ACCESS PHARMACEUTICALS, INC.
2600 Stemmons Freeway, Suite 176
Dallas, Texas 75207
(214) 905-5100
April 17, 2001
To Our Stockholders:
You are cordially invited to attend the Annual
Meeting of Stockholders of Access Pharmaceuticals,
Inc. to be held on Monday, May 21, 2001 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 recommends 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 May 21, 2001
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, May 21, 2001, at 10:00 a.m., local
time, for the following purposes:
1. To elect three Class 3 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 1995 Stock Option Plan to adjust the number of
options to be granted to non-employee directors.
3. To consider and vote upon a proposal to approve
the 2001 Access Pharmaceuticals, Inc. Restricted
Stock Plan.
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, 2001.
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
March 28, 2001, 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, 2000 accompanies the Proxy Statement.
Information relating to the proposals is set forth
in the accompanying Proxy Statement dated April 17,
2001. 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
April 17, 2001
-----------------------------------
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. 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 May 21, 2001
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, May 21, 2001 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 April 17, 2001.
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 March 28, 2001, the
record date for the Meeting, the number of our
outstanding shares of Common Stock that are entitled
to vote was 12,850,478. 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.
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, 2000 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 the financial
statements and management's discussion and analysis
of financial condition and results of operations for
the fiscal year ended December 31, 2000.
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 seven.
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 seven 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. Meakem are members of the Class 1
directors with their terms set to expire upon the
annual meeting of stockholders in 2002. Dr. Howell
and Mr. Tsao are Class 2 directors with their terms
set to expire upon the annual meeting of
stockholders in 2000. Messrs. McDade, Gray 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 its right, we shall permit a
representative of Sunrise to attend and observe all
Board of Directors meetings. Mr. Tsao is a managing
director of Sunrise. For more information, see
"Certain Relationships and Related Transactions."
Nominees for Term Expiring at the Annual Meeting of
Stockholders in 2001 (Class 3 Directors)
Herbert H. McDade, Jr., Kerry P. Gray and J. Michael
Flinn are the members of the Class 3 Directors. Mr.
McDade has served as director since 1988, Mr. Gray
has been a director since 1996 and Mr. Flinn has
served as a Director since 1983. The terms of
Messrs. McDade, Gray and Flinn 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 2004. The
terms of the other four Directors will continue as
indicated below.
2
Business and Experience of Nominees for Director
Mr. Herbert H. McDade, Jr. was elected to be one of
our directors in 1988, and presently is Chairman of
the Board of Directors. He is also a member of the
Compensation Committee 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.
McDade served in such capacities until January 1996.
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, 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.
Mr. Kerry P. Gray has been our President and 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 26 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 Cell Path, Inc.,
Lonesome Dove Petroleum and Carroll College.
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. Each director
shall be elected by a plurality of the votes cast by
the holders of Common Stock entitled to vote at the
Meeting.
UNLESS OTHERWISE INDICATED THEREON, 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.
3
Information With Respect to Directors Whose Terms
Continue and Executive Officers
Directors Whose Term Expires at the Annual Meeting
in 2002 (Class 1 Directors)
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 seven other publicly-traded
life science companies: Alexion Pharmaceuticals,
Inc., Cell Therapeutics, Inc., CytRx Corporation,
Discovery Laboratories, Inc., Human Genome Sciences,
Inc., Protein Design Labs, Inc. and Sulzes Medica,
Ltd. Dr. Link received his Ph.D. in Economics from
the University of St. Gallen in 1970.
Mr. John J. Meakem, Jr. was appointed as a director
at the February 16, 2001 board meeting. Mr. Meakem
is a private investor with portfolio holdings in
innovative companies with a particular focus on
healthcare. Most recently Mr. Meakem served as
Chairman of the Board, President and Chief Executive
Officer of Advanced Polymer Systems, Inc. from 1991
to 2000. Prior to 1991, he was Corporate Executive
Vice President of Combe, Inc. and President of Combe
North America. Prior to 1970, Mr. Meakem was with
Vick Chemical Company, a division of Richardson
Merrell Drug Corporation for ten years as Vice
President of Marketing, New Products & Acquisitions.
Directors Whose Term Expires at the Annual Meeting
in 2003 (Class 2 Directors)
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
Professor of Medicine at the University of
California, San Diego, and director of the Cancer
Pharmacology Program of the UCSD Cancer Center. Dr.
Howell is a recipient of the Milken Foundation prize
for his contributions to the field of cancer
chemotherapy. He has served on the National Research
Council of the American Cancer Society and is on the
editorial boards of multiple medical journals. Dr.
Howell currently serves on the board of directors of
Matrix Pharmaceuticals. Dr. Howell received his AB
at University of Chicago and his MD from Harvard
Medical School.
Mr. Preston Tsao has served as one of our directors
since 1999. Mr. Tsao is also a member of the Audit
Committee. From January 1, 1995 through the date of
this proxy statement, 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.
4
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., a private Texas corporation.
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.
Officers and Directors
Our directors and executive officers are as follows:
Name Age Title
- ------------------------- ----- -------------------------
Herbert H. McDade, Jr. 74 Chairman of the Board
of Directors
Kerry P. Gray 48 President, Chief Executive
Officer, Director
J. Michael Flinn 67 Director
Stephen B. Howell. M.D. 56 Director
Max Link, Ph.D. 60 Director
John J. Meakem, Jr. 65 Director
Preston Tsao 55 Director
David P. Nowotnik, Ph.D. 52 Vice President
Research & Development
Stephen B. Thompson 47 Vice President, Chief
Financial Officer, Treasurer
5
Meetings of The Board of Directors and Committees
Our Board of Directors held a total of seven
meetings in 2000.
We have the following committees:
* Nominating Committee - comprised of J. Michael
Flinn and Max Link.
* Audit & Finance Committee - comprised of J.
Michael Flinn, Max Link and Preston Tsao. The
members of the Audit & Finance committee met one
time during 2000 to review auditing activities.
* Compensation Committee - comprised of Max Link,
Stephen B. Howell and Herbert H. McDade, Jr. The
Compensation Committee met four times in 2000.
During the fiscal year ended December 31, 2000 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 except
Howard P. Milstein.
Compensation of Directors
Each director who is not also our employee receives
a quarterly fee of $1,250, plus $1,000 for each
board meeting which he attends and $500 for each
committee meeting he attends as a 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 is also entitled to receive
options to purchase 5,000 shares of our common stock
on the date of each annual meeting of stockholders
and options to purchase 20,000 shares of common
stock when he/she is first appointed as a director.
See Proposal No. 2 of this proxy where stockholders
are asked to consider and vote upon a proposal to
amend our 1995 Stock Option Plan to adjust the
number of options to be granted to non-employee
directors.
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, 2000, all Section 16(a) filing requirements
applicable to our directors, executive officers and 10%
holders for such year were complied with.
6
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, 2000,
1999 and 1998.
Summary Compensation Table
Long-term
Annual Compensation Compensation Awards
------------------------------- --------------------
Name and Securities Underlying All Other
Principal Position Year Salary (1) Bonus (2) Options(#) Compensation(3)
- ------------------------ ------ ----------- ---------- ------------------ ------------
Kerry P. Gray
President and CEO 2000 $ 279,497 $ 125,000 760,000 $ 6,328
1999 255,107 100,000 160,000 4,150
1998 236,497 0 160,000 1,200
David P. Nowotnik, Ph.D.
Vice President Research
and Development (4) 2000 $ 181,638 $ 24,280 50,000 $ 53,633
1999 171,155 19,000 50,000 2,287
1998 21,359 1,800 50,000 0
Stephen B. Thompson
Vice President, Chief
Financial Officer 2000 $ 108,996 14,700 45,000 $ 2,179
1999 98,367 11,000 20,000 1,333
1998 92,360 5,960 20,000 0
(1) Includes amounts deferred under our 401(k) Plan.
(2) Includes bonuses earned in the reported year
but paid in the following year with the exception of
$25,000 for Mr. Gray which was earned and paid in 2000.
(3) Amounts reported for fiscal year 2000 consist
of: (i) amounts we contributed to our 401(k) Plan
with respect to each named individual; (ii) premiums
paid for life insurance for Mr. Gray each year; and,
(iii) moving expenses paid to Dr. Nowotnik in 2000.
Amounts reported for fiscal year 1999 consist of:
(i) amounts we contributed to our 401(k) Plan with
respect to each named individual; and, (ii) premiums
paid for life insurance for Mr. Gray in 1999.
Amounts reported for fiscal year 1998 consist of
premiums paid for life insurance and long-term
disability for Mr. Gray.
(4) Dr. Nowotnik joined us on November 16, 1998.
7
Option Grants in 2000
Individual Option Grants In Last Fiscal Year
--------------------------------------------
Potential Realizable
Number of Percent of Value at Assumed
Securities Total Options Annual Rates of
Underlying Granted to Exercise Stock Appreciation
Options Employees in Price Expiration For Option Term (4)
Name Granted # Fiscal Year(1) $/Sh (2) Date 5% 10%
- ------------------------- ---------- -------------- -------- ---------- ----------- ----------
Kerry P. Gray (3) 500,000 $2.50 03/01/10 $ 786,000 $1,992,000
100,000 $5.50 10/12/10 346,000 877,000
160,000 $6.875 11/20/10 692,000 1,753,000
------- --------- ---------
760,000 74% 1,824,000 4,622,000
David P. Nowotnik (3) 50,000 5% $2.50 03/01/10 $ 79,000 $ 199,000
Stephen B. Thompson (3) 45,000 4% $2.50 03/01/10 $ 71,000 $ 179,000
1) Based on an aggregate of 1,031,500 options
granted to employees and non-employee board members
in the fiscal year ended December 31, 2000,
including options granted to the named individual.
2) The exercise price of each grant on March 1,
2000 is equal to the value of our common stock
issued 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. The
exercise price of the grants on October 12, 2000 and
November 20, 2000 were the closing price as quoted
on the American Stock Exchange, or AMEX.
3) Mr. Gray, 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.
4) 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.
8
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, 2000. 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.
Aggregated Option Exercises In Last Fiscal Year
And Fiscal Year-End Option Values
---------------------------------
Number of Securities Value of
Underlying Unexercised Unexercised In-
Number of Options The-Money Options($)(1)
Shares At Fiscal Year End At Fiscal Year End
Acquired Value Exercisable/ Exercisale/
Name On Exercise # Realized ($) Unexercisable Unexercisable
- ------------------- ------------- ------------ ------------------- -------------------
Kerry P. Gray - - 427,500 / 652,500 $1,061,000 / $989,000
David P. Nowotnik - - 19,792 / 80,208 $ 170,000 / $205,000
Stephen B. Thompson - - 37,813 / 47,187 $ 92,000 / $121,000
(1) On December 31, 2000, the closing price of our stock on AMEX was $5.00.
Compensation Pursuant to Agreements and Plans
Employment Agreements
We are party to an employment agreement with Kerry
P. Gray which expires March 31, 2002 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
$314,600 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
9
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
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, 2001 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 $200,000 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.
10
Certain Relationships and Related Transactions
On October 12, 2000, the Board of Directors
authorized a restricted stock purchase program.
Under the program, the Company's executive officers
were given the opportunity to purchase shares of
common stock in an individually designated amount
per participant determined by the Compensation
Committee. A total of 180,000 shares were purchased
by such officers at $5.50 per share, the fair market
value of the common stock on October 12, 2000, for
an aggregate consideration of $990,000. The purchase
price was paid through the participant's delivery of
a 50%-recourse promissory note payable to the
Company. Each note bears interest at 5.87%
compounded semi-annually and has a maximum term of
ten years. The notes are secured by a pledge of the
purchased shares to the Company. The Company
recorded the notes receivables from participants in
this Program for $990,000 as a reduction of equity
in the Consolidated Balance Sheet.
Stephen B. Howell, MD. Dr. Howell, one of our
directors, also serves as a scientific consultant.
Pursuant to the consulting agreement that provides
for a minimum of three days consulting per month at
a rate of $8,400 per month plus expenses. Dr. Howell
has also received warrants to purchase 15,000 shares
of our common stock at $3.00 per share that can be
exercised until January 1, 2008 and warrants to
purchase 30,000 shares of our common stock at $2.00
per share that can be exercised until January 1,
2007 and warrants to purchase 30,000 shares of our
common stock at $3.00 per share that can be
exercised until January 1, 2003. During 2000, 1999
and 1998, Dr. Howell was paid an aggregate amount of
$136,000 in consulting fees.
Herbert H. McDade, Jr. Mr. McDade is Chairman of
the Board of Directors. In consideration for the
termination of his employment with the Company, 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
* 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 2000, 1999 and 1998, 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 was one of our
directors until his resignation on February 16,
2001. 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
2000, 1999 and 1998. In connection with such private
placements, Mr. Stone received the following:
Exercise
Year Shares Warrants Price
- ------- -------- --------- --------
2000 83,434 101,995 $2.50
1999 101,225 86,499 $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 its
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.
11
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 2000, 1999 and 1998. In
connection with such private placements, Mr. Tsao
received the following:
Exercise
Year Shares Warrants Price
- ------- -------- ---------- ---------
2000 1,436 65,791 $2.50
1999 - 15,310 $2.00
1998 - 11,015 $3.00
The remainder of this page is intentionally left blank.
12
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 10, 2001 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) 87,707 *
Kerry P. Gray (3) 598,540 4.5%
J. Michael Flinn (4) 102,475 *
Stephen B. Howell (5) 111,394 *
Max Link 25,000 *
Preston Tsao (6) 93,552 *
David P. Nowotnik (7) 119,792 *
Stephen B. Thompson (8) 69,836 *
Larry Feinberg (9) 1,050,000 8.2%
Howard P. Milstein (10) 750,140 5.8%
Richard B. Stone (11) 815,307 6.2%
All Directors and Executive
Officers as a group
(consisting of 10 persons) (12) 1,208,295 8.9%
* - Less than 1%
(1) Includes our Common Stock held plus all
options and warrants exercisable within 60 days
after April 10, 2000.
(2) Including presently exercisable options for
the purchase of 12,000 shares of our Common Stock
and 5,091 exercisable SARs pursuant to the 1987
Stock Option Plan and presently exercisable options
for the purchase of 30,000 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 427,500 shares of our Common Stock
pursuant to the 1995 Stock Option Plan.
(4) Including presently exercisable options for
the purchase of 27,500 shares of our Common Stock
pursuant to the 1995 Stock Option Plan.
(5) Including presently exercisable options for
the purchase of 750 and 5,728 shares of our Common
Stock pursuant to the 1987 Stock Option Plan and
1995 Stock Option Plan, respectively, and warrants
to purchase 15,000 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 $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 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 and presently exercisable warrants for
the purchase of 65,791 shares of Common Stock at
$2.50 per share with the expiration date of March 1,
2005.
13
(7) Including presently exercisable options for
the purchase of 69,792 shares of our Common Stock
pursuant to the 1995 Stock Option Plan.
(8) Including presently exercisable options for
the purchase of 37,813 shares of our Common Stock
pursuant to the 1995 Stock Option Plan.
(9) Larry N. Feinberg and affiliates, Oracle
Partners, L.P., Oracle Institutional Partners, L.P.,
Oracle Investment Management, Inc., and Sam Oracle
Fund, 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 March 8, 2001.
(10) 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 an expiration date of
April 30, 2002. Mr. Milstein 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.
(11) Mr. Richard B. Stone, 44 West 77th Street,
New York, New York, 10024, owns 528,340 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,
warrants to purchase 86,499 shares of our Common
Stock at $2.00 per share with an expiration date of
July 20, 2004, and warrants to purchase 101,995
shares of our Common Stock at $2.50 per share with
an expiration date of March 1, 2005. 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 March 1, 2000 and from our
shareholder records.
(12) Does not include Richard Stone who resigned
as a director on February 16, 2001 or Howard P.
Milstein who resigned as a director on November 15,
2000.
PROPOSAL 2
AMENDMENT OF OUR 1995 STOCK OPTION PLAN TO ADJUST THE NUMBER
OF OPTIONS TO BE GRANTED TO NON-EMPLOYEE DIRECTORS
The 1995 Stock Option Plan, or Plan, presently
provides for formula grants to each director who is
not our employee as follows: on the date the non-
employee director is initially elected or appointed
to the Board of Directors he/she receives a receives
a non-statutory option to purchase 20,000 shares of
Common Stock and annually each director receives a
non-statutory option to purchase 5,000 shares of
Common Stock. The Board of Directors has authorized,
subject to Stockholder ratification, an amendment to
the Plan which would provide for the number of
options to be granted to non-employee directors
pursuant to the annual grant referenced above to be
adjusted such that each director would receive
annually a non-statutory option to purchase 10,000
shares of Common Stock. Each such option would have
an exercise price equal to the fair market value of
the Common Stock on the date of grant.
The Board of Directors believes that the proposed
amendment to the Plan would put us in line with
other biomedical companies at a similar stage of
our development with respect to the number of
options issuable to non-employee director under our
stock option plan and give us the ability to attract
and maintain qualified individuals to serve on the
Board of Directors. The affirmative vote of the
holders of a majority of the shares of Common Stock
represented in person or by proxy at the meeting and
entitled to vote is required for approval of the
amendment of the Plan.
UNLESS OTHERWISE INDICATED THEREON, THE ACCOMPANYING
PROXY WILL BE VOTED TO APPROVE THE AMENDMENT OF OUR
1995 STOCK OPTION PLAN AS DESCRIBED ABOVE. YOUR
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF
THE PROPOSED AMENDMENT.
14
PROPOSAL 3
TO CONSIDER AND VOTE UPON A PROPOSAL TO APPROVE THE
2001 ACCESS PHARMACEUTICALS, INC. RESTRICTED STOCK PLAN.
The Board of Directors has approved and adopted,
subject to shareholder ratification, the 2001
Restricted Stock Plan (the "Restricted Stock Plan").
The primary purpose of the Restricted Stock Plan is
to conserve Company cash and enable us to grant or
sell restricted stock to certain employees,
directors, consultants and advisers of the Company
thereby strengthening the Company's ability to
attract, motivate and retain key employees,
directors, consultants and advisors by providing
them with an opportunity to acquire shares of Common
Stock and thus participate in the ownership of the
Company, including the opportunity to share in any
appreciation in the value of such shares of Common
Stock. It is intended that the Restricted Stock Plan
will strengthen the mutuality of interest between
such persons and the stockholders of the Company and
provide additional incentive to certain employees,
directors, consultants and advisors to contribute to
the success of the Company.
The Restricted Stock Plan, which is attached to this
Proxy Statement as Appendix A, will be administered
by the Compensation Committee of the Board of
Directors, which will have complete authority,
subject to the limitations described herein, to
interpret and enforce the Restricted Stock Plan and
to determine all rights with respect to participants
under the Restricted Stock Plan. The Board may, at
any time, amend, modify, suspend or terminate the
Restricted Stock Plan as it shall deem advisable,
subject to the rights of holders of restricted stock
subject thereto and to approval of the stockholders
of the Company if required by applicable law or regulation.
No restricted stock may be granted or sold under the
Restricted Stock Plan after February 16, 2011.
Restricted stock may be granted or sold under the
Restricted Stock Plan to key employees, directors,
consultants, and advisers to the Company as the
Compensation Committee may determine. The shares
authorized for issuance under the Restricted Stock
Plan are shares of the Company's Common Stock, which
may be newly issued shares or previously issued
shares reacquired by the Company. The maximum number
of shares of Common Stock which may be made
available for restricted stock sold or granted
pursuant to the Restricted Stock Plan is 200,000
shares, subject to increase or decrease in the event
of subsequent stock splits or other capital changes,
including reorganizations or mergers.
As of March 30, 2001, no restricted stock had been
awarded under the Restricted Stock Plan. The
reported closing price of the Company's Common Stock
on American Stock Exchange on March 30, 2001 was
$2.95 per share.
Under the Restricted Stock Plan, the Company may
sell or grant shares of Common Stock to eligible
participants for such consideration (which may
consist wholly of services) and subject to such
restrictions (such as conditions of performance or
continued employment) as the Compensation Committee
may determine. The holder of restricted shares
issued under the Restricted Stock Plan will have all
rights of a stockholder with respect to such shares,
including the right to receive any dividends and
other distributions paid or made with respect
thereto. It is anticipated that shares awarded to
eligible participants under the Restricted Stock
Plan, whether sold or granted, may be subject to the
right of the Company to repurchase or reacquire the
shares if the restrictions to which such shares are
subject are not met.
15
Restricted shares issued under the Restricted Stock
Plan may not be sold, transferred or otherwise
disposed of until such shares are released from any
restrictions to which such shares are subject;
provided, however, that the Compensation Committee
may, at its discretion, permit the transfer of
restricted shares to one or more immediate family
members of the holder thereof or to a trust
maintained exclusively for the benefit of, or
partnership all of the interests of which are held
by, one or more of such immediate family members.
Restricted stock issued pursuant to the Restricted
Stock Plan will be taxed in accordance with Section
83 of the Internal Revenue Code of 1986, as amended,
and the regulations thereunder. A person that sold
or was granted shares under the Restricted Stock
Plan will recognize income for tax purposes at the
date such shares cease to be subject to any Company
right to repurchase or reacquire the same, or at the
date such shares are sold or granted to the person
if such person elects to have the Company's
repurchase or reacquisition right disregarded for
tax purposes. The income recognized (the difference
between the price paid for the shares, if any, and
the fair market value of the shares at the time the
employee realizes the income) will be ordinary
income to the employee for which the Company will be
able to claim a compensation deduction.
UNLESS OTHERWISE INDICATED THEREON, THE ACCOMPANYING
PROXY WILL BE VOTED FOR THE APPROVAL OF THE 2001
ACCESS PHARMACEUTICALS, INC. RESTRICTED STOCK PLAN.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
APPROVAL OF THE PROPOSED PLAN. THE AFFIRMATIVE VOTE
OF THE HOLDERS OF A MAJORITY OF THE SHARES OF THE
COMMON STOCK REPRESENTED IN PERSON OR BY PROXY AT
THE MEETING IS REQUIRED FOR RATIFICATION OF THE
ADOPTION OF THE RESTRICTED STOCK PLAN.
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, 2001. 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 .
Audit Fees
The aggregate fees billed for professional services
rendered by Grant Thornton LLP for the audit of the
Company's annual financial statement for the fiscal
year ended December 31, 2000 and the reviews of the
financial statements included in the Company's Forms
10-Q for such fiscal year totaled $31,000.
All Other Fees
The aggregate fees billed for all other services
rendered by Grant Thornton LLP for the fiscal year
ended December 31, 2000 totaled $14,000.
16
Auditor Independence
The Audit Committee considered whether the provision
of services covered under "All Other Fees" is
compatible with maintaining Grant Thornton LLP's
independence in determining whether to appoint Grant
Thornton LLP as the Company's independent auditors.
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, 2001.
REPORT OF THE AUDIT COMMITTEE REPORT TO STOCKHOLDERS
This Report shall not be deemed incorporated by
reference by any general statement incorporating by
reference this proxy statement into any filing under
the Securities Act of 1933 or under the Securities
Exchange Act of 1934, except to the extent the
Company specifically incorporates this report by
reference, and shall not otherwise be deemed filed
under such Acts.
Audit Committee Report
The Audit Committee of the Board of Directors of the
Company operates under a written charter adopted by
the Board of Directors in May 2000, which is
attached to this Proxy Statement as Appendix B. The
members of the Audit Committee are Messrs. Flinn,
Link and Tsao. All members of the Audit Committee
meet the independence standards of Section 121(A) of
the AMEX listing standards. In accordance with its
written charter, the Audit Committee assists the
Board of Directors in fulfilling its responsibility
for oversight of the quality and integrity of the
accounting, auditing and financial reporting
practices of the Company.
In discharging its oversight responsibility as to
the audit process, the Audit Committee obtained from
the independent accountants a formal written
statement describing all relationships between the
accountants and the Company that might bear on the
accountants' independence consistent with
Independence Standards Board Standard No. 1,
"Independence Discussions with Audit Committees."
The Audit Committee discussed with the independent
accountants any relationships that may impact their
objectivity and independence and satisfied itself as
to that firm's independence.
The Audit Committee discussed and reviewed with the
independent accountants all communications required
by generally accepted accounting standards,
including those described in Statement on Auditing
Standards No. 61, as amended, "Communication with
Audit Committees." In addition, the Audit Committee,
met with and without management present, and
discussed and reviewed the results of the
independent accountants' examination of the
financial statements.
Based upon the Audit Committee's discussion with
management and the independent accountants and the
Audit Committee's review of the representation of
management and the report of the independent
accountants to the Audit Committee, the Audit
Committee recommended to the Board of Directors that
the Company
17
include the audited consolidated
financial statements in its Annual Report on Form
10-K for the year ended December 31, 2000 for filing
with the Securities and Exchange Commission. The
Audit Committee also recommended the reappointment,
subject to stockholder approval, of the independent
accountants and the Board of Directors concurred in
such recommendation.
J. Michael Flinn, Member
Max Link, Member
Preston Tsao, Member
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.
STOCKHOLDER PROPOSALS FOR 2002 ANNUAL MEETING
The annual meeting of Stockholders in 2002 is
expected to be held on or about May 20, 2002. We
must receive Stockholder proposals, other than
nominations for directors, no later than December
14, 2001 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
18
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
April 17, 2001, 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, May 21, 2001 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.
SEE REVERSE SIDE
(continued, and to be signed on other side)
/X/ Please mark your votes as in this example.
WITHHOLD
1. Election of Directors FOR AUTHORITY
[ ] [ ]
Cumulative Votes for one or more nominees as follows:
Nominees:____ Herbert H. McDade, Jr. Class 3 - 3 Year Term
____ Kerry P. Gray Class 3 - 3 Year Term
____ J. Michael Flinn Class 3 - 3 Year Term
(INSTRUCTION: To withhold authority to vote for any
individual nominee, check the box "FOR" all nominees
and strike a line through the nominee's name at
right.)
2. Proposal to amend our 1995 Stock Option Plan
to adjust the number of options to be granted to
non-employee directors. FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Proposal to approve the 2001 Access
Pharmaceuticals, Inc. Restricted Stock
Plan. FOR AGAINST ABSTAIN
[ ] [ ] [ ]
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, 2001. [ ] [ ] [ ]
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.
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.