SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant /x/
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Check the appropriate box:
/x/ Preliminary Proxy Statement
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Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ACCESS PHARMACEUTICALS, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / No fee required
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2) Aggregate number of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount Previously Paid:
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3) Filing Party:
4) Date Filed:
ACCESS PHARMACEUTICALS, INC.
2600 Stemmons Freeway, Suite 176
Dallas, Texas 75207
(214) 905-5100
May __, 2000
To Our Stockholders:
You are cordially invited to attend the Annual
Meeting of Stockholders of Access Pharmaceuticals,
Inc. to be held on Monday, June 26, 2000 at 10:00
a.m., local time, at the New York Athletic Club,
180 Central Park South, New York, New York 10019,
(212) 247-5100.
The Notice of Annual Meeting and the Proxy
Statement that follow describe the business to be
considered and acted upon by the Stockholders at
the Meeting. The Board of Directors unanimously
recommend that our Stockholders approve the
proposals. Please carefully review the information
contained in the Proxy Statement.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, IT
IS VERY IMPORTANT THAT YOU MARK, SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE
PROVIDED AS SOON AS POSSIBLE. IF YOU ATTEND THE
MEETING, YOU MAY REVOKE THE PROXY AT THAT TIME BY
REQUESTING THE RIGHT TO VOTE IN PERSON.
Sincerely,
/s/ Kerry P. Gray
------------------
Kerry P. Gray
President and CEO
ACCESS PHARMACEUTICALS, INC.
2600 Stemmons Freeway, Suite 176
Dallas, Texas 75207
(214) 905-5100
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on June 26, 2000
PLEASE TAKE NOTICE that the Annual Meeting of
Stockholders, the Meeting, of Access
Pharmaceuticals, Inc. will be held at the New York
Athletic Club, 180 Central Park South, New York,
New York, on Monday, June 26, 2000, at 10:00 a.m.,
local time, for the following purposes:
1. To elect three Class 2 Directors, to hold
office for a term of three years and until their
successors are elected and qualified.
2. To consider and vote upon a proposal to amend
our certificate of incorporation to increase our
authorized shares from 20,000,000 to 50,000,000 shares.
3. To consider and vote upon a proposal to amend
our 1995 Stock Option Plan to increase the total
number of shares of our common stock authorized
for issuance under that plan to 2,000,000 shares.
4. To consider and act upon a proposal to ratify
the appointment of Grant Thornton LLP as our
independent accountants for the fiscal year ending
December 31, 2000.
5. To transact such other business as may
properly come before the meeting or any
postponements or adjournments thereof.
Stockholders of record at the close of business on
May 5, 2000, the record date for the Meeting, are
entitled to receive notice of, and to vote at the
Meeting and any adjournment or postponement
thereof. Our Annual Report for the fiscal year
ended December 31, 1999 accompanies the Proxy Statement.
Information relating to the proposals is set forth
in the accompanying Proxy Statement dated May ___,
2000. Please carefully review the information
contained in the Proxy Statement, which is
incorporated into this Notice.
By Order of the Board of Directors,
/s/ Kerry P. Gray
-----------------
Kerry P. Gray
President and CEO
Dallas, Texas
May ___, 2000
-------------------------------------
Stockholders are cordially invited to attend the
Meeting in person. YOUR VOTE IS IMPORTANT. If you
do not expect to attend the Meeting, or if you do
plan to attend but wish to vote by proxy, please
complete, date, sign and mail the enclosed proxy
card in the return envelope provided addressed to
Access Pharmaceuticals, Inc., c/o American Stock
Transfer & Trust Co., 40 Wall Street, 46th Floor,
New York, New York 10005 ("American Stock
Transfer"). Proxies will also be accepted by
transmission of a telegram, cablegram or telecopy
provided that such telegram, cablegram or telecopy
contains sufficient information from which it can
be determined that the transmission was authorized
by the Stockholder. American Stock Transfer &
Trust Company's fax number is (718) 234-2287.
ACCESS PHARMACEUTICALS, INC.
2600 Stemmons Freeway, Suite 176
Dallas, Texas 75207
(214) 905-5100
-----------------
PROXY STATEMENT
-----------------
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On June 26, 2000
This Proxy Statement is furnished by Access
Pharmaceuticals, Inc., a Delaware corporation, to
holders of common stock, par value $.01 per share,
or the Common Stock, in connection with the
solicitation of proxies by our Board of Directors
for use at our Annual Meeting of Stockholders, or
the Meeting, and at any and all adjournments or
postponements thereof. The Meeting will be held
on Monday, June 26, 2000 at 10:00 a.m., local
time, at the New York Athletic Club, 180 Central
Park South, New York, New York. This Proxy
Statement and the accompanying form of proxy is
first being sent to holders of Common Stock on or
about May ___, 2000. Our mailing address and the
location of our principal executive offices are at
2600 Stemmons Freeway, Suite 176, Dallas, Texas
75207, (214) 905-5100.
A Stockholder signing and returning the enclosed
proxy may revoke it at any time before it is
exercised by voting in person at the Meeting, by
submitting another proxy bearing a later date or
by giving notice in writing to our Secretary not
later than the day prior to the Meeting. All
proxies returned prior to the Meeting will be
voted in accordance with instructions contained
therein.
At the close of business on May ___, 2000, the
record date for the Meeting, the number of our
outstanding shares of Common Stock that are
entitled to vote was ___________. We have no other
outstanding voting securities. Each outstanding
share of Common Stock is entitled to one vote. A
complete list of Stockholders entitled to vote at
the Meeting will be available for examination by
any Stockholder for any purpose germane to the
Meeting at our principal executive offices,
during normal business hours, at least ten
business days prior to the Meeting. Our Bylaws
require that a majority of the shares entitled to
vote, present in person or by proxy, shall
constitute a quorum for the conduct of business at
the meeting. Abstentions and broker non-votes are
counted for purposes of determining the presence
or absence of a quorum for the transaction of
business. Abstentions are counted in tabulations
of the votes cast on proposals presented to the
Stockholders, whereas broker non-votes are not
counted for purposes of determining whether a
proposal has been approved. However, because
Proposal 2 requires the affirmative vote of a
majority of our outstanding shares of Common
Stock, abstentions and broker non-votes will have
the effect of a vote against Proposal 2.
Stockholders have the right to vote cumulatively
for the election of Directors. This means that in
voting at the Meeting, each Stockholder, or his
proxy, may multiply the number of his shares by
three (the number of directors to be elected) and
then cast the resulting total number for a single
nominee, or distribute such votes on the ballot
among the three nominees desired. The proxies
submitted to the Board of Directors in response to
this solicitation may, at the discretion of the
proxy holder, accumulate the votes of the shares
they represent. However, the Board of Directors
requires any Stockholder otherwise electing to
exercise his cumulative voting rights, if voting
in person, to so indicate prior to the beginning
of the Meeting or if voting by proxy given to
someone other than those designated by the Board
of Directors in the solicitation to so indicate on
said proxy.
All expenses in connection with solicitation of
proxies will be borne by us. We will also request
brokers, dealers, banks and voting trustees, and
their nominees, to forward this Proxy Statement,
the accompanying form of
proxy and our Annual Report for the fiscal year
ended December 31, 1999 to beneficial owners and
will reimburse such record holders for their
expense in forwarding solicitation material. We
expect to solicit proxies primarily by mail, but
Directors, officers and our regular employees may
also solicit in person, by telephone or by fax.
The Board of Directors does not know of any
matters which will be brought before the Meeting
other than those matters specifically set forth in
the Notice of Annual Meeting. However, if any
other matter properly comes before the Meeting, it
is intended that the persons named in the enclosed
form of proxy, or their substitutes acting
thereunder, will vote on such matter in accordance
with their best judgement.
This proxy statement should be read in conjunction
with our Annual Report, including financial
statements and management's discussion and
analysis of financial condition and results of
operations for the fiscal year ended December 31,
1999.
PROPOSAL 1
Election of Directors
Our Certificate of Incorporation and Bylaws
presently provide that our Board of Directors
shall consist of three to fifteen members, shall
be divided into three classes as nearly equal in
number as possible, and that each Director shall
serve for a term of three years and until his
successor is elected and qualified or until his
earlier resignation, death or removal. By
resolution, the Board has set the number of its
members at eight. The term of office of one class
of Directors expires each year in rotation so that
one class is elected at each annual meeting for a
three-year term. The Board presently consists of
eight members.
Members of each class serve a term of three years
until the respective annual meeting of
stockholders and election and qualification of
their successors. Dr. Link and Mr. Milstein are
members of the Class 1 directors with their terms
set to expire upon the annual meeting of
stockholders in 2002. Dr. Howell and Messrs. Stone
and Tsao are Class 2 directors with their terms
set to expire upon the annual meeting of
stockholders in 2000. Messrs. Gray, McDade and
Flinn are Class 3 directors with their terms set
to expire upon the annual meeting of stockholders
in 2001. Each of our officers is selected by the
board of directors for a term of one year. There
is no family relationship among any of the
directors or executive officers.
Until August 1, 2001, Sunrise Securities
Corporation, or Sunrise, has the right to
designate one individual for election to our board
of directors and, if Sunrise exercises such right,
we are required to use our best efforts to cause
their nominee to be elected. In addition, if
Sunrise does not exercise their right, we shall
permit a representative of Sunrise to attend and
observe all board of directors meetings. Messrs.
Stone and Tsao are managing directors of Sunrise.
For more information, see "Certain Relationships and
Related Transactions."
Nominees for Term Expiring at the Annual Meeting
of Stockholders in 2000 (Class 2 Directors)
Stephen B. Howell, MD, Richard B. Stone and
Preston Tsao are the members of the Class 2
Directors. Dr. Howell has served as a Director
since 1996 and Messrs. Stone and Tsao have served
as Directors since 1999. The terms of Dr. Howell
and Messrs. Stone and Tsao expire at the Meeting.
If elected at the Meeting, all three will serve
for a term of three years expiring on the date of
the annual meeting of Stockholders in 2003. The
terms of the other five Directors will continue as
indicated below.
2
Business and Experience of Nominees for Director
Stephen B. Howell, M.D. has served as one of our
directors since 1996. Dr. Howell is also a member
of the Compensation Committee. Dr. Howell is a
medical oncologist who is Professor of Medicine at
the University of California, San Diego, and
leader of the Cancer Pharmacology Program of the
UCSD Cancer Center. Dr Howell also directs the
Laboratory of Pharmacology and the Clayton
Foundation Drug Resistance Center at the UCSD
Cancer Center. Amongst other awards and honors,
Professor Howell is a recipient of the Milken
Family Medical Foundation Award for Outstanding
Work in the Field of Cancer Research, and has been
listed in The Best Doctors in America since 1990.
Acknowledged as a leading world expert in the
field of cancer therapeutics, Professor Howell has
published over 280 journal articles, and serves on
the editorial boards of numerous medical journals.
Dr. Howell received his AB at University of
Chicago and his MD from Harvard Medical School.
Mr. Richard B. Stone was appointed as a director
at the October 22, 1999 board meeting. Mr. Stone
is a Managing Director of Sunrise Securities
Corp., an investment bank specializing in the life
science and communications industries. Since 1974
Mr. Stone has been the Wilbur H. Friedman
Professor of Tax Law at Columbia University where
his responsibilities include teaching Federal
Income Tax, Partnership Tax, Real Estate Tax and
Business Planning. A graduate of Harvard College
and Harvard Law School Mr. Stone served four years
as Assistant Solicitor General of the United
States.
Mr. Preston Tsao was appointed as a director at
the October 22, 1999 board meeting. From January
1, 1995 through the date of this prospectus, Mr.
Tsao has been Managing Director for Corporate
Finance of Sunrise Securities Corp., an investment
bank specializing in the life science and
communications industries. From 1993 to 1994, Mr.
Tsao was Managing Director of D. Blech & Company,
Inc., a venture capital and investment bank
specializing in the biotech industry. Mr. Tsao
received his BA at Princeton and a JD degree from
Columbia University Law School.
The nominees have consented to serve as our
Directors and the Board of Directors has no reason
to believe that the nominee will be unavailable.
There is no family relationship among any of the
Directors or nominees.
The Board recommends a vote "FOR" the proposed
nominees to the Board of Directors.
UNLESS OTHERWISE INDICATED THRERON, THE ACCOMPANYING
PROXY WILL BE VOTED FOR THE NOMINEES NAMED ABOVE.
HOWEVER, THE PERSONS DESIGNATED AS PROXIES RESERVE THE
RIGHT TO CAST VOTES FOR ANOTHER PERSON DESIGNATED BY THE
BOARD OF DIRECTORS IN THE EVENT THE NOMINEES ARE UNABLE OR
UNWILLING TO SERVE.
Information With Respect to Directors Whose Terms
Continue and Executive Officers
Directors Whose Term Expires at the Annual Meeting
in 2001 (Class 3 Directors)
Mr. Herbert H. McDade, Jr. was elected to be one
of our directors in 1988, and presently is
Chairman of the board of directors. In February
1989, he was elected Vice-Chairman of the board of
directors and Chief Executive Officer. In June
1989, he was elected Chairman of the board of
directors and Treasurer in addition to his
responsibilities as Chief Executive Officer, and
from 1990 to January 1996 he was our President. Mr.
3
McDade served in such capacities until January
1996. He is also a member of the Compensation
Committee of the board of directors. He is
currently President and Chief Executive Officer of
the Thoma Corporation, a closely-held health care
consulting company. In addition, he also serves on
the boards of CytRx Corporation, Shaman
Pharmaceuticals, Inc., Discovery Laboratories,
Inc. and Cell Path, Inc. From 1986 to 1987 he
served as Chairman of the board of directors and
President of Armour Pharmaceutical Co., a
wholly-owned subsidiary of Rorer Group, Inc. Prior
to 1986 he served for approximately 13 years in
various executive positions at Revlon, Inc.,
including from 1979 to 1986, as President of the
International Division of the Revlon Health Care
Group. He was also previously associated for
twenty years in various executive capacities with
The Upjohn Company. From January 1989 to July 1995
he served on the board of Access Pharmaceuticals,
Inc. of Texas.
Mr. Kerry P. Gray has been our President and a
Chief Executive Officer and a director since
January 1996. Prior to such time, from June 1993,
Mr. Gray served as President and Chief Executive
Officer of Access Pharmaceuticals, Inc., a private
Texas corporation. Previously, Mr. Gray served as
Vice President and Chief Financial Officer of
PharmaSciences, Inc., a company he co-founded to
acquire technologies in the drug delivery area.
From May 1990 to August 1991, Mr. Gray was Senior
Vice President, Americas, Australia and New
Zealand of Rhone-Poulenc Rorer, Inc. Prior to the
Rorer/Rhone Poulenc merger, he had been Area Vice
President Americas of Rorer International
Pharmaceuticals. Previously, from January 1986 to
May 1988, he was Vice President, Finance of Rorer
International Pharmaceuticals, having served in
that same capacity for the Revlon Health Care
Group of companies before their acquisition by
Rorer Group. Between 1975 and 1985, he held
various senior financial positions in Revlon
Health Care Group. Mr. Gray's experience in the
pharmaceutical industry totals 25 years.
Mr. J. Michael Flinn has served as one of our
directors since 1983. Mr. Flinn is also a member
of the Audit & Finance Committee of the board of
directors. Since 1970, he has been an investment
counselor. Currently he is a consultant to the
Operations Group of United Asset Management.
Previously from 1970 to 1996 he was a principal
with the investment counseling firm of Sirach
Capital Management, Inc. He assisted in the
management of pension, profit sharing, individual,
corporate and foundation accounts totaling over
$6.5 billion. He serves as a board member of
Oridigm Corporation, Lonesome Dove Petroleum and
Carroll College.
Director Whose Term Expires at the Annual Meeting
in 2002 (Class 1 Director)
Max Link, Ph.D. has been one of our directors
since 1996. Dr. Link is also a member of the
Compensation and Audit & Finance Committees of the
board of directors. He has held a number of
executive positions with pharmaceutical and health
care companies. Most recently, he served as Chief
Executive Officer of Corange Limited, from May
1993 until June 1994. Prior to joining Corange,
Dr. Link served in a number of positions with
Sandoz Pharma Ltd., including Chief Executive
Officer, from 1987 until April 1992, and Chairman,
from April 1992 until May 1993. Dr. Link currently
serves on the board of directors of eight other
publicly-traded life science companies: Alexion
Pharmaceuticals, Inc., Cell Therapeutics, Inc.,
CytRx Corporation, Discovery Laboratories, Inc.,
Human Genome Sciences, Inc., Procept, Inc.,
Protein Design Labs, Inc. and Sulges Medica, Ltd.
Dr. Link received his Ph.D. in Economics from the
University of St. Gallen in 1970.
Mr. Howard P. Milstein was appointed as a director
at the October 22, 1999 board meeting. Mr.
Milstein is a Managing Partner of Milstein
Properties, an investment builder active in both
residential and commercial development primarily
in New York City and a Managing Partner of
Milstein Ventures. Mr. Milstein is Co-Chairman of
the Emigrant Savings Bank and chairs Douglas
Elliman-Beitler, a national commercial leasing and
management company. As Chairman of Milford Hotel
Corp., Mr. Milstein owns and operates hotels in
New
4
York. Mr. Milstein chairs the family communication
activities, including cable and telephone
activities and The Milford Advertising Agency.
Mr. Milstein has a BA from Cornell University and
a JD and MBA from Harvard University.
Executive Officers
In addition to our executive officers who are also
directors, set forth below is the business
experience of our other executive officers.
David P. Nowotnik, Ph.D. has been Vice President
Research and Development since November 1998. From
1994 until 1998, Dr. Nowotnik had been with
Guilford Pharmaceuticals, Inc. in the position of
Senior Director, Product Development and was
responsible for a team of scientists developing
polymeric controlled-release drug delivery
systems. From 1988 to 1994 he was with Bristol-
Myers Squibb researching and developing technetium
radiopharmaceuticals and MRI contrast agents. From
1977 to 1988 he was with Amersham International
leading the project which resulted in the
discovery and development of Ceretec.
Mr. Stephen B. Thompson has been Vice President
since April 2000 and our Chief Financial Officer
since January 1996. From 1990 to 1996, he was
Controller and Administration Manager of Access
Pharmaceuticals, Inc. Previously, from 1989 to
1990, Mr. Thompson was Controller of Robert E.
Woolley, Inc. a hotel real estate company where he
was responsible for accounting, finances and
investor relations. From 1985 to 1989, he was
Controller of OKC Limited Partnership, an oil and
gas company where he was responsible for
accounting, finances and SEC reporting. Between
1975 and 1985 he held various accounting and
finance positions with Santa Fe International
Corporation.
The remainder of this page is intentionally left blank.
5
Officers and Directors
Our directors and executive officers are as follows:
Name Age Title
- ----------------------- ----- -------------------------------------
Herbert H. McDade, Jr. 73 Chairman of the Board of Directors
Kerry P. Gray 47 President, Chief Executive Officer, Director
J. Michael Flinn 66 Director
Stephen B. Howell. M.D. 55 Director
Max Link, Ph.D. 59 Director
Howard P. Milstein 48 Director
Richard B. Stone 57 Director
Preston Tsao 54 Director
David P. Nowotnik, Ph.D. 51 Vice President Research & Development
Stephen B. Thompson 46 Vice President, Chief Financial Officer,
Treasurer
Meetings of The Board of Directors and Committees
Our Board of Directors held a total of four
meetings in 1999. We have the following committees:
* Nominating Committee - comprised of J. Michael
Flinn and Max Link.
* Audit & Finance Committee - comprised until
April 2000 of J. Michael Flinn, Max Link and
Herbert H. McDade, Jr. The members of the Audit &
Finance committee met one time during 1999 to
review auditing activities. The current
membership of this committee is J. Michael Flinn,
Max Link and Preston Tsao.
* Compensation Committee - comprised until June
1999 of Max Link, Stephen B. Howell and J. Michael
Flinn. The Compensation Committee met twice in
1999. Current membership of the committee is Max
Link, Stephen B. Howell and Herbert H. McDade, Jr.
During the fiscal year ended December 31, 1999
each Director attended at least 75% of the
aggregate of the total number of formal meetings
of the Board and the total number of meetings held
by all committees on which the individual director served.
Compensation of Directors
Each director who is not also our employee
receives a quarterly fee of $1,250, plus $1,000 for each
6
board meeting which he attends and $500 for each
committee meeting he attends as member of the
Audit and Finance and/or Compensation Committees.
Each committee Chairman also receives $250 for
each meeting he attends. In addition, we
reimbursed each director, whether an employee or
not, the expenses of attending board and committee
meetings. Each non-employee director will also be
entitled to receive stock options to purchase
5,000 shares of our common stock on the date of
each annual meeting of stockholders and 20,000
shares of common stock when he/she is first
appointed as a director.
Compliance with Section 16(a) of the Securities
Act of 1934
Section 16(a) of the Securities Exchange Act of
1934 requires our directors, executive officers
and persons who own more than ten percent of a
registered class of our equity securities to file
with the Securities and Exchange Commission
initial reports of ownership and reports of
changes in ownership of our common stock and other
equity securities. Directors, officers and 10%
holders are required by SEC regulation to furnish
us with copies of all of the Section 16(a) reports
they file.
Based solely on a review of reports furnished to
us or written representatives from our directors
and executive officers during the fiscal year
ended December 31, 1999, all Section 16(a) filing
requirements applicable to our directors,
executive officers and 10% holders for such year
were complied with except for: Messrs. Milstein,
Stone and Tsao, each filed a late Form 3.
Executive Compensation
The following table sets forth the aggregate
compensation paid to our CEO and each of our
executive officers whose aggregate salary and
bonus exceeded $100,000 for services rendered in
all capacities for the years ended December 31,
1999, 1998 and 1997
Summary Compensation Table
-----------------------------
Long-term
Annual Compensation Compensation Awards
------------------------------- --------------
Name and Securities Underlying All Other
Principal Position Year Salary (1) Bonus (2) Options (#) Compens.(3)
- ----------------------- ------ ----------- ---------- -------------- ----------
Kerry P. Gray
President and CEO 1999 $ 255,107 $ 0 160,000 $ 4,150
1998 236,497 0 160,000 1,200
1997 221,025 0 0 573
David P. Nowotnik, Ph.D.
Vice President Research 1999 $ 171,155 $ 1,800 50,000 $ 2,287
and Development (4) 1998 21,359 0 50,000 0
Stephen B. Thompson
Vice President, Chief 1999 $ 98,367 $ 5,960 20,000 $ 1,333
Financial Officer 1998 92,360 0 20,000 0
1997 87,750 4,000 0 0
(1) Includes amounts deferred under our 401(k) Plan.
7
(2) Includes bonuses paid in the indicated year
and earned in the preceding year.
(3) Amounts reported for fiscal year 1999
consist of: (i) amounts we contributed to our
401(k) Plan with respect to each named Executive
Officer and (ii) premiums paid for life insurance
and long-term disability for Mr. Gray only.
Amounts reported for fiscal year 1998 and 1997
consist of premiums paid for life insurance and
long-term disability for Mr. Gray only.
(4) Dr. Nowotnik joined us on November 16, 1998.
Options Grants in 1999
Individual Option Grants In Last Fiscal Year
----------------------------------------------
Number of Percent of Potential Realizable
Securities Total Options Value at Assumed
Underlying Granted to Exercise Annual Rates of
Options Employees in Price Expiration Stock Appreciation
Name Granted # Fiscal Year (1) $/Sh (2) Date For Option Term (2)
5% 10%
- ----------------------- --------- -------------- ---------- ---------- ---------- -----------
Kerry P. Gray (3) 160,000 56% $2.00 07/20/09 $201,000 $510,000
David P. Nowotnik (3) 50,000 18% $2.00 07/20/09 $ 63,000 $159,000
Stephen B. Thompson (4) 20,000 7% $2.00 07/20/09 $ 25,000 $ 64,000
(1) Based on an aggregate of 333,000 options
granted to employees in the fiscal year ended
December 31, 1999, including options granted to
the Named Executive.
(2) The exercise price of each grant is equal to
the value of our common stock received in the
private placement on the date of the grant which
was determined by the Board of Directors to be the
fair market value on such date.
(3) Mr. Gray had 100,000 options vest on the
date of grant. The remaining 60,000 options vest
2.083% monthly commencing twelve months from the
date of grant and are cumulatively exercisable 48
months after the date of grant.
(4) Dr. Nowotnik and Mr. Thompson's options vest
25% after twelve months and the remaining 75% vest
2.083% monthly commencing twelve months from the
date of grant and are cumulatively exercisable 48
months after the date of grant.
(5) Potential realizable value is based on the
assumption that the price per share of our common
stock appreciates at the assumed annual rate of
stock appreciation for the option term. There is
no assurance that the assumed 5% and 10% annual
rates of appreciation (compounded annually) will
actually be realized over the term of the option.
The assumed 5% and 10% annual rates are set forth
in accordance with the rules and regulations
adopted by the Securities and Exchange Commission
and do not represent our estimate of stock price
appreciation.
Option Exercises and Year-End Value Table
This table includes the number of shares covered
by both exercisable and non-exercisable stock
options as of December 31, 1999. Also reported are
the values of "in-the-money" stock options which
represent the positive spread between the exercise
price of any such existing stock options and the
year-end price of our common stock.
8
Aggregated Option Exercises In Last Fiscal Year
And Fiscal Year-End Option Values
-----------------------------------------------
Number of Securities Value of
Underlying Unexercised Unexercised In-
Number Options The-Money Options ($) (1)
of Shares At Fiscal Year End At Fiscal Year End
Acquired on Value Exercisable/ Exercisable/
Name Exercise # Realized ($) Unexercisable Unexercisable
- ------------------- ---------- ------------- ---------------------- -----------------
Kerry P. Gray - - 222,500 / 97,500 $0 / $0
David P. Nowotnik - - 13,542 / 36,458 $0 / $0
Stephen B. Thompson - - 7,500 / 12,500 $0 / $0
(1) On December 31, 1999, the exercise price of
all outstanding options held by such executive was
greater than $2.00, the closing price of our stock
on the OTC Bulletin Board.
Compensation Pursuant to Agreements and Plans
Employment Agreements
We are party to an employment agreement with Kerry
P. Gray which expires March 31, 2001 and
thereafter may be automatically renewed for
successive one-year periods. Under this agreement,
Mr. Gray is currently entitled to receive an
annual base salary of $286,000 subject to
adjustment by the board of directors. Mr. Gray is
eligible to participate in all of our employee
benefit programs available to executives. Mr. Gray
is also eligible to receive:
* a bonus payable in cash and common stock
related to the attainment of reasonable
performance goals specified by the board of
directors;
* stock options at the discretion of the board
of directors;
* long-term disability insurance to provide
compensation equal to at least 60% of his annual
base salary; and
* term life insurance coverage of $400,000.
Mr. Gray is entitled to certain severance benefits
in the event that we terminate his employment
without cause or that Mr. Gray terminates his
employment following a change of control. In the
event that we terminate the employment agreement
for any reason, other than for cause, Mr. Gray
would receive the salary due for the remaining
term of the agreement or 18 months, whichever is
longer. We will also continue benefits for such
period. In the event that Mr. Gray's employment is
terminated within six months following a change in
control or by Mr. Gray upon the occurrence of
certain events following a change in control, Mr.
Gray would receive two years salary and his target
bonus. We will also continue payment of benefits
for such period. The employment agreement contains
a covenant not to compete with us for up to 18
months following the
9
termination date. In the employment agreement,
the term change of control is defined to mean
when:
* persons who were Directors of the Company on
April 1, 1998 no longer constitute a majority of
the Board of Directors of the Company, or
* a person or group "beneficially owns" in the
aggregate 50% or more of the outstanding shares of
capital stock entitled to vote generally in the
election of the Board of Directors, or
* there occurs a sale of all or substantially
all of the business and/or assets of the Company.
We are party to an employment agreement with David
P. Nowotnik. PhD which expires November 16, 2000
and thereafter may be automatically renewed for
successive one-year periods. Under this agreement,
Dr. Nowotnik is currently entitled to receive an
annual base salary of $185,000 subject to
adjustment by the board of directors. Dr. Nowotnik
is eligible to participate in all of our employee
benefit programs available to executives. Dr.
Nowotnik is also eligible to receive:
* a bonus payable in cash and common stock
related to the attainment of reasonable
performance goals specified by the board of
directors;
* stock options at the discretion of the board
of directors;
* long-term disability insurance to provide
compensation equal to at least 60,000; and
* term life insurance coverage of $25,000.
Dr. Nowotnik is entitled to certain severance
benefits in the event that we terminate his
employment without cause or that Dr. Nowotnik
terminates his employment following a change of
control. In the event that we terminate the
employment agreement for any reason, other than
for cause, Dr. Nowotnik would receive the salary
due for 12 months. We will also continue benefits
for such period. In the event that Dr. Nowotnik's
employment is terminated within six months
following a change in control or by Dr. Nowotnik
upon the occurrence of certain events following a
change in control, Dr. Nowotnik would receive
twelve months salary. We will also continue
payment of benefits for such period. In the
employment agreement, the term change of control
is defined to mean when:
* a person or group "beneficially owns" in the
aggregate 50% or more of the outstanding shares of
capital stock entitled to vote generally in the
election of the Board of Directors, or
* there occurs a sale of all or substantially
all of the business and/or assets of the Company.
Certain Relationships and Related Transactions
Herbert H. McDade, Jr. In consideration for the
termination of his employment with the pre-merger
Access, Mr. McDade and Access entered into an
agreement on October 4, 1995, pursuant to which,
among other things:
* Mr. McDade became a consultant to Access,
providing consulting services to Access at least
four days each month;
* Mr. McDade is paid a base of $1,500 per day of
consulting; and
10
* the period for exercise of all options owned
by Mr. McDade was extended from three months after
the termination of his employment with Access to
the expiration of the option.
During 1999, 1998 and 1997, Thoma Corporation, of
which Mr. McDade is a principal, was paid an
aggregate amount of $216,000 in consulting fees.
Richard B. Stone. Mr. Stone is a managing
director of Sunrise Securities Corp., which acted
as a placement agent in the private placements of
our common stock in 1999 and 1998. In connection
with such private placements, Mr. Stone received
the following:
Exercise
Year Shares Warrants Price
----- --------- ---------- -------
1999 101,225 165,722 $2.00
1998 109,904 98,474 $3.00
Until August 1, 2001, Sunrise has the right to
designate one individual for election to our board
of directors and, if Sunrise exercises such right,
we are required to use our best efforts to cause
their nominee to be elected. In addition, if
Sunrise does not exercise their right, we shall
permit a representative of Sunrise to attend and
observe all board of directors meetings.
Preston Tsao. Mr. Tsao is Managing Director for
Corporate Finance of Sunrise Securities Corp.,
which acted as a placement agent in the private
placements of our common stock in 1999 and 1998. In
connection with such private placements, Mr. Tsao
received the following:
Exercise
Year Shares Warrants Price
------ -------- ---------- -------
1999 - 15,310 $2.00
1998 - 11,015 $3.00
Until August 1, 2001, Sunrise has the right to
designate one individual for election to our board
of directors and, if Sunrise exercises their
right, we are required to use our best efforts to
cause their nominee to be elected. In addition, if
Sunrise does not exercise their right, we shall
permit a representative of Sunrise to attend and
observe all board of directors meetings.
Stephen B. Howell, MD. Dr. Howell, one of our
directors, also serves as a scientific consultant.
The consulting agreement provides for a minimum of
two days consulting per month at a rate of $5,417
per month plus expenses. Dr. Howell has also
received warrants to purchase 30,000 shares of our
common stock at $3.00 per share that can be
exercised until January 1, 2003. During 1999, 1998
and 1997, Dr. Howell was paid an aggregate amount
of $72,000 in consulting fees.
The remainder of this page is intentionally left blank.
11
Security Ownership of Certain Beneficial Owners and Management
Based solely upon information made available to us
the following table sets forth certain information
with respect to the beneficial ownership of our
Common Stock as of April 27, 2000 by (i) each
person who is known by us to beneficially own more
than five percent of our common stock; (ii) each
of our directors; (iii) each of our executive
officers; and (iv) all our executive officers and
directors as a group. Except as otherwise
indicated, the holders listed below have sole
voting and investment power with respect to all
shares of our common stock beneficially owned by
them.
Common Stock Beneficially Owned
---------------------------------
Number
Name of Shares (1) % of Class
- ---------------------------- ------------- ------------
Herbert H. McDade. Jr. (2) 81,707 *
Kerry P. Gray (3) 301,040 2.6%
J. Michael Flinn (4) 97,475 *
Stephen B. Howell (5) 103,250 *
Max Link (6) 22,000 *
Howard P. Milstein (7) 750,140 6.5%
Richard B. Stone (8) 743,639 6.4%
Preston Tsao (9) 27,761 *
David P. Nowotnik (10) 19,791 *
Stephen B. Thompson (11) 12,023 *
Larry Feinberg (12) 2,000,000 17.4%
All Directors and Executive
Officers as a group
(consisting of 10 persons) 2,158,826 17.8%
* Less than 1%
(1) Includes our Common Stock held plus all
options and warrants exercisable within 60 days
after April 27, 2000. Unless otherwise indicated,
the persons listed have sole voting and investment
powers with respect to all such shares.
(2) Including presently exercisable options for
the purchase of 12,000 shares of our Common Stock
and 7,591 exercisable SARs pursuant to the 1987
Stock Option Plan and presently exercisable
options for the purchase of 25,000 shares of our
Common Stock pursuant to the 1995 Stock Option
Plan. Also includes 1,000 shares of our Common
Stock owned by Thoma Corporation of which Mr.
McDade is the beneficial owner.
(3) Including presently exercisable options for
the purchase of 230,000 shares of our Common Stock
pursuant to the 1995 Stock Option Plan.
(4) Including presently exercisable options for
the purchase of 22,500 shares of our Common Stock
pursuant to the 1995 Stock Option Plan.
(5) Including presently exercisable options for
the purchase of 750 and 20,500 shares of our
Common Stock pursuant to the 1987 Stock Option
Plan and 1995 Stock Option Plan, respectively, and
warrants to purchase 30,000 shares of our Common
Stock at an exercise price of $3.00 per share and
warrants to purchase 30,000 shares of our Common
Stock at an exercise price of $2.50 per share.
(6) Including presently exercisable options for
the purchase of 20,000 shares of our Common Stock
pursuant to the 1995 Stock Option Plan.
12
(7) Mr. Howard P. Milstein, c/o Douglas Elliman,
575 Madison Avenue, New York, NY 10022,
beneficially owns 738,588 shares of our Common
Stock and has warrants to purchase 11,552 shares
of our Common Stock at $12.98 per share with
expiration of April 30, 2002, is known to be the
beneficial owner of more than five percent of our
Common Stock. The information set forth in this
footnote is based on a Schedule 13D filed by Mr.
Milstein on October 5, 1999.
(8) Mr. Richard B. Stone, 44 West 77th Street,
New York, New York, 10024, owns 574,174 shares of
our Common Stock and has warrants to purchase
98,473 shares of our Common Stock at $3.00 per
share with expiration dates between April 1 and
July 20, 2004 and has warrants to purchase 70,992
shares of our Common Stock at $2.00 per share with
an expiration date of July 20, 2004. Mr. Stone is
known to be the beneficial owner of more than five
percent of our Common Stock. The information set
forth in this footnote is based on a Schedule 13D
filed by Mr. Stone on November 2, 1999 and from
our shareholder records.
(9) Including presently exercisable warrants for
the purchase of 11,015 shares of our Common Stock
at $3.00 per share with expiration dates between
April 1 and July 30, 2003 and presently
exercisable warrants for the purchase of 15,310
shares of Common Stock at $2.00 per share with the
expiration date of July 20, 2004.
(10) Including presently exercisable options for
the purchase of 19,791 shares of our Common Stock
pursuant to the 1995 Stock Option Plan.
(11) Including presently exercisable options for
the purchase of 10,000 shares of our Common Stock
pursuant to the 1995 Stock Option Plan.
(12) Larry N. Feinberg and affiliates, Oracle
Partners, L.P., Oracle Institutional Partners,
L.P. and Oracle Investment Management, Inc., 712
Fifth Avenue, 45th Floor, New York, NY 10019 is
known to be the beneficial owner of more than five
percent of our Common Stock. The information set
forth in this footnote is based on a Schedule 13G
filed by Mr. Feinberg on April 12, 2000.
PROPOSAL 2
AMENDMENT OF OUR CERTIFICATE OF INCORPORATION TO INCREASE
OUR AUTHORIZED SHARES FROM 20,000,000 TO 50,000,000 SHARES.
Our Board of Directors has approved an amendment
to our Certificate of Incorporation to increase
the number of our shares of Common Stock, $.01 par
value per share, which we shall be authorized to
issue from 20,000,000 to 50,000,000. The
additional shares of our Common Stock may be
issued from time to time as our Board of Directors
may determine without further action by the
Stockholders. With the exception of the issuance
of our Common Stock upon the exercise of options
granted pursuant to the 1995 Stock Option Plan,
the 1987 Stock Option Plan and upon the exercise
of any rights to receive shares or warrants
pursuant to currently existing agreements, the
issuance of any other additional shares of our
Common Stock authorized by the proposed amendment
is not presently contemplated. We do not have any
agreements, arrangements or understandings with
respect to any acquisition, financing, stock split
or dividend. The form of the Certificate of
Amendment is attached hereto as Exhibit A.
Our Stockholders do not currently possess, nor
upon the adoption of the proposed amendment will
they acquire, preemptive rights which would
entitle such persons, as a matter of right, to
subscribe for the purchase of any of our
securities. The proposed amendment will not affect
the rights of existing holders of Common Stock
except to the extent that future issuances of
Common Stock will reduce each existing
stockholders' proportional ownership.
There are currently no preferred shares
outstanding. The authorized shares of our
preferred stock will remain at 2,000,000 shares.
UNLESS OTHERWISE INDICATED THEREON, THE ACCOMPANYING PROXY
WILL BE VOTED FOR THE APPROVAL TO AMEND THE OUR CERTIFICATE
OF INCORPORATION AS DESCRIBED ABOVE. YOUR BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSED AMENDMENT.
13
PROPOSAL 3
AMENDMENT OF 1995 STOCK OPTION PLAN TO INCREASE THE NUMBER
OF SHARES ISSUABLE UNDER THE PLAN TO 2,000,000 SHARES.
Our Board of Directors has authorized, subject to
Stockholder ratification, an amendment to the 1995
Stock Option Plan, as amended, or the Plan, which
would provide for the ability of the Compensation
Committee to issue options to officers, directors,
employees and consultants to purchase, in the
aggregate 2,000,000 shares of our Common Stock.
Currently, the Plan authorizes the issuance of up
to 1,035,260 shares of Common Stock.
The purpose of the Plan is to provide for the
issuance of our Common Stock to allow for grants
to our officers, directors, employees and
consultants. As of May __, 2000 there were
options outstanding under the Plan to purchase an
aggregate of 784,500 shares of our Common Stock.
The Plan was adopted on January 25, 1996 and
replaced the 1987 Stock Awards Plan. No further
grants have been or can be made under the 1987
Stock Awards Plan. There are currently options
outstanding under the our 1987 Stock Awards Plan
to purchase an aggregate of approximately 37,699
shares of our Common Stock.
The Board of Directors believes that the proposed
amendment to the Plan would put our Plan in line
with other biomedical companies at a similar stage
of development with respect to the number of
options issuable and outstanding under our stock
option plans and give us the ability to attract
and retain qualified employees.
General. The Plan authorizes the granting of
"incentive stock options" as defined in Section
422A of the Code and non-qualified stock options.
See "Administration."
Securities Subject to the Plan and Market Value.
Under the Plan, options currently may be granted
covering up to an aggregate of 1,035,260 shares of
Common Stock. The Plan provides for appropriate
adjustments in the number and kind of shares
subject to the Plan in the event of a stock split,
stock dividend, or certain other similar changes
in the Common Stock, and in the event of a
reorganization, merger, consolidation or certain
other types of recapitalization.
Eligibility to Participate. Any executive, other
key employee or director of, or advisor or
consultant to, us or of any of our subsidiaries or
parent corporation is eligible to be granted
options under the Plan. No election by any such
person is required to participate in the Plan.
Administration. The Plan is administered by a
committee (the "Committee") consisting of two or
more directors appointed by the Board. The
Committee is authorized to determine which of our
employees are executive or other key employees and
select from among the executive or other key
employees and the advisors the individuals to whom
options are to be granted, to determine the number
of shares to be subject to such options and to
determine the terms and conditions of the options,
all consistent with the terms of the Plan.
Stock Options. The Committee in its discretion
may issue stock options which qualify as incentive
stock options under the Code nor non-qualified
stock options. The Committee will determine the
time or times when each stock option becomes
exercisable, the period within which it remains
exercisable and the price per share at which it is
exercisable, provided that no incentive stock
option shall be exercised more than ten years
after it is granted and no other options shall be
exercised more than ten years and one day after it
is granted, and further provided that the exercise
price of incentive stock options shall not be less
than 100% of the fair market value
14
of the Common Stock on the date of the grant. The
reported closing price of the Common Stock on the
American Stock Exchange, or AMEX, on May ___,
2000 was $____ per share.
Payment for shares purchased upon exercise of
an option must be made in full in cash or by
check, when the option is exercised. No option is
transferable except by will or the laws of descent
and distribution or pursuant to a qualified
domestic relations order, as amended; provided
that the Committee may grant options that are
transferable without payment of consideration to
immediate family members of the optionee or to
trusts or partnerships for such family members the
Committee may also amend outstanding options to
provide for such transferability.
All options granted under the Plan terminate
on the earliest of (a) the expiration of the term
specified in the option document, which may not
exceed ten years from the date of grant; (b) the
expiration of three months from the date an option
holder's employment or service with us or our
subsidiaries or parent terminates for any reason
other than disability or death; (c) the expiration
of one year from the date an option holder's
employment or service with us, our subsidiaries or
our parent terminates by reason of such option
holder's disability or death. The Committee, in
its discretion, may provide for additional
limitations or provisions relating to the term of
any option.
Tax Aspects of the Plan. The following
discussion is intended to briefly summarize the
general principles of federal income tax law
applicable to options granted under the Plan. A
recipient of an incentive stock option will not
recognize taxable income under either the grant or
exercise of an incentive stock option. The
option holder will recognize long-term capital
gain or loss on a disposition of the shares
acquired upon exercise of an incentive stock
option, provided the option holder does not
dispose of those shares within two years from the
date the incentive stock option was granted or
within one year after the shares were transferred
to such option holder. Currently, for regular
federal income tax purposes, long-term capital
gain on a sale of stock generally is taxed at a
maximum rate of 20% or 28%, depending on the
holding period. If the option holder satisfies
requirements for capital gain treatment, then we
will not be allowed a deduction by reason of the
grant or exercise of an incentive stock option.
As a general rule, if the option holder
disposes of the shares before satisfying both
holding period requirements (a "disqualifying
disposition"), the gain recognized by the option
holder on the disqualifying disposition will be
taxed as ordinary income to the extent of the
difference between (i) the lesser of the fair
market value of the shares on the date of exercise
or the amount received for the shares in the
disqualifying disposition, and (ii) the adjusted
basis of the shares, and we will be entitled to a
deduction in that amount. The gain (if any) in
excess of the amount recognized as ordinary income
on a disqualifying disposition will be long-term
or short-term capital gain, depending on the
length of time the option holder held the shares
prior to the disposition.
The amount by which the fair market value of
a share at the time of exercise exceeds the option
price will be included in the computation of such
option holder's "alternative minimum taxable
income" in the year the option holder exercises
the incentive stock option. If an option holder
pays alternative minimum tax with respect to the
exercise of an incentive stock option, then the
amount of such tax paid will be allowed as a
credit against regular liability in a subsequent
year to the extent that the regular liability
exceeds the alternative minimum tax liability for
such subsequent year. The option holder's basis in
the shares for purposes of the alternative minimum
tax will be adjusted when income is included in
alternative minimum taxable income.
15
A recipient of a non-qualified stock option
generally will not recognize taxable income at the
time of grant, and we will not be allowed a
deduction by reason of the grant. Such an option
holder will recognize ordinary income in the
taxable year in which the option holder exercises
the non-qualified stock option, in an amount equal
to the excess of the fair market value of the
shares received upon exercise, at the time of
exercise of such options, over the exercise price
of the option, and we will be allowed a deduction
in that amount. Upon disposition of the shares
subject to the option, an option holder will
recognize long-term or short-term capital gain or
loss, depending upon the length of time the shares
were held prior to disposition, equal to the
difference between the amount realized on
disposition and the option holder's basis in a
share subject to the option (which basis
ordinarily is the fair market value of the shares
subject to the option on the date the option was
exercised).
UNLESS OTHERWISE INDICATED THEREON, THE ACCOMPANYING PROXY
WILL BE VOTED FOR THE APPROVAL TO AMEND THE OUR 1995 STOCK
OPTION PLAN AS DESCRIBED ABOVE. YOUR BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSED AMENDMENT.
PROPOSAL 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed, subject to
ratification by the Stockholders at the Meeting,
the accounting firm of Grant Thornton LLP as our
principal independent accountants for the fiscal
year ending December 31, 2000. Grant Thornton LLP
has served in this capacity since December 1998.
Representatives of Grant Thornton LLP are expected
to be present at the Meeting and will have the
opportunity to make a statement if he or she
desires to do so and will be available to respond
to appropriate questions.
UNLESS OTHERWISE INDICATED THEREON, THE ACCOMPANYING PROXY
WILL BE VOTED FOR THE APPROVAL OF GRANT THORNTON LLP. YOUR
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF GRANT THORNTON LLP AS PRINCIPAL INDEPENDENT
ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000.
OTHER MATTERS
As of the date of this Proxy Statement, our Board
of Directors has no knowledge of any matters to be
presented for consideration at the Annual Meeting
other than those referred to above. If (i) any
matters not within the knowledge of the Board of
Directors as of the date of this Proxy Statement
should properly come before the meeting; (ii) a
person not named herein is nominated at the
meeting for election as a Director because a
nominee named herein is unable to serve or for
good cause will not serve; (iii) any proposals
properly omitted from this Proxy Statement and the
form of proxy, subject to applicable laws and our
Charter and Bylaws, should come before the
meeting; or (iv) any matters should arise incident
to the conduct of the meeting, then the proxies
will be voted in accordance with the
recommendations of our Board of Directors.
16
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
The annual meeting of Stockholders in 2001 is
expected to be held on or about ________, 2001. We
must receive Stockholder proposals, other than
nominations for directors, no later than ________,
2000 to be considered for inclusion in our proxy
materials agenda relating to that meeting.
Nominations for election as director must be made
by written notice to us not later than one hundred
and twenty days in advance of the meeting.
EACH STOCKHOLDER IS URGED TO COMPLETE, DATE, SIGN AND RETURN
THE ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE PROVIDED FOR
THAT PURPOSE AND ADDRESSED TO ACCESS PHARMACEUTICALS, INC. c/o
AMERICAN STOCK TRANSFER & TRUST CO., 40 WALL STREET, 46TH FLOOR,
NEW YORK, NEW YORK 10005, A PROMPT RESPONSE IS HELPFUL AND YOUR
COOPERATION WILL BE APPRECIATED.
By Order of the Board of Directors,
/s/ Kerry P. Gray
------------------
Kerry P. Gray
President and CEO
Exhibit A
PROPOSED CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
ACCESS PHARMACEUTICALS, INC.
Access Pharmaceuticals, Inc. (the "Corporation"),
a Delaware corporation, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the directors of the
Corporation, a resolution was duly adopted setting
forth a proposed amendment of the Certificate of
Incorporation of the Corporation, as previously
amended, and declaring such amendment to be
advisable and calling a meeting of the
stockholders of the Corporation for consideration
thereof. The resolution setting forth the
proposed amendment is as follows:
RESOLVED: That it is advisable that the paragraph of
Article V, Section A of the Corporation's Certificate of
Incorporation, as amended, relating to the authorized shares
of Common Stock of the Corporation be amended to read as
follows:
A. The aggregate number of shares of Common
Stock which the Corporation shall have authority
to issue is Fifty Million (50,000,000) shares with
a par value of one cent ($0.01) per share.
SECOND: That thereafter, pursuant to resolution
of the Board of Directors, a meeting of the
stockholders of the Corporation was duly called
and held, upon notice in accordance with Section
222 of the General Corporation Law of the State of
Delaware at which meeting the necessary number of
shares as required by the General Corporation Law
of the State of Delaware voted in favor of the
amendment.
THIRD: That such amendment was duly adopted in
accordance with the provisions of Section 242 of
the General Corporation Law of the State of
Delaware.
FOURTH: That the effective date of this
amendment shall be ______, 2000.
ACCESS PHARMACEUTICALS, INC.
2600 Stemmons Freeway, Suite 176, Dallas, Texas 75207
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned having received the Notice of
Annual Meeting of Stockholders and Proxy Statement
dated May ___, 2000, and revoking any proxy
heretofore given, hereby appoints each of Herbert
H. McDade, Jr. and Kerry P. Gray or either of
them, proxies of the undersigned with full power
of substitution, to cumulate votes and to vote all
shares of common stock of Access Pharmaceuticals,
Inc. which the undersigned is entitled to vote at
a Annual Meeting of Stockholders to be held
Monday, June 26, 2000 at 10:00 a.m., local time,
at the New York Athletic Club, 180 Central Park
South, New York, New York 10019, (212) 247-5100,
or any adjournment thereof.
This proxy when properly executed will be voted in
the manner directed herein by the undersigned
stockholder. If no direction is made, this Proxy
will be voted FOR the Proposal.
In their discretion, the Proxies are authorized to
vote on any other matters which may properly come
before the Annual Meeting or any adjournment
thereof as set forth in the Proxy Statement.
PLEASE MARK, SIGN AND DATE BELOW AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
Proxies will also be accepted by transmission of a
telegram, cablegram or telecopy provided that such
telegram, cablegram or telecopy contains
sufficient information from which it can be
determined that the transmission was authorized by
the Stockholder. Telegrams or cablegrams may be
addressed to American Stock Transfer & Trust Co.
("American Stock Transfer") at the address
appearing on the attached envelope. American Stock
Transfer's telecopy number is (718) 234-2287.
(continued, and to be signed on the reverse side)
SEE REVERSE SIDE
[ X ] PLEASE MARK YOUR VOTE THIS WAY
1. Election of Directors FOR WITHHOLD
[ ] [ ]
Cumulative Votes for one or more nominees as follows:
Nominees: ______ Stephen B. Howell, MD Class 2 - 3 Year Term
______ Richard B. Stone Class 2 - 3 Year Term
______ Preston Tsao Class 2 - 3 Year Term
(INSTRUCTION: To withhold authority to vote for any individual
nominee, check the box to vote "FOR" all nominees and strike a
line through the nominee's name above)
2. Proposal to amend our Certificate of Incorporation
to increase our authorized capital stock from
20,000,000 shares to 50,000,000 shares. FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Proposal to amend our 1995 Stock Option Plan
to increase the number of shares of our common
stock authorized for issuance under the Plan FOR AGAINST ABSTAIN
to 2,000,000 shares. [ ] [ ] [ ]
4. Proposal to ratify and approve the
appointment of Grant Thornton LLP as our
independent accountants for the year ending FOR AGAINST ABSTAIN
December 31, 2000. [ ] [ ] [ ]
Shares Held: ___________
THIS PROXY IS SOLICITED ON BEHALF OF ACCESS PHARMACEUTICALS,
INC.'S BOARD OF DIRECTORS AND MAY BE REVOKED BY THE STOCKHOLDER
PRIOR TO EXERCISE.
Signature ____________________________ ________
Date
____________________________ ________
Signature (if held jointly) Date
NOTE: Please sign exactly as name appears
hereon. Joint owners should each sign. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign in full
corporate name by President or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.