EX-10.2



 Exhibit 10.2 

OTONOMY, INC. 
 2010
EQUITY INCENTIVE PLAN 
 1. DEFINED TERMS. Capitalized terms in this Otonomy, Inc. 2010 Equity Incentive Plan, as
amended (the “Plan”) shall have the meanings set forth in Appendix A attached hereto, unless defined elsewhere in this Plan or the context of their use clearly indicates a different meaning. 

2. PURPOSES. The primary purpose of the Plan is to provide a means by which the Company can retain and maximize the services of its
current Employees, Directors and Consultants, and secure, retain and maximize the services of new Employees, Directors and Consultants, by providing Stock Awards, including Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock Awards
and stock bonuses, to such persons on the terms and conditions set forth in the Plan. In addition, the Plan is intended to generate proceeds from the sale of Common Stock pursuant to Stock Awards that shall be used as general funds of the Company.

  

	3.	ADMINISTRATION. 

 3.1 Authority of the Board. Unless and until the
Board decides to delegate administration of the Plan to a Committee as set forth in Section 3.2 below, the Board shall have full authority to administer the Plan, subject only to the express provisions and limitations set forth in the Plan and
any applicable laws. Without limiting the generality of the foregoing, the Board shall be fully empowered to: (i) determine, from time to time, the recipients of Stock Awards and the terms upon which Stock Awards shall be granted to such
recipients; (ii) construe and interpret, and correct any defects, omissions or inconsistencies in, the Plan and any Stock Awards; (iii) terminate, suspend or amend the Plan or any Stock Award as provided in Section 11; and
(iv) exercise such powers and perform such acts consistent with the provisions of the Plan as the Board deems necessary or expedient to promote the best interests of the Company and its stockholders. The determinations of the Board with respect
to the Plan shall not be subject to review by any Person and shall be final, binding and conclusive on the Company and all other Persons. 

3.2 Delegation to Committee. In accordance with the Board’s authority under the relevant provisions of the Delaware General
Corporation Law and the Company’s bylaws, the Board may delegate administration of the Plan to a Committee, which shall, upon such delegation, be empowered to exercise the full authority of the Board with respect to the Plan. 

 

	4.	COMMON STOCK SUBJECT TO THE PLAN. 


4.1 Reserve Pool. Subject to the provisions of Section 10 hereof relating to Capitalization Adjustments, an aggregate of 88,083,000
shares of Common Stock (the “Reserve Pool”) may be issued pursuant to Stock Awards. If any Stock Award shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, the shares
of Common Stock not acquired under such Stock Award shall automatically revert to the Reserve Pool and again become available for issuance under the Plan. During the term of the Plan, the Company shall keep available in the Reserve Pool at all times
a number of shares of Common Stock sufficient to satisfy all outstanding Stock Awards. 







 4.2 Limitation on Number of Shares. To the extent required by Section 260.140.45 of
CCR Title 10, the total number of shares of Common Stock issuable upon exercise of all outstanding Stock Awards, together with the total number of shares of Common Stock provided for under any stock bonus or similar plan of the Company, shall not
exceed the applicable percentage as calculated in accordance with the conditions and exclusions of Section 260.140.45 of CCR Title 10, based on the shares of Common Stock of the Company that are outstanding at the time the calculation is made.

  

	5.	ELIGIBILITY. 

 5.1 Employees. Employees shall be eligible to
receive each of the types of Stock Awards provided for in the Plan. 
 5.2 Directors. Directors shall be eligible to receive each of
the types of Stock Awards, except Incentive Stock Options, provided for in the Plan. 
 5.3 Consultants. Consultants shall be
eligible to receive each of the types of Stock Awards, except Incentive Stock Options, provided for in the Plan; provided, however, that a Consultant shall not be eligible for the grant of a Stock Award if, at the time of the proposed
grant, either the offer or sale of the Company’s securities to such Consultant would not be exempt under Rule 701 of the Securities Act or the securities laws of any other relevant jurisdiction, unless the Company determines that the grant will
otherwise comply with, or be exempt from, the Securities Act and the securities laws of all other relevant jurisdictions. 
 5.4 Ten
Percent Stockholders. In addition to any other applicable restrictions set forth in this Section 5, a Ten Percent Stockholder shall not be granted: (i) an Incentive Stock Option, unless the exercise price of such Incentive Stock Option
is at least one hundred ten percent (110%) of the Fair Market Value of the Common Stock on the date of grant and such Incentive Stock Option is not exercisable after the expiration of five (5) years from the date of grant; (ii) a
Nonstatutory Stock Option, unless the exercise price of such Nonstatutory Stock Option is at least (a) one hundred ten percent (110%) of the Fair Market Value of the Common Stock on the date of grant or (b) such lower percentage of
the Fair Market Value of the Common Stock on the date of grant as is permitted by Section 260.140.41 of CCR Title 10 at the time of the grant of the Nonstatutory Stock Option; (iii) a Restricted Stock Award, unless the purchase price of
the Common Stock issuable upon exercise of such Restricted Stock Award is at least (a) one hundred ten percent (110%) of the Fair Market Value of the Common Stock on the date of grant or (b) such lower percentage of the Fair Market
Value of the Common Stock on the date of grant as is permitted by Section 260.140.42 of CCR Title 10 at the time of the grant of the Restricted Stock Award. 
  

	6.	PROVISIONS APPLICABLE TO ALL STOCK AWARDS. 


6.1 No Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to,
any shares of Common Stock subject to any Stock Award held by such Participant unless and until such Participant has satisfied all requirements for the exercise of the Stock Award pursuant to its terms. 

6.2 No Employment or Other Service Rights. Nothing in the Plan or any Stock Award Agreement shall confer upon any Participant any right
to continue to serve the Company or an Affiliate in any capacity, or modify any agreement governing the employment of any Participant. Likewise, nothing in the Plan or any Stock Award shall affect the right of the Company or any applicable Affiliate
to terminate: (i) the employment of an Employee with or without notice and with or without Cause; (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an








 
Affiliate; or (iii) the service of a Director pursuant to the bylaws of the Company or any applicable Affiliate, and any applicable provisions of the corporate law of the state in which the
Company or the Affiliate is incorporated, as the case may be. 
 6.3 Investment Assurances. At any time that the issuance of the
shares of Common Stock issuable upon the exercise of a Stock Award has not been registered under an effective registration statement under the Securities Act, the Company may: (i) require a Participant, as a condition of acquiring Common Stock
under such Stock Award, to give written assurances satisfactory to the Company (a) as to the Participant’s knowledge and experience in financial and business matters and capability to evaluate the merits and risks of acquiring such Common
Stock under such Stock Award and (b) stating that the Participant is acquiring such Common Stock under the Stock Award for the Participant’s own account and not with any present intention of selling or otherwise distributing such Common
Stock; and (ii) place legends, including without limitation, legends restricting the transfer of such Common Stock, on any and all stock certificates representing such Common Stock in order to comply with applicable securities laws. 

6.4 Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement, the Participant may satisfy any federal,
state or local tax withholding obligation relating to the acquisition of Common Stock under a Stock Award by any of the following means (in addition to the Company’s right to withhold from any compensation paid to the Participant by the
Company) or by a combination of any of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the
acquisition of Common Stock under the Stock Award; provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law (or such lower amount as may be necessary
to avoid variable award accounting); or (iii) delivering to the Company owned and unencumbered shares of Common Stock. 
 6.5
Vesting. The Board or Committee may provide that the total number of shares of Common Stock subject to a Stock Award shall vest in installments over any given period of time. Criteria for determining the vesting of shares of Common Stock subject
to a Stock Award may be based solely on the passage of time or on any other criteria, including without limitation, the performance of the Participant, deemed appropriate by the Board or Committee. 

6.6 Acceleration of Exercisability and Vesting. The Board shall have the power to accelerate the time at which a Stock Award may first
be exercised or the time during which a Stock Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock Award stating the time at which it may first be exercised or the time during which it will
vest. 
 6.7 Terms of Repurchase Options. The terms of any repurchase option in favor of the Company with respect to shares of Common
Stock issuable pursuant to a Stock Award shall be specified in the applicable Stock Award Agreement. The price per share of Common Stock at which such repurchase option may be exercised may be either: (i) the Fair Market Value of the shares of
Common Stock on the date of the termination of the applicable Participant’s Continuous Service; or (ii) the lower of (a) the Fair Market Value of the shares of Common Stock on the date of repurchase and (b) the original purchase
price per share of Common Stock paid by the applicable Participant; provided, however, that the terms of any repurchase option shall comply at all times with the provisions of Sections 260.140.41 and 260.140.42 of CCR Title 10 relating
to “presumptively reasonable” repurchase prices. 
 6.8 Information Obligation. To the extent required by
Section 260.140.46 of CCR Title 10, the Company shall deliver financial statements to Participants at least annually; provided, however, that the obligation to deliver financial statements shall not apply to Employees whose duties
with the Company assure them access to equivalent information. 








	7.	OPTIONS. 

 7.1 Stock Award Agreements for Options. Each Stock Award
Agreement for an Option shall be in such form and shall contain such terms and conditions as the Board or Committee shall deem appropriate. The terms and conditions of such Stock Award Agreements may change from time to time, and the terms and
conditions of Stock Award Agreements for separate Options need not be identical; provided, however, that each Stock Award Agreement for an Option shall include (through incorporation of provisions hereof by reference in the Stock Award
Agreement or otherwise) the substance of the provisions set forth in this Section 7. 
 7.2 Designation. All Options shall be
separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates shall be issued for shares of Common Stock purchased on exercise of each type
of Option. 
 7.3 Term. Subject to the provisions of Section 5.4 above, no Option shall be exercisable after the expiration of
ten (10) years from the date it was granted. 
 7.4 Minimum Vesting. Notwithstanding Section 6.5 above, to the extent
required by Section 260.140.41(f) of CCR Title 10: (i) Options granted to an Employee who is not an Officer, Director or Consultant shall provide for vesting of the total number of shares of Common Stock at a rate of at least twenty
percent (20%) per year over five (5) years from the date the Option was granted, subject to reasonable conditions such as Continuous Service; and (ii) Options granted to Officers, Directors or Consultants may be made fully exercisable
at any time or during any period established by the Board or Committee, subject to reasonable conditions such as Continuous Service. 
  

	 	7.5	Consideration. 

 (a) The purchase price of Common Stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and regulations, either: (i) in cash at the time the Option is exercised; or (ii) at the discretion of the Board at the time of the grant of the Option (or subsequently
in the case of a Nonstatutory Stock Option), (a) by delivery to the Company of other Common Stock at the time the Option is exercised, (b) according to a deferred payment or other similar arrangement with the Participant or (c) in any
other form of legal consideration that may be acceptable to the Board. 
 (b) Notwithstanding Section 7.5(a) above:
(i) unless otherwise specifically provided in the Option, the purchase price of Common Stock acquired pursuant to an Option that is paid by delivery to the Company of other Common Stock acquired, directly or indirectly, from the Company, shall
be paid only by shares of the Common Stock of the Company that have been held for more than six (6) months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes); and (ii) in the
case of any deferred payment arrangement, interest shall be compounded at least annually and shall be charged at the minimum rate of interest necessary to avoid (a) the treatment as interest, under any applicable provisions of the Code, of any
amounts other than amounts stated to be interest under the deferred payment arrangement and (b) the treatment of the Option as a variable award for financial accounting purposes. 

7.6 Early Exercise. An Option may include a provision whereby the Participant may elect, at any time before the Participant’s
Continuous Service terminates, to exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior to the full vesting of such shares of Common Stock. Subject to Section 6.7 above, any unvested shares of
Common Stock so purchased may 







 
be subject to a repurchase option in favor of the Company or to any other restriction the Board determines to be appropriate. 

 

	 	7.7	Termination of Continuous Service. 

 (a) Termination Other Than for Cause or As a
Result of Death or Disability. In the event that a Participant’s Continuous Service terminates other than for Cause or as a result of the Participant’s Disability or death, the Participant may exercise his or her Option (to the extent
that the Participant was entitled to exercise such Option as of the date of termination) at any time within the period (the “Post-Termination Exercise Period”) ending on the earlier of: (i) the expiration of the term of
the Option as set forth in the applicable Stock Award Agreement; or (ii) the date three (3) months following the termination of the Participant’s Continuous Service (or such longer or shorter period specified in the applicable Stock
Award Agreement, which period shall not be less than thirty (30) days). If, after the termination of such Participant’s Continuous Service, such Participant does not exercise his or her Option within such Post-Termination Exercise Period,
the Option shall terminate. 
 (b) Termination for Cause. In the event a Participant’s Continuous Service is terminated for
Cause, the Option shall terminate upon the termination date of such Participant’s Continuous Service, and the Participant shall be prohibited from exercising his or her Option as of the time of such termination. 

(c) Termination As a Result of Disability. In the event that a Participant’s Continuous Service terminates as a result of the
Participant’s Disability, the Participant may exercise his or her Option (to the extent that the Participant was entitled to exercise such Option as of the date of termination), at any time during the Post-Termination Exercise Period ending on
the earlier of: (i) the expiration of the term of the Option as set forth in the Stock Award Agreement; or (ii) the date twelve (12) months following such termination of Continuous Service (or such longer or shorter period specified
in the Stock Award Agreement, which period shall not be less than six (6) months). If, after termination of Continuous Service, the Participant does not exercise his or her Option within such Post-Termination Exercise Period, the Option shall
terminate. 
 (d) Termination As a Result of Death. In the event that a Participant’s Continuous Service terminates as a result
of the Participant’s death or a Participant dies within any applicable Post-Termination Exercise Period, then such Participant’s Option may be exercised (to the extent the Participant was entitled to exercise such Option as of the date of
death) by the Participant’s estate, by a Person who acquired the right to exercise the Option by bequest or inheritance or by a Person designated to exercise the Option upon the Participant’s death pursuant to Section 7.8(b) or 7.9(b)
below, at any time during the Post-Termination Exercise Period ending on the earlier of: (i) the expiration of the term of the Option as set forth in the Stock Award Agreement; or (ii) the date eighteen (18) months following such
termination of Continuous Service (or such longer or shorter period specified in the Stock Award Agreement, which period shall not be less than six (6) months). If, after termination of Continuous Service, the Participant does not exercise his
or her Option within such Post-Termination Exercise Period, the Option shall terminate. 
  

	 	7.8	Special Provisions for Incentive Stock Options. 

 (a) Exercise Price. Subject to
the provisions of Section 5.4 above, the exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Incentive Stock Option on the date the
Incentive Stock Option is granted. Notwithstanding the foregoing, an Incentive Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Incentive Stock Option is granted pursuant








 
to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code. 

(b) Transferability. An Incentive Stock Option shall not be transferable except by will or by the laws of descent and distribution and
shall be exercisable during the lifetime of the Participant only by the Participant. Notwithstanding the foregoing, a Participant may, by delivering written notice to the Company in a form satisfactory to the Company, designate a third party who, in
the event of the death of such Participant, shall thereafter be entitled to exercise such Participant’s Incentive Stock Option. 

(c) $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with
respect to which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year under all plans of the Company and its Affiliates exceeds $100,000, the Incentive Stock Options or the portions thereof that
exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Stock Award Agreement(s). 

 

	 	7.9	Special Provisions for Nonstatutory Stock Options. 

 (a) Exercise Price. Subject
to the provisions of Section 5.4 above, the exercise price of each Nonstatutory Stock Option shall be not less than eighty-five percent (85%) of the Fair Market Value of the Common Stock subject to the Nonstatutory Stock Option on the date
the Nonstatutory Stock Option is granted. Notwithstanding the foregoing, a Nonstatutory Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Nonstatutory Stock Option is granted pursuant to
an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code. 
 (b)
Transferability. A Nonstatutory Stock Option shall not be transferable except by will or by the laws of descent and distribution and, to the extent provided in the Stock Award Agreement and as permitted by Section 260.140.41(d) of CCR Title
10 at the time of the grant of the Nonstatutory Stock Option, and shall be exercisable during the lifetime of the Participant only by the Participant. If a Nonstatutory Stock Option does not provide for transferability, then such Nonstatutory Stock
Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Participant only by the Participant. Notwithstanding the foregoing, a Participant may, by delivering
written notice to the Company in a form satisfactory to the Company, designate a third party who, in the event of the death of such Participant, shall thereafter be entitled to exercise such Participant’s Nonstatutory Stock Option. 

 

	8.	STOCK BONUSES. 

 8.1 Stock Award Agreements for Stock
Bonuses. Each Stock Award Agreement for a stock bonus shall be in such form and shall contain such terms and conditions as the Board or Committee shall deem appropriate. The terms and conditions of such Stock Award Agreements may change from
time to time, and the terms and conditions of Stock Award Agreements for separate stock bonuses need not be identical; provided, however, that each Stock Award Agreement for a stock bonus shall include (through incorporation of
provisions hereof by reference in the Stock Award Agreement or otherwise) the substance of the provisions set forth in this Section 8. 

8.2 Consideration. A stock bonus may be awarded in consideration for past services actually rendered to the Company or an Affiliate for
its benefit. 







 8.3 Termination of Participant’s Continuous Service. In the event that a
Participant’s Continuous Service terminates, the Company may reacquire, for no consideration, any or all of the shares of Common Stock held by the Participant that have not vested as of the date of termination under the terms of the Stock Award
Agreement for the stock bonus. 
 8.4 Transferability. Rights to acquire shares of Common Stock under the Stock Award Agreement for a
stock bonus shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Participant only by the Participant. 

 

	9.	RESTRICTED STOCK AWARDS. 

 9.1 Stock
Award Agreements for Restricted Stock Awards. Each Stock Award Agreement for a Restricted Stock Award shall be in such form and shall contain such terms and conditions as the Board or Committee shall deem appropriate. The terms and conditions of
such Stock Award Agreements may change from time to time, and the terms and conditions of Stock Award Agreements for separate Restricted Stock Awards need not be identical; provided, however, that each Stock Award Agreement for a
Restricted Stock Award shall include (through incorporation of provisions hereof by reference in the Stock Award Agreement or otherwise) the substance of the provisions set forth in this Section 9. 

9.2 Purchase Price. At the time of grant of a Restricted Stock Award, the Board or Committee will determine the price to be paid by the
Participant for each share of Common Stock subject to such Restricted Stock Award. Subject to the provisions of Section 5.4 above, the purchase price of Restricted Stock Awards shall not be less than eighty-five percent (85%) of the Fair
Market Value of the Common Stock on the date such Restricted Stock Award is made or at the time the purchase is consummated. A Restricted Stock Award may be awarded as a stock bonus (i.e., with no cash purchase price to be paid) to the extent
permissible under applicable law. 
 9.3 Consideration. At the time of the grant of a Restricted Stock Award, the Board will
determine the consideration permissible for the payment of the purchase price of the Restricted Stock Award. The purchase price of Common Stock acquired pursuant to the Stock Award Agreement for the Restricted Stock Award shall be paid either:
(i) in cash at the time of purchase; (ii) at the discretion of the Board, according to a deferred payment or other similar arrangement with the Participant; (iii) by services rendered or to be rendered to the Company; or (iv) in
any other form of legal consideration that may be acceptable to the Board in its discretion. 
 9.4 Termination of Participant’s
Continuous Service. Subject to Section 6.7, in the event that a Participant’s Continuous Service terminates, the Company may repurchase or otherwise reacquire any or all of the shares of Common Stock held by the Participant that have
not vested as of the date of termination under the terms of the Stock Award Agreement for such Participant’s Restricted Stock Award. 

9.5 Transferability. Rights to acquire shares of Common Stock under the Stock Award Agreement for a Restricted Stock Award shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Participant only by the Participant. 
  

	10.	ADJUSTMENTS UPON CHANGES IN STOCK. 


10.1 Capitalization Adjustments. If any change is made in, or any event occurs with respect to, the Common Stock of the Company without
the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in 







 
property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction (each a “Capitalization
Adjustment”)), the Plan will be appropriately adjusted in the class and maximum number of securities subject to the Plan pursuant to Section 4.1, and the outstanding Stock Awards will be appropriately adjusted in the class and
number of securities and price per share of Common Stock subject to such outstanding Stock Awards; provided, however, that the conversion of any convertible securities of the Company shall not be treated as a transaction “without
receipt of consideration” by the Company and shall not give rise to a Capitalization Adjustment pursuant to this Section 10.1. The Board or Committee shall make such adjustments, which shall be final, binding and conclusive. 

10.2 Dissolution or Liquidation. In the event of a dissolution or liquidation of the Company, all outstanding Stock Awards shall
terminate immediately prior to the completion of such dissolution or liquidation, and shares of Common Stock subject to any repurchase option in favor of the Company may be repurchased by the Company, regardless of whether or not the applicable
Participant’s Continuous Service has terminated. 
  

	 	10.3	Corporate Transaction. 

 (a) In the event of a Corporate Transaction, any
surviving corporation or acquiring corporation may (but need not) assume or continue any or all Stock Awards outstanding under the Plan or may (but need not) substitute similar stock awards for Stock Awards outstanding under the Plan (including an
award to acquire the same consideration paid to the stockholders or the Company, as the case may be, pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to
Stock Awards may be assigned by the Company to the successor of the Company or to the acquiring corporation (or such successor’s or acquiring corporation’s parent company), if any, in connection with such Corporate Transaction. In the
event any surviving corporation or acquiring corporation elects to assume or continue any or all Stock Awards outstanding under the Plan, such Stock Awards shall remain in effect in accordance with the terms of this Plan and the applicable Stock
Award Agreements, but shall thereafter represent the right to receive (upon exercise thereof in accordance with the terms of such Stock Awards, if applicable) for each share of Common Stock underlying each such Stock Award such cash, securities or
other property that would have been received by the applicable Participant had such Participant exercised such Stock Award immediately prior to the effective time of the Corporate Transaction. 

(b) In the event that, in connection with a Corporate Transaction, any surviving corporation or acquiring corporation does not assume
or continue any or all such outstanding Stock Awards or substitute similar stock awards for such outstanding Stock Awards, then with respect to Stock Awards that have not been assumed, continued or substituted, such Stock Awards shall terminate if
not exercised (if applicable) at or prior to the effective time of such Corporate Transaction, and any reacquisition or repurchase rights held by the Company with respect to such Stock Awards held by Participants whose Continuous Service has not
terminated shall (contingent upon the effectiveness of the Corporate Transaction) lapse. 
 10.4 Change in Control. A Stock Award
held by any Participant whose Continuous Service has not terminated prior to the effective time of a Change in Control may be subject to additional acceleration of vesting and exercisability upon or after such Change in Control as may be provided in
the Stock Award Agreement for such Stock Award; provided, however, that in the absence of any such provision in the Stock Award Agreement for such Stock Award, no such acceleration shall occur. 








	11.	TERMINATION, SUSPENSION AND AMENDMENT. 


11.1 Termination or Suspension of the Plan. The Board may terminate or suspend the Plan at any time. Unless sooner terminated, the Plan
shall terminate on the day before the tenth (10th) anniversary of the date the Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier. No Stock Awards may be granted under the Plan while the Plan is
suspended or after it is terminated. 
 11.2 Amendment of the Plan and Stock Awards. Subject to Section 11.3 below, the Board
may, from time to time, amend the Plan or any Stock Award in any manner it deems appropriate or necessary. Notwithstanding the foregoing, except as expressly provided elsewhere in the Plan, no amendment to the Plan shall be effective unless approved
by the stockholders of the Company to the extent stockholder approval is necessary to satisfy the requirements of Section 422 of the Code. 

11.3 No Impairment. No termination or suspension of the Plan or amendment of the Plan or any Stock Award shall impair the rights of a
Participant with respect to any outstanding Stock Award, unless the Company receives the written consent of such Participant. 
  

	12.	MISCELLANEOUS. 

  

	 	12.1	Compliance with Laws. 

 (a) This Plan and the obligations of the Company with
respect to any Stock Awards granted hereunder shall be subject to all applicable federal and state securities laws. If, after reasonable efforts, the Company is unable to obtain from any applicable regulatory commission or agency the authority that
legal counsel for the Company deems necessary for the lawful issuance and sale of Common Stock pursuant to such Stock Awards, then the Company shall be relieved from any liability for failure to issue and sell Common Stock in connection with such
Stock Awards unless and until such authority is obtained. 
 (b) To facilitate the grant of any Stock Award, the Committee may impose
special terms for Stock Awards granted to Participants who are foreign nationals or who are employed by the Company or any Affiliate outside of the United States as the Board or Committee may consider necessary or appropriate to accommodate
differences in local laws, tax policies or customs. 
 12.2 Severability. If one or more provisions of this Plan are held to be
unenforceable under applicable law, such provision shall be excluded from this Plan and the balance of the Plan shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 

12.3 Governing Law. The law of the State of California shall govern all questions concerning the construction, validity and
interpretation of this Plan, without regard to such state’s conflict of laws rules. 
 *        
*         * 







 APPENDIX A 

DEFINITIONS 

“Affiliate” means any parent corporation or subsidiary corporation of the Company, whether now or hereafter existing,
as those terms are defined in Sections 424(e) and (f), respectively, of the Code. 
 “Board” means the Board of
Directors of the Company. 
 “Cause” means, with respect to a particular Participant (unless otherwise provided in
any employment agreement between the Company and such Participant), the occurrence of any of the following: (i) such Participant’s conviction of any felony or any crime involving fraud; (ii) such Participant’s participation
(whether by affirmative act or omission) in a fraud or felonious act against the Company and/or its Affiliates; (iii) such Participant’s violation of any statutory or fiduciary duty, or duty of loyalty owed to the Company and/or its
Affiliates and which has a material adverse effect on the Company and/or its Affiliates; (iv) such Participant’s violation of state or federal law in connection with such Participant’s performance of such Participant’s job;
(v) breach of any material term of any contract between such Participant and the Company and/or its Affiliates; and (vi) such Participant’s violation of any material Company policy; provided, however, that the final
determination that a termination is for Cause shall be made by the Board or Committee, as applicable, in its sole and exclusive judgment and discretion. 

“CCR Title 10” means Title 10 of the California Code of Regulations, as amended from time to time. 

“Change in Control” means any Corporate Transaction or the occurrence, in any single transaction or in any series of
related transactions not approved by the Board, of any Person becoming the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s
then-outstanding securities; provided, however, that notwithstanding the foregoing or any other provision of this Plan, the definition of Change in Control (or any analogous term) in an individual written agreement between the Company
or any Affiliate and the Participant shall supersede the foregoing definition with respect to Stock Awards subject to such agreement (it being understood, however, that if no definition of Change in Control or any analogous term is set forth in such
an individual written agreement, the foregoing definition shall apply). 
 “Code” means the Internal Revenue Code of
1986, as amended. 
 “Committee” means a committee of two (2) or more members of the Board appointed by the
Board in accordance with Section 3.2 of the Plan. 
 “Common Stock” means the Company’s common stock. 

“Company” means Otonomy, Inc., a Delaware corporation. 

“Consultant” means any person, including an advisor, engaged by the Company or an Affiliate to render consulting or
advisory services and who is compensated for such services; provided, however, that the term “Consultant” shall not include Directors who are not compensated by the Company for their services as Directors, and the payment of
a fee by the Company for services which the Board determines in its sole discretion are services as a Director shall not cause a Director to be considered a “Consultant” for purposes of the Plan. 







 “Continuous Service” means that the Participant’s service with the
Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a
change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, shall not terminate a Participant’s Continuous
Service. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate, or to a Director shall not constitute an interruption of Continuous Service. The Board, Committee or any authorized Officer of the Company, in
that party’s sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave. Notwithstanding
the foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting in a Stock Award only to such extent as may be provided in the Company’s leave of absence policy or in the written terms of the Participant’s
leave of absence. 
 “Corporate Transaction” means the occurrence, in a single transaction or in a series of related
transactions, of any one or more of the following events: 
 (a) there is consummated a merger, consolidation or similar transaction
involving (directly or indirectly) the Company if, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either:
(i) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction; or (ii) more than fifty percent
(50%) of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction; 

(b) the stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the Company, or a
complete dissolution or liquidation of the Company shall otherwise occur; or 
 (c) there is consummated a sale of all or
substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity more than fifty percent (50%) of the
combined voting power of the voting securities of which Entity is Owned by stockholders of the Company in substantially the same proportion as their Ownership of the Company immediately prior to such sale. 

The term “Corporate Transaction” shall not include a sale of assets, merger or other transaction effected exclusively for the
purpose of changing the domicile of the Company. 
 “Director” means a member of the Board. 

“Disability” means the inability of a person (unless otherwise provided in any employment agreement between the
Company and such person), in the opinion of a qualified physician acceptable to the Company, to perform the duties of that person’s position with the Company or an Affiliate because of the sickness or injury of the person. 

“Employee” means any person employed by the Company or an Affiliate; provided, however, that service as
a Director, or payment of a fee by the Company for services which the Board determines in its sole discretion are services as a Director or as a member of the Board of Directors of an Affiliate, shall not be sufficient to constitute
“employment” by the Company or such Affiliate. 







 “Entity” means any corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization or entity. 

“Fair Market Value” means, as of any date, the value of the Common Stock determined by the Board in good faith and in
a manner consistent with Section 260.140.50 of CCR Title 10. 
 “Incentive Stock Option” means an option to
purchase shares of Common Stock that is intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 

“Nonstatutory Stock Option” means an option to purchase shares of Common Stock that is not intended to qualify as an
Incentive Stock Option. 
 “Officer” means any person designated by the Company as an officer. 

“Option” means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant to the Plan. 

A Person shall be deemed to “Own”, to have “Owned”, to be the “Owner”
of, or to have acquired “Ownership” of securities if such Person, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the
power to vote or to direct the voting, with respect to such securities. 
 “Participant” means a person to whom a
Stock Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award. 

“Person” means any natural person or Entity. 

“Plan” means this 2010 Equity Incentive Plan, as amended. 

“Restricted Stock Award” means an award of shares of Common Stock, which is granted pursuant to the terms and
conditions of Section 9 of the Plan. 
 “Securities Act” means the Securities Act of 1933, as amended. 

“Stock Award” means any right granted under the Plan, including an Option, a Restricted Stock Award or a stock bonus.

 “Stock Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and
conditions of an individual Stock Award. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan. 

“Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code)
stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any of its Affiliates. 







 EXHIBIT A 

OTONOMY, INC. 
 STOCK
OPTION AGREEMENT 
 (2010 EQUITY INCENTIVE PLAN) 

Pursuant to its 2010 Equity Incentive Plan (the “Plan”), OTONOMY, INC. (the
“Company”), hereby grants to you (the “Participant”) an option to purchase the number of shares of the Company’s Common Stock set forth below (the “Option”). Capitalized
terms used and not otherwise defined herein shall have the meanings given to such terms in the Plan, a copy of which is attached hereto as Attachment 1. 

1. GOVERNING PLAN DOCUMENT. Your Option is subject to all of the provisions of the Plan, which provisions
are hereby made a part of this Stock Option Agreement. In the event of any conflict between the provisions of this Stock Option Agreement and the provisions of the Plan, the provisions of the Plan shall control in all respects. 

2. DETAILS OF OPTION. The details of your Option are as follows: 

 

					
	Date of Grant:	 	  

	Vesting Commencement Date:	 	  

	Number of Shares Subject to Option:	 	  

	Exercise Price (Per Share):	 	  

	Aggregate Exercise Price:	 	  

	Expiration Date:	 	  

		
	Type of Grant:	 	 ̈ Incentive Stock Option*
		
		 	 ̈ Nonstatutory Stock Option
		
	Exercise Schedule:	 	x Same as Vesting Schedule
		
	Vesting Schedule:	 	 1/4th of the shares vest one year after the Vesting Commencement Date.

1/48th of the shares vest monthly thereafter over the next three years.


 3. EXERCISE. You may exercise your Option only for whole shares of Common Stock. In order to exercise
your Option, you must submit to the Company: (i) a completed and executed notice of exercise in the form attached hereto as Attachment 2; and (ii) payment by cash or check for the aggregate exercise price for that number of shares
of Common Stock you are electing to purchase pursuant to your Option. In the event that your Option is an Incentive Stock Option, by exercising your Option you expressly agree that you will notify the Company in writing within fifteen (15) days
after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your Option that occurs within two (2) years after the date of your Option grant or within one (1) year after such shares of Common Stock
are 
  

	*	 If this is an Incentive Stock Option, it (plus any other outstanding Incentive Stock Options held by the Participant) cannot be first
exercisable for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 shall be deemed a Nonstatutory Stock Option. Please refer to the Plan for additional details.




  
 1. 








 
transferred upon exercise of your Option. Notwithstanding the foregoing, you expressly acknowledge and agree that you may not exercise your Option unless the tax withholding obligations of the
Company and/or any Affiliate are satisfied. Accordingly, but without limiting the generality of the foregoing, you and the Company expressly acknowledge and agree that, as a condition to the exercise of your Option, the Company may require you to
enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of the exercise of your Option, the lapse of any substantial risk of forfeiture to which the shares of
Common Stock underlying your Option are subject at the time of exercise, or the disposition of shares of Common Stock acquired upon the exercise of your Option. 

4. “EARLY EXERCISE”. If it is indicated in Section 2 that “early exercise” of your Option is
permitted, then you may elect at any time that is both during the period of your Continuous Service and during the term of your Option to exercise all or part of your Option, including the nonvested portion of your Option; provided,
however, that: (i) a partial exercise of your Option shall be deemed to cover first vested shares of Common Stock and then the earliest vesting installment of unvested shares of Common Stock; (ii) any shares of Common Stock so
purchased from installments that have not vested as of the date of exercise shall be subject to the repurchase option in favor of the Company as described in the Company’s form of Early Exercise Stock Purchase Agreement, a copy of which will be
provided to you at the time you elect to “early exercise” your Option; and (iii) you shall enter into the Company’s form of Early Exercise Stock Purchase Agreement with a vesting schedule that will result in the same vesting as
if no early exercise had occurred. 
 5. TERM. You may not exercise your Option before the commencement of its term or after its term
expires. The term of your Option commences on the Date of Grant indicated in Section 2 and expires upon the earlier of: (i) the Expiration Date set forth in Section 2; or (ii) in the event of the termination of your Continuous
Service to the Company, the date provided by the Plan. 
 6. RESTRICTIONS ON STOCK. You acknowledge and
agree that it is a condition to your receipt of your Option that you execute an Instrument of Accession to that certain Amended and Restated Stockholders’ Agreement (the “Stockholders’ Agreement”) by and among the
Company and the stockholders of the Company listed therein, thereby joining as a party to the Stockholders’ Agreement and a “Holder” for all purposes under the Stockholders’ Agreement. In addition, you acknowledge that any shares
of Common Stock that you acquire upon exercise of your Option are subject to any right of first refusal that may be described in the Company’s bylaws in effect at such time the Company elects to exercise its right. 

7. NOTICES. Any notices to be delivered pursuant to this Stock Option Agreement shall be given in writing and shall be deemed
effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. 

8. SEVERABILITY. If one or more provisions of this Plan are held to be unenforceable under applicable law, such provision shall be
excluded from this Plan and the balance of the Plan shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 

9. BINDING AND ENTIRE AGREEMENT. The terms and conditions of this Stock Option Agreement
shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. This Stock Option Agreement, together with the Plan and any attachments hereto or thereto, constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein
and therein. 

  
 2. 








 10. COUNTERPARTS. This Stock Option Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall constitute one instrument. 
  

			
	COMPANY:
	
	OTONOMY, INC.
		
	 By:
	 	  

		 	David A. Weber, Ph.D.
		 	President and Chief Executive Officer
	
	PARTICIPANT:
		
	 By:
	 	  

		 	(Employee)



  
 3. 








 ATTACHMENT 1 

OTONOMY, INC. 2010 EQUITY INCENTIVE PLAN 







 ATTACHMENT 2 

NOTICE OF EXERCISE 
 Otonomy, Inc.

 Attention: Chief Financial Officer 
 Date
of Exercise:                      
 Ladies and
Gentlemen: 
 This letter is intended to inform you of my election pursuant to that certain Stock Option Agreement between me and Otonomy,
Inc. (the “Company”) to purchase pursuant to my Option (as defined in the Stock Option Agreement) that number of shares of the Company’s Common Stock indicated below: 

 

									
	 Type of option (check one):
	 	 	Incentive  	 ̈ 	 	 	Nonstatutory  	 ̈ 
			
	 Number of shares as to which Option is exercised:
	 				 			
			
	 Total exercise price:
	 	$	            	  	 			
			
	 Cash payment delivered herewith:
	 	$	            	  	 			

 I hereby make the following certifications and representations with respect to the number of shares of Common
Stock of the Company listed above (the “Shares”), which are being acquired by me for my own account upon exercise of the Option as set forth above: 

I acknowledge that the Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”),
and are deemed to constitute “restricted securities” under Rule 701 and Rule 144 promulgated under the Securities Act. I warrant and represent to the Company that I have no present intention of distributing or selling the Shares,
except as permitted under the Securities Act and any applicable state securities laws. 
 I further acknowledge that all certificates
representing any of the Shares subject to the provisions of the Option shall have endorsed thereon appropriate legends reflecting the foregoing limitations, as well as any legends reflecting restrictions pursuant to the Company’s Certificate of
Incorporation, bylaws and/or applicable securities laws. 
  

			
	Very truly yours,
		
	By:	 	  

	Name: