Document:

EX-10.AL

 Exhibit 10AL 
 A.P. PHARMA, INC. 
 NON-QUALIFIED STOCK
OPTION AGREEMENT 
 TERMS AND CONDITIONS 
 This document (the “Agreement”) sets forth the terms and conditions governing the non-qualified stock option grant (the “NQO”) described in the attached
Notice of Grant of Stock Options and Option Agreement (the “Grant Notice”). Acceptance of the NQO shall constitute the Optionee’s acceptance of the following terms and conditions. For purposes of this Agreement, the
following defined terms shall have the respective meanings: the “Company” means A.P. Pharma, Inc.; “Optionee” means the individual named in the Grant Notice as the recipient of the NQO; and
“Grant Date” means the effective date of the grant of the NQO, as set forth on the Grant Notice. 

1. Grant of Option. The Company hereby grants to Optionee the NQO to purchase all or any part of an aggregate of
the number of shares (the “NQO Shares”) of the Company’s Common Stock as set forth in the Grant Notice on the terms and conditions set forth herein. The NQO is granted outside of the Company’s 2007 Equity Incentive
Plan (the “Plan”), but is governed in all respects as if granted under the Plan, the terms and conditions of which are hereby incorporated into this Agreement by reference. Capitalized terms not otherwise defined in this
Agreement shall have the meanings ascribed to them in the Plan. 
 2. Exercise Price. The exercise price
for purchase of each share of Common Stock covered by this NQO shall be the price set forth in the Grant Notice. 

3. Term. This NQO shall expire on the expiration date set forth in the Grant Notice, or earlier following the
Optionee’s termination of service, as set forth in the Plan. 
 4. Adjustment of NQOs. The Company
shall adjust the number and kind of shares and the exercise price thereof in certain circumstances in accordance with the Plan including, without limitation, the provisions of Section 14(a) of the Plan. 

5. Exercise of Options. 
 5.1 Vesting; Time of Exercise. This NQO shall be exercisable according to the schedule set forth in the Grant Notice.

5.2 Exercise After Termination of Status as an Employee, Director or Consultant. In the event of termination of
Optionee’s continuous status as an employee, director or consultant, this NQO may be exercised within the applicable time periods set forth in Section 9 of the Plan (but in no event after the expiration date of this NQO pursuant to
Section 3 above). 
 5.3 Manner of Exercise. Optionee may exercise this NQO, or any portion of this
NQO, by giving written notice to the Company at its principal executive office, to the attention of the officer of the Company designated by the Plan Administrator, accompanied by payment of the exercise price and payment of any applicable
withholding or employment taxes. The date the Company receives written notice of an exercise hereunder accompanied by payment will be considered as the date this NQO was exercised. 

5.4 Payment. Payment may be made for NQO Shares purchased at the time written notice of exercise of the NQO is
given to the Company, by delivery of cash, check or, in the exercise of the absolute discretion of the Administrator, previously owned shares of Common Stock (including constructive delivery) or through a “net exercise” resulting in the
forfeiture of a number of NQO Shares with a value equal to the exercise price. Any applicable withholding taxes must be paid in cash. The proceeds of any payment shall constitute general funds of the Company. 

 5.5 Delivery of Certificate. Promptly after receipt of payment and
written notice of exercise of the NQO, the Company shall, without stock issue or transfer taxes to the Optionee or other person entitled to exercise, deliver to the Optionee or other person a certificate or certificates for the requisite number of
NQO Shares or shall register the Optionee as a shareholder on the books of the Company. An Optionee or transferee of an Optionee shall not have any privileges as a shareholder with respect to any NQO Shares covered by the option until the date
of issuance of a stock certificate or, if applicable, such registration. 
 6. Non-assignability of
NQO. This NQO is not assignable or transferable by Optionee except by will or by the laws of descent and distribution. During the life of Optionee, the NQO is exercisable only by the Optionee. Any attempt to assign, pledge,
transfer, hypothecate or otherwise dispose of this NQO in a manner not herein permitted, and any levy of execution, attachment, or similar process on this NQO, shall be null and void. 

7. Restriction on Transfer. Regardless whether the sale of the NQO Shares has been registered under the
Securities Act or has been registered or qualified under the securities laws of any state, the Company may impose restrictions upon the sale, pledge, or other transfer of NQO Shares (including the placement of appropriate legends on stock
certificates) if, in the judgment of the Company and the Company’s counsel, such restrictions are necessary or desirable in order to achieve compliance with the provisions of the Securities Act, the securities laws of any state, or any other
law, or if the Company does not desire to have a trading market develop for its securities. 
 8. Tax
Advice. The Company has made no warranties or representations to Purchaser with respect to the income tax consequences of the transactions contemplated by the agreement pursuant to which the NQO Shares will be purchased and Purchaser is
in no manner relying on the Company or its representatives for an assessment of such tax consequences. 

9. Assignment; Binding Effect. Subject to the limitations set forth in this Agreement, this Agreement shall be
binding upon and inure to the benefit of the executors, administrators, heirs, legal representatives, and successors of the parties hereto; provided, however, that Optionee may not assign any of Optionee’s rights under this Agreement.

 10. Damages. Optionee shall be liable to the Company for all costs and damages, including incidental
and consequential damages, resulting from a disposition of NQO Shares which is not in conformity with the provisions of this Agreement. 
 11. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California excluding those laws that direct the application of
the laws of another jurisdiction. 
 12. Notices. All notices and other communications under this
Agreement shall be in writing. Unless and until the Optionee is notified in writing to the contrary, all notices, communications, and documents directed to the Company and related to the Agreement, if not delivered by hand, shall be mailed,
addressed as follows: 
 A.P. Pharma, Inc.
 123 Saginaw Drive
 Redwood City, CA 94063

Attention: President 

Unless and until the Company is notified in writing to the contrary, all notices, communications, and documents intended for the Optionee and related to
this Agreement, if not delivered by hand, shall be mailed to Optionee’s last known address as shown on the Company’s books. Notices and communications shall be mailed by first class mail, postage prepaid; documents shall be mailed by
registered mail, return receipt requested, postage prepaid. All mailings and deliveries related to this Agreement shall be deemed received when actually received, if by hand delivery, and two business days after mailing, if by mail. 

  
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 13. Arbitration. Any and all disputes or controversies relating to
the Option shall be finally settled by arbitration conducted in California in accordance with the then existing rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof; provided that nothing in this Section 13 shall prevent a party from applying to a court of competent jurisdiction to obtain temporary relief pending resolution of the dispute through arbitration. The parties hereby
agree that service of any notices in the course of such arbitration at their respective addresses as provided for in Section 12 shall be valid and sufficient. 
 14. Entire Agreement. Company and Optionee agree that this Agreement (including its attached Exhibits and the Grant Notice) is the complete and exclusive statement between Company
and Optionee regarding its subject matter and supersedes all prior proposals, communications, and agreements of the parties, whether oral or written, regarding the grant of stock options or issuances of shares to Optionee. 

*        *        * 

  
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 Exhibit 10AM 
 

 
 123 Saginaw Drive | Redwood City, CA 94063 
 June 24, 2013 
 John Whelan 
 c/o AP Pharma, Inc. 
 123 Saginaw Dr.
 Redwood City, CA 94063 
  

	 	Re:	Amendment to Management Retention Agreement, dated as of April 25, 2011, as amended May 29, 2013 (as amended, the “Retention Agreement”)

 Dear John: 
 This letter agreement (the “Agreement”) memorializes the terms of your separation with A.P. Pharma, Inc. (the “Company”) and amends certain terms and conditions of the
Retention Agreement. Capitalized terms that are not otherwise defined in this Agreement will have the meanings ascribed to them in the Retention Agreement. 
 On May 1, 2013, the Board of Directors removed you as President and Chief Executive Officer of the Company (the “Removal Action”). The Company hereby acknowledges and agrees that the
Removal Action was taken without Cause, and stipulates that, as of the date hereof, no facts or circumstances exist that would permit the Company to characterize the Removal Action as having been for Cause. Notwithstanding the Removal Action, the
Company wishes to retain your services as an employee and as our Chief Financial Officer through August 15, 2013, or such earlier date as may be selected by the Company. In consideration of the foregoing, the parties hereby agree as follows:

 1. Your execution of this Agreement will constitute formal notice under Section 3(c) of the Retention Agreement that the
Removal Action may give rise to an Involuntary Termination. The Company acknowledges and agrees that if the Removal Action is not rescinded within 30 days from the date hereof, then, notwithstanding the time periods set forth in Section 3(c) of
the Retention Agreement, you will have until midnight (Pacific Time) on August 15, 2013 to resign as an officer and employee of the Company, with such resignation to be deemed to constitute an Involuntary Termination. Upon such Involuntary
Termination (or your earlier termination by the Company or due to your death or disability), you will be entitled to the cash severance payments set forth on Annex I attached hereto, which payments will be in full satisfaction of the amounts
owed under Section 2(a) of the Retention Agreement. 
 2. The following sentence shall be inserted at the end of the
definition of “Cause” in Section 3(a) of the Retention Agreement, “Notwithstanding the foregoing, in no event shall “Cause” be deemed to exist unless the basis for asserting the existence of “Cause” has been
communicated in writing to Employee at least 60 days prior to a termination for Cause being effected, it being understood that if Employee resigns his employment prior to the expiration of such 60-day period, then the termination shall not be deemed
for “Cause.” 
 3. Set forth on Annex II attached hereto is a schedule of your outstanding equity awards granted by the
Company (the “Outstanding Awards”). As contemplated under Section 2(a) of the Retention Agreement, the vesting of the Outstanding Awards will be partially accelerated as of the effective date of an Involuntary Termination (or
your earlier termination by the Company or due to your death or disability). Set forth on Annex II is the following information: (a) the vested portion of the Outstanding Awards as of the date of this Agreement (the “Effective
Date”), (b) the monthly vesting schedule during your continued employment, and (c) the accelerated vesting of the Outstanding Awards to be provided to you under Section 2(a) of the Retention Agreement on an Involuntary
Termination (or your earlier termination by the Company or due to your death or disability). 
 4. Provided that you remain
employed by the Company through the earlier of 5:00 p.m. (Pacific Time) on August 15, 2013 or such time as when the Company may terminate your employment, then: (a) the period in which you will be permitted to exercise the vested portion
of the Outstanding Awards following your termination 

 
of service will be extended, as set forth on Annex III, and (b) the Company may, on a case-by-case basis, permit the “cashless” exercise of the vested portion of the Outstanding
Awards (i.e., satisfying the required exercise price by surrendering a portion of the Outstanding Awards with an intrinsic value equal to the exercise price), provided, however, that unless the required tax withholding will be funded within the
required time period by a broker-assisted sale, you will be required to remit in cash to the Company an amount equal to the required withholding taxes due upon exercise of the Outstanding Options (such amount to be determined by the Company in good
faith at the time of each exercise). If you wish to exercise any portion of the Outstanding Awards on a cashless basis, you will be required to obtain the prior written approval of the Chief Executive Officer or the Chief Operating Officer of the
Company. If you elect to resign your employment prior to August 15, 2013, then you will not be entitled to the extended vesting period set forth on Annex III and will not be permitted to exercise the Outstanding Awards on a cashless basis.

 5. As contemplated in Section 4(b) of the Retention Agreement, your right to receive severance benefits upon an
Involuntary Termination (or your earlier termination by the Company or due to your death or disability) shall be conditioned upon the execution and non-revocation of a release of claims (the “Release”). The parties hereby agree that
the Release shall be in the form attached hereto as Exhibit A. 
 Except as set forth above, the terms and conditions of the
Retention Agreement, which shall be deemed incorporated herein by reference, shall remain in full force and effect. To accept this Agreement, please countersign below and return an executed copy of this letter to my attention. 

Sincerely, 
 /s/ Barry Quart 
 Barry Quart 

Chief Executive Officer 
 Agreed and Accepted as of the date set forth below 
  

	
	 /s/ John Whelan

	John Whelan
	
	 June 24, 2013

	Date:

  
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