Document:

Form of 2002 Equity Incentive Plan Stock Option Agreement

 Exhibit 10-P 
 A.P. PHARMA, INC. 
 2002 EQUITY INCENTIVE PLAN 
 [NONSTATUTORY] [INCENTIVE] STOCK OPTION 
 TO PURCHASE SHARES OF COMMON STOCK 
  

							
	(A)   Optionee:	  	 	  	(D)   Grant Date:	  	 
	(B)   Exercise Price:	  	$	  	(E)   Vesting Base Date:	  	 
	(C)   Shares:	  	 	  	(F)   Fully-Vested Date:	  	 

 A.P. Pharma, Inc. (the “Company”) has granted to you a [Nonstatutory] [Incentive] Stock
Option to purchase the number of shares of Common Stock listed in item (C) above at the purchase price listed in item (B) above. This option is granted subject to the terms of the Company’s 2002 Equity Incentive Plan (the
“Plan”) and to the terms and conditions set forth herein. To accept your stock option, please sign the enclosed copy of this letter and return it to
                            . 
 General terms 
 Your option is intended to be [an incentive][a nonstatutory]
option. The basic terms of your option grant are identified in the information block at the top of this offer letter, but other important terms and conditions are described in the Plan. We encourage you to carefully review the Plan, a copy of which
is [enclosed] [available on request from our {Stock Administrator}{Human Resources Department}]. 
 Purchase and payment 
 Subject to the plan, [your option vests (becomes exercisable) [to the extent of 25% of the Option Shares one year after the Vesting Base Date (or, if no
Vesting Base Date is specified, the Grant Date), and then] in cumulative monthly increments of [2.0833]% of the Option Shares, calculated to the closest whole share on each monthly anniversary of the Vesting Base Date, so that all shares will become
purchasable on the Fully-Vested Date shown above.] 
 [your option is exercisable in its entirety. However, until the Fully-Vested Date shown above, shares
you purchase under this option will be subject to a repurchase right of the Company, as set out in section 15.2(a) of the Plan. That repurchase right lapses [to the extent of 25% of the Option Shares one year after the Vesting Base Date, and then]
in cumulative monthly increments of [2.0833]% of the Option Shares, calculated to the closest whole share on each monthly anniversary of the Vesting Base Date, so that this repurchase right will be entirely lapsed on the Fully-Vested Date shown
above.] 
 If you decide to purchase shares under this option, you will be required to submit a completed exercise agreement on a form approved by the
Company, together with payment for the shares. You may pay for the shares (plus any associated withholding taxes) using cash, a check, a wire transfer or any other form of payment listed in section 6.4(c) of the plan and permitted by the
Administrator at the time you wish to exercise. Shares available under this option must be purchased, if at all, no later than the Expiration Date. 

 Restrictions on the Shares 
 [Shares you purchase under this option may be subject to {other} repurchase rights and resale restrictions, {including market standoff requirements}. Those rights and restrictions are set forth in section 15.2 of the
Plan. 
 I accept this option and agree to the terms of this offer letter and the plan. 

					
		 		 	
			
	  	 		 	                            ,
200  
	Optionee signature	 		 	DateForm of 2002 Equity Incentive Plan Restricted Stock Agreement

 Exhibit 10-Q 
 Restricted Stock Award Agreement 
 between A.P. Pharma, Inc. and
                             
 pursuant to the 
 A.P. Pharma, Inc. 2002 Equity Incentive Plan 

A.P. Pharma, Inc. (the “Company”) has awarded to you,
                        ,              shares (the
“Shares”) of A.P. Pharma, Inc. Common Stock (“Common Stock”) as restricted stock under the Company’s 2002 Equity Incentive Plan (the “Plan”). This agreement (the “Agreement”) sets forth the terms and
conditions of the award. 
 Capitalized terms used without definition in this Agreement shall have the meanings set forth in the Plan.

 1. Payment. Under the terms of the Plan you have 15 days from the date of receipt of this Agreement to accept the award of the
Shares by delivering to the Company a check for the par value of the Shares ($0.01 per share). Payment of the par value shall constitute purchase of the Shares. 
 2. Forfeiture and Transfer Restrictions. 
 a. Except to the extent otherwise provided
in paragraphs (b) or (c) below, upon termination of your agreement for any reason during the Restriction Period (as defined below), all Shares still subject to restriction shall be forfeited by you and shall be repurchased by the Company
for an amount equal to the original purchase price. This restriction is referred to as the “Forfeiture Restriction.” In addition, you shall not be permitted to sell, assign, transfer, pledge or otherwise encumber any Shares until lapse of
the Restriction Period. This restriction is referred to as the “Transfer Restriction.” 
 b. All Forfeiture and
Transfer Restrictions on the Shares will lapse on the earlier of                      or on your last day as an employee of the Company (the
“Restriction Period”), or in the event of a Change of Control as such term is defined in the Change of Control Agreement between the parties, whichever is earlier. 
 c. In the event of a dissolution, liquidation, merger or consolidation under the terms of the Plan, the Administrator of the Plan may, in
its discretion, arrange for new shares of restricted stock to be substituted for the Shares or for the Company’s obligations as to the Shares to be assumed by an employer corporation other than the Company or by a parent or subsidiary of such
employer corporation, or the Administrator may waive the restrictions on the Shares as more fully described in the Plan. 

 d. If the outstanding shares of Common Stock of the Company are increased or decreased in
number or changed into or exchanged for a different number or kind of securities of the Company or any other corporation by reason of a recapitalization, reclassification, stock split, combination of shares, stock dividend or other event, the
Administrator may, in its sole discretion, adjust the number of Shares or substitute new shares of restricted stock for the Shares. 
 3.
Dividends. Cash dividends shall be automatically reinvested in additional shares of restricted stock, and dividends payable in stock shall be paid in additional shares of restricted stock. For this purpose, restricted stock issued as a
dividend shall be valued at the fair market value of the shares as determined in good faith by the Administrator on the record date for determination of the stockholders to receive the dividend, and shall be treated as additional Shares hereunder.

 4. Certificates; Legends. 
 a. Certificates representing the Shares will bear the following legend: 
 “The shares represented by
this certificate have been issued under the A.P. Pharma, Inc. 2002 Equity Incentive Plan as shares of “Restricted Stock.” They are subject to the terms of that plan and of the terms of an agreement between the holder hereof and A.P.
Pharma, Inc. dated                         . Under the terms of the plan and the agreement, the shares represented hereby
are subject to forfeiture and may not be sold, assigned, transferred, pledged or otherwise encumbered without the prior written consent of A.P. Pharma, Inc. A copy of the plan and the agreement may be obtained from the secretary of A.P. Pharma,
Inc.” 
 The foregoing legend shall be removed upon your request as restrictions on the Shares represented by a certificate lapse. 
 b. Certificates representing the Shares will be issued in your name and held by the Company until restrictions on the Shares have lapsed.
When restrictions have lapsed on any of the Shares, certificates for such Shares will be delivered to you upon request. 
 5. Tax
Consequences. 
 a. Tax Adviser. The tax consequences associated with the Shares and this Agreement are complex and
can depend upon your particular circumstances. THE COMPANY URGES YOU TO CONSULT A TAX ADVISER. By signing below you acknowledge that neither the Company nor any of its employees, representatives or advisers has given you tax advice regarding the
Shares or this Agreement and that you have made an independent decision whether to consult a tax adviser. 

 b. Withholding Tax. You are responsible for the payment of any withholding or
employment taxes which, in the judgment of the Administrator of the Plan, result from the purchase of the Shares or the lapse of Forfeiture and Transfer Restrictions thereon. Payment of any withholding tax associated with the purchase of the Shares
or the lapse of Forfeiture and Transfer Restrictions thereon shall be as provided in Section 10 of the Plan. The tax consequences associated with a request to withhold Shares for payment of taxes are complex, and you should consult a tax
adviser before making such a request. 
 c. Section 83(b) Election. Since the Shares are subject to a
“substantial risk of forfeiture,” if you do not make an election under Section 83(b) of the Code with respect to the Shares within 30 days after the date on which the Shares are granted in accordance with Section 1 above (a
“Section 83(b) Election”), you will have taxable income upon lapse of the Forfeiture and Transfer Restrictions, in an amount equal to the spread between the fair market value of the stock on the date of lapse and any consideration paid for
the stock. The taxable income constitutes supplemental wages subject to income and employment tax withholding, and the Company will generally receive a corresponding income tax deduction. 
 6. Plan Provisions Applicable. The Shares are being awarded under the Plan and are subject to all of the provisions of the Plan. Copies of the
Plan and the related Prospectus are enclosed. NEVERTHELESS, THIS AGREEMENT CONTROLS OVER THE PLAN. THE STANDARD RESTRICTED STOCK DESCRIBED IN THE PROSPECTUS MAY VARY SUBSTANTIALLY FROM THE SHARES. YOUR RIGHTS ARE AS SET FORTH IN THIS AGREEMENT,
WHICH CONTROLS IN THE EVENT OF ANY INCONSISTENCY WITH THE DESCRIPTION IN THE PROSPECTUS. 

 7. Governing Law. Except to the extent that the Delaware General Corporation Law shall be
applicable with respect to matters relating to the internal corporate affairs of the Company, this Agreement and the award of Shares shall be governed by and construed under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within California. 
  

							
		 		 	A.P. PHARMA, INC.
				
	Company	 		 	By	 	 
				
		 		 		 	 
		 		 		 	

  

					
			
	Employee	 		 	  
			
	 	 		 	  
			
	 	 		 	  

 If the optionee resides in California, or another community property jurisdiction, I as the
optionee’s spouse also accept and agree to be bound by the terms and conditions of this Agreement and the Plan. 
  

	
	
	  
	Spouse

 Enclosures: 2002 Stock Plan 
                      Prospectus

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