Document:

Amended and Restated Offer Letter - James Welch

 Exhibit 10.18 

 

 

  
  

 December 29, 2010 

Re:   Amended and Restated Offer Letter 
 Dear Jim, 
 This letter (the “Amended
Letter”) amends and restates the offer letter between you and AcelRx Pharmaceuticals, Inc. (the “Company”) dated September 14, 2010 (the “Original Letter”) in order to clarify the
manner of exemption or compliance of certain items of compensation with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). 

The terms of your position with the Company are as set forth below: 

1.      Position. 

(a)        You will continue to serve as 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, the Company’s President and Chief Executive Officer. 

(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 accepting speaking or presentation engagements in
exchange for honoraria or from serving on boards of charitable organizations, or from owning no more than one percent (1%) of the outstanding equity securities of a corporation whose stock is listed on a national stock exchange. 

2.      Start Date.    You commenced employment with the Company
on October 1, 2010 (the “Start Date”). 

3.      Compensation.    You will be eligible to earn a monthly
salary of $24,166.66, which is equivalent to $290,000.00 on an annualized basis, less standard payroll deductions and withholdings (the “Base Salary”). 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 an opportunity to earn a target annual bonus of up to 30%
of your earned Base Salary based on achievement of a series of personal and Company objectives that the Board and/or the 

  

 
Compensation Committee of the Board will approve annually. Whether you earn any bonus will be dependent upon the actual achievement by you and the Company of the applicable personal and Company
objectives, as determined by the Board (or Committee, as applicable), and will be subject to your continued employment through the end of the applicable performance period. The 2010 performance bonus will be prorated based on your Start Date. In all
events, any earned bonus will be paid not later than March 15 of the year following the year in which your right to such amount became vested so that such amounts are exempt from Code Section 409A pursuant to Treasury Regulation
1.409A-1(b)(4). 
 4.      Stock Options. 

(a)        Initial Grant.      In
connection with the commencement of your employment, the Board of Directors of the Company (the “Board”) granted to you an option to purchase 500,000 shares of the Company’s Common Stock (the “Initial Option
Shares”). Such option is subject to the terms of the Company’s 2006 Stock Plan (the “Plan”) and the Stock Option Agreement between you and the Company, except as expressly modified by this Amended Letter.

 (b)        Milestone Grant.    If, by
June 30, 2011, the Company has either (i) closed its underwritten initial public offering for the purchase of equity securities of the Company or (ii) sold at least $15 million dollars of preferred stock in a private financing to
investors who are not stockholders prior to such financing, then, promptly following the Board’s certification of the achievement of such performance milestones, and subject to your continued employment through both the milestone achievement
and the date of grant, the Board will grant to you an additional stock option to purchase 100,000 shares of the Company’s Common Stock (the “Contingent Shares”). Subject to Board approval, such grant will be made
pursuant to the terms of the Company’s then-current equity incentive plan and a Stock Option Agreement between you and the Company, and will have an exercise price equal to 100% of the fair market value of the Common Stock on the date of the
grant. The Contingent Shares will vest at the rate of 1/48 of the total number of the Contingent Shares per month, subject to the acceleration provisions set forth below. Vesting will, of course, depend on your continued employment with the Company.

 (c)        Effect of Termination Following a Change in
Control.    In the event that the Company undergoes a Change in Control (as such term is defined in the Plan) and on or within eighteen (18) months following the closing of the Change in Control, the Company (or its
successor) terminates your employment without Cause (as such term is defined below) and other than as a result of your death or disability, or you terminate your employment due to an Involuntary Termination (as such term is defined below), and
subject to your execution of a general release of all claims with respect to the Company that is effective not later than sixty (60) days after your termination date, the vesting of the Initial Option Shares, Contingent Shares and any stock
options that the Company may grant to you in the future (the shares subject to each such stock option, the “Option Shares”) shall accelerate in full such that 100% of the then unvested Option Shares will become vested and
exercisable as of your termination date. 
 5.      Benefits. 

  

 (a)        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.

 (b)        Vacation; Sick Leave.    You
will be entitled to paid time off according to the Company’s standard policies. 

(c)        Expense Reimbursements.    You will be
eligible for expense reimbursement in accordance with Company policy. For the avoidance of doubt, to the extent that any reimbursements payable to you are subject to the provisions of Code Section 409A: (a) to be eligible to obtain
reimbursement for such expenses you must submit expense reports within 45 days after the expense is incurred, (b) any such reimbursements will be paid no later than December 31 of the year following the year in which the expense was
incurred, (c) the amount of expenses reimbursed in one year will not affect the amount eligible for reimbursement in any subsequent year, and (d) the right to reimbursement under this agreement will not be subject to liquidation or
exchange for another benefit. 
 6.      Confidential Information and Invention
Assignment Agreement.      Your employment with the Company is subject to the terms of the Confidential Information and Invention Assignment Agreement previously entered into between you and the Company (the
“Confidentiality Agreement”). 
 7.      Severance
Benefits. 
 (a)        Termination Following a Change in
Control.    If the Company or a successor entity terminates your employment other than for Cause (and other than as a result of your death or disability), or if you terminate your employment due to an Involuntary Termination,
in either case on or within twelve (12) months following a Change in Control, and provided such termination constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h) and without regard to
alternate definitions thereunder, a “Separation from Service”), then subject to your obligations below, you shall be entitled to receive the following severance benefits (collectively the “Severance
Benefits”): 
 (i)        an amount equal to six
(6) months of your then current Base Salary, ignoring any decrease in Base Salary that forms the basis for an Involuntary Termination, subject to applicable tax withholdings, paid (except as set forth below) over the first 6 months following
your Separation from Service; and 
 (ii)        if you timely
elect continued coverage under the health care continuation laws commonly known as COBRA for yourself and your covered dependents, then the Company shall pay, directly to the COBRA carrier as and when due, the COBRA premiums necessary to continue
your health insurance coverage in effect for yourself and your eligible dependents from your termination date until the earliest of (A) the end of the 6th month following your termination date, (B) the expiration of your eligibility for the continuation coverage under
COBRA, or (C) the date when you become eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment (such period from the 

  

 
termination date through the earliest of (A) through (C), the “COBRA Payment Period”). Notwithstanding the foregoing, if at any time the Company determines that the
payment of the COBRA premiums would result in a violation of the nondiscrimination rules of Section 105(h)(2) of the Code or any statute or regulation of similar effect (including but not limited to the 2010 Patient Protection and Affordable
Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of providing the COBRA premiums, the Company will instead pay to you on the last day of each month of the remainder of the COBRA Payment Period, a fully
taxable cash payment equal to the COBRA premiums for that month (such amount, the “Special Severance Payment”), for the remainder of the COBRA Payment Period. If you become eligible for coverage under another employer’s
group health plan or otherwise cease to be eligible for COBRA during the period provided in this clause, you must immediately notify the Company of such event, and all payments and obligations under this clause shall cease. 

(b)        Conditions.    Your entitlement to the
Severance Benefits shall be contingent upon your execution of a release of claims agreement in a form acceptable to the Company that is effective within sixty (30) days after your Separation from Service. In addition, notwithstanding the
payment schedules described above, no payments will be made prior to the 60th day following your Separation from Service. On the 60th day following your Separation from Service, the Company will pay, in a lump sum, the Severance Benefits that would have otherwise been paid on or prior to such date under the original schedule but for
the delay while waiting for the 60th day in compliance
with Section 409A and the effectiveness of the release, with the balance of the Severance Benefits being paid as originally scheduled. All of the Severance Benefits are subject to applicable tax withholdings. 

(c)        Certain Definitions.    The following
terms have the meaning set forth below wherever they are used in the Original Letter (as amended by this Amended Letter): 
 (i)        “Cause” shall exist for termination if any of the following occur: (i) your material breach of your employment
responsibilities, including but not limited to material violations of the Company’s policies or gross negligence in the performance of your duties and responsibilities, if the breach is not cured within thirty days following written notice from
the Company, (ii) your conviction of, or the entry of a pleading of guilty or nolo contendere to, any crime involving moral turpitude or any felony, or (iii) your commission of fraud or any material act of dishonesty or disloyalty in
connection with your employment with the Company. 

(ii)        “Involuntary Termination” shall mean
your voluntary resignation from all positions you then hold with the Company within sixty (60) days following the occurrence of any of the following events without your written consent and after providing written notice of such event to the
Company and providing the Company at least 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 that
increases your one-way commute by more than thirty (30) miles. 

8.      At-Will Employment.    Your employment with the Company
will continue to be on an “at will” basis, meaning that either you or the Company may terminate your employment at any time for any reason or no reason, without further obligation or liability. 

9.      No Conflicting Obligations.    In your work for the
Company, you are not to 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. 
 10.      Section 409A
Matters.    It is intended that all of the severance benefits and other payments payable under the Original Letter, as amended by this Amended Letter, satisfy, to the greatest extent possible, the exemptions from the
application of Section 409A provided under Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9), and will be construed to the greatest extent possible as consistent with those provisions, and to the extent not so exempt, will
be construed and interpreted in a manner that makes such amounts compliant with the requirements Section 409A. For purposes of Code Section 409A (including, without limitation, for purposes of Treasury Regulation
Section 1.409A-2(b)(2)(iii)), your right to receive any installment payments hereunder (whether reimbursements or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment
hereunder shall at all times be considered a separate and distinct payment. Notwithstanding any provision to the contrary herein, if you are deemed by the Company at the time of your Separation from Service to be a “specified employee” for
purposes of Code Section 409A(a)(2)(B)(i), and if any of the payments or benefits due upon Separation from Service set forth herein and/or under any other agreement with the Company are deemed to be “deferred compensation”, then to
the extent delayed commencement of any portion of such payments or benefits is required in order to avoid a prohibited distribution under Code Section 409A(a)(2)(B)(i) and the related adverse taxation under Section 409A, such payments
shall not be provided to you prior to the earliest of (i) the expiration of the six-month period measured from the date of your Separation from Service with the Company, (ii) the date of your death or (iii) such earlier date as
permitted under Section 409A without the imposition of adverse taxation. Upon the first business day following the expiration of such applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this paragraph shall
be paid in a lump sum to you, and any remaining payments due shall be paid as otherwise provided herein or in the applicable agreement. No interest shall be due on any amounts so deferred. For all purposes

  

 
under this Agreement, references to termination of employment shall mean a Separation from Service. 
 11.      Entire Agreement.    This Amended 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 Amended 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. This Amended Letter will be governed by the laws of the State of California without
regard to is conflict of laws provision. 

  

 We hope you find this Amended Letter acceptable and look forward to your favorable
response. Please return one copy of this Amended Letter indicating your acceptance to me. 
 Sincerely, 

 
  
  

/s/ Richard King 

Richard King 

President and Chief Executive Officer 
  

 
 I accept the terms of employment offered in this Amended Letter.

  
  
  

					
		 	Signature:	 	/s/ Jim Welch
		 		 	Jim Welch

  

					
		 	Date:	 	12/29/10Resignation Agreement - Thomas Schreck

 Exhibit 10.19 

 

 

  

 May 6, 2010 

Dear Tom: 
 As discussed with you, this letter contains the terms of the resignation agreement (the “Agreement”) between you and AcelRx Pharmaceuticals, Inc. (the
“Company”). 
 1.      Resignation
Date; Final Pay. You tendered the resignation of your employment, which the Company accepted, effective as of April 30, 2010 (the “Resignation Date”), which was your last day of work. On the Resignation Date, the
Company paid you (i) all accrued salary and (ii) following the submission of proper expense reports, all expenses reasonably and necessarily incurred by you in connection with the business of the Company prior to the Resignation Date,
subject to standard payroll deductions and withholdings. 

2.      Benefits. In recognition of your prior service and in
consideration of your signing this Agreement and returning it to the Company, you are entitled to the following benefits: 
 (a)      As of the Effective Date (as defined below), six months of your base salary as in effect as of the Resignation Date, to be paid monthly, starting within
thirty (30) days of the Effective Date; 

(b)      As of the Effective Date, six months of Company-paid
health (i.e., medical, vision and dental) coverage and benefits for such coverage as in effect for you as of the Resignation Date; provided, however, that (i) you constitute a qualified beneficiary, as defined in Section 4980B(g)(1) of the
Internal Revenue Code of 1986, as amended; and (ii) you elect continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), within the time period prescribed pursuant
to COBRA. 
 By signing below, you acknowledge that you are receiving the separation benefits
outlined in this Paragraph 2 in consideration for waiving your rights to claims referred to in this agreement and that you would not otherwise be entitled to such benefits. 

3.      Vesting of Stock Option Awards. In consideration for your
willingness to continue to serve on the Board of Directors of the Company (the “Board”), each outstanding stock option granted to you under the 2006 Stock Plan, as amended, shall continue to vest according to the terms of
each such grant, so long as you continue to provide service to the Company as a member of the Board or as a Consultant (set forth in Exhibit C to this agreement). 

 May 6, 2010 

Thomas Schreck 
  

 4.      Other
Compensation or Benefits. You acknowledge that, except as provided in this Agreement, you have not earned and will not receive any other compensation from the Company, including without limitation wages, bonus, incentive compensation, severance,
accrued vacation or employee benefits, with the exception of any vested benefits you may have under the express terms of a written ERISA-qualified benefit plan (e.g., 401(k) account or other retirement account). By way of example but not limitation,
you acknowledge that you have not eamed and are not owed any unpaid bonus or other incentive compensation. 
 5.      Proprietary Information Obligations. You acknowledge and reaffirm your obligations pursuant to that certain Confidential Information and Invention Assignment
Agreement between you and the Company, dated December 8, 2005, attached hereto as Exhibit A. Additionally, you agree that any and all work product that you created or contributed in connection with your employment with the Company
that is related to research and development of any current or contemplated AcelRx product, including, but not limited to, oral transmucosal formulations, oral transmucosal drug dosage forms, andlor medical device technology for oral transmucosal
drug delivery relating thereto is the sole and exclusive property of the Company, and you hereby assign to the Company all of your right, title and interest in all such work product, if any, with the exception of any work product that qualifies
fully for protection under Section 2870 of the California Labor Code (set forth in Exhibit B to this Agreement). 
 6.      Company Property. You and the Company mutually acknowledge and agree that as of the date of this Agreement you may retain those materials related to the
performance of your duties as a member of the Board of Directors, and you have returned to the Company all other property of the Company in your possession or control which you do not need in your capacity as a member of the Board of Directors,
including, but not limited to: credit cards, entry cards, identification badges and keys. You may continue to use your Company-owned laptop computer and email account for Company business while a member of the Board of Directors. 

7.      Nondisparagement. You agree not to disparage the Company, or
its officers, directors, employees, shareholders and agents, in any manner likely to be harmful to their business, business reputations or personal reputations. Similarly, the Company shall direct its officers and directors not to disparage you in
any manner likely to be harmful to your business or personal reputation. Notwithstanding the foregoing: any party may respond accurately and fully to any request for information when required by legal process. 

8.      No Admissions. The promises and payments in consideration of
this Agreement shall not be construed to be an admission of any liability or obligation by either party to the other party, and neither party makes any such admission. 

9.      Confidentiality. The provisions of this Agreement shall be
held in strictest confidence by you and the Company and shall not be publicized or disclosed in any manner whatsoever; provided, however, that: (a) you may disclose this Agreement in confidence to your immediate family; (b) the
parties may disclose this Agreement in confidence to their respective attorneys, accountants, investors, auditors, tax preparers, and financial advisors; (c) the Company may disclose this Agreement to fulfill standard or legally required
corporate reporting or 

 May 6, 2010 

Thomas Schreck 
  

 
disclosure requirements; and (d) the parties may disclose this Agreement insofar as such disclosure may be necessary to enforce its terms or as otherwise required by law. By way of example
and without limitation, you agree not to disclose the terms of this Agreement to any current or former Company employee. If a provision of this Agreement is hereafter made available to you through public disclosure by the Company or any third party
having a legal right to do so, you are relieved of the confidentiality requirement with respect to that provision. 
 10.      No Voluntary Adverse Action; Cooperation.   You agree that you will not voluntarily assist any person in preparing, bringing, or pursuing any
litigation, arbitration, administrative claim or other formal proceeding against the Company or any of its current or future subsidiaries, affiliates, successors or assigns, and their officers, directors, employees or agents, unless pursuant to
subpoena or other compulsion of law. In addition, you agree to cooperate fully with the Company in connection with any actual or contemplated defense, prosecution, or investigation of any claims or demands by or against third parties, or other
matters arising from events, acts, or failures to act that occurred during the period of your employment by the Company. Such cooperation includes, without limitation, making yourself available to the Company upon reasonable notice, without
subpoena, to provide truthful and accurate information in witness interviews and deposition and trial testimony. The Company will reimburse you for reasonable out-of-pocket expenses you incur in connection with any such cooperation (excluding
forgone wages, salary, or other compensation) and will make reasonable efforts to accommodate your scheduling needs. In addition, you agree to execute all documents (if any) necessary to carry out the terms of this Agreement. 

11.    Release of Claims. 

(a)      General Release.   In consideration of the
covenants and terms provided under this Agreement and excluding only the obligations and representations set forth herein, you and Company hereby generally and completely release the other Party, its current or future subsidiaries, and their
respective directors, officers, employees, shareholders, agents, attorneys, predecessors, successors, insurers, affiliates, and assigns (collectively, the “Released Parties”) from any and all claims, liabilities and
obligations, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to or on the date you sign this Agreement (collectively, the “Released Claims”). 

(b)      Scope of Release.   The Released Claims include,
but are not limited to: (i) all claims arising out of or in any way related to your employment with the Company, or the termination of that employment; (ii) all claims related to your compensation or benefits from the Company, including salary,
bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, profit sharing, carried interest, stock, stock options, or any other ownership, equity, or profits interests in the Company; (iii) all claims for breach
of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (iv) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and
(v) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Age
Discrimination in Employment Act of 

 May 6, 2010 

Thomas Schreck 
  

 
1967 (as amended) (the “ADEA”), the federal Americans with Disabilities Act of 1990, the California Labor Code (as amended), and the California Fair Employment and Housing
Act (as amended). 

                
(c)      Excluded Claims.   Notwithstanding the foregoing, the following are not included in the Released Claims (the “Excluded Claims”): (i) any rights or claims for
indemnification you may have pursuant to any written indemnification agreement with the Company to which you are a party or under applicable law; (ii) any rights which are not waivable as a matter of law; and (iii) any claims for breach of
this Agreement. In addition, nothing in this Agreement prevents you from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission, the Department of Labor, the California Department of Fair
Employment and Housing, or any other government agency, except that you acknowledge and agree that you hereby waive your right to any monetary benefits in connection with any such claim, charge or proceeding. You represent and warrant that, other
than the Excluded Claims, you are not aware of any claims you have or might have against any of the Released Parties that are not included in the Released Claims. 

                
(d)      ADEA Waiver.   You acknowledge that you are knowingly and voluntarily waiving and releasing any rights you may have under the ADEA, and that the consideration given for the waiver and release in
this Section 12(d) is in addition to anything of value to which you are already entitled. You further acknowledge that you have been advised, as required by the ADEA, that: (i) your waiver and release do not apply to any rights or claims
that may arise after the date that you sign this Agreement; (ii) you should consult with an attorney prior to signing this Agreement (although you may choose voluntarily not to do so); (iii) you have twenty-one (21) days in which to
consider this Agreement (although you may choose voluntarily to sign it earlier); (iv) you have seven (7) days following the date you sign this Agreement to revoke the Agreement (by providing written notice of your revocation to me); and
(v) this Agreement will not be effective until the date upon which the revocation period has expired, which will be the eighth day after the date that this Agreement is signed by you provided that you do not revoke it (the “Effective
Date”). 

                
(e)      Waiver of Unknown Claims.   In giving the releases set forth in this Agreement, which include claims which may be unknown to you at present, you acknowledge that you have read and understand
Section 1542 of the California Civil Code: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must
have materially affected his or her settlement with the debtor.” You hereby expressly waive and relinquish all rights and benefits under that section and any law or legal principle of similar effect in any jurisdiction with respect to your
release of claims herein, including but not limited to the release of unknown and unsuspected claims. 
 12.      Representations.   You hereby represent that you have been paid all compensation owed and for all hours worked, you have received all the leave and
leave benefits and protections for which you are eligible pursuant to the Company’s policies and any applicable 

 May 6, 2010 

Thomas Schreck 
  

 
law, and you have not suffered any on-the-job injury for which you have not already filed a workers’ compensation claim. 

13.      No Admissions.   Nothing contained in this
Agreement shall be construed as an admission by you or the Company of any liability, obligation, wrongdoing or violation of law. 
 14.      Dispute Resolution.   To aid in the rapid and economical resolution of any disputes which may arise under this Agreement, you and the Company agree
that any and all claims, disputes or controversies of any nature whatsoever arising from or regarding the interpretation, execution or enforcement of this Agreement, your employment, or the termination of your employment, shall be resolved by
confidential, final and binding arbitration conducted before a single arbitrator with JAMS, Inc. (“JAMS”) in San Francisco, California under JAMS’ then-applicable arbitration rules. The parties acknowledge that, by agreeing
to this arbitration procedure, they waive the right to resolve any such dispute through a trial by jury, judge or administrative proceeding. You will have the right to be represented by legal counsel at any arbitration proceeding. Nothing in
this Agreement shall prevent either you or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. 

15.      Miscellaneous.   This Agreement constitutes the
complete, final and exclusive embodiment of the entire agreement between you and the Company with regard to the subject matter hereof. It is entered into without reliance on any promise, agreement, or representation, written or oral, other than
those expressly contained herein, and it supersedes any other such promises, agreements, or representations. This Agreement may not be modified or amended except in a written agreement signed by both you and an officer of the Company. This Agreement
will bind the heirs, personal representatives, successors and assigns of both you and the Company, and inure to the benefit of both you and the Company, and your and its heirs, successors and assigns. This Agreement will be deemed to have been
entered into and will be construed and enforced in accordance with the laws of the State of California without regard to conflicts of laws principles. If any provision of this Agreement or the application thereof shall be held by a court or
arbitrator to be invalid, unenforceable, or void, in any jurisdiction, it shall not effect the application of the Agreement in any other jurisdiction, and the remainder of this Agreement shall remain in full force and effect, and the provision in
question shall be modified so as to be rendered enforceable in a manner consistent with the intent of the parties insofar as possible. 
 If you wish to enter into this Agreement, please sign where indicated below within twenty-one (21) days and return this Agreement to me. If you do not sign and return this Agreement within the
aforementioned time period, the Company’s offer of separation benefits contained herein will expire. 
 We
greatly appreciate your ongoing efforts in support of the Company. 

 May 6, 2010 

Thomas Schreck 
  

 Sincerely, 

 

	
	 /s/ Richard King

	 Richard King

	 Chief Executive Officer

	 AcelRx Pharmaceuticals, Inc.

 I have read and understand the Agreement and agree to its terms: 
  

									
	 /s/ Thomas Schreck
	 		  	 Date:
	  	 May 7, 2010
	  	
	 Thomas Schreck
	 		  		  		  	

 EXHIBIT A 
 CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT 

 May 6, 2010 

Thomas Schreck 
  

 EXHIBIT B 
 CALIFORNIA LABOR CODE SECTION 2870 

(a)      Any provision in an employment agreement which provides
that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s
equipment, supplies, facilities, or trade secret information except for those inventions that either: 
 (1)      Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or
development of the employer; or 
 (2)      Result from
any work performed by the employee for the employer. 
 To the extent a provision in an employment agreement
purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable. 

 May 6, 2010 

Thomas Schreck 
  

 EXHIBIT C 
 STOCK OPTION GRANTS 
  

									
	 	  	Date	 	  	Shares	    	Vest
	 Restricted Stock and Founders Shares
	  				  		    	
				
	 Thomas Schreck
	  	 	8/15/2006	  	  	500,000	    	1/48 per month
				
	 Thomas Schreck
	  	 	8/15/2006	  	  	500,000	    	Fully vested founders shares
		  				  	 	    	
				
	 Total Restricted Stock Purchases & Founders Shares
	  				  	1,000,000	    	
				
	 Stock Option Grants - 2006 Stock Plan
	  				  		    	
				
	 Thomas Schreck
	  	 	4/3/2007	  	  	75,000	    	25% cliff 1 year; 1/48/mo.
				
	 Thomas Schreck
	  	 	8/14/2008	  	  	150,000	    	25% cliff 1 year; 1/48/mo.
				
	 Thomas Schreck
	  	 	3/25/2009	  	  	100,000	    	25% cliff 1 year; 1/48/mo.
				
	 Thomas Schreck
	  	 	7/1/2009	  	  	100,000	    	25% cliff 1 year; 1/48/mo.
				
	 Thomas Schreck
	  	 	4/28/2010	  	  	875,000	    	25% cliff 1 year; 1/48/mo.
				
		  				  	 	    	
				
		  				  	1,300,000	    	
				
		  				  	 	    	
				
	 Total Common Shares
	  				  	2,300,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00183-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00183-of-00352.parquet"}]]