Exhibit 10.3

AMENDMENT NO. 1 TO

THE EMPLOYMENT AGREEMENT

Between

Recro Pharma, Inc.

and

[                    ]

WHEREAS, Recro Pharma, Inc. (the “Company”) has employed [                    ]
(“Executive”) as its President and Chief Executive Officer, pursuant to the
terms of an Employment Agreement dated October 8, 2013, and effective March 12,
2014 (“Employment Agreement”); and

WHEREAS, the parties wish to modify the Employment Agreement to more accurately
reflect current circumstances.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, effective as of December 17, 2014:

1. Section 10(a)(v) of the Employment Agreement is amended in its entirety to
read as follows:

“By Executive upon a Change of Control. Executive may terminate this Agreement
at any time during the twelve (12) months following a Change of Control, if
during such twelve-month period the Company and/or its successor (a) materially
and adversely changes the status, responsibilities or perquisites of Executive,
or (b) requires Executive to be principally based at any office or location more
than fifty (50) miles from Executive’s principal office immediately prior to the
Change of Control. For purposes of this Agreement, a “Change of Control” shall
be deemed to have occurred upon the happening of any of the following events:
(i) the consummation of a plan of dissolution or liquidation of the Company;
(ii) the consummation of the sale or disposition of all or substantially all of
the assets of the Company; (iii) the consummation of a merger, consolidation or
other shareholder-approved fundamental business transaction in which the Company
is a participant with another entity where the stockholders of the Company,
immediately prior to the referenced transaction, will not beneficially own,
immediately after the referenced transaction, shares or other equity interests
entitling such stockholders to more than 50% of all votes to which all
equityholders of the surviving entity would be entitled in the election of
directors; (iv) the date any entity, person or group, (within the meaning of
Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as
amended), (other than (A) the Company or any of its subsidiaries or any employee
benefit plan (or related trust) sponsored or maintained by the Company or any of
its subsidiaries or (B) any person who, on the date the Plan is effective, is
the beneficial owner of outstanding securities of the Company), shall have
become the beneficial owner of, or shall have obtained voting control over, more
than fifty

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percent (50%) of the outstanding shares of the Common Stock; or (v) the first
day after the date hereof when directors are elected such that a majority of the
Board shall have been members of the Board for less than twenty-four
(24) months, unless the nomination for election of each new director who was not
a director at the beginning of such twenty-four (24) month period was approved
by a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period.”

2. Section 10(b) of the Employment Agreement is amended in its entirety to read
as follows:

“Severance.

(i) In the event of termination of Executive’s employment by reason of death,
the Company shall pay to Executive’s estate Executive’s Base Salary, in
accordance with its normal payroll practices (but not less frequently than
monthly), for a period of twelve (12) months from the effective date of such
termination, and continue health benefits, if applicable, for the same period.

(ii) In the event of a nonrenewal or termination by the Company pursuant to
Section 2 or Section 10(a)(iii), or if Executive terminates this Agreement
during the twelve (12) months after a Change of Control pursuant to
Section 10(a)(v), the Company shall continue to pay Executive his/her Base
Salary, in accordance with its normal payroll practices (but not less frequently
than monthly), and shall continue Executive’s health insurance benefits at
Company’s expense (or such portion thereof as is then funded by the Company for
other employees of the Company) for a period of twelve (12) months from the
effective date of such termination.

(iii) Except as expressly provided in this Section 10(b), upon the termination
of Executive’s employment, all payments hereunder shall cease except payments of
Base Salary and reimbursement of expenses through the effective date of such
termination.”

3. The Employment Agreement is amended to add a new Section 11 (and renumber
existing Sections 11 and 12 sequentially) as follows:

“Parachute Payment.

(a) If any payment or benefit the Executive would receive under this Agreement
or otherwise in connection with a Change in Control, as defined herein (the
“Total Payments”) would (i) constitute a “Parachute Payment” within the meaning
of Section 280G of the Internal Revenue Code (the “Code”), and (ii) but for this
sentence, be subject to the excise tax imposed by Section 4999 of the Code (the
“Excise Tax”), then such Total Payment shall be equal to the Reduced Amount. The
“ Reduced Amount” shall be either (x) the largest portion of the Total Payment
that would result in no portion of the Total Payment being

 

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subject to the Excise Tax or (y) the largest portion, up to and including the
total of the Total Payment, whichever amount, after taking into account all
applicable federal, state and local employment taxes, income taxes, and the
Excise Tax (all computed at the highest applicable marginal rate), results in
the Executive’s receipt, on an after-tax basis, of the greatest economic benefit
notwithstanding that all or some portion of the Total Payment may be subject to
the Excise Tax. If a reduction in payments or benefits constituting Parachute
Payments is necessary so that the Total Payment equals the Reduced Amount,
reduction shall occur in the manner that results in the greatest economic
benefit for the Executive. If more than one method of reduction will result in
the same economic benefit, the items so reduced will be reduced pro rata.

(b) In the event it is subsequently determined by the Internal Revenue Service
that some portion of the Reduced Amount (as determined pursuant to clause (x) in
the preceding paragraph) is subject to the Excise Tax, Executive agrees to
promptly return to the Company a sufficient amount of the Total Payment so that
no portion of the Reduced Amount is subject to the Excise Tax. For the avoidance
of doubt, if the Reduced Amount is determined in accordance with clause (y) in
the preceding paragraph, Executive will have no obligation to return any portion
of the Total Payment pursuant to the preceding sentence. Unless Executive and
the Company agree on an alternative accounting or law firm, the accounting firm
then engaged by the Company for general tax compliance purposes shall perform
the foregoing calculations. If the accounting firm so engaged by the Company is
serving as accountant or auditor for the individual, entity or group effecting
the Change in Control, the Company shall appoint a nationally recognized
accounting, law or consulting firm to make the determinations required
hereunder. The Company shall bear all expenses with respect to the
determinations by such accounting, law or consulting firm required to be made
hereunder.

(c) The Company shall use commercially reasonable efforts such that the
accounting, law or consulting firm engaged to make the determinations hereunder
shall provide its calculations, together with detailed supporting documentation,
to Executive and the Company within fifteen (15) calendar days after the date on
which Executive’s right to a Total Payment is triggered (if requested at that
time by the Executive or the Company) or such other time as requested by the
Executive or the Company.”

(signatures on next page)

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first written above.

 

COMPANY: RECRO PHARMA, INC. By:  

 

Name:   Title:   EXECUTIVE:

 

[Signature Page to Amendment No. 1 to Employment Agreement]