A.P. PHARMA, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE. This A.P. Pharma, Inc. 1997 Employee Stock Purchase Plan is designed to encourage and assist employees of
A.P. Pharma, Inc. and participating subsidiaries to acquire an equity interest in the Company through the purchase of shares of
Company common stock.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) “Administrator” shall mean the entity, either the Board or the committee of the Board, responsible for
administering this Plan, as provided in Section 3.
(b) “Board” shall mean the Board of Directors of the Company, as constituted from time to time.
(c) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any successor statute.
(d) “Company” shall mean A.P. Pharma, Inc., a Delaware corporation, and Participating Subsidiaries.
(e) “Common Stock” shall mean the Common Stock, $.01 par value, of the Company.
(f) “Employee” shall mean any individual who is an employee of the Company or a Participating Subsidiary within the
meaning of Section 3401(c) of the Code and the Treasury Regulations thereunder.
(g) “Enrollment Date” shall have the meaning set forth in Section 6.
(h) “Fair market value” means as of any given date: (i) the closing price of the Common Stock on the Nasdaq National
Market as reported in the Wall Street Journal; or (ii) if the Common Stock is no longer quoted on the Nasdaq National
Market, but is listed on an established stock exchange or quoted on any other established interdealer quotation system,
the closing price for the Common Stock on such exchange or system, as reported in the Wall Street Journal; or (iii) in the
absence of an established market for the Common Stock, the fair market value of the Common Stock as determined by the
Administrator in good faith.
(i) “Lower Price Enrollment Date” shall have the meaning set forth in Section 6.
(j) “Option Period” shall have the meaning set forth in Section 7(b).