     

    The
      Administrator also may, but is not required to, authorize a non-cash payment
      alternative by notice and third party payment in such manner as may be
      authorized by the Administrator, or, subject to such procedures as the
      Administrator may adopt, authorize a “cashless exercise” with a third party who
      provides simultaneous financing for the purposes of (or who otherwise
      facilitates) the exercise of the Option.

     

    The
      Option will qualify as an ISO only if it meets all of the applicable
      requirements of the Code. The Option may be rendered a nonqualified stock option
      if the Administrator permits the use of one or more of the non-cash payment
      alternatives referenced above.

     

    
      	
              5.

            	
              Early
                Termination of Option.

            


    

     

    5.1 Expiration
      Date.
      Subject
      to earlier termination as provided below in this Section 5, the Option will
      terminate on the “Expiration Date” set forth in the Grant Notice (the
“Expiration
      Date”).

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


     

    5.2 Possible
      Termination of Option upon Certain Corporate Events.
      The
      Option is subject to termination in connection with certain corporate events
      as
      provided in Section 7.2 of the Plan.

     

    5.3 Termination
      of Option upon a Termination of Grantee’s Employment or
      Services.
      Subject
      to earlier termination on the Expiration Date of the Option or pursuant to
      Section 5.2 above, if the Grantee ceases to be employed by or ceases to provide
      services to the Corporation or a Subsidiary, the following rules shall apply
      (the last day that the Grantee is employed by or provides services to the
      Corporation or a Subsidiary is referred to as the Grantee’s “Severance
      Date”):
      

     

    
      	·  	
              other
                than as expressly provided below in this Section 5.3, (a) the Grantee
                will
                have until the date that is 3 months after his or her Severance Date
                to
                exercise the Option (or portion thereof) to the extent that it was
                vested
                on the Severance Date, (b) the Option, to the extent not vested on
                the
                Severance Date, shall terminate on the Severance Date, and (c) the
                Option,
                to the extent exercisable for the 3-month period following the Severance
                Date and not exercised during such period, shall terminate at the
                close of
                business on the last day of the 3-month
                period;

            


    

     

    
      	·  	
              if
                the termination of the Grantee’s employment or services is the result of
                the Grantee’s death or Total Disability (as defined below), or if the
                Grantee dies or suffers a Total Disability within 3 months after
                the
                Grantee’s Severance Date, (a) the Grantee (or his beneficiary or personal
                representative, as the case may be) will have until the date that
                is 12
                months after the date of the Grantee’s death or Total Disability, as the
                case may be, to exercise the Option, (b) the Option, to the extent
                not
                vested on the Severance Date, shall terminate on the Severance Date,
                and
                (c) the Option, to the extent exercisable for the 12-month period
                following the Grantee’s death or Total Disability and not exercised during
                such period, shall terminate at the close of business on the last
                day of
                the 12-month period;

            


    

     

    
      	·  	
              if
                the Grantee’s employment or services are terminated by the Corporation or
                a Subsidiary for Cause (as defined below), the Option (whether vested
                or
                not) shall terminate on the Severance
                Date.

            


    

     

    For
      purposes of the Option, “Total
      Disability”
means
      a
“permanent and total disability” (within the meaning of Section 22(e)(3) of the
      Code or as otherwise determined by the Administrator).

     

    For
      purposes of the Option, “Cause”
means
      that the Grantee:

     

    
      	 	
              (1)

            	
              has
                been negligent in the discharge of his or her duties to the Corporation
                or
                any of its Subsidiaries, has refused to perform stated or assigned
                duties
                or is incompetent in or (other than by reason of a disability or
                analogous
                condition) incapable of performing those
                duties;

            


    

     

    
      	 	
              (2)

            	
              has
                been dishonest or committed or engaged in an act of theft, embezzlement
                or
                fraud, a breach of confidentiality, an unauthorized disclosure or
                use of
                inside information, customer lists, trade secrets or other confidential
                information; has breached a fiduciary duty, or willfully and materially
                violated any other duty, law, rule, regulation or policy of the
                Corporation, any of its Subsidiaries or any affiliate of the Corporation
                or any of its Subsidiaries; or has been convicted of a felony or
                misdemeanor (other than minor traffic violations or similar
                offenses);

            


    

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


     

    
      	 	
              (3)

            	
              has
                materially breached any of the provisions of any agreement with the
                Corporation, any of its Subsidiaries or any affiliate of the Corporation
                or any of its Subsidiaries; or

            


    

     

    
      	 	
              (4)

            	
              has
                engaged in unfair competition with, or otherwise acted intentionally
                in a
                manner injurious to the reputation, business or assets of, the
                Corporation, any of its Subsidiaries or any affiliate of the Corporation
                or any of its Subsidiaries; has improperly induced a vendor or customer
                to
                break or terminate any contract with the Corporation, any of its
                Subsidiaries or any affiliate of the Corporation or any of its
                Subsidiaries; or has induced a principal for whom the Corporation,
                any of
                its Subsidiaries or any affiliate of the Corporation or any of its
                Subsidiaries acts as agent to terminate such agency
                relationship.

            


    

     

    In
      all
      events the Option is subject to earlier termination on the Expiration Date
      of
      the Option or as contemplated by Section 5.2. The Administrator shall be the
      sole judge of whether the Grantee continues to render employment or services
      for
      purposes of this Option Agreement.

     

    Notwithstanding
      any post-termination exercise period provided for herein or in the Plan, the
      Option will qualify as an ISO only if it is exercised within the applicable
      exercise periods for ISOs under, and meets all of the other requirements of,
      the
      Code. If the Option is not exercised within the applicable exercise periods
      for
      ISOs or does not meet such other requirements, the Option will be rendered
      a
      nonqualified stock option.

     

    
      	
              6.

            	
              Non-Transferability.

            


    

     

    The
      Option and any other rights of the Grantee under this Option Agreement or the
      Plan are nontransferable and exercisable only by the Grantee, except as set
      forth in Section 5.7 of the Plan.

     

    
      	
              7.

            	
              Notices.

            


    

     

    Any
      notice to be given under the terms of this Option Agreement shall be in writing
      and addressed to the Corporation at its principal office to the attention of
      the
      Secretary, and to the Grantee at the address last reflected on the Corporation’s
      payroll records, or at such other address as either party may hereafter
      designate in writing to the other. Any such notice shall be delivered in person
      or shall be enclosed in a properly sealed envelope addressed as aforesaid,
      registered or certified, and deposited (postage and registry or certification
      fee prepaid) in a post office or branch post office regularly maintained by
      the
      United States Government. Any such notice shall be given only when received,
      but
      if the Grantee is no longer employed by the Corporation or a Subsidiary, shall
      be deemed to have been duly given five business days after the date mailed
      in
      accordance with the foregoing provisions of this Section 7.

     

    
      	
              8.

            	
              Plan.

            


    

     

    The
      Option and all rights of the Grantee under this Option Agreement are subject
      to
      the terms and conditions of the Plan, incorporated herein by this reference.
      The
      Grantee agrees to be bound by the terms of the Plan and this Option Agreement.
      The Grantee acknowledges having read and understanding the Plan, the Prospectus
      for the Plan, and this Option Agreement. Unless otherwise expressly provided
      in
      other sections of this Option Agreement, provisions of the Plan that confer
      discretionary authority on the Board or the Administrator do not and shall
      not
      be deemed to create any rights in the Grantee unless such rights are expressly
      set forth herein or are otherwise in the sole discretion of the Board or the
      Administrator so conferred by appropriate action of the Board or the
      Administrator under the Plan after
      the date
      hereof.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


     

    
      	
              9.

            	
              Entire
                Agreement.

            


    

     

    This
      Option Agreement and the Plan together constitute the entire agreement and
      supersede all prior understandings and agreements, written or oral, of the
      parties hereto with respect to the subject matter hereof. The Plan and this
      Option Agreement may be amended pursuant to Section 8.6 of the Plan. Such
      amendment must be in writing and signed by the Corporation. The Corporation
      may,
      however, unilaterally waive any provision hereof in writing to the extent such
      waiver does not adversely affect the interests of the Grantee hereunder, but
      no
      such waiver shall operate as or be construed to be a subsequent waiver of the
      same provision or a waiver of any other provision hereof.

     

    
      	
              10.

            	
              Governing
                Law.

            


    

     

    This
      Option Agreement shall be governed by and construed and enforced in accordance
      with the laws of the State of Delaware without regard to conflict of law
      principles thereunder.

     

    
      	
              11.

            	
              Effect
                of this Agreement.

            


    

     

    Subject
      to the Corporation’s right to terminate the Option pursuant to Section 7.2 of
      the Plan, this Option Agreement shall be assumed by, be binding upon and inure
      to the benefit of any successor or successors to the Corporation.

     

    
      	
              12.

            	
              Counterparts.

            


    

     

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

     

    
      	
              13.

            	
              Section
                Headings.

            


    

     

    The
      section headings of this Option Agreement are for convenience of reference
      only
      and shall not be deemed to alter or affect any provision hereof.