Exhibit 10-O

A.P. PHARMA, INC

2007 EQUITY INCENTIVE PLAN

RESTRICTED STOCK PURCHASE AGREEMENT

THIS RESTRICTED STOCK PURCHASE AGREEMENT (the “Agreement”), dated             ,
is entered into between A.P. Pharma, Inc., a Delaware corporation (the
“Company”) and              (the “Purchaser”). Unless otherwise defined herein,
the terms of this Agreement will have the same meaning as defined in the A.P.
Pharma, Inc. 2007 Equity Incentive Plan (the “Plan”). The Agreement is entered
into as follows:

WHEREAS, the consultant services of Purchaser is considered by the Company to be
important for the Company’s continued growth; and

WHEREAS, in order to induce Purchaser to remain with the Company and to assure
his continued commitment to the success of the Company, the Board of Directors
of the Company (the “Board”) has determined that Purchaser shall be granted the
right to purchase (“Stock Purchase Award”) covering shares of the Company’s
common stock (the “Shares”), under the Plan and subject to the restrictions
stated below.

THEREFORE, the parties agree as follows:

1. Sale of Stock. Subject to the terms and conditions of this Agreement and the
Plan, which is incorporated herein by reference, the Company will issue and sell
to Purchaser, and Purchaser agrees to purchase from the Company, [number = $25K
/ FMV on DOG] Shares of the Company’s Common Stock at a purchase price of $[FMV
on DOG] per Share and a total purchase price of $25,000. The term Shares refers
to purchased Shares and all securities received in replacement of or in
connection with the Shares pursuant to stock dividends or splits, all securities
received in replacement of the Shares in a recapitalization, merger,
reorganization, exchange or the like, and all new, substituted or additional
securities or other properties to which Purchaser is entitled by reason of
Purchaser’s ownership of the Shares.

2. Vesting Schedule. So long as Purchaser’s service relationship with the
Company continues during the following vesting term, the interest of Purchaser
in the Shares shall vest as follows: [             Shares subject to the Stock
Award will vest [            ] months after [            ] (the “Vesting
Commencement Date”) and              Shares shall vest every [            ]
months after the Vesting Commencement Date.] Therefore, provided Purchaser has
not experienced a termination of his Continuous Service (as defined in the Plan)
prior to the close of business on the [            ] anniversary of the Vesting
Commencement Date, the interest of Purchaser in the Shares shall become fully
vested on that date.

3. Repurchase Option.

(a) In the event of the voluntary or involuntary termination of Purchaser’s
Continuous Service for any reason (including death or disability), with or
without cause, the Company shall upon the date of such termination (the
“Termination Date”) have an irrevocable, exclusive option (the “Repurchase
Option”) for a period of 90 days from such date to repurchase all or any portion
of the Shares held by Purchaser as of the Termination Date which have not yet
been released from the Company’s Repurchase Option at the original purchase
price per Share specified in Section 1 (adjusted for any stock splits, stock
dividends and the like).

(b) Unless the Company notifies Purchaser within 90 days from the Termination
Date of Purchaser’s employment or consulting relationship that it does not
intend to exercise its Repurchase Option with respect to some or all of the
Shares, the Repurchase Option shall be deemed automatically exercised by the
Company as of the 90th day following such termination, provided that the Company
may notify Purchaser that it is exercising its Repurchase Option as of a date
prior to such 90th day. Unless Purchaser is otherwise notified by the Company
pursuant to the preceding sentence that the Company does not intend to exercise
its Repurchase Option as to some or all of the Shares to which it applies at the
time of termination, execution of this Agreement by Purchaser constitutes
written notice to Purchaser of the Company’s intention to exercise its
Repurchase Option with respect to all Shares to which such Repurchase Option
applies. The Company, at its choice, may satisfy its payment obligation to
Purchaser with respect to exercise of the Repurchase Option by either
(A) delivering a check to Purchaser in the amount of the

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purchase price for the Shares being repurchased, or (B) in the event Purchaser
is indebted to the Company, canceling an amount of such indebtedness equal to
the purchase price for the Shares being repurchased, or (C) by a combination of
(A) and (B) so that the combined payment and cancellation of indebtedness equals
such purchase price. In the event of any deemed automatic exercise of the
Repurchase Option pursuant to this Section 3(a)(ii) in which Purchaser is
indebted to the Company, such indebtedness equal to the purchase price of the
Shares being repurchased shall be deemed automatically canceled as of the 90th
day following termination of Purchaser’s employment or consulting relationship
unless the Company otherwise satisfies its payment obligations. As a result of
any repurchase of Shares pursuant to this Section 3(a), the Company shall become
the legal and beneficial owner of the Shares being repurchased and shall have
all rights and interest therein or related thereto, and the Company shall have
the right to transfer to its own name the number of Shares being repurchased by
the Company, without further action by Purchaser.

(c) [Number of shares from Section 1] of the Shares shall initially be subject
to the Repurchase Option. [            ] of the total number of shares shall be
released from the Repurchase Option on the [            ] month anniversary of
the Vesting Commencement Date (as set forth on the signature page of this
Agreement), and an additional [            ] of the total number of Shares shall
be released from the Repurchase Option every [            ] months after the
date of issuance of the Shares on the Vesting Commencement Date (as set forth in
Section 1), until all Shares are released from the Repurchase Option. Fractional
shares shall be rounded to the nearest whole share.

(d) All transferees of Shares or any interest therein will receive and hold such
Shares or interest subject to the provisions of this Agreement, including
insofar as applicable the Company’s Repurchase Option. Any sale or transfer of
the Shares shall be void unless the provisions of this Agreement are satisfied.

(e) Upon the expiration or exercise of the Repurchase Option, a new certificate
or certificates representing the Shares not repurchased shall be issued, on
request, without the legend referred to in Section 10 below and delivered to
Purchaser.

4. Escrow of Shares.

(a) To ensure that Purchaser’s unvested Shares are delivered to the Company in
the event the Company exercises its Repurchase Option described in Section 3,
Purchaser agrees to promptly following the execution of this Agreement, deliver
to and deposit with the escrow agent (the “Escrow Agent”) named in the Joint
Escrow Instructions attached as Exhibit A, the certificate(s) evidencing the
unvested Shares and an Assignment Separate from Certificate executed by
Purchaser (with date and number of shares in blank) in the form attached as
Exhibit B. The certificate(s) evidencing the unvested Shares and the Assignment
Separate from Certificate shall be delivered to the Escrow Agent and held under
the Joint Escrow Instructions, which shall be delivered to the Escrow Agent
promptly following the execution of this Agreement.

(b) Promptly following the date when the Shares have vested in full, the Company
shall direct the Escrow Agent to deliver to Purchaser a certificate or
certificates representing the Shares.

5. Transfer Restrictions. In addition to any other limitation on transfer
created by applicable securities laws, Purchaser shall not assign, encumber or
dispose of any interest in the Shares while the Shares are subject to the
Company’s Repurchase Option, as described in Section 3 above.

6. Stockholder Rights. Purchaser shall be entitled to all of the rights and
benefits generally accorded to stockholders with respect to the Shares. All
dividends on Shares that are subject to any restrictions, including vesting,
shall be subject to the same restrictions, including those set forth in Sections
2 and 3, as the Shares on which the dividends were paid.

7. Taxes.

(a) Purchaser shall be liable for any and all taxes, including withholding
taxes, arising out of this grant or the vesting of Shares hereunder. In the
event that the Company is required to withhold taxes as a result of the grant or
vesting of the Shares, or subsequent sale of the Shares, Purchaser shall
surrender a sufficient number of

 

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whole Shares or make a cash payment, in the discretion of the Company, as
necessary to cover all applicable required withholding taxes and required social
security contributions at the time the Shares vest and the Repurchase Option on
the Shares lapses (or at such other time as required by applicable laws), unless
alternative procedures for such payment are established by the Company.
Purchaser will receive a cash refund for any fraction of a surrendered Share not
necessary for required withholding taxes and required social security
contributions. To the extent that any surrender of Shares or payment of cash or
alternative procedure for such payment is insufficient, Purchaser authorizes the
Company, its affiliates and subsidiaries, which are qualified to deduct tax at
source, to deduct all applicable required withholding taxes and social security
contributions from Purchaser’s compensation. Purchaser agrees to pay any amounts
that cannot be satisfied from wages or other cash compensation, to the extent
permitted by law.

(b) Purchaser understands that Section 83(a) of the Internal Revenue Code of
1986, as amended (the “Code”), taxes as ordinary income the difference between
the amount paid for the Shares and the fair market value of the Shares as of the
date any Repurchase Option on the Shares lapses. In this context, “restrictions”
mean the repurchase option in the event of the Termination of Continuous Service
of Purchaser as set forth in Section 12 of the Plan and the restriction on
transferability as set forth in Section 5 of this Agreement and in Section 13 of
the Plan. Purchaser understands that Purchaser may elect to be taxed at the time
the Shares are issued, based on the value of the Shares at the issuance date
rather than when and as the Repurchase Option lapses (on the vesting dates), by
filing an election under Section 83(b) (an “83(b) Election”) of the Code with
the Internal Revenue Service within 30 days from the date of issuance. Purchaser
acknowledges that the foregoing is only a summary of the effect of United States
federal income taxation with respect to issuance and vesting of the Shares
hereunder, and does not purport to be complete. The Company has directed
Purchaser to seek independent advice regarding the applicable provisions of the
Code, the income tax laws of any municipality, state or foreign country in which
Purchaser may reside, the tax consequences of Purchaser’s death, and the
decision as to whether or not to file an 83(b) Election (as well as appropriate
advice and assistance with the actual filing of any such 83(b) Election) in
connection with the issuance of the Shares.

(c) Regardless of any action the Company takes with respect to any or all income
tax, social insurance, payroll tax, payment on account or other tax-related
withholding (“Tax-Related Items”), Purchaser acknowledges and agrees that the
ultimate liability for all Tax-Related Items legally due by Purchaser is and
remains Purchaser’s responsibility and that the Company (i) make no
representations nor undertakings regarding the treatment of any Tax-Related
Items in connection with any aspect of this issuance of Shares, including the
vesting of the Shares or the subsequent sale of the Shares; and (ii) do not
commit to structure the terms or any aspect of this issuance of Shares to reduce
or eliminate Purchaser’s liability for Tax-Related Items. Upon the vesting of
the Shares, Purchaser shall pay the Company any amount of Tax-Related Items that
the Company may be required to withhold as a result of Purchaser’s receipt of
the Stock Purchase Award or Purchaser’s receipt of Shares that cannot be
satisfied by the means previously described. The Company may refuse to deliver
the Shares if Purchaser fails to comply with Purchaser’s obligations in
connection with the Tax-Related Items.

8. Acknowledgment and Waiver. By accepting this grant of a Stock Purchase Award,
Purchaser acknowledges and agrees that:

(a) the grant of a Stock Purchase Award is voluntary and occasional and does not
create any contractual or other right to receive future grants of Stock Purchase
Awards or Shares, even if Stock Purchase Awards or Shares have been granted
repeatedly in the past;

(b) the grant of a Stock Purchase Award shall not create a right to employment
or a service relationship with the Company, shall not create an employment
agreement between Purchaser and the Company and shall not interfere with the
ability of the Company to terminate Purchaser’s employment or service
relationship at any time with or without cause and it is expressly agreed and
understood that employment is terminable at the will of either party, insofar as
permitted by law;

(c) the grant of a Stock Purchase Award, Shares and resulting benefits are
extraordinary items that do not constitute compensation of any kind for services
of any kind rendered to the Company, and are outside the scope of Purchaser’s
service relationship contract, if any; and the grant of a Stock Purchase Award,
Shares and resulting benefits are not part of normal or expected compensation or
salary for any purposes, including, but not limited to calculating any
severance, resignation, termination, redundancy, end of service payments,
bonuses, long-service awards, pension or retirement benefits or similar payments
insofar as permitted by law;

 

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(d) in consideration of this grant of a Stock Purchase Award, no claim or
entitlement to compensation or damages shall arise from termination of this
Stock Purchase Award or diminution in value of the Shares resulting from
termination of Continuous Service by the Company (for any reason whatsoever and
whether or not in breach of local labor laws) and Purchaser irrevocably releases
the Company from any such claim that may arise; if, notwithstanding the
foregoing, any such claim is found by a court of competent jurisdiction to have
arisen, then, by accepting the terms of this Agreement, Purchaser shall be
deemed irrevocably to have waived any entitlement to pursue such claim; and

(e) notwithstanding any terms or conditions of the Plan to the contrary, in the
event of involuntary termination of Continuous Service (whether or not in breach
of local labor laws), Purchaser’s right to receive benefits under this
Agreement, if any, will terminate effective as of the date that Purchaser is no
longer actively employed and will not be extended by any notice period mandated
under local law (e.g., active service relationship would not include a period of
“garden leave” or similar period pursuant to local law); furthermore, in the
event of involuntary termination of Continuous Service (whether or not in breach
of local labor laws), Purchaser’s right to receive benefits under this Agreement
after termination of Continuous Service, if any, will be measured by the date of
termination of Purchaser’s active service relationship and will not be extended
by any notice period mandated under local law.

9. Conditions Upon Issuance of Shares. Notwithstanding any other provision of
this Agreement, the Company shall not be obligated, and shall have no liability
for failure, to issue or deliver any Shares under this Agreement unless such
issuance or delivery would comply with applicable laws, with such compliance
determined by the Company in consultation with its legal counsel.

10. Restrictive Legends and Stop-Transfer Orders.

(a) The certificate or certificates representing the Shares shall bear the
following legend (as well as any legends required by applicable state and
federal corporate and securities laws):

THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE
WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY
OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

(b) Purchaser agrees that, in order to ensure compliance with the restrictions
referred to herein, the Company may issue appropriate “stop transfer”
instructions to its transfer agent, if any, and that, if the Company transfers
its own securities, it may make appropriate notations to the same effect in its
own records.

(c) The Company shall not be required (i) to transfer on its books any Shares
that have been sold or otherwise transferred in violation of any of the
provisions of this Agreement or (ii) to treat as owner of such Shares or to
accord the right to vote or pay dividends to any purchaser or other transferee
to whom such Shares shall have been so transferred.

11. Miscellaneous.

(a) The Company shall not be required to treat as the owner of Shares, and
associated benefits hereunder, any transferee to whom such Shares or benefits
shall have been so transferred in violation of this Agreement.

(b) The parties agree to execute such further instruments and to take such
action as may reasonably be necessary to carry out the intent of this Agreement.

(c) Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon delivery to Purchaser at Purchaser’s
address then on file with the Company.

 

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(d) The Plan is incorporated herein by reference. The Plan and this Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to Purchaser’s interest except by
means of a writing signed by the Company and Purchaser. This Agreement is
governed by the laws of the state of Delaware.

(e) The provisions of this Agreement are severable and if any one or more
provisions are determined to be illegal or otherwise unenforceable, in whole or
in part, the remaining provisions shall nevertheless be binding and enforceable.

[Signature page follows]

 

Accepted by Purchaser:     A.P. PHARMA, INC.       By            

RETAIN THIS AGREEMENT FOR YOUR RECORDS

 

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EXHIBIT A

JOINT ESCROW INSTRUCTIONS

[                             ,             ]

[                                    ]

A.P. Pharma, Inc.

123 Saginaw Drive

Redwood City, CA 94063

Dear Sir or Madam:

As Escrow Agent for A.P. Pharma, Inc. (the “Company”), and
[                    ] (the “Purchaser”), you are authorized and directed to
hold the Assignment Separate from Certificate form(s) executed by Purchaser and
the certificate(s) of stock representing Purchaser’s unvested shares transferred
in accordance with the terms of the Restricted Stock Purchase Agreement (the
“Agreement”) entered into between the Company and Purchaser, in accordance with
the following instructions:

1. In the event of the exercise of the Repurchase Option by the Company
described in Section 3 of the Agreement, Purchaser and the Company hereby
irrevocably authorize and direct you to effect the contemplated Repurchase
Option, and to promptly deliver the stock certificates.

2. Promptly following the exercise of the Repurchase Option by the Company
described in Section 3 of the Agreement, you are directed (a) to date the
Assignment Separate from Certificate form(s) necessary for the transfer in
question, (b) to fill in the number of shares being transferred, and (c) to
deliver the form(s), together with the certificate or certificates evidencing
the shares to be transferred, to the Company.

3. Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares to be held by you under this letter and any
additions and substitutions to the shares as defined in the Agreement. Purchaser
irrevocably appoints you as his or her attorney-in-fact and agent for the term
of this escrow to execute, with respect to the shares of stock, all documents
necessary or appropriate to make such securities negotiable and to complete any
transaction contemplated by these Joint Escrow Instructions. Subject to the
provisions of this Section 3, Purchaser shall exercise all rights and
privileges, including but not limited to, the right to vote and to receive
dividends (if any), of a stockholder of the Company while the shares are held by
you.

4. In accordance with the terms of Section 4(b) of the Agreement, you may
deliver to Purchaser a certificate or certificates representing shares that are
no longer subject to the Company’s repurchase option described in Section 3 of
the Agreement.

5. This escrow shall terminate upon the release of all shares held under the
terms and provisions hereof.

6. If at the time of termination of this escrow you should have in your
possession any documents, securities or other property belonging to Purchaser,
you shall deliver them to Purchaser and shall be discharged from all further
obligations under these Joint Escrow Instructions.

7. Your duties under these Joint Escrow Instructions may be altered, amended,
modified or revoked only by a writing signed by all of the parties.

 

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8. You shall be obligated to perform the duties described in these Joint Escrow
Instructions and shall be protected in relying or refraining from acting on any
instrument reasonably believed by you to be genuine and to have been signed or
presented by the proper party or parties. You shall not be personally liable for
any act or omission as Escrow Agent or as attorney-in-fact of Purchaser while
acting in good faith and in the exercise of your own good judgment, and any act
or omission by you pursuant to the advice of your own attorneys shall be
conclusive evidence of such good faith.

9. You are expressly authorized to disregard any and all warnings given by any
of the parties hereto or by any other person or corporation, excepting only
orders or process of courts of law, and are expressly authorized to comply with
and obey orders, judgments or decrees of any court. In case you obey or comply
with any such order, judgment or decree of any court, you shall not be liable to
any of the parties under these Joint Escrow Instructions or to any other person,
firm or corporation by reason of such compliance, notwithstanding any such
order, judgment or decree being subsequently reversed, modified, annulled, set
aside, vacated or found to have been entered without jurisdiction.

10. You shall not be liable in any respect on account of the identity, authority
or rights of the parties executing or delivering or purporting to execute or
deliver the Agreement or any documents or papers deposited or called for under
these Joint Escrow Instructions.

11. You shall not be liable for the outlawing of any rights under any statute of
limitations with respect to these Joint Escrow Instructions or any documents
deposited with you.

12. You shall be entitled to employ such legal counsel and other experts as you
may deem necessary properly to advise you in connection with your obligations
under these Joint Escrow Instructions and may rely upon the advice of such
counsel.

13. Your responsibilities as Escrow Agent under these Joint Escrow Instructions
shall terminate if you shall cease to be employed by the Company or if you shall
resign by written notice to each party. In the event of any such termination,
the Company shall appoint any officer of the Company as successor Escrow Agent.

14. If you reasonably require other or further instruments in connection with
these Joint Escrow Instructions or obligations under these Joint Escrow
Instructions, the parties shall furnish such instruments.

15. It is understood and agreed that should any dispute arise with respect to
the delivery and/or ownership or right of possession of the securities held by
you under these Joint Escrow Instructions, you are authorized and directed to
retain in your possession without liability to anyone all or any part of the
securities until the dispute is settled either by mutual written agreement of
the parties or by a final order, decree or judgment of a court of competent
jurisdiction after the time for appeal has expired and no appeal has been
perfected. You are under no duty whatsoever to institute or defend against any
such proceedings.

16. Any notice required or permitted under these Joint Escrow Instructions shall
be given in writing and will be deemed effectively given upon personal delivery
or upon deposit in the United States Post Office, by registered or certified
mail with postage and fees prepaid, addressed to each of the other parties.

17. By signing these Joint Escrow Instructions, you become a party only for the
purpose of these Joint Escrow Instructions; you do not become a party to the
Agreement.

18. This instrument shall be governed by and construed in accordance with the
laws of the State of Delaware.

 

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19. This instrument shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.

 

Very truly yours, A.P. Pharma, Inc. By     Its    

 

ESCROW AGENT:                  

 

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EXHIBIT B

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED, [            ] sells, assigns and transfers to A.P. Pharma,
Inc. (the “Company”) or its assignee                      shares of the Common
Stock of the Company (the “Shares”), standing in his or her name on the books of
the Company represented by Certificate No.              and irrevocably
constitutes and appoints [            ] as Attorney to transfer the Shares on
the books of the Company with full power of substitution in the premises.

Dated:                         ,             .

 

[NAME]    (Signature)

Spousal Consent (if applicable)

                                 (Purchaser’s spouse) indicates by the execution
of this Assignment his or her consent to be bound by the terms herein as to his
or her interests, whether as community property or otherwise, if any, in the
Shares.

 

Printed Name    Signature

INSTRUCTIONS: PLEASE DO NOT FILL IN ANY BLANKS OTHER THAN THE SIGNATURE LINE.
THE PURPOSE OF THIS ASSIGNMENT IS TO ENABLE THE COMPANY TO ENFORCE THE
REPURCHASE OPTION SET FORTH IN THE RESTRICTED STOCK PURCHASE AGREEMENT WITHOUT
REQUIRING ADDITIONAL SIGNATURE.

 

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