appas80108ex44.htm


    
      

    


    A.P.
      PHARMA, INC.

     

    2007
      EQUITY INCENTIVE PLAN

     

    RESTRICTED
      STOCK UNIT GRANT NOTICE

     

    A.P.
      Pharma, Inc. (the “Company”), pursuant to its 2007 Equity Incentive Plan (the
“Plan”), hereby grants to the participant under the Plan (the “Participant”)
      restricted stock units covering the number of shares of the Company’s common
      stock (the “Common Stock”) set forth below (the “Stock Units”).  Each
      Stock Unit represents one share of Common Stock.  The Stock Units are
      subject to all of the terms and conditions as set forth in this Restricted
      Stock
      Unit Grant Notice (the “Grant Notice”), the Restricted Stock Unit Agreement, and
      the Plan, all of which are attached hereto and incorporated herein in their
      entirety.

     

    
      	
              Participant:

            	 
	
              Date
                of Grant:

            	 
	
              Vesting
                Commencement Date:

            	 
	
              Number
                of Shares Subject to Stock Units:

            	 
	
              Vesting
                Schedule:

            	
              Subject
                to Participant’s not experiencing a Termination of Continuous Service,
                [twenty five percent (25%) of the Stock Units per year on
                the
                anniversary of the Vesting Commencement
                Date.]

            


    

     

    Additional
      Terms/Acknowledgements: The undersigned Participant acknowledges receipt of,
      and understands and agrees to the terms and conditions of this Grant Notice,
      the
      Restricted Stock Unit Agreement, and the Plan.  Participant further
      acknowledges that as of the Date of Grant, this Grant Notice, the Restricted
      Stock Unit Agreement and the Plan set forth the entire understanding between
      Participant and the Company regarding the acquisition of restricted stock units
      and the stock in the Company covered by the restricted stock units and supersede
      all prior oral and written agreements relating thereto, with the exception
      of
      other awards previously granted and delivered to Participant under the
      Plan.

     

    A.P.
      Pharma,
      Inc.                                                                           Participant:

     

    By:
      _____________________________                                                                                     By:
      _____________________________

     

    Signature                                                                                                   Signature

     

    Title:                                                                                                     Date:

     

    _________________________________                                                                                     _________________________________

     

    Date:

     

    ____________________________________

     

    


     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    A.P.
      PHARMA, INC.

     

    2007
      EQUITY INCENTIVE PLAN

     

    RESTRICTED
      STOCK UNIT AGREEMENT

     

    THIS
      RESTRICTED STOCK UNIT AGREEMENT (the “Agreement”), dated ____________, 200_, is
      entered into by and between _______________ (“Participant”) and A.P. Pharma,
      Inc., a Delaware corporation (the “Company”).

     

    RECITALS

     

    WHEREAS,
      the Company has adopted the A.P. Pharma, Inc. 2007 Equity Incentive Plan (the
      “Plan”), which provides for awards of restricted stock units to the Company’s
      Employees, Consultants and Directors; and

     

    WHEREAS,
      Participant is currently serving as an Employee or Director of, or a Consultant
      to, the Company; and

     

    WHEREAS,
      in order to provide Participant incentive to continue in the employ of the
      Company and his or her commitment to the success of the Company, the
      Compensation Committee of the Board of Directors of the Company (the
“Committee”) has determined that Participant shall be granted restricted stock
      units (“Stock Units”) representing hypothetical shares of the Company’s common
      stock, par value $0.0001 per share (the “Common Stock”), with each Stock Unit
      equal in value to one share of the Company’s Common Stock, subject to the terms
      and restrictions set forth in the Restricted Stock Unit Grant Notice (the “Grant
      Notice”) and this Agreement and in accordance with the terms and conditions of
      the Plan.

     

    NOW
      THEREFORE, in consideration of the foregoing, and the mutual covenants and
      agreements set forth herein, the parties hereto agree as follows:

     

        1.  Definitions.

     

    Capitalized
      terms not explicitly defined in this Agreement or the Grant Notice but defined
      in the Plan shall have the same meanings ascribed to them in the
      Plan.

     

      
      2.  Grant
      of Stock
      Units.

     

    The
      Company hereby grants to Participant, pursuant to the terms of the Grant Notice
      and this Agreement (collectively, the “Award Agreement”) Stock Units covering
      the number of shares of Common Stock indicated in the Grant Notice (the
“Shares”).

     

    
      	
              3.  

            	
              Agreement
                to Accept
                Stock Units.

            


    

     

    Participant
      hereby agrees to accept from the Company, and the Company hereby agrees to
      issue
      to Participant, the Stock Units.

     

    
      	
              4.  

            	
              Vesting.

            


    

     

    Subject
      to the limitations contained herein, the Stock Units issued to Participant
      shall
      vest as provided in the Grant Notice, provided, however, that vesting shall
      cease upon the Participant’s Termination of Continuous Service.

     

    
      	
              5.  

            	
              Benefit
                Upon Vesting.

            


    

     

    Upon
      the vesting of the Stock Units,
      Participant shall be entitled to receive, as soon as administratively
      practicable, a number of Shares equal to:

    


    (a)           the
      number of Stock Units that have vested multiplied by the fair market value
      (as
      defined in the Plan) of a share of Common Stock on the date on which such Stock
      Units vest, and

    


    (b)           a
      dividend equivalent payment determined by

    


    (1)           multiplying
      the number of vested Stock Units by the dividend per share of Common Stock
      on
      each dividend payment date between the date hereof and the vesting date to
      determine the dividend equivalent amount for each dividend payment
      date;

    


    (2)           dividing
      the amount determined in (1) above by the fair market value of a share of
      Common Stock on the date of such dividend payment to determine the number of
      additional Stock Units to be credited to the Participant; and

    


    (3)           multiplying
      the number of additional Stock Units determined in (2) above by the fair
      market value of a share of Common Stock on the vesting date to determine the
      aggregate amount of dividend equivalent payments for such vested Stock
      Units;

    


    provided,
      however, that if any aggregated dividend equivalent payments in
      paragraph (b)(3) above or otherwise results in a payment of a fractional
      Share, such fractional share shall be rounded down to the nearest whole
      Share.

    


    
      	
              6.  

            	
              Securities
                Law Compliance.

            


    

     

    Notwithstanding
      anything to the contrary contained herein, the Company shall not deliver, and
      shall have no liability for failing to deliver, any Shares under the Award
      Agreement unless the Shares are then registered under the Securities Act or,
      if
      such Shares are not then so registered, the Company has determined that such
      issuance and transfer would be exempt from the registration requirements of
      the
      Securities Act.  The issuance and transfer of the Shares also must
      comply with other applicable laws and regulations governing such Stock Units
      and
      Shares, and the Company shall not issue, and shall have no liability for failing
      to issue, the Shares if the Company determines that such issuance and transfer
      would not be in material compliance with such laws and regulations.

     

    
      	
              7.  

            	
              Forfeiture.

            


    

     

    In
      the
      event of the Termination of Continuous Service of the Participant, at any time
      for any reason (including as a result of the Participant’s death or disability)
      prior to the vesting of the Stock Units, except as otherwise provided for in
      the
      Award Agreement, all Stock Units granted hereunder that have not vested by
      such
      termination date and that are held by the Participant as of such date shall
      be
      forfeited by, and no further rights shall accrue to, the
      Participant.  In addition, in the event of Participant’s Termination
      of Continuous Service for Cause (as defined in the Plan), any Stock Units
      (including any vested portion thereof) held by Participant shall immediately
      be
      forfeited in their entirety upon first notification to Participant of such
      Termination for Cause.  If Participant’s Continuous Service with the
      Company is suspended pending an investigation of whether Participant shall
      be
      terminated for Cause, all of Participant’s rights under the Award Agreement
      likewise shall be suspended during the investigation period.  This
      Section 7 shall apply with equal effect to vested Shares issued upon vesting
      of
      the Stock Units in that the Company shall have the right to recover from
      Participant any such Shares, and/or to recover any profits Participant might
      have received upon Participant’s sale or other transfer of such Shares, provided
      the Company commences action to recover such Shares or profits within six months
      following the date of Participant’s Termination of Continuous Service for
      Cause.

     

    
      	
              8.  

            	
              Corporate
                Transactions.

            


    

     

    In
      the
      event of a Change in Control pursuant to Section 14(c) of the Plan, the Company
      may provide for the assumption or substitution of, or adjustment to, the Stock
      Units; accelerate the vesting of Stock Units and terminate any restrictions
      on
      the Stock Units and/or provide for termination of the Stock Units.  To
      the extent the Stock Units remain in effect following such Change in Control,
      such Stock Units shall apply to the new capital stock or other property received
      in exchange for the Common Stock in consummation of the corporate
      transaction.

     

    
      	
              9.  

            	
              Rights
                as
                Shareholder.

            


    

     

    Stock
      Units represent hypothetical shares of Common Stock.  Until the Stock
      Units become vested, the Participant shall not be entitled to any of the rights
      or benefits generally accorded to shareholders.

     

    
      	
              10.  

            	
              Limitations
                on
                Transfer.

            


    

     

    Except
      as
      otherwise provided for in the Award Agreement, the Stock Units or rights granted
      hereunder may not be sold, pledged or otherwise transferred until the Stock
      Units become vested in accordance with Section 4 and the Shares are issued
      under Section 5.

     

    
      	
              11.  

            	
              Award
                not a Service
                Contract.

            


    

     

    The
      Award
      Agreement is not an employment or service contract, and nothing in the Award
      Agreement shall be deemed to create in any way whatsoever any obligation on
      the
      Company or an Affiliate to continue Participant’s employment or
      service.  In addition, nothing in the Award Agreement shall obligate
      the Company or an Affiliate, their respective shareholders, Boards of Directors,
      officers or Employees to continue any relationship that Participant may have
      as
      an Employee or Director of, or a Consultant to, the Company or an
      Affiliate.

     

    
      	
              12.  

            	
              Tax
                and Withholding
                Obligations.

            


    

     

    12.1  Participant
      understands and agrees that Participant is solely responsible for any and all
      federal, state, local and foreign tax withholding obligations in connection
      with
      the Stock Units.  Participant further agrees to make adequate
      provision for any sums required to satisfy the federal, state, local and foreign
      tax withholding obligations of the Company or an Affiliate, if any, which arise
      in connection with the grant or vesting of the Stock Units, or the issuance
      of
      Shares subject to the Stock Units or the subsequent sale of Common Stock
      acquired pursuant to such Stock Units, or due upon receipt of dividend
      equivalent payments.

     

    12.2  If
      Participant does not deliver to the Company’s [Stock Plan
      Administrator] at least five (5) days prior to any date on which Stock
      Units vest (each, a “Vesting Date”) a written notice of Participant’s election
      to satisfy by cash, check or other manner agreeable to the Company, all federal,
      state, local or foreign tax withholding obligations related to such Shares,
      Participant and the Company agree that the Company shall retain that number
      of
      the Shares, based on the fair market value of the Company’s common stock on such
      Vesting Date, with an aggregate value equal to the amount of all federal, state,
      local or foreign tax withholding obligations that Participant, the Company,
      or
      an Affiliate would incur as a result of the vesting relating to such
      Shares.

     

    12.3  Unless
      and until the tax withholding obligations of the Company or any Affiliate are
      satisfied, the Company shall have no obligation to issue a certificate for,
      or
      permit the transfer, alienation, etc. of, any of the Shares.

     

    
      	
              13.  

            	
              Representations.

            


    

     

    Participant has
      reviewed with his or her own tax advisors the federal, state, local and
      foreign tax consequences relating to the Stock Units and the transactions
      contemplated by the Award Agreement.  Participant is relying solely on
      such advisors and not on any statements or representations of the Company or
      any
      of its agents.  Participant understands that he or she (and not the
      Company) shall be responsible for any tax liability that may arise as a result
      of the Stock Units or the transactions contemplated by the Award
      Agreement.

     

    
      	
              14.  

            	
              Data
                Privacy
                Consent.

            


    

     

    Optionee
      explicitly and unambiguously consents to the collection, use and transfer,
      in
      electronic or other form, of Optionee's personal data as described in this
      document by and among, as applicable, the Employer, and the Company and its
      Subsidiaries and Affiliates for the exclusive purpose of implementing,
      administering and managing Optionee's participation in the
      Plan.  Optionee understands that the Company, its Affiliates, its
      Subsidiaries and the Employer hold certain personal information about Optionee,
      including, but not limited to, name, home address and telephone number, date
      of
      birth, social security number (or other identification number), salary,
      nationality, job title, any shares of stock or directorships held in the
      Company, details of all options or any other entitlement to shares of stock
      awarded, canceled, purchased, exercised, vested, unvested or outstanding in
      Optionee's favor for the purpose of implementing, managing and administering
      the
      Plan ("Data").  Optionee understands that the Data may be transferred
      to any third parties assisting in the implementation, administration and
      management of the Plan, that these recipients may be located in Optionee's
      country or elsewhere and that the recipient country may have different data
      privacy laws and protections than Optionee's country.  Optionee may
      request a list with the names and addresses of any potential recipients of
      the
      Data by contacting the Company’s [Stock Plan
      Administrator].  Optionee authorizes the recipients to
      receive, possess, use, retain and transfer the Data, in electronic or other
      form, for the purposes of implementing, administering and managing Optionee's
      participation in the Plan, including any requisite transfer of such Data, as
      may
      be required to a broker or other third party with whom Optionee may elect to
      deposit any Shares acquired upon the exercise of this
      Option.  Optionee understands that Data will be held only as long as
      is necessary to implement, administer and manage participation in the
      Plan.  Optionee may, at any time, view Data, request additional
      information about the storage and processing of the Data, require any necessary
      amendments to the Data or refuse or withdraw the consents herein, in any case
      without cost, by contacting the Company’s [Stock Plan
      Administrator] in writing. Optionee understands that refusing or
      withdrawing consent may affect Optionee's ability to participate in the
      Plan.  For more information on the consequences of refusing to consent
      or withdrawing consent, Optionee may contact the Company’s [Stock Plan
      Administrator] at the Company.

    


    
      	
              15.  

            	
              Acknowledgment.

            


    

     

    Participant
      acknowledges and agrees that 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), Participant’s right to receive
      benefits under the Award Agreement, if any, will terminate effective as of
      the
      date that Participant no longer has a service relationship with the Company
      and
      will not be extended by any notice period mandated under local law (e.g., active
      employment 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), Participant’s
      right to receive benefits under the Award Agreement after Termination of
      Continuous Service, if any, will be measured by the date of termination of
      Participant’s service relationship and will not be extended by any notice period
      mandated under local law.

     

    
      	
              16.  

            	
              Notices.

            


    

     

    Any
      notices provided for in the Award Agreement or the Plan 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 Participant, five (5) days after
      deposit in the United States mail, postage prepaid, addressed to Participant
      at
      the last address provided by Participant to the Company.

     

    
      	
              17.  

            	
              Survival
                of
                Terms.

            


    

     

    The
      Award
      Agreement shall apply to and bind Participant and the Company and their
      respective permitted assignees and transferees, heirs, legatees, executors,
      administrators and legal successors.

     

    
      	
              18.  

            	
              Failure
                to Enforce not a
                Waiver.

            


    

     

    The
      failure of the Company to enforce at any time any provision of the Award
      Agreement shall in no way be construed to be a waiver of such provision or
      of
      any other provision hereof.

     

    
      	
              19.  

            	
              Amendments.

            


    

     

    The
      Award
      Agreement may be amended or modified at any time only by an instrument in
      writing signed by each of the parties hereto, provided that the Administrator
      may amend an outstanding Stock Award in order to conform it to the
      Administrator’s intent (in its sole discretion) that such Stock Award not be
      subject to Code Section 409A(a)(1)(B).

     

    
      	
              20.  

            	
              Authority
                of the
                Committee.

            


    

     

    The
      Committee shall have full authority to interpret and construe the terms of
      the
      Award Agreement.  The determination of the Committee as to any such
      matter of interpretation or construction shall be final, binding and
      conclusive.

     

    
      	
              21.  

            	
              Miscellaneous.

            


    

     

    21.1  The
      rights and obligations of the Company under the Award Agreement shall be
      transferable to any one or more persons or entities, and all covenants and
      agreements hereunder shall inure to the benefit of, and be enforceable by the
      Company’s successors and assigns.

     

    21.2  Participant
      agrees upon request to execute any further documents or instruments necessary
      or
      desirable in the sole determination of the Company to carry out the purposes
      or
      intent of the Award Agreement.

     

    21.3  Participant
      acknowledges and agrees that he or she has reviewed the Award Agreement in
      its
      entirety, has had an opportunity to obtain the advice of counsel prior to
      executing and accepting the Award Agreement and fully understands all provisions
      of the Award Agreement.

     

    21.4  If
      Participant has received this or any other document related to the Plan
      translated into a language other than English and if the translated version
      is
      different than the English version, the English version will
      control.

     

    21.5  The
      Award
      Agreement may be signed in counterparts, each of which shall be deemed an
      original, and all of which together shall constitute one and the same
      instrument.

     

    21.6  The
      Award
      Agreement is governed by the laws of the state of Delaware.

     

    
      	
              22.  

            	
              Governing
                Plan
                Document.

            


    

     

    The
      Stock
      Units are subject to all the provisions of the Plan, the provisions of which
      are
      hereby made a part of the Award Agreement, and is further subject to all
      interpretations, amendments, rules and regulations which may from time to time
      be promulgated and adopted pursuant to the Plan.  In the event of any
      conflict between the provisions of the Award Agreement and those of the Plan,
      the provisions of the Plan shall control.  Participant represents
      that he or she has read this Agreement, the Grant Notice and the Plan, and
      is familiar with their terms and provisions.  Participant hereby agrees to
      accept as binding, conclusive and final all decisions or interpretations of
      the
      Committee upon any questions arising under the Award Agreement.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
      first above written.

     

    A.P.
      Pharma,
      Inc.                                                                           Participant:

     

    By:
      _____________________________                                                                                     By:
      _____________________________

     

          Signature                                                                                  Signature

     

    Name:
      __________________________

     

    Title:
      ___________________________

     

    


     

    I,
      __________________, spouse of __________________ (the “Participant’), have read
      and hereby approve the foregoing Agreement.  In consideration of the
      Company’s granting my spouse restricted stock units covering the number of
      Shares of the Company’s common stock as set forth in the Agreement, I hereby
      agree to be irrevocably bound by the Agreement and further agree that any
      community property or other such interest shall hereby be similarly bound by
      the
      Agreement.  I hereby appoint my spouse as my attorney-in-fact with
      respect to any amendment or exercise of any rights under the
      Agreement.

     

    ________________________________

     

    Spouse
      of Participant

     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    [SIGNATURE
      PAGE TO RESTRICTED STOCK UNIT AGREEMENT]

     

    


     

    


     


    
      
              

                  
      
      

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