Document:

EX-10.3

 Exhibit 10.3 

March 24, 2014 
 Timothy E. Morris

 Dear Tim: 
 On behalf of AcelRx
Pharmaceuticals, Inc. (the “Company”), I am pleased to offer you the position of Chief Financial Officer of the Company. Speaking for myself, as well as the other members of the Company’s Board, we were all very impressed with
your credentials and we look forward to your future success in this position. 
 The terms of your new position with the Company are as set
forth below: 
 1. Position. 

(a) You will become the Chief Financial Officer of the Company, working out of the Company’s headquarters office in Redwood City,
California. You will report to Richard King, President & CEO. 
 (b) You agree to the best of your ability and experience that you
will at all times loyally and conscientiously perform all of the duties and obligations required of and from you pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company. During the term of your
employment, you further agree that you will devote at least 100% of your business time and attention to the business of the Company, the Company will be entitled to all of the benefits and profits arising from or incident to all such work
services and advice, you will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, without the prior written consent of the Company, such consent not to be unreasonably
withheld, and you will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company. Nothing in this letter agreement will prevent you from: (i) accepting speaking or
presentation engagements in exchange for honoraria; (ii) serving on boards of charitable organizations; (iii) owning no more than five percent (5%) of the outstanding equity securities of a corporation whose stock is listed on a
national stock exchange; or (iv) serving on no more than one board of directors of another noncompetitive domestic or international company; provided, however, that in all cases, these activities do not unreasonably detract from the performance
of your duties for the Company. 
 2. Start Date. Subject to fulfillment of any conditions imposed by this letter agreement,
you will commence this new position with the Company on March 25, 2014 (the “Start Date”). 

 Tim Morris 

March 24, 2014 
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 3. Proof of Right to Work. For purposes of federal immigration law, you will be
required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three business days of your date of hire, or our employment relationship
with you may be terminated. 
 4. Compensation and Benefits. 

(a) Annual Salary. You will be paid a monthly salary of $31,250.00, which is equivalent to $375,000.00 on an annualized basis
(the “Base Salary”), less required deductions and tax withholdings. Your salary will be payable in two equal payments per month pursuant to the Company’s regular payroll policy. The Base Salary will be reviewed annually as part
of the Company’s normal salary review process. In addition to your Base Salary, you will have the opportunity to earn a targeted annual bonus of 37.5% of your earned Base Salary based on achievement of both a series of personal objectives
defined in consultation with your manager and the Company’s business objectives that the Board of Directors, acting through the Compensation Committee, will define annually. 

(b) Insurance Benefits. The Company will provide you with the opportunity to participate in the standard benefits plans
currently available to other Company employees, subject to any eligibility requirements imposed by such plans. 
 (c) Vacation; Sick
Leave. You will be entitled to paid time off according to the Company’s standard policies for employees at the same level or above. 

(d) Stock Option Grant. In connection with the commencement of your employment, the Company will recommend at the next regularly
scheduled meeting that the Board of Directors (the “Board”) grant you an option to purchase 200,000 shares of the Company’s Common Stock (“Option Shares”) with an exercise price equal to the fair market value of the
Common Stock on the date of the grant, as determined by reference to the closing price as listed on NASDAQ. The Option Shares will vest at the rate of 25% of the shares on the twelve (12) month anniversary of your Vesting Commencement Date (as
defined in your Stock Option Agreement, which date will be your Start Date, as defined above) and the remaining Option Shares will vest monthly thereafter at the rate of 1/48 of the total number of the Option Shares per month, subject to the
acceleration provisions set forth below. Vesting will, of course, depend on your continued employment with the Company. The option will be subject to the terms of the Company’s 2006 Stock Plan (the “Plan”) and the Stock Option
Agreement between you and the Company. 
 5. Change of Control Severance Benefits. 

(a) Severance Benefits. If: (i) the Company undergoes a Change in Control (as such term is defined in the Plan); and (ii) during
the period which begins three (3) months prior to consummation of the Change of Control and ends twelve (12) months following the closing of the Change in Control, the Company terminates your employment without Cause (as such term is defined in the
Plan) or you terminate your employment due to an Involuntary 

 Tim Morris 

March 24, 2014 
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Resignation (as such term is defined below); and (iii) you execute and allow to become effective a general release of all claims against the Company in a format acceptable to the Company,
then the Company will provide you with the following severance benefits: 
 (i) The vesting of the Option Shares and any additional grant
of options to purchase shares of the Company’s common stock subsequently awarded to you by the Board (collectively, the “Employee Options”) shall accelerate in full such that 100% of the then unvested Employee Options will
become immediately vested and exercisable as of your termination date; 
 (ii) A single lump sum severance payment equal to nine
(9) months of your then-current base salary, less required deductions and withholdings; and 
 (iii) If you elect continuing health
care coverage under the federal COBRA law or governing state law, payment of the premiums necessary to continue your then-current coverage for you and your dependents for nine (9) months after your termination date or until you become eligible
for coverage with another employer, whichever comes first. 
 (b) Involuntary Resignation. For purposes of this Paragraph 5,
an “Involuntary Resignation” shall mean your resignation of employment with the Company within thirty (30) days following the occurrence of any of the following events without your written consent and after providing the Company with
thirty (30) days to cure such event: (i) a material reduction or change in your job duties, reporting relationships, responsibilities and requirements inconsistent with your position with the Company and prior duties, reporting
relationships, responsibilities and requirements prior to the Change in Control, provided that neither a mere change in title alone nor reassignment following a Change in Control to a position that is substantially similar to the position held prior
to the Change in Control in terms of job duties, responsibilities or requirements shall constitute a material reduction in job responsibilities; (ii) a reduction in your then-current base salary by at least 20%, provided that an
across-the-board reduction in the salary level of all other senior executives by the same percentage amount as part of a general salary level reduction shall not constitute such a salary reduction, or (iii) the relocation of your principal
place for performance of your Company duties to a location more than thirty (30) miles from the Company’s then current location. 

6. Confidential Information and Invention Assignment Agreement. Your acceptance of this offer and commencement of employment
with the Company is contingent upon the execution, and delivery to an officer of the Company, of the Company’s Confidential Information and Invention Assignment Agreement, a copy of which is enclosed for your review and execution (the
“Confidentiality Agreement”), prior to or on your Start Date. 
 7. At-Will Employment. Your employment with
the Company will be on an “at will” basis, meaning that either you or the Company may terminate your employment at any time, with or without cause, and with or without advance notice. 

 Tim Morris 

March 24, 2014 
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 8. No Conflicting Obligations. You understand and agree that by accepting this
offer of employment, you represent to the Company that your performance will not breach any other agreement to which you are a party and that you have not, and will not during the term of your employment with the Company, enter into any oral or
written agreement in conflict with any of the provisions of this letter or the Company’s policies. You are not to bring with you to the Company, or use or disclose to any person associated with the Company, any confidential or proprietary
information belonging to any former employer or other person or entity with respect to which you owe an obligation of confidentiality under any agreement or otherwise. The Company does not need and will not use such information and we will assist
you in any way possible to preserve and protect the confidentiality of proprietary information belonging to third parties. Also, we expect you to abide by any obligations to refrain from soliciting any person employed by or otherwise associated with
any former employer and suggest that you refrain from having any contact with such persons until such time as any non-solicitation obligation expires. 

9. Entire Agreement. This letter, together with the Confidentiality Agreement, sets forth the entire agreement and understanding
between you and the Company relating to your employment and supersedes all prior agreements and discussions between us. This letter may not be modified or amended except by a written agreement, signed by an officer of the Company, although the
Company reserves the right to modify unilaterally your compensation, benefits, job title and duties, reporting relationships and other terms of your employment subject to the provisions of this letter agreement. This letter will be governed by the
laws of the State of California without regard to is conflict of laws provision. 
 We are all delighted to be able to extend you this offer and look
forward to working with you. To indicate your acceptance of the Company’s offer, please sign and date this letter in the space provided below and return it to me, along with a signed and dated copy of the Confidentiality Agreement. This offer
will terminate if not accepted by you on or before March 14, 2014. 
  

							
	Very truly yours,	 		 	ACCEPTED AND AGREED:
			
	ACELRX PHARMACEUTICALS, INC.	 		 	TIMOTHY E. MORRIS
				
	By:	 	/s/ Richard King	 		 	/s/ Timothy E. Morris
		 		 	Signature
	 Richard King
 President &
Chief Executive Officer
	 		 	Date: 3-24-14EX-10.4

 Exhibit 10.4 

SECOND AMENDMENT TO AMENDED AND RESTATED CAPITAL 

EXPENDITURE AND EQUIPMENT AGREEMENT 

THIS SECOND AMENDMENT TO THE AMENDED AND RESTATED CAPITAL EXPENDITURE AND EQUIPMENT AGREEMENT (this
“Amendment”) is effective as of January 30, 2014 (the “Amendment Effective Date”) between 

ACELRX PHARMACEUTICALS, INC., 

a corporation existing under the laws of the State of Delaware, located at 575 Chesapeake Drive, Redwood City, California 94063
(“AcelRx”) 
 -and- 

PATHEON PHARMACEUTICALS INC., 

a corporation existing under the laws of the State of Delaware, located at 2110 East Galbraith Road, Cincinnati, Ohio 45237-1625
(“Patheon”). 
 BACKGROUND 

AcelRx and Patheon entered into an Amended and Restated Capital Expenditure and Equipment Agreement dated December 11, 2012 as amended July 26, 2013
(the “Agreement”). The purpose of this Amendment is to revise the Agreement to include additional capital for Phase III manufacturing Facility Modifications. 

AGREEMENT 
 NOW,
THEREFORE, in consideration of the rights conferred and the obligations assumed herein, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows: 

 

	 	1.	Amendment 

  

	 	(a)	In Section 3(b), Expenditures and Payment, and Section 4(a), Patheon Use of Facility Modifications and Dedicated Equipment, the reference to “$3,669,404 is deleted and is replaced with
“$4,382,912.” 

  
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	 	(b)	Schedule B of the Agreement is deleted in its entirety and is replaced with the attached “REVISED SCHEDULE B.” 

 

	 	(c)	The “Background” section of this document is expressly incorporated into this Amendment. 

  

	 	2.	General 

 All other terms and conditions of the Agreement shall continue
unchanged and remain in full force and effect. 
 IN WITNESS WHEREOF the duly authorized representatives of the parties have executed this
Agreement. 
  

									
	ACELRX PHARMACEUTICALS, INC.	 		 	PATHEON PHARMACEUTICALS INC.
					
	By:	 	 /s/ James Welch
	 		 	By:	 	 /s/ Francis P. McCune

	Name:	 	 James Welch
	 		 	Name:	 	 Francis P. McCune

	Title:	 	 CFO
	 		 	Title:	 	 Secretary

  
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 Revised Schedule B 

 

					
	 Facility Modifications
	  			
	 Phase I
	  			
	 Renovated space for process room and corridor with white zone finishes, Cat3B gowning, material airlock, CII Security
	  	$	434,202	  
	 Utility modifications: existing unit HVAC once thru air, THP monitoring, Compressed air piping, piped Chilled water, piped Purified
water, piped city water, Portable Cat3b central vacuum, portable CAT3b dust collection, Misting shower, 230V and 110V power, bottled nitrogen
	  	$	390,068	  
	 Engineering Cost. This cost will be charged on a time and materials basis, and is estimated to be equal to 12% of the total cost of the
first two line items in this table.
	  	$	98,912	  
	 Facility Qualification Cost. This cost will be charged on a time and materials basis, and is estimated to be equal to 5% of the total
cost for the first two line items in this table.
	  	$	41,214	  
	 Contingency. This cost covers charges for items that have not yet been determined, and is estimated to be equal to 15% of the total
cost for the first two line items in this table.
	  	$	123,641	  
	 Cartridge filling line Facility Support
	  	$	10,500	  
	 Total Phase I
	  	$	1,098,537	  
	 Phase II—Bldg. 6 Packaging/Processing Suites
	  			
	 Renovated space for 2 additional processing rooms, all with white zone finishes, material airlock modifications, CII security. (Direct
cost $480,437)
	  			
	 Utility modifications: new HVAC unit with once thru air sized for Phase 2 and 3, additional THP monitoring, compressed air piping,
piped Purified water, piped city water, new CAT3b central vacuum,new Cat3b dust collection, 230 V and 110 V power, piped nitrogen.waster water collection system. (Direct cost $1,467,190)
	  	$	1,947,627	  
	 Contingency (15% of direct costs ($292,144))
	  	$	292,144	  
	 Engineering Cost (12%)
	  	$	233,715	  
	 Qualification Cost (5%)
	  	$	97,381	  
	 Total Phase II
	  	$	2,570,867	  
	 Phase III—Bldg. 6 Processing Suite and associated support areas
	  			
	 Processing room, equipment storage and wash-up area, gowning and material airlocks, CII security and access corridor.
	  	$	225,335	  
	 Utility modifications, including HVAC, facility and process piping, electrical service and THP & controls.
	  	$	315,505	  
	 Engineering Cost (12%)
	  	$	64,500	  
	 Qualification Cost (5%)
	  	$	27,042	  
	 Contingency (15%)
	  	$	81,126	  
	 Total Phase III
	  	$	713,508	  
	 Total Facility Modifications
	  	$	4,382,912	  

  
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