EX-10.AE



 Exhibit 10-AE 
  





 
 November 10, 2012 
 Mark Gelder,
M.D. 
 Dear Mark: 
 It is with great pleasure that we
extend an offer of employment with A.P. Pharma, Inc. for the position of Chief Medical Officer of A.P. Pharma, Inc., reporting to the company’s Chief Executive Officer. If you accept, it is expected that your first day of employment will be no
later than November 26, 2012. Your employment will be “at-will,” meaning that either you or the Company can terminate the employment relationship at any time, with or without cause. 
 You will receive an annual salary of $350,000.00, payable on a bi-weekly basis in accordance with the Company’s normal payroll practices. In addition, following your first day of employment you will receive a
$40,000.00 hiring bonus. Subject to your commencement of employment, you will be granted an option to purchase up to 4,000,000 shares of A.P. Pharma Common Stock, with an exercise price equal to the fair value of our common stock on the date of
grant. The option will vest over four years, with 25% cliff vesting at the end of the first year, and then the remaining 75% vesting monthly over the final three years. You will participate in the company’s annual management cash bonus program,
and will be eligible to receive an annual bonus in a target amount equal to 30% of your annual salary. You will be eligible to participate in all of the company’s employee benefit plans and programs and a summary of 2012 benefits accompanies
this letter. 
 If you elect to leave A.P. Pharma prior to your one-year anniversary, you agree to repay your hiring bonus to the Company on your
termination. 
 A Management Retention Agreement also accompanies this letter. This agreement contains certain standard terms and conditions of your
employment and severance benefits in certain circumstances. 
 You will accrue 4.62 hours of vacation per pay period equivalent to 3 weeks every 12 months
of employment. In addition, the company typically provides employees with 2 personal days, 9 fixed holidays and 8 days of sick time per year. 
 Enclosed
are copies of our At Will Statement, Confidential Disclosure Agreement, Conflicts of Interest Agreement, and a list of acceptable documents needed to complete an Employment Verification Form I-9 (which will be completed on your first day of
employment). All of these forms need to be completed prior to initiating active employment. 
 123 Saginaw Drive  Ÿ  
Redwood City, CA 94063  Ÿ  Phone: 650.366.2626  Ÿ  Fax: 650.365.6490  Ÿ  www.appharma.com 







 This offer letter, along with the accompanying Management Retention Agreement, constitute our entire agreement and
supersede our prior agreements, negotiations and understandings. This agreement may only be amended in writing by mutual consent. This employment agreement will be governed by California laws, without regard to conflict-of-law principles.

 This offer will expire as of 5 p.m. (Pacific Time) on Friday, November 16, 2012. If you decide to accept this offer, please scan and e-mail the signed
offer letter to my attention at jwhelan@appharma.com. 
 We look forward to having you join A.P. Pharma. If you have any questions regarding any of
the information above, please feel free to contact me. 
 Sincerely, 
 /s/ John Whelan 
 John Whelan 
 Chief Executive Officer 
 jwhelan@appharm.com 
 650.366.2626 x223 
  

    The provisions of this offer of employment have been read, are understood, and the offer is herewith
accepted. 
  

					
	/s/ Mark Gelder, M.D.	  		  	 
	Mark Gelder, M.D.	  		  	Date

 
 123 Saginaw Drive  Ÿ  Redwood City, CA 94063  Ÿ  
Phone: 650.366.2626  Ÿ  Fax: 650.365.6490  Ÿ  www.appharma.com