UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment
No, )
Filed by the Registrant x
Filed by a Party other than the
Registrant [ ]
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Check
the appropriate box:
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[
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Preliminary
Proxy Statement
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[ ]
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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[x]
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Definitive
Proxy Statement
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[
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Definitive
Additional Materials
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[ ]
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Soliciting
Material Pursuant to Rule 14a-11(c) or Rule
14a-12
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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):
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[
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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1)
Title of each class of securities to which transaction
applies:
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2)
Aggregate number of securities to which transaction
applies:
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3)
Per unit price or other underlying value of transaction computed
pursuant
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to
Exchange Act Rule 0-11(set forth the amount on which the filing fee
is
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calculated
and state how it was determined):
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4)
Proposed maximum aggregate value of
transaction:
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[
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Check
box if any part of the fee is offset as provided by Exchange
Act
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Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
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previously.
Identify the previous filing by registration statement number, or
the
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form
or schedule and the date of its
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1)
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No.:
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4) Date Filed:
ACCESS
PHARMACEUTICALS, INC.
2600
Stemmons Freeway, Suite 176
Dallas,
Texas 75207
(214) 905-5100
April 21,
2008
To Our
Stockholders:
You are cordially invited to attend
the Annual Meeting of Stockholders (the “Meeting”) of Access
Pharmaceuticals, Inc. (the “Company”) to be held on
Wednesday, May 21, 2008 at 10:00 a.m., local time, at the offices of Bingham
McCutchen LLP, 399 Park Avenue, 19th Floor,
New York, New York 10022, (212) 705-7000.
The Notice of Annual Meeting and the
Proxy Statement that follow describe the business to be considered and acted
upon by stockholders of the Company at the Meeting. 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. YOU MAY ALSO REVOKE THE PROXY 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.
Sincerely,
/s/ Jeffrey B.
Davis
Jeffrey B. Davis
Chief Executive
Officer
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, 2008
PLEASE
TAKE NOTICE that the Annual Meeting of Stockholders (the “Meeting”) of Access
Pharmaceuticals, Inc. (the “Company”) will be held at
the offices of Bingham McCutchen LLP, 399 Park Avenue, 19th Floor,
New York, New York 10022, on Wednesday, May 21, 2008, at 10:00 a.m., local time,
for the following purposes:
1.
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To
elect two Class 1 Directors to hold office for a term of three years and
until their successors are elected and
qualified.
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2.
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To
consider and act upon a proposal to amend the Company’s Certificate of
Incorporation to make certain changes to the terms of the Company’s
outstanding Series of Preferred
Stock.
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3.
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To
consider and act upon a proposal to amend the Company’s 2005 Equity
Incentive Plan to increase the number of shares of Common Stock reserved
for issuance thereunder.
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4.
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To
consider and act upon a proposal to ratify the appointment of Whitley Penn
LLP as our independent registered public accounting firm for the fiscal
year ending December 31, 2008.
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5.
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To
transact such other business as may properly come before the Meeting or
any postponements or adjournments
thereof.
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Stockholders of record at the close
of business on March 28, 2008, the record date for the Meeting (the “Record Date”) are entitled to
receive notice of, and to vote at, the Meeting and any adjournment or
postponement thereof.
Information relating to the proposals
described above is set forth in the accompanying Proxy Statement dated April 21,
2008. Please carefully review the information contained in the Proxy Statement,
which is incorporated into this Notice. Our Annual Report for the fiscal year
ended December 31, 2007 accompanies the Proxy Statement.
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 Company, 40 Wall Street, 46th Floor, New York, New York
10005. Proxies will also be accepted by transmission of a facsimile provided
that such facsimile contains sufficient information from which it can be
determined that the transmission was authorized by the stockholder delivering
such proxy. American Stock Transfer & Trust Company's fax number is (718)
234-2287.
By Order of the Board of
Directors,
/s/ Jeffrey B.
Davis
Jeffrey B. Davis
Chief Executive Officer
Dallas,
Texas
April 21,
2008
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, 2008
This Proxy Statement is furnished by
Access Pharmaceuticals, Inc., a Delaware corporation (the “Company”), to holders of
its common stock, par value $.01 per share (the “Common Stock”), and to holders
of its preferred stock, par value $.01 per share (the “Preferred Stock”), in
connection with the solicitation of proxies by our Board of Directors (the “Board”) for use at our
Annual Meeting of Stockholders (the “Meeting”), and at any and
all adjournments or postponements thereof. The Meeting will be held on
Wednesday, May 21, 2008 at 10:00 a.m., local time, at the offices of Bingham
McCutchen LLP, 399 Park Avenue, 19th Floor,
New York, New York 10022. This Proxy Statement and the accompanying form of
proxy is first being sent to holders of Common Stock and Preferred Stock on or
about April 24, 2008. Our mailing address and the location of our principal
executive offices are at 2600 Stemmons Freeway, Suite 176, Dallas, Texas 75207.
Our telephone number is (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 or, if no choice is specified for one or
more proposals in a proxy submitted by or on behalf of a Company stockholder,
the shares represented by such proxy will be voted in favor of such proposals
and in the discretion of the named proxies with respect to any other matters
which may properly come before the Meeting.
At the close of business on March 28,
2008, the record date for the Meeting, the number of our issued and outstanding
shares of Common Stock entitled to vote was 5,623,781. Each share of common
stock entitles the holder to one vote with respect to all matters submitted to
stockholders at the meeting. In addition, as of March 28, 2008, 3,227.3617
shares of our Series A Cumulative Convertible Preferred Stock (the "Series A
Preferred Stock") were issued and outstanding. The Series A Preferred Stock is
convertible into shares of common stock and votes together with the common stock
on an as-if-converted to common stock basis. Unless a holder of Series A
Preferred Stock elects otherwise, its ability to convert its Series A Preferred
Stock into common stock or to vote on an as-if-converted to common stock basis
is restricted to the extent that such conversion would result in the holder
owning more than 4.99% of our issued and outstanding common stock or voting
together with the common stock on an as-if-converted to common stock basis in
respect of more than 4.99% of our issued and outstanding common
stock. Eight holders of our Series A Preferred Stock have elected not to be
governed by these restrictions, although we have entered into an agreement with
one such holder whereby that holder's ability to convert or vote its shares of
Series A Preferred Stock will not be subject to a beneficial ownership cap of
4.99%. Consequently, giving effect to the beneficial ownership cap restrictions,
the Series A Preferred Stock issued and outstanding as of March 28, 2008 is
convertible into 11,666,195 shares of common stock and the holders of the Series
A Preferred Stock vote on an as-converted basis with the holders of our common
stock. The Company has no other voting securities.
A complete list of Company
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 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 as present
for purposes of determining the presence or absence of a quorum for the
transaction of business at the Meeting. A broker non-vote occurs when a nominee
holding shares for a beneficial owner does not vote on a particular proposal
because the nominee does not have discretionary voting power with respect to
that item and has not received instructions from the beneficial owner. We
believe that nominees have discretionary voting power with respect to all of the
proposals described in this Proxy Statement except for Proposal 2 and therefore
broker non-votes will exist only for this proposal.
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 two (the number of directors to be elected) and then vote the resulting total
number of shares for a single nominee, or distribute such votes on the ballot
among the two nominees desired. The proxies submitted to the Board in response
to this solicitation may, at the discretion of the proxy holder, cumulate the
votes of the shares the proxies represent. However, the Board 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 in the
solicitation to so indicate on said proxy.
For Proposal 1, directors will be
elected by a plurality of shares present in person or represented by proxy at
the Meeting, which means that the two individuals receiving the highest number
of “For” votes will be
elected directors. Abstentions will have no effect on the voting results of
Proposal 1. Proposals 2 will be approved upon the affirmative vote of a majority
of shares outstanding and voted in person or by proxy at the Meeting and
entitled to vote on such proposals. For the purposes of Proposal 2, abstentions
and broker non-votes will have the effect of a vote against such proposal.
Proposals 3 and 4 will be approved upon the affirmative vote of a majority of
shares present in person or by proxy at the Meeting and entitled to vote on such
proposals. Abstentions will have the effect of a vote against such proposals.
Broker non-votes will have no effect on the vote for Proposal 3.
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, 2007 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 Company directors, officers and employees
may also solicit in person, by telephone, email or by fax.
The Board 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 the recommendations of the Board, or, if no
such recommendations are made, in accordance with their best
judgment.
This Proxy Statement should be read
in conjunction with our Annual Report for the fiscal year ended December 31,
2007, including the financial statements and management's discussion and
analysis of financial condition and results of operations contained
therein.
Corporate
Governance Matters
Corporate
Governance Practices and Board Independence
The Board has adopted a number of
corporate governance documents, including charters for its Audit and Finance
Committee, Compensation Committee and Nominating and Corporate Governance
Committee, corporate governance guidelines, a code of business conduct and
ethics for employees, executive officers and directors (including its principal
executive officer and principal financial officer) and a whistleblower policy
regarding the treatment of complaints on accounting, internal accounting
controls and auditing matters. All of these documents are available on the
Company's website at www.accesspharma.com under the heading “Investor
Relations,”
and a copy of any such document may be obtained, without charge, upon written
request to the Company, c/o Investor Relations, 2600 Stemmons Freeway, Suite
176, Dallas, Texas, 75207.
Stockholder
Communications with the Board
The Board has established a process for
stockholders to send communications to it. Stockholders may send written
communications to the Board or individual directors to Access Pharmaceuticals,
Inc., Board of Directors, c/o Chief Executive Officer, 2600 Stemmons Freeway,
Suite 176, Dallas, Texas 75207. Stockholders also may send communications via
email to akc@accesspharma.com with the notation “Attention: Chief
Executive Officer” in the Subject
field. All communications will be reviewed by the Chief Executive Officer of the
Company, who will determine whether such communications are relevant and/or for
a proper purpose and appropriate for Board review and, if applicable, submit
such communications to the Board on a periodic basis.
Attendance
of Directors at Annual Stockholder Meetings
With the exception of David P. Luci,
all of the directors then currently serving as directors attended the 2007
annual stockholder meeting. Although the Company currently does not require
directors to attend annual stockholder meetings, it does encourage directors to
do so and welcomes their attendance. The Company generally schedules a Board
meeting in conjunction with the Meeting and plans to continue to do so in the
future. The Company expects that directors will attend annual stockholder
meetings absent a valid reason.
Nomination
and Election of Directors
When seeking candidates for director,
the Nominating and Corporate Governance Committee may solicit suggestions from
incumbent directors, management or others. After conducting an initial
evaluation of a candidate, the committee will interview that candidate if it
believes the candidate might be suitable to serve as a director. The committee
may also ask the candidate to meet with Company management. If the committee
believes a candidate would be a valuable addition to the Board and there is
either a vacancy on the Board or the committee believes it is in the best
interests of the Company and our stockholders to increase the number of Board
members to elect that candidate, it will recommend to the full Board that
candidate's election. Messrs. Davis and Alvino were each initially
appointed to the Board as a result of contractual obligations of the
Company.
Before nominating a sitting director
for reelection at an annual stockholder meeting, the committee will consider the
director's performance on the Board and whether the director's reelection would
be in the best interests of the Company’s stockholders and consistent with the
Company's corporate governance guidelines and the Company's continued compliance
with applicable law, rules and regulations.
The Board believes that it should be
comprised of directors with diverse and complementary backgrounds, and that
directors should have expertise that, at a minimum, may be useful to the Company
and may contribute to the success of the Company's business. Directors also
should possess the highest personal and professional ethics and should be
willing and able to devote an amount of time sufficient to effectively carry out
their duties and contribute to the success of the Company's business. When
considering candidates for director, the committee takes into account a number
of factors, including the following:
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Independence
from management;
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Age,
gender and ethnic background;
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Relevant
business experience;
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Judgment,
skill and integrity;
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Existing
commitments to other businesses;
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Potential
conflicts of interest;
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Corporate
governance background;
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Financial
and accounting background;
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Executive
compensation background; and
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Size
and composition of the existing
Board.
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The Nominating and Corporate Governance
Committee will consider candidates for director suggested by stockholders by
considering the foregoing criteria and the additional information referred to
below. Stockholders wishing to suggest a candidate for director should write to
the Company, c/o Investor Relations, 2600 Stemmons Freeway, Suite 176, Dallas,
Texas 75207 and include the following:
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The
name and address of the stockholder and a statement that he, she or it is
a stockholder of the Company and is proposing a candidate for
consideration by the committee;
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The
class and number of shares of Company capital stock, if any, owned by the
stockholder as of the record date for the applicable annual stockholder
meeting (if such date has been announced) and as of the date of the
notice, and length of time such stockholder has held such
shares;
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The
name, age and address of the
candidate;
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A
description of the candidate's business and educational
experience;
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The
class and number of shares of Company capital stock, if any, owned by the
candidate, and length of time such candidate has held such
shares;
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Information
regarding each of the foregoing criteria the Board generally considers,
other than the factor regarding Board size and composition, sufficient to
enable the committee to evaluate the
candidate;
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A
description of any relationship between the candidate and any customer,
supplier or competitor of the Company or any actual or potential conflict
of interest;
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A
description of any relationship or understanding between the stockholder
and the candidate;
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A
statement that the candidate is willing to be considered and willing to
serve as a director if nominated and elected;
and
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A
statement as to whether the director is independent under applicable AMEX
rules.
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Director
Independence
The Board has determined that each of
Dr. Ahn, Mr. Alvino and Mr. Meakem are independent under applicable AMEX rules.
Based on the fully-diluted Common Stock ownership of SCO Capital Partners LLC
and its affiliates, the Board has determined that the Company is a “Controlled
Company” under applicable AMEX rules and regulations and therefore under
applicable AMEX rules and regulations, the Company would not be required to
comply with certain director independence requirements. Although the
Company is not currently listed on AMEX, and is instead listed on the OTCBB, the
Company has chosen to follow the AMEX rules and regulations governing director
independence.
PROPOSAL
1
ELECTION
OF DIRECTORS
Our Certificate of Incorporation and
Bylaws presently provide that our Board shall consist of between 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 directors
at nine, with such number to be reduced to seven after the completion of and
adjournment of the Meeting. The term of office of one class of Directors expires
each year in rotation so that one class is elected at each annual meeting of
stockholders for a three-year term. The Board presently consists of nine
members. As a result of our policy regarding Board member age limitation, Mr.
Meakem will retire as director as of the date of the Meeting. In addition, Dr.
Mazanet has decided not to stand for re-election.
Members of each class serve a term of
three years until the respective annual meeting of stockholders and election and
qualification of their successors. Mr. Davis and Dr. Cvitkovic are Class 1
Directors with their terms set to expire upon the annual meeting of stockholders
in 2008. Dr. Howell and Messrs. Luci and Rouhandeh are Class 2 Directors with
their terms set to expire upon the annual meeting of stockholders in 2009. Dr.
Ahn and Mr. Alvino are Class 3 Directors with their terms to expire upon the
annual meeting of stockholders in 2010. Each of our officers is selected by the
Board for a term of one year. There is no family relationship among any of the
directors or officers.
Nominees
for Term Expiring at the Meeting (Class 1 Directors)
Mr. Davis and Dr. Cvitkovic are Class
1 Directors. Mr. Davis and Dr. Cvitkovic have served as directors since March
2006 and February 2007, respectively. The terms of Mr. Davis and Dr. Cvitkovic
expire at the Meeting. If elected at the Meeting, both will serve for a term of
three years expiring on the date of the annual meeting of stockholders in 2011.
The terms of the other five remaining Directors will continue as indicated
above.
Business
and Experience of Nominees for Director
Mr. Jeffrey B. Davis became a
director in March 2006. Mr. Davis became Chief Executive Officer of the Company
on December 26, 2007. Previously, Mr. Davis was Chairman of the Board, member of
the Executive Committee and Chairman of the Compensation Committee of the Board.
Mr. Davis currently serves as President of SCO Financial Group LLC and has been
employed by SCO since 1997. Previously, Mr. Davis served in senior management at
a publicly traded healthcare technology company. Prior to that, Mr. Davis was an
investment banker with various Deutsche Bank banking organizations, both in the
U.S. and Europe. Mr. Davis also served in senior marketing and product
management positions at AT&T Bell Laboratories, where he was also a member
of the technical staff, and at Philips Medical Systems North America. Mr.
Davis is currently on the board of MacroChem Corporation, Uluru, Inc. and Virium
Pharmaceuticals, Inc., a private biotechnology company. Mr. Davis holds a
B.S. in biomedical engineering from Boston University and an M.B.A. degree from
the Wharton School, University of Pennsylvania.
Dr. Esteban Cvitkovic became
a director in February 2007 as Vice Chairman (Europe) and is also a consultant
to the Company as Senior Director, Oncology Clinical Research & Development.
Recently, the oncology-focused CRO, Cvitkovic & Associés Consultants (CAC),
founded by Dr. Cvitkovic 11 years ago and which he developed from a small
oncology consultancy to a full-service CRO, was sold to AAIPharma to become
AAIOncology. Dr. Cvitkovic is currently a Senior Medical Consultant to
AAIOncology. In addition, he maintains a part-time academic practice including
teaching at the hospitals Beaujon and St. Louis in Paris. Dr. Cvitkovic is
Scientific President of the FNAB, a foundation devoted to the furthering of
personalized cancer treatments. Together with a small number of collaborators,
he has recently co-founded Oncoethix, a biotech company focused on licensing and
co-development of anti-cancer molecules. Dr. Cvitkovic has authored more than
200 peer-reviewed articles and 600 abstracts focused on therapeutic oncology
development. His international career includes staff and academic appointments
at Memorial Sloan Kettering Cancer Center (New York), Columbia Presbyterian (New
York), Instituto Mario Negri (Milan), Institut Gustave Roussy (Villejuif),
Hôpital Paul Brousse (Villejuif) and Hôpital St. Louis (Paris).
The nominees have consented to serve
as our Directors and the Board has no reason to believe that either nominee will
be unavailable for such service.
The Board recommends a vote “FOR” the proposed
nominees to the Board and the enclosed proxy will be so voted unless a contrary
vote is indicated. Each Director shall be elected by a plurality of the total
votes cast by the holders of Common Stock and Preferred Stock, on an
as-converted basis, present in person or by proxy and 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 IN THE EVENT THE
NOMINEES ARE UNABLE OR UNWILLING TO SERVE.
Information
With Respect to Other Directors
Directors
Whose Terms Expire at the Annual Meeting in 2009 (Class 2
Directors)
Stephen B. Howell, M.D. has
served as one of Access’ directors since 1996. Dr. Howell is a member of the
Compensation Committee of the Board and a scientific consultant to the Company.
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 founded DepoTech, Inc. and served as a
member of its board of directors from 1989 to 1999. Dr. Howell served on the
board of directors of Matrix Pharmaceuticals from 2000 to 2002. Dr. Howell
received his A.B. at the University of Chicago and his M.D. from Harvard Medical
School.
Mr. David P. Luci has served
as one of Access’ directors since January 2007 and is also chairman of the Audit
and Finance Committee and a member of the Compensation Committee. Mr. Luci is
currently General Counsel and Vice President of Corporate Development of
MacroChem Corporation. Mr. Luci was Executive Vice President of Bioenvision,
Inc. until August 2007. He has also served as Bioenvision’s chief financial
officer, general counsel and corporate secretary since July 2004, after serving
as director of finance, general counsel and corporate secretary since July 2002.
From September 1994 to July 2002, Mr. Luci served as a corporate associate at
Paul, Hastings, Janofsky & Walker LLP (New York office). Prior to that, Mr.
Luci served as a senior auditor at Ernst & Young LLP (New York office). Mr.
Luci is a certified public accountant. He holds a Bachelor of Science in
Business Administration with a concentration in accounting from Bucknell
University and a J.D. (cum laude) from Albany Law School of Union
University.
Mr. Steven H. Rouhandeh became
a director and Chairman of the Board on March 4, 2008. He is a Chief Investment Officer
of SCO Capital Partners, L.P., a New York based life sciences fund. Mr.
Rouhandeh also is a founder of SCO Financial Group LLC, a highly successful
value-oriented healthcare group with an 11-year track record in this sector
(advisory, research, banking and investing). He possesses a diverse
background in financial services that includes experience in asset management,
corporate finance, investment banking and law. He has been active
throughout recent years as an executive in venture capital and as a founder of
several companies in the biotech field. His experience also includes
positions as Managing Director of a private equity group at Metzler Bank, a
private European investment firm and Vice President, Investment Banking at
Deutsche Morgan Grenfell. Mr. Rouhandeh was also a corporate attorney at
New York City-based Cravath, Swaine & Moore. Mr. Rouhandeh holds a J.D.,
from Harvard Law School, Harvard University and B.A. Government, Economics, from
Southern Illinois University.
Directors
Whose Terms Expire at the Annual Meeting in 2010 (Class 3
Directors)
Dr. Mark J. Ahn became a
director in September 2006 and is a member of the Executive Committee and the
Nominating & Corporate Governance Committee. Dr. Ahn is Professor and Chair,
Science & Technology Faculties of Commerce & Administration Science at
Victoria University of Welling, New Zealand and has been in this position since
September 2007. Dr. Ahn was President and Chief Executive Officer and a member
of the board of directors of Hana Biosciences, Inc. from November 2003 to
September 2007. Prior to joining Hana, from December 2001 to November 2003, he
served as Vice President, Hematology and corporate officer at Genentech, Inc.
where he was responsible for commercial and clinical development of the
Hematology franchise. From February 1991 to February 1997 and from February 1997
to December 2001, Dr. Ahn was employed by Amgen and Bristol-Myers Squibb
Company, respectively, holding a series of positions of increasing
responsibility in strategy, general management, sales & marketing, business
development, and finance. He has also served as an officer in the U.S. Army. Dr.
Ahn is a Henry Crown Fellow at the Aspen Institute, founder of the Center for
Non-Profit Leadership, a director of TransMolecular, Inc., a privately held
biotechnology company focused on neuroncology, and a member of the Board of
Trustees for the MEDUNSA (Medical University of South Africa) Trust. Dr. Ahn
received a B.A. in History and an M.B.A. in Finance from Chaminade University.
He was a graduate fellow in Economics at Essex University, and has a Ph.D. in
Business Administration from the University of South Australia.
Mr. Mark J. Alvino became a
director in March 2006 initially as a designee of SCO Capital Partners LLC and
is a member of the Nominating and Corporate Governance Committee. Mr. Alvino is
currently Managing Director for Griffin Securities and has been in this position
since May 2007. Mr. Alvino was Managing Director for SCO Financial Group LLC
from July 2002 to May 2007. He is currently on the board of directors of
MacroChem Corporation. He previously worked at Feinstein Kean Healthcare, an
Ogilvy Public Relations Worldwide Company. There he was Senior Vice President,
responsible for managing both investor and corporate communications programs for
many private and public companies and acted as senior counsel throughout the
agency's network of offices. Prior to working at FKH, Mr. Alvino served as Vice
President of Investor Relations and managed the New York Office of Allen &
Caron, Inc., an investor relations agency. His base of clients included medical
devices, biotechnology, and e-healthcare companies. Mr. Alvino also spent
several years working with Wall Street brokerages including Ladenburg, Thallman
& Co. and Martin Simpson & Co.
Directors
whose terms are expiring as of the date of the Meeting and will not stand for
Reelection
Rosemary Mazanet, M.D. became
a director of the Company in May 2006. Dr. Mazanet currently serves as Managing
Director of Argenis Capital. She served as Chief Executive Officer of
Breakthrough Therapeutics, LLC, a privately held development stage biotechnology
company from September 2004 to December 2007. From May 2005 to January 2007 she
served as Access’ Acting Chief Executive Officer. From June 1998 to February
2004, Dr. Mazanet served as Chief Scientific Officer and a General Partner of
Oracle Partners, L.P., a healthcare investment firm. Dr. Mazanet also serves as
an independent director at GTx, Inc (Nasdaq: GTXI), Aksys, Ltd. and is a trustee
at the University of Pennsylvania, School of Medicine. Prior to joining Oracle,
Dr. Mazanet was the Director of Clinical Research at Amgen, Inc. She has over 20
years experience in the pharmaceutical industry, and was trained as a Medical
Oncologist/Hematologist in the Harvard Medical System, and holds an M.D. and
Ph.D. from University of Pennsylvania.
Mr. John J. Meakem, Jr. has
been one of Access’ directors since 2001. Mr. Meakem is also the chairman of the
Nominating and Corporate Governance Committee of the Board and a member of the
Audit and Finance Committee of the Board. 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.
Executive
Officers
David P. Nowotnik, Ph.D. has
been Senior Vice President Research and Development since January 2003 and was
Vice President Research and Development from 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. Phillip S. Wise has been
Access’ Vice President Business Development since June 2006. Mr. Wise was Vice
President of Commercial and Business Development for Enhance Pharmaceuticals,
Inc. and Ardent Pharmaceuticals, Inc. from 2000 until 2006. Prior to that time
he was with Glaxo Wellcome, from 1990 to 2000 in various
capacities.
Mr. Stephen B. Thompson has
been Vice President since 2000 and Access’ Chief Financial Officer since 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 |
Steven H.
Rouhandeh |
50 |
Chairman of
the Board |
Jeffrey B.
Davis |
45 |
Chief
Executive Officer, Director |
Rosemary
Mazanet, M.D., Ph.D.
|
52 |
Vice
Chairman |
Esteban
Cvitkovic, M.D.
|
58 |
Vice
Chairman – Europe |
Mark J. Ahn,
Ph.D. |
45 |
Director |
Mark J.
Alvino |
40 |
Director |
Stephen B.
Howell, M.D. |
63 |
Director |
David
P. Luci |
41 |
Director |
John J.
Meakem, Jr. |
71 |
Director |
David P.
Nowotnik, Ph.D. |
59 |
Senior Vice
President Research & Development |
Phillip S.
Wise |
49 |
Vice
President, Business Development & Strategy |
Stephen B.
Thompson |
54 |
Vice
President, Chief Financial Officer, Treasurer,
Secretary
|
Committees
of the Board of Directors
The Board established an Audit and
Finance Committee, a Compensation Committee and a Nominating and Corporate
Governance Committee. Each of the committees of the Board acts pursuant to a
separate written charter adopted by the Board. On February 8, 2007, the Board
also established an Executive Committee consisting of Mr. Davis, Mr. Stephen R.
Seiler and Dr. Ahn. The committee was dissolved on February 12,
2008.
The Audit and Finance Committee is
currently comprised of David P. Luci (chairman) and John J. Meakem, Jr. Mr. Luci
is independent under applicable SEC rules relating to Audit Committee
member independence. Mr. Meakem is independent under applicable SEC and AMEX
rules and regulations. The Board has determined that Mr. Luci, the chairman of
the Audit and Finance Committee, is an “audit committee financial expert,” under
applicable SEC rules and regulations. The Audit and Finance Committee’s
responsibilities and duties are among other things to engage the independent
auditors, review the audit fees, supervise matters relating to audit functions
and review and set internal policies and procedure regarding audits, accounting
and other financial controls.
The Compensation Committee is currently
comprised of Mr. David P. Luci and Dr. Stephen B. Howell. Mr. Luci
is a non-employee director under applicable SEC rules and “outside” under
Internal Revenue Code Section 162(m). Mr. Luci and Dr. Howell are not
independent under applicable AMEX rules and regulations.
The Nominating and Corporate Governance
Committee is currently comprised of John J. Meakem, Jr. (chairman), Mark Ahn,
PhD and Mark J. Alvino. All committee members are independent under applicable
AMEX rules and regulations. The Nominating and Corporate Governance Committee is
responsible for, among other things, considering potential Board members, making
recommendations to the full Board as to nominees for election to the Board,
assessing the effectiveness of the Board and implementing Access’ corporate
governance guidelines.
The table
below provides current membership information for each Board
committee:
Director
|
|
Audit and Finance
|
Compensation
|
Nominating
and
Corporate
Governance
|
Mark
J. Ahn, PhD (3)
|
|
|
|
X
|
Mark
J. Alvino (3)
|
|
|
|
X
|
Esteban
Cvitkovic, MD (1)
|
|
|
|
|
Jeffrey
B. Davis (1)
|
|
|
|
|
Stephen
B. Howell, MD (2)
|
|
|
X
|
|
David
P. Luci (2)
|
|
X*
|
X*
|
|
Rosemary
Mazanet, MD, PhD (4)
|
|
|
|
|
John
J. Meakem, Jr. (1)
|
|
X
|
|
X*
|
Steven
H. Rouhandeh (2)
|
|
|
|
|
|
|
|
|
|
____________________
*
Chair
(1) Class I directors: Term as director is expected to expire in 2008, subject
to re-election
(2) Class II directors: Term as director is expected to expire in
2009
(3) Class III directors: Term as director expires in 2010
(4)
Term as director will expire as of the 2008 annual meeting
Meetings
Attendance
During the 2007 fiscal year, the Board held ten (10) meetings. Each director
attended 75 percent or more of the aggregate number of Board meetings and
meetings of committees of which he or she was a member that were held during the
period of his or her service as a director.
The Audit and Finance Committee did not hold any meetings during the 2007 fiscal
year but the Charirman of the Audit and Finance Committee met with the
Company's auditors on a quarterly basis.
The Compensation Committee did not hold any meetings during the 2007 fiscal
year, but the Chairman of the Committee met with management several times during
the year.
The Nominating and Corporate Governance Committee did not hold any
meetings during the 2007 fiscal year, but did meet informally on several
occassions.
The Company does not have a formal policy regarding attendance by members of the
Board at the Company's annual meeting of stockholders, although it does
encourage attendance by the directors. Historically, more than a majority of the
directors have attended the annual meeting. With the exception of David P. Luci,
all of the directors then in office attended the 2007 annual stockholders
meeting.
Compensation
of Directors
Each director who is not also an
Access employee receives a quarterly fee of $3,000 and $1,000 per quarter per
committee (aggregate for all committees) in which he/she is a member. The
Chairman of the Board is paid an additional $1,000 per quarter and the Chairman
of each of the Audit and Finance and Compensation Committee is paid an
additional $500 per quarter. Each director will have $2,000 deducted from his or
her fee if the director misses more than one Board meeting, and $1,000 deducted
per committee meeting not attended. In addition, Access reimbursed each
director, whether an employee or not, the expenses of attending Board and
committee meetings. Each non-employee director is also entitled to receive
options to purchase 2,500 shares of Common Stock on the date of each annual
meeting of stockholders and options to purchase 25,000 shares of Common Stock
when he/she is first appointed as a director.
Director
Compensation Table - 2007
The table below represents the compensation paid to our outside directors
during the year ended December 31, 2007:
Name
|
Fees
earned or Paid in Cash ($)
|
Stock
Awards ($)
|
Option
Awards ($)
(1)
|
All
Other Compensation ($)
|
Total
($)
|
Mark
J. Ahn, PhD (2)
|
16,000
|
-
|
2,000
|
-
|
18,000
|
Mark
J. Alvino
|
16,000
|
-
|
-
|
-
|
16,000
|
Esteban
Cvitkovic, MD (3)
|
11,000
|
-
|
256,000
|
153,000
|
420,000
|
Jeffrey
B. Davis
|
22,000
|
-
|
-
|
-
|
22,000
|
Stephen
B. Howell, MD (4)
|
15,000
|
-
|
2,000
|
67,000
|
84,000
|
David
P. Luci (5)
|
13,000
|
-
|
50,000
|
-
|
63,000
|
Rosemary
Mazanet, MD, PhD (6)
|
12,000
|
-
|
330,000
|
29,000
|
371,000
|
John
J. Meakem, Jr. (7)
|
18,000
|
-
|
2,000
|
-
|
20,000
|
___________________
|
(1)
|
|
The
value listed in the above table represents the fair value of the options
recognized as expense under FAS 123R during 2007, including unvested
options granted before 2007 and those granted in 2007. Fair value is
calculated as of the grant date using a Black-Sholes (“Black-Sholes”)
option-pricing model. The determination of the fair value of share-based
payment awards made on the date of grant is affected by our stock price as
well as assumptions regarding a number of complex and subjective
variables. Our assumptions in determining fair value are described in note
10 to our audited financial statements for the year ended December 31,
2007, included in our Annual Report on Form 10-K.
|
|
(2)
|
|
Represents
expense recognized in 2007 in respect of 25,000 options to purchase shares
based on a grant date fair value of $7,592.
|
|
(3)
|
|
Represents
expense recognized in 2007 in respect of 25,000 options to purchase shares
based on a grant date fair value of $157,027 and an additional 25,000
options to purchase shares based on a grant date fair value of $99,347.
Includes $153,000 Dr. Cvitkovic received for scientific consulting
services in 2007.
|
|
(4)
|
|
Represents
expense recognized in 2007 in respect of 25,000 options to purchase shares
based on a grant date fair value of $5,581. Includes $67,000 Dr. Howell
received for scientific consulting services in 2007.
|
|
(5)
|
|
Represents
expense recognized in 2007 in respect of 25,000 options to purchase shares
based on grant date fair value of $65,768.
|
|
(6)
|
|
Represents
expense recognized in 2007 in respect of 50,000 options to purchase shares
based on a grant date fair value of $147,737; 200,000 options to purchase
shares based on a grant date fair value of $81,464; and an additional
100,000 options to purchase shares based on a grant date fair value of
$263,071. Includes $29,000 Dr. Mazanet received for scientific consulting
services in 2007.
|
|
(7)
|
|
Represents
expense recognized in 2007 in respect of 25,000 options to purchase shares
based on a grant date fair value of
$5,581.
|
Equity Compensation Plan
Information
The
following table sets forth information as of December 31, 2007 about shares of
Common Stock outstanding and available for issuance under our equity
compensation plans existing as of such date.
|
|
|
|
|
|
|
|
Number of
securities |
|
|
|
|
|
|
|
|
|
remaining
available |
|
|
|
|
|
|
|
|
|
for future
issuance |
|
|
|
Number of securities
to |
|
|
Weighted-average |
|
|
under equity |
|
|
|
be issued upon
exercise |
|
|
exercise price
of |
|
|
compensation
plans |
|
|
|
of outstanding
options |
|
|
outstanding
options |
|
|
(excluding
securities |
|
Plan Category |
|
warrants and rights |
|
|
warrants and rights |
|
|
reflected in column
(a)) |
|
Equity
compensation plans |
|
|
|
|
|
|
|
|
|
approved by
security
|
|
|
|
|
|
|
|
|
|
holders
|
|
|
|
|
|
|
|
|
|
2005 Equity
Incentive Plan
|
|
|
926,386 |
|
|
$ |
1.59 |
|
|
|
717,328 |
|
1995 Stock
Awards Plan
|
|
|
162,417 |
|
|
|
15.53 |
|
|
|
- |
|
2001
Restricted Stock Plan
|
|
|
- |
|
|
|
- |
|
|
|
52,818 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans |
|
|
|
|
|
|
|
|
|
|
|
|
not approved
by security |
|
|
|
|
|
|
|
|
|
|
|
|
holders |
|
|
|
|
|
|
|
|
|
|
|
|
2007 Special
Stock Option Plan
|
|
|
100,000 |
|
|
|
2.90 |
|
|
|
350,000 |
|
Total |
|
|
1,188,803 |
|
|
$ |
3.60 |
|
|
|
1,120,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
Ownership of Certain Beneficial Owners and Management
Based solely
upon information made available to Access, the following table sets forth
certain information with respect to the beneficial ownership of Access’ Common
Stock as of April 21, 2008 by (i) each person who is known by Access to
beneficially own more than five percent of Access’ Common Stock; (ii) each of
Access’ directors; (iii) each of Access’ named executive officers; and (iv) all
Access’ executive officers and directors as a group. Beneficial ownership as
reported in the following table has been determined in accordance with Rule
13d-3 under the Securities Exchange Act of 1934, as amended. The address of each
holder listed below, except as otherwise indicated, is c/o Access
Pharmaceuticals, Inc., 2600 Stemmons Freeway, Suite 176, Dallas, Texas
75207.
Common
Stock Beneficially Owned
|
Name
of Beneficial Owner
|
Number
of Shares(1)
|
% of
Class(20)
|
Steven
H. Rouhandeh(2)
|
-
|
*(2)
|
Jeffery
B. Davis (3)
|
30,820
|
*(3)
|
Mark
J. Ahn, Ph. D. (4)
|
25,000
|
*
|
Mark
J. Alvino (5)
|
80,525
|
1.4%
|
Esteban
Cvitkovic, M.D. (6)
|
50,000
|
*
|
Stephen
B. Howell, M.D. (7)
|
50,839
|
*
|
David
P. Luci (8)
|
37,500
|
*
|
Rosemary
Mazanet, M.D., Ph.D.(9)
|
289,959
|
4.9%
|
John
J. Meakem, Jr.
(10)
|
53,536
|
*
|
David
P. Nowotnik, Ph.D. (11)
|
175,682
|
3.0%
|
Phillip
S. Wise (12)
|
100,000
|
1.8%
|
Stephen
B. Thompson (13)
|
143,375
|
2.5%
|
SCO
Capital Partners LLC, SCO Capital Partners LP, and Beach Capital LLC (14)
|
13,001,870
|
74.0%
|
Larry
N. Feinberg (15)
|
2,479,372
|
31.7%
|
Lake
End Capital LLC (16)
|
1,623,993
|
22.6%
|
Perceptive
Life Sciences
Master
Fund, Ltd. (17)
|
999,999
|
15.1%
|
Midsummer
Investment, Ltd. (18)
|
750,000
|
11.8%
|
All
Directors and Executive
Officers
as a group
(consisting
of 12 persons) (19)
|
1,037,237
|
15.7%
|
* - Less
than 1%
(1)
|
Includes
Access’ outstanding shares of Common Stock held plus all shares of Common
Stock issuable upon conversion of Series A Preferred Stock, exercise of
options, warrants and other rights exercisable within 60 days of April 21,
2008.
|
(2)
|
Steven
H. Rouhandeh is Chairman of SCO Securities LLC. a wholly-owned subsidiary
of SCO Financial Group LLC. His address is c/o SCO Capital Partners LLC,
1285 Avenue of the Americas, 35th Floor, New York, NY 10019. SCO
Securities LLC and affiliates (SCO Capital Partners LP and Beach Capital
LLC) are known to beneficially own an aggregate of 787,796 shares of
Access Common Stock, warrants to purchase an aggregate of 5,922,103 shares
of Access’ Common Stock and 7,077,100 shares of Common Stock are issuable
to them upon conversion of Series A Preferred Stock. Mr. Rouhandeh
disclaims beneficial ownership of all such shares except to the extent of
his pecuniary interest therein. Mr. Rouhandeh is a designated director of
SCO Securities LLC.
|
(3)
|
Includes
5,820 shares underlying warrants held directly by Mr. Davis and presently
exercisable options for the purchase of 25,000 shares of Access’ Common
Stock pursuant to the 2005 Equity Incentive Plan. Mr. Davis is President
of SCO Securities LLC, a wholly-owned subsidiary of SCO Financial Group
LLC. His address is c/o SCO Capital Partners LLC, 1285 Avenue of the
Americas, 35th Floor, New York, NY 10019. SCO Securities LLC and
affiliates (SCO Capital Partners LP and Beach Capital LLC) are known to
beneficially own an aggregate of 787,796 shares of Access Common Stock,
warrants to purchase an aggregate of 5,922,103 shares of Access’ Common
Stock and 7,077,100 shares of Common Stock are issuable to them upon
conversion of Series A Preferred Stock. Mr. Davis disclaims beneficial
ownership of all such shares except to the extent of his pecuniary
interest therein. Mr. Davis is a designated director of SCO Securities
LLC.
|
(4)
|
Includes
presently exercisable options for the purchase of 25,000 shares of Access’
Common Stock pursuant to the 2005 Equity Incentive
Plan.
|
(5)
|
Includes
55,525 shares of Common Stock underlying warrants held by Mr. Alvino and
presently exercisable options for the purchase of 25,000 shares of Access’
Common Stock pursuant to the 2005 Equity Incentive Plan.
|
(6)
|
Includes
presently exercisable options for the purchase of 50,000 shares of Access’
Common Stock pursuant to the 2005 Equity Incentive
Plan.
|
(7)
|
Includes
presently exercisable options for the purchase of 26,200 shares of Access’
Common Stock pursuant to the 2005 Equity Incentive Plan, 12,917 shares of
Access’ Common Stock pursuant to the 1995 Stock Option Plan, and a
warrant to purchase 2,000 shares of Access’ Common Stock at an exercise
price of $24.80 per share.
|
(8)
|
Includes
warrants to purchase an aggregate of 4,167 shares of Access’ Common Stock,
8,333 shares of Common Stock are issuable to him upon conversion of Series
A Preferred Stock and presently exercisable options for the purchase of
25,000 shares of Access’ Common Stock pursuant to the 2005 Equity
Incentive Plan.
|
(9)
|
Includes
presently exercisable options for the purchase of 283,959 shares of
Access’ Common Stock pursuant to the 2005 Equity Incentive Plan and 6,000
shares of Access’ Common Stock pursuant to the 1995 Stock Option
Plan.
|
(10)
|
Includes
presently exercisable options for the purchase of 31,036 shares of Access’
Common Stock pursuant to the 2005 Equity Incentive Plan and 13,500 shares
of Access’ Common Stock pursuant to the 1995 Stock Option
Plan.
|
(11)
|
Includes
presently exercisable options for the purchase of 100,000 shares of
Access’ Common Stock pursuant to the 2005 Equity Incentive Plan and 58,166
shares of Access’ Common Stock pursuant to the 1995 Stock Option
Plan.
|
(12)
|
Includes
presently exercisable options for the purchase of 100,000 shares of
Access’ Common Stock pursuant to the 2005 Equity Incentive
Plan.
|
(13)
|
Includes
presently exercisable options for the purchase of 100,000 shares of
Access’ Common Stock pursuant to the 2005 Equity Incentive Plan and 33,844
shares of Access’ Common Stock pursuant to the 1995 Stock Option
Plan.
|
(14)
|
SCO
Capital Partners LLC, SCO Capital Partner LP and Beach Capital LLC's
address is 1285 Avenue of the Americas, 35th
Floor, New York, NY 10019. SCO Capital Partners LLC and affiliates (SCO
Capital Partners LP and Beach Capital LLC) are known to beneficially own
an aggregate of 787,796 shares of Access Common Stock, warrants to
purchase an aggregate of 5,922,103 shares of Access’ Common Stock and
7,077,100 shares of Common Stock issuable to them upon conversion of
Series A Preferred Stock. Each of Mr. Rouhandeh and Mr. Davis are
executives with SCO Capital Partners LLC and disclaim beneficial ownership
of such shares except to the extent of their pecuniary interest
therein.
|
(15)
|
Larry
N. Feinberg is a partner in Oracle Partners, L.P. His address is c/o
Oracle Partners, L.P., 200 Greenwich Avenue, 3rd
Floor, Greenwich, CT 06830. Oracle Partners, L.P. and affiliates (Oracle
Institutional Partners, L.P., Oracle Investment Management, Inc., Sam
Oracle Fund, Inc. and Mr. Feinberg) are known to beneficially own an
aggregate of 292,823 shares of Access’ Common Stock, warrants to purchase
an aggregate of 728,850 shares of Access’ Common Stock and Series A
Preferred Stock which may be converted into an aggregate of 1,457,699
shares of Access’ Common Stock.
|
(16)
|
Lake
End Capital LLC’s address is 1285 Avenue of the Americas, 35th
Floor, New York, NY 10019. Lake End Capital LLC is known to beneficially
own an aggregate of 67,694 shares of Access Common Stock, warrants to
purchase an aggregate of 763,232 shares of Access’ Common Stock and
793,067 shares of Common Stock issuable to them upon conversion of Series
A Preferred Stock.
|
(17)
|
Perceptive
Life Sciences Master Fund, Ltd.’s address is 499 Park Ave., 25th
Fl., New York, NY 10022. Perceptive Life Sciences Master Fund is known to
beneficially own warrants to purchase an aggregate of 333,333 shares of
Access’ Common Stock and Series A Preferred Stock which may be converted
into an aggregate of 666,666 shares of Access’ Common
Stock.
|
(18)
|
Midsummer
Investment, Ltd.’s address is 295 Madison Ave., 38th
Fl., New York, NY 10017. Midsummer Investment is known to beneficially own
warrants to purchase an aggregate of 250,000 shares of Access’ Common
Stock and Series A Preferred Stock which may be converted into an
aggregate of 500,000 shares of Access’ Common
Stock.
|
(19)
|
Does
not include shares held by SCO Securities LLC and
affiliates.
|
(20)
|
Unless
a holder of Series A Preferred Stock elects otherwise, its ability to
convert its Series A Preferred Stock into common stock or to vote on an
as-if-converted to common stock basis is restricted to the extent that
such conversion would result in the holder owning more than 4.99% of our
issued and outstanding common stock or voting together with the common
stock on an as-if-converted to common stock basis in respect of more than
4.99% of our issued and outstanding common
stock. |
The
information contained in this report shall not be deemed to be “soliciting
material” or “filed” or incorporated by reference in future filings with the
Securities and Exchange Commission, or subject to the liabilities of Section 18
of the Exchange Act, except to the extent that Access Pharmaceuticals, Inc.
specifically incorporates it by reference into a document filed under the
Securities Act of 1933, as amended (the “Securities Act”), or the Exchange
Act.
The
Compensation Committee has reviewed the Compensation Discussion and Analysis
required by Item 402(b) of Regulation S-K with management and, based on such
review and discussions, the Compensation Committee recommended to the Board that
the Compensation Discussion and Analysis be included in this Proxy Statement and
incorporated by reference into the Company’s Annual Report on Form 10-K for the
year ended December 31, 2007.
Submitted
by,
COMPENSATION
COMMITTEE
David P.
Luci
Stephen
B. Howell
COMPENSATION
COMMITTEE DISCUSSION ON EXECUTIVE COMPENSATION
The
Compensation committee operates under a written charter adopted by the Board and
is responsible for making all compensation decisions for the Company’s named
executives including determining base salary and annual incentive compensation
amounts and recommending stock option grants and other stock-based compensation
under our equity incentive plans. The Compensation Committee
charter can be found on our website at www.accesspharma.com under “Investor
Relations”.
Executive
Summary
The discussion that follows outlines the compensation awarded to, earned by or
paid to the named executive officers of the Company including a review of the
principal elements of compensation, the objectives of the Company’s compensation
program, what the program is designed to reward and why and how each element of
compensation is determined.
In general, the Company operates in a marketplace where competition for talented
executives is significant. Further, the Company is engaged in the long-term
development of drug candidates, without the benefit of significant current
revenues, and therefore its operations require it to raise capital in order to
continue its activities. As such, the Company’s operations include special needs
and risks for the Company to address in developing programs that promote
long-term performance and retention. The Company’s compensation program for
named executive officers consists of cash compensation as base salary, medical,
basic life insurance, long term disability, flexible spending accounts, paid
time off, and defined contribution 401(k) retirement plans as well as long term
equity incentives offered through stock option plans. This program is developed
in part by benchmarking against other companies in the
biotechnology/pharmaceutical sectors, as well as by the judgment and discretion
of our Board.
Overall
Objectives of the Executive Compensation Program
The purpose of our compensation plan is
to attract, retain and motivate key management employees. It is our philosophy
to pay our executives at levels commensurate with both industry levels and
individual experience and performance. The biopharmaceutical marketplace is
highly competitive and includes companies with far greater resources than ours.
Our work involves development of drug candidates over a long period of time and
involves a high degree of risk and uncertainty. Continuity of both scientific
knowledge and relationships across multi-disciplinary functions are critical
success factors to our business. The objectives of our compensation program for
named executive officers is to provide competitive cash compensation,
competitive health, welfare and 401(k) retirement benefits as well as long-term
equity incentives that offer significant reward potential for the risks assumed
and for each individual’s contribution to the long-term performance of the
Company. Individual performance is measured against long-term strategic goals,
short-term business goals, scientific innovation, regulatory compliance, new
business development, development of employees, fostering of teamwork and other
Access values designed to build a culture of high performance. These policies
and practices are based on the principle that total compensation should serve to
attract and retain those executives critical to the overall success of Access
and are designed to reward executives for their contributions toward business
performance that is designed to build and enhance stockholder value. Throughout
the 2007 fiscal year, the Compensation Committee reviewed compensation for
comparable organizations in order to establish our total compensation program
and to recommend awards under our equity incentive plans.
Base
Salary Program
It is our policy to establish salaries
at a level approximating the average of the competitive levels in comparable
companies in the bio-medical industry and to provide annual salary increases
reflective of an executive's performance, level of responsibility and position
with the Company.
Compensation
of Chief Executive Officer
Access is a party to an employment
agreement, with Jeffrey B. Davis, who was named by the Board as Access’ Chief
Executive Officer, effective as of December 26, 2007. Mr. Davis agreement was
effective January 4, 2008 (the “Effective Date”) and was amended April 9, 2008.
Pursuant to the terms of his employment agreement Mr. Davis was paid an annual
salary of $335,000 from the Effective Date through March 31, 2008 and is
currently paid an annual salary of $240,000 from April 1, 2008. Mr. Davis does
not currently have any stock options resulting from his employment with us. Mr.
Davis was awarded stock options to purchase 600,000 shares of Common Stock.
However, as of the Effective Date and pursuant to the amended employment
agreement, Mr. Davis has agreed to forgo any stock options awarded under the
terms of the original employment agreement. Mr. Davis is entitled to similar
employee benefits as Access’ other executive officers.
Access was a party to an
employment arrangement with Stephen R. Seiler, who was named by the Board as
Access’ President and Chief Executive Officer and director, effective as of
January 4, 2007 (the "Effective Date") and resigned December 16, 2007. Mr.
Seiler was paid an annual salary of $350,000 and was granted stock options to
purchase 500,000 shares of Common Stock with an exercise price equal to the
closing price of Common Stock on the day preceding the Effective Date. Pursuant
to a separation agreement with Mr. Seiler, 100,000 of his options vested on
December 16, 2007 and such options shall remain exercisable until March 12,
2010. The stock options were granted under Access’ 2005 Equity Incentive Plan
and the 2007 Special Stock Option Plan. Mr. Seiler was entitled to similar
employee benefits as Access’ other executive officers.
Access was a party to an employment
arrangement with Rosemary Mazanet, Access’ former Acting Chief Executive
Officer. Dr. Mazanet reported directly to, and was subject to the direction of,
the Board. Dr. Mazanet salary was set at $25,000 monthly. Dr. Mazanet was
granted a non-qualified stock option of 6,000 shares of Common Stock, vesting
over a six month period. In November 2005, Dr. Mazanet was also
granted 50,000 options under Access’ 2005 Equity Incentive Plan. Of the options
granted, 14,000 options vested on grant, the rest vest upon attainment of preset
milestones. Dr. Mazanet also received similar employee benefits as Access’ other
executive officers, D&O insurance coverage and received a signing bonus of
$30,000. The Board granted Dr. Mazanet an additional 200,000 options in 2006.
Additionally, Dr. Mazanet was awarded a bonus of $100,000 in April
2007.
Annual
Incentive
Each year, the Compensation Committee
evaluates the performance of the Company as a whole, as well as the performance
of each individual executive. Factors considered include Company development,
performance against objectives, advancement of our research and development
programs, commercial operations, product acquisition, and in-licensing and
out-licensing agreements. The Compensation Committee does not utilize formalized
mathematical formulas, nor does it assign weightings to these factors. The
Compensation Committee, in its sole discretion, determines the amount, if any,
of incentive payments to be awarded to each executive based on an individual’s
targeted incentive payment. The Compensation Committee believes that analysis of
our corporate growth requires subjectivity on the part of the Compensation
Committee when determining incentive payments. The Compensation Committee
believes that specific formulas restrict flexibility. Based on this criteria,
for the 2007 fiscal year Mr. Seiler was granted options to purchase 500,000
shares of Common Stock under the 2005 Equity Incentive Plan and the 2007 Special
Stock Option Plan. Pursuant to the terms of his separation agreement with us,
100,000 of these options vested and will expire on March 12, 2010.
Stock
Option Plans
The Board has adopted and our
stockholders have approved our 2005 Equity Incentive Plan and 1995 Stock Awards
Plan. The 2005 Equity Incentive Plan currently provides for the issuance of up
to a maximum of 1,675,000 shares of our Common Stock to our employees, directors
and consultants or any of our subsidiaries. The 1995 Stock Awards Plan provided
for the issuance of up to a maximum of 500,000 shares of our Common Stock to our
employees, directors and consultants or any of our subsidiaries. A total of
474,044 options were granted under the 1995 Stock Awards Plan before it was
terminated. Options granted under both plans may be either incentive stock
options or options which do not qualify as incentive stock options. In 2007, the
Board adopted the 2007 Special Stock Option Plan and Agreement (the “2007
Plan”). The 2007 Plan provides for the award of options to purchase a maximum of
450,000 shares of our Common Stock.
The stock option plans are administered
by a committee of non-employee members of the Board, chosen by the Board, and is
currently administered by the Compensation Committee. The Compensation Committee
presently is composed of David P. Luci and Stephen B. Howell, MD. The
Compensation Committee has the authority to determine those individuals to whom
stock options are granted, the number of shares to be covered by each option,
the option price, the type of option, the option period, the vesting
restrictions, if any, with respect to exercise of each option, the terms for
payment of the option price and other terms and conditions of each
option.
Our non-employee directors, who include
certain members of the Compensation Committee, are eligible to receive options
under the 2005 Equity Incentive Plan. Each non-employee director is entitled to
receive options to purchase 2,500 shares of our Common Stock on the date of each
annual meeting of stockholders and options to purchase 25,000 shares of Common
Stock when he/she is first appointed as a director.
Access was a party to an
employment arrangement with Mr. Seiler. Mr. Seiler was granted stock options to
purchase 500,000 shares of Common Stock. Pursuant to a separation agreement with
Mr. Seiler, 100,000 of his options vested on December 16, 2007 and such options
shall remain exercisable until March 12, 2010. The stock options were granted
under Access’ 2005 Equity Incentive Plan and the 2007 Special Stock Option
Plan.
Dr. Mazanet received options to
purchase 6,000 shares of Common Stock in the 2005 fiscal year under the 1995
Stock Awards Plan and options to purchase 50,000 shares of Common Stock in the
2005 fiscal year under the 2005 Equity Incentive Plan. Dr. Mazanet also received
options to purchase 200,000 shares of Common Stock in the 2006 fiscal year under
the 2005 Equity Incentive Plan.
We also have a restricted stock plan,
the 2001 Restricted Stock Plan under which 80,000 shares of our Common Stock
have been reserved for issuance to certain employees, directors, consultants and
advisors. The restricted stock granted under the plan generally vests over five
years, 25% two years after the grant date with an additional 25% vesting on the
next three anniversary dates. All stock is vested after five years. At December
31, 2007 there were 27,182 shares granted and 52,818 shares available for grant
under the 2001 Restricted Stock Plan.
Section
162(m)
Section 162(m) of the Internal Revenue
Code of 1986, as amended, currently imposes a $1 million limitation on the
deductibility of certain compensation paid to each of our five highest paid
executives. Excluded from this limitation is compensation that is “performance
based.” For
compensation to be performance based it must meet certain criteria, including
being based on predetermined objective standards approved by stockholders. In
general, we believe that compensation relating to options granted under the 1995
Stock Awards Plan and 2000 Plan should be excluded from the $1 million
limitation calculation. Compensation relating to our incentive compensation
awards do not currently qualify for exclusion from the limitation, given the
discretion that is provided to the Compensation Committee in establishing the
performance goals for such awards. The Compensation Committee believes that
maintaining the discretion to evaluate the performance of our management is an
important part of its responsibilities and inures to the benefit of our
stockholders. The Compensation Committee, however, intends to take into account
the potential application of Section 162(m) with respect to incentive
compensation awards and other compensation decisions made by it in the
future.
Compensation
Committee Interlocks and Insider Participation
Jeffrey B. Davis, our Chief Executive
Officer, was the Chairperson of the Compensation Committee in 2007. Mr.
Davis became our Chief Executive Officer on December 26, 2007. Mr. Davis is also
a director of MacroChem Corporation where he serves on the Compensation
Committee. David Luci, a director and member of our Compensation Committee is
also the General Counsel and Vice President of Business Development of MacroChem
Corporation. No other members of our Compensation Committee serve as members of
the Board of Directors or Compensation Committee of any entity that has one or
more executive officers servicing as members of our Board of Directors or
Compensation Committee.
Conclusion
The Compensation Committee believes
these executive compensation policies effectively serve the interests of the
stockholders. The Compensation Committee believes that the various pay vehicles
offered are appropriately balanced to provide increased motivation for
executives to contribute to our overall future successes, thereby enhancing the
value of the Company for the stockholders' benefit.
REPORT
OF THE AUDIT AND FINANCE COMMITTEE
The Audit
and Finance Committee of the Board operates under a written charter adopted by
the Board in May 2001 and amended and restated by the Board in January 2004 and
further amended and restated in June 2006, which charter is available on the
Company's website at www.accesspharma.com
under the heading “Investor
Relations”
and is attached to this Proxy Statement as Appendix A. The Audit and Finance
Committee presently is composed of two directors, David P. Luci and John J.
Meakem, Jr. The Board has determined that each of Messrs. Luci and Meakem is
independent under applicable SEC and AMEX rules and regulations. In accordance
with its charter, the Audit and Finance Committee assists the Board 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 and
Finance Committee obtained from the Company’s independent registered public
accounting firm 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 and
Finance 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
and Finance Committee reviewed with the independent registered public accounting
firm their judgments as to the quality, not just the acceptability, of the
Company’s accounting principles and such other matters as are required to be
discussed with the Audit Committee by Statement on Auditing Standards No. 61
(AICPA, Professional Standards, Vol. 1 AU section 380, as adopted by the Public
Company Accounting Oversight Board in Rule 3200T), as amended by Statement on
Auditing Standards No. 90 (Communications with Audit Committees). In addition,
the Audit and Finance Committee has discussed with the independent registered
public accounting firm the auditors’ independence from management and the
Company, including the matters in written disclosures required by the
Independence Standards Board Standard No 1. (Independence Standards Board
Standard No. 1, Independence Discussions with Audit Committees), as adopted by
the Public Company Oversight Board in Rule 3600T, and considered the
compatibility of non-audit services with the auditors’
independence.
Management
has primary responsibility for the Company's consolidated financial statements
and the overall reporting process, including the Company's system of internal
control over financial reporting. Whitley Penn LLP (“WP”), the Company’s
independent registered public accounting firm, audits the annual financial
statements prepared by management, expresses an opinion as to whether those
financial statements fairly present the consolidated financial position, results
of operations and cash flows of the Company and its subsidiaries in conformity
with accounting principles generally accepted in the United States, and report
on internal control over financial reporting. WP reports to the Audit and
Finance Committee as members of the Board and as representatives of the
Company's stockholders.
The Audit and Finance Committee meets with management periodically to consider
the adequacy of the Company's internal control over financial reporting and the
objectivity of its financial reporting. The Audit and Finance Committee
discusses these matters with the appropriate Company financial personnel. In
addition, the Audit and Finance Committee has discussions with management
concerning the process used to support certifications by the Company’s Chief
Executive Officer and Chief Financial Officer that are required by the SEC and
the Sarbanes-Oxley Act to accompany the Company’s periodic filings with the
SEC.
Based
upon the Audit and Finance Committee's discussion with management and the
independent registered public accounting firm, and the Audit and Finance
Committee's review of the representation of management, and the report of the
independent accountants to the Audit and Finance Committee, the Audit and
Finance Committee recommended to the Board that the Company include the audited
consolidated financial statements in its Annual Report on Form 10-K for the 2007
fiscal year for filing with the SEC. The Audit and Finance Committee also
recommended the reappointment of the independent registered public accounting
firm and the Board concurred with such recommendation.
David P.
Luci
John J.
Meakem, Jr.
INDEPENDENT
AUDITOR FEES
The following table presents fees for professional audit services rendered by
Whitely Penn LLP for the audit of our annual financial statements for the years
ended December 31, 2007 and December 31, 2006, and fees billed for other
services rendered by such firms during the respective periods.
Types of Fees
|
|
2007
|
|
|
2006
|
|
Audit
Fees (1)
|
|
$ |
110,000 |
|
|
$ |
87,000 |
|
Audit
Related Fees (2)
|
|
|
- |
|
|
|
- |
|
Tax
Fees (3)
|
|
|
- |
|
|
|
- |
|
All
Other Fees (4)
|
|
|
44,000 |
|
|
|
- |
|
____________________
|
(1)
|
|
Audit
fees for 2007 and 2006 were for professional services rendered for the
audit of the Company’s financial statements for the fiscal year and
reviews of the Company’s quarterly financial statements included in its
Form 10-Q filings.
|
|
(2)
|
|
Audit-related
fees include professional services related to the audit of our financial
statements, such as consultation on accounting standards or
transactions.
|
|
(3)
|
|
Tax
fees are for professional services rendered for tax compliance, tax advice
and tax planning.
|
|
(4)
|
|
All
other fees are for services related to our registration statements on Form
S-4, Form SB-2 and Form S-8 and financing
transactions.
|
All decisions regarding
selection of independent registered public accounting firms and approval of
accounting services and fees are made by our Audit and Finance Committee in
accordance with the provisions of the Sarbanes-Oxley Act of 2002 and related SEC
rules.
The Audit and Finance Committee selected WP to serve as the Company’s
independent registered public accounting firm for the fiscal year ending
December 31, 2008. WP has served as Access’ independent registered public
accounting firm since September 2006. Grant Thornton LLP previously served in
such capacity.
Policy
on Audit and Finance Committee Pre-Approval of Audit and Permissible Non-Audit
Services of Independent Registered Public Accounting Firm
The Audit and Finance
Committee pre-approves all audit and non-audit services provided by the
independent registered public accounting firm prior to the engagement with
respect to such services. The Chairman of the Audit and Finance Committee has
been delegated the authority by the Audit and Finance Committee to pre-approve
the engagement of the independent accountants when the entire committee is
unable to do so. The Chairman of the Audit and Finance Committee approved 100%
of the services listed under the preceding captions “Audit-Related
Fees,” “Tax Fees” and “All Other
Fees.”
Executive
Compensation
The following table sets forth the
aggregate compensation paid to our CEO and each of our other executive officers
whose aggregate salary and bonus exceeded $100,000 for services rendered in all
capacities for the fiscal years ended December 31, 2007 and 2006.
Summary Compensation
Table
Name and Principal Position
(8)
|
|
Year
|
|
|
Salary ($) (1)
|
|
|
Bonus ($)
|
|
|
Stock Awards ($) (2)
|
|
|
Option Awards ($) (3)
|
|
|
All Other Compensation (4)
|
|
|
Total ($)
|
|
Stephen
R. Seiler (5)
Former
President and CEO
|
|
2007
|
|
|
$ |
350,000
|
|
|
$ |
-
|
|
|
$ |
-
|
|
|
$ |
270,000 |
|
|
$ |
14,840
|
|
|
$
|
634,840
|
|
Rosemary
Mazanet(5)
Former
Acting CEO
|
|
|
2007
2006
|
|
|
$
|
8,076
357,385
|
|
|
$
|
-
100,000
|
|
|
$
|
-
-
|
|
|
$
|
263,071
81,464
|
|
|
$
|
-
2,594
|
|
|
$
|
271,147
541,443 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
P. Nowotnik, Ph.D.
Senior
Vice President Research
and
Development
|
|
|
2007
2006
|
|
|
$ |
253,620
253,620
|
|
|
$ |
20,000 |
|
|
$ |
- |
|
|
$ |
40,732 |
|
|
$ |
12,225
7,152
|
|
|
$ |
265,845
321,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phillip
S. Wise(7)
Vice
President, Business
Development
|
|
|
2007
2006
|
|
|
$
|
200,000
116,667 |
|
|
$
|
-
25,000
|
|
|
$
|
-
-
|
|
|
$
|
-
40,732
|
|
|
$
|
9,876
$ 358
|
|
|
$
|
209,876
182,757 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen
B. Thompson
Vice
President, Chief Financial Officer
|
|
|
2007
2006
|
|
|
$
|
154,080
154,080
|
|
|
$
|
-
20,000
|
|
|
$
|
-
-
|
|
|
$
|
-
40,732
|
|
|
$
|
7,427
4,508
|
|
|
$
|
161,507
219,320 |
|
____________________
(1)
|
Includes
amounts deferred under our 401(k)
Plan.
|
(2)
|
There
were no stock awards grants in 2007 and 2006 and no restricted stock
outstanding at December 31, 2007 and
2006.
|
(3)
|
The
value listed in the above table represents the fair value of the options
granted in prior years that was recognized in 2007 and 2006 under FAS
123R. Fair value is calculated as of the grant date using a Black-Sholes
option-pricing model. The determination of the fair value of share-based
payment awards made on the date of grant is affected by our stock price as
well as assumptions regarding a number of complex and subjective
variables. Our assumptions in determining fair value are described in note
10 to our audited financial statements for the year ended December 31,
2007, included in our Annual Report on Form
10-K.
|
(4)
|
Amounts
reported for fiscal years 2007 and 2006 consist of: (i) amounts we
contributed to our 401(k) Plan with respect to each named individual, and
(ii) amounts we paid for group term life insurance for each named
individual.
|
(5)
|
Amounts
listed in 2007 for Mr. Seiler indicate compensation paid to him in
connection with his services as our President and CEO commencing on
January 1, 2007 and ending December 16,
2007.
|
(6)
|
Amounts
listed in 2007 and 2006 for Dr. Mazanet indicate compensation paid to her
in connection with her services as our Acting CEO commencing on May 11,
2005 and ending January 4, 2007.
|
(7)
|
Phillip
S. Wise became our Vice President Business Development June 1,
2006.
|
(8)
|
Jeffrey
B. Davis became our Chief Executive Officer effective December 26, 2007
and his employment agreement started January 4,
2008.
|
Outstanding Equity Awards at
Fiscal Year-End
The following table summarizes the aggregate number of option awards held by our
named executive officers at December 31, 2007. There were no outstanding stock
awards held by such officer at December 31, 2007:
Name
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options (#)
|
Option
Exercise Price ($)
|
Option
Expiration Date
|
|
|
|
|
|
|
Stephen
R. Seiler
|
100,000
|
-
|
-
|
2.90
|
03/12/10
|
Rosemary
Mazanet(2
|
33,333
200,000
48,251
6,000
|
66,667
-
1,749
-
|
-
|
2.90
0.63
5.45
12.50
|
01/04/17
08/17/16
11/02/15
05/11/15
|
David
P. Nowotnik, Ph.D. (3)
|
100,000
6,000
5,000
7,000
10,000
10,000
10,000
10,000
|
-
2,000
-
-
-
-
-
-
|
-
|
0.63
11.60
29.25
10.10
18.65
12.50
10.00
15.00
|
08/17/16
05/23/15
01/23/14
01/30/13
03/22/12
03/01/10
07/20/09
11/16/08
|
Phillip
S. Wise
|
100,000
|
-
|
-
|
0.63
|
08/17/16
|
Stephen
B. Thompson (3)
|
100,000
3,750
3,000
4,000
6,000
9,000
4,000
4,000
|
-
1,250
-
-
-
-
-
-
|
-
|
0.63
11.60
29.25
10.10
18.65
12.50
10.00
15.00
|
08/17/16
05/23/15
01/23/14
01/30/13
03/22/12
03/01/10
07/20/09
06/18/08
|
|
|
|
|
|
|
____________________
(1)
|
On
December 31, 2007, the closing price of our Common Stock as quoted on the
OTC Bulletin Board was
$3.25.
|
(2)
|
Options
listed for Dr. Mazanet include options paid to her in connection with her
services as our Acting CEO commencing on May 11, 2005 and ending on
January 4, 2007. Dr. Mazanet’s options vest over four years from the grant
date. Options to purchase 66,667 shares of common stock will be fully
vested in December 2010 and options to purchase 1,749 shares of common
stock will be fully vested in October
2009.
|
(3)
|
Dr.
Nowotnik and Mr. Thompson’s options to purchase shares of common stock
will be fully vested in April 2009.
|
(4)
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Jeffrey
B. Davis became our Chief Executive Officer effective December 26, 2007
and his employment agreement started January 4, 2008. Mr. Davis does not
currently have any stock options resulting feom his employment with
us.
|
Compensation
Pursuant to Agreements and Plans
Employment
Agreements
President and Chief
Executive Officer
Access is a party to an
employment agreement, with Jeffrey B. Davis, who was named by the Board as
Access’ Chief Executive Officer, effective as of December 26, 2007. Mr. Davis
agreement was effective January 4, 2008 (the “Effective Date”) and was amended
April 9, 2008. Pursuant to the terms of his employment agreement Mr. Davis was
paid an annual salary of $335,000 from the Effective Date through March 31, 2008
and is currently paid an annual salary of $240,000 from April 1, 2008. Mr. Davis
does not currently have any stock options resulting from his employment with us.
Mr. Davis was awarded stock options to purchase 600,000 shares of Common Stock.
However, as of the Effective Date and pursuant to the amended employment
agreement, Mr. Davis has agreed to forgo any stock options awarded under the
terms of the original employment agreement. Mr. Davis is entitled to similar
employee benefits as Access’ other executive officers.
Access was a party to an
employment arrangement with Stephen R. Seiler, who was named by the Board as
Access’ President and Chief Executive Officer and director, effective as of
January 4, 2007 (the "Effective Date") and resigned from those positions on
December 16, 2007. Mr. Seiler was paid an annual salary of $350,000 and was
granted stock options to purchase 500,000 shares of Common Stock with an
exercise price equal to the closing price of Common Stock on the day preceding
the Effective Date. Pursuant to a separation agreement with Mr. Seiler, 100,000
of his options vested on December 16, 2007 and such options shall remain
exercisable until March 12, 2010. The stock options were granted under Access’
2005 Equity Incentive Plan and the 2007 Special Stock Option Plan. Mr. Seiler
was entitled to similar employee benefits as Access’ other executive
officers.
Access was a party to an
employment arrangement with Rosemary Mazanet, Access’ former Acting Chief
Executive Officer. Dr. Mazanet reported directly to, and was subject to the
direction of, the Board. Dr. Mazanet salary was set at $25,000 monthly. Dr.
Mazanet was granted a non-qualified stock option of 6,000 shares of Common
Stock, vesting over a six month period. In November 2005, Dr. Mazanet
was also granted 50,000 options under Access’ 2005 Equity Incentive Plan. Of the
options granted, 14,000 options vested on grant, the rest vest upon attainment
of preset milestones. Dr. Mazanet also received similar employee benefits as
Access’ other executive officers, D&O insurance coverage and received a
signing bonus of $30,000. The Board granted Dr. Mazanet an additional 200,000
options in 2006. Additionally, Dr. Mazanet was awarded a bonus of $100,000 in
April 2007.
Senior Vice
President
Access is a party to an
employment agreement with David P. Nowotnik, Ph.D., Access’ Senior Vice
President, Research and Development, which renews automatically for successive
one-year periods, with the current term extending until November 16, 2007. Under
this agreement, Dr. Nowotnik is currently entitled to receive an annual base
salary of $253,620, subject to adjustment by the Board. Dr. Nowotnik is eligible
to participate in all of Access’ 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;
|
·
|
stock
options at the discretion of the
Board;
|
·
|
long-term
disability insurance to provide compensation equal to at least $60,000
annually; and
|
·
|
term
life insurance coverage of
$254,000.
|
Dr. Nowotnik is entitled to
certain severance benefits in the event that Access terminates his employment
without cause or if Dr. Nowotnik terminates his employment following a change of
control. In the event that Access terminates the employment agreement for any
reason, other than for cause, Dr. Nowotnik will receive his salary for six
months. Access 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 will receive twelve months salary and his stock
options will become immediately exercisable. Access will also continue payment
of benefits for such period.
Vice President – Chief
Financial Officer
Access is party to an
employment agreement with Stephen B. Thompson, Access’ Vice President and Chief
Financial Officer, which renews automatically for successive one-year periods.
Mr. Thompson is entitled to an annual base salary of $154,080, subject to
adjustment by the Board. The employment agreement also grants Mr. Thompson
similar employee benefits as Access’ other executive officers. Mr. Thompson 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;
|
·
|
stock
options at the discretion of the
Board;
|
·
|
long-term
disability insurance to provide compensation equal to at least $90,000
annually; and
|
·
|
term
life insurance coverage of
$155,000.
|
Mr. Thompson is entitled
to certain severance benefits in the event that Access terminates his employment
without cause or if Mr. Thompson terminates his employment following a change of
control. In the event that Access terminates the employment agreement for any
reason, other than cause, Mr. Thompson will receive salary for six months.
Access will also continue benefits for such period. In the event that Mr.
Thompson's employment is terminated within six months following a change of
control or by Mr. Thompson upon the occurrence of certain events following a
change in control, Mr. Thompson will receive twelve months salary and his stock
options will become immediately exercisable. Access will also continue payment
of benefits for such period.
Section
16(a) Beneficial Ownership Reporting Compliance
Section 16(a) (“Section 16(a)”) of the
Securities Exchange Act of 1934, as amended, requires our directors, executive
officers and holders of more than ten percent of our Common Stock to file with
the SEC initial reports of ownership and reports of changes in ownership of such
securities. Directors, officers and 10% holders are required by SEC rules 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 during the 2007 fiscal year or written representations from our
directors and executive officers, none of our directors, executive officers and
10% holders failed to file on a timely basis reports required by Section 16(a)
during the 2007 fiscal year or in prior years, except for Esteban Cvitkovic
and David P. Luci who each filed one late Form 4, reporting one
transaction.
Certain
Relationships and Related Transactions
On
occasion we may engage in certain related party transactions. Our policy is that
all related party transactions are reviewed and approved by the Board of
Directors or Audit Committee prior to the Company entering into any related
party transactions.
On February 12, 2008, the Board of
Directors of the Company elected Steven H. Rouhandeh as director and Chairman of
the Board effective as of March 4, 2008.
David P. Luci, one of our directors,
participated in the February 2008 sale of our preferred stock. Mr. Luci
purchased 2.5 preferred shares for $25,000 and warrants to purchase 4,167 shares
of our common stock.
Dr. Esteban Cvitkovic, one of our
directors, also serves as a consultant as Senior Director, Oncology Clinical
Research & Development to the Company since August 2007. Dr. Cvitkovic
currently receives $20,000 per month plus $2,500 for office expenses. During
2007 Dr. Cvitkovic received $153,000. Dr. Cvitkovic received warrants to
purchase 25,000 shares of our Common Stock at $4.35 per share with 12,500
options immediately in August 2007 and 12,500 options will vest in March 2008
based on the completion of certain defined tasks.
In the event SCO Capital Partners LLC
(“SCO”) and its affiliates were to convert all of their shares of Series A
Preferred Stock and exercise all of their warrants, they would own approximately
69.8% of the voting securities of Access. During 2007 SCO and affiliates were
paid $240,000 in placement agent fees relating to the issuance of preferred
stock and 100,000 warrants to purchase our common stock. SCO and affiliates also
were paid $150,000 in investor relations fees in 2007. During 2006 SCO and
affiliates were paid $415,000 in fees relating to the issuance of convertible
notes and were paid $131,000 in investor relations fees.
On November 7, 2007, we
entered into securities purchase agreements (the “Purchase Agreements”) with
accredited investors whereby we agreed to sell 954.0001 shares of a newly
created series of our preferred stock, designated “Series A Cumulative
Convertible Preferred Stock”, par value $0.01 per share, for an issue price of
$10,000 per share, (the “Series A Preferred Stock”) and agreed to issue warrants
to purchase 1,589,999 shares of our common stock at an exercise price of $3.50
per share, for an aggregate purchase price for the Series A Preferred Stock and
Warrants of $9,540,001. The shares of Series A Preferred Stock are convertible
into common stock at the initial conversion price of $3.00 per
share.
On November 7, 2007, as a condition to
closing our sale of Series A Preferred Stock, SCO Capital Partners LLC and
affiliates, along with the other holders of an aggregate of $6,000,000 Secured
Convertible Notes, also exchanged their notes and accrued interest for an
additional 1,836.0512 shares of Series A Preferred Stock and were issued
warrants to purchase 1,122,031 shares of our common stock at an exercise price
of $3.50 per share, and Oracle Partners LP and affiliates, along with the other
holders of an aggregate of $4,015,000 Convertible Notes also exchanged their
notes and accrued interest for 437.3104 shares of the Series A Preferred Stock
and were issued warrants to purchase 728,850 shares of our common stock at an
exercise price of $3.50 per share. SCO Capital Partners LLC currently
has two designees serving on our Board of Directors. In connection
with the exchange of the notes, all security interests and liens relating
thereto were terminated.
On November 7, 2007, as a condition to
closing our sale of Series A Preferred Stock, we entered into an Investor Rights
Agreement with each of the investors purchasing shares of Series A Preferred
Stock and our Board of Directors approved with respect to the shareholder rights
plan any action necessary under our shareholder rights plan to accommodate the
issuance of the Series A Preferred Stock and warrants without triggering the
applicability of the shareholder rights plan. In addition, we entered into an
Investor Rights Agreement with the holders of Series A Preferred Stock. The
Investor Rights Agreement grants certain registration and other rights to each
of the investors.
In connection with the sale and
issuance of Series A Preferred Stock and warrants, we entered into a Director
Designation Agreement whereby we agreed to continue SCO’s right to designate two
individuals to serve on the Board of Directors of Access.
Lake End Capital LLC is known to
beneficially own warrants to purchase an aggregate of 1,195,717 shares of
Access’ Common Stock and Series A Preferred Stock which may be converted into an
aggregate of 793,067 shares of Access’ Common Stock. Lake End Capital LLC and
Mr. Davis are known to beneficially own warrants and options to purchase an
aggregate of 1,832,357 shares of Access’ Common Stock and 793,067 shares of
Common Stock issuable upon conversion of Series A Preferred Stock. Jeffrey B.
Davis, in his capacity as managing member of Lake End Capital LLC, has the power
to direct the vote and disposition of the shares owned by Lake End Capital LLC.
Mr. Davis is President of SCO Securities LLC, a wholly-owned subsidiary of SCO
Financial Group LLC.
Dr. Howell, one of our directors, also
serves as a scientific consultant to the Company pursuant to a consulting
agreement that provides for a minimum of two days consulting during 2007 at a
rate of $5,880 per month plus expenses. Dr. Howell received warrants to purchase
2,000 shares of our Common Stock at $24.80 per share that can be exercised until
January 1, 2009; and warrants to purchase 3,000 shares of our Common Stock at
$15.00 per share that can be exercised until January 1, 2008. During 2006, Dr.
Howell was paid $69,000 in consulting fees; during 2005, Dr. Howell was paid
$79,000 in consulting fees; and during 2004 Dr. Howell was paid $58,000 in
consulting fees. Dr. Howell’s agreement with us expired March 1,
2008.
On January 20, 2006, Board approved the
payment of a fee of $140,000 to J. Michael Flinn, our former Chairman of the
Board, for services as Chairman of the Board for fiscal 2005. The $140,000 fee
was paid on the completion of a financing. The Board also approved the grant of
options to purchase 20,000 shares of Common Stock at an exercise price of $3.15
per share to J. Michael Flinn for services as Chairman of the Board. In May
2006, the Board also approved the payment of a fee of $43,333 to Mr. Flinn for
services as Chairman of the Board for 2006. The Board also approved the grant of
options to purchase 4,836 shares of Common Stock at an exercise price of $3.15
per share to Messrs. Duty and Meakem, members of the then existing Merger and
Acquisitions Committee of the Board, for services in connection therewith. The
Board also approved the grant of options to purchase 1,200 shares of Common
Stock at an exercise price of $3.15 per share to each member of the Board, for
services as members of the Board.
In August 2006, the Board approved the
grant of options to purchase 25,000 shares of Common Stock at an exercise price
of $0.63 per share to each member of the Board.
On October 12, 2000, the Board
authorized a restricted stock purchase program. Under the program, our executive
officers were given the opportunity to purchase shares of Common Stock in an
individually designated amount per participant determined by our Compensation
Committee. A total of 36,000 shares were purchased by such officers at $27.50
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 us. 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 to us of the purchased shares. We
recorded the notes receivable of $990,000 from participants in this program as a
reduction of equity in the Consolidated Balance Sheet. As of December 31, 2007,
principal and interest on the notes was: Mr. Gray - $857,000; Dr. Nowotnik -
$428,000; and Mr. Thompson - $257,000. In accordance with the Sarbanes-Oxley Act
of 2002, we no longer make loans to our executive officers.
PROPOSAL
2
PROPOSED
AMENDMENT OF THE COMPANY'S CHARTER
On December 18, 2007, in
connection with the most recent closing of the sale of Series A Preferred Stock,
the Board of Directors approved and directed that the shareholders consider an
amendment to the company's corporate charter that would amend the Certificate of
Designations, Rights and Preferences of Series A Cumulative Convertible
Preferred Stock, referred to as the Certificate of Designation, to (i) expand
the actions requiring the approval of the holders of at least 66% of the shares
of Series A Preferred Stock at the time outstanding and (ii) to amend the rights
of the holders of Series A Preferred Stock so that a mandatory conversion of the
Series A Preferred Stock into Common Stock could not occur without the approval
of the holders of a majority of the shares of Series A Preferred Stock at the
time outstanding. If approved, the amendment will become effective upon the
filing of the Certificate of Amendment to the Certificate of Designations,
Rights and Preferences of Series A Cumulative Convertible Preferred Stock to the
company's charter with the Secretary of State of the State of Delaware, which
filing is expected to take place shortly after the annual meeting. The Board of
Directors believes that the charter amendment is in the best interest of the
company and all of its shareholders. In connection with the sale of Series A
Preferred Stock, the Company agreed to use its best efforts to obtain
stockholder approval for the Series A Certificate of Amendment and to cause the
amendments to the Certificate of Designation to become effective, in each case,
as promptly as practicable.
Except as set forth
below, the relative rights of the holders of the Company's Series A Preferred
Stock and Common Stock under the Company's charter would remain unchanged.
Section 4(h) of the Certificate of Designations of the Company's charter, as
amended by the charter amendment, is removed and re-numbered 4(j) and the
following new Sections 4(h) and 4(i) are inserted after the existing Section
4(g) and are set forth below. The remainder of Section 4 will remain
unchanged.
“(h) any
Change of Control or any liquidation, winding up or dissolution of the
Corporation or any subsidiary thereof, whether in one transaction or a series of
transactions, or adoption of any plan for the same;
(i) in a
transaction or series of related transactions involving aggregate potential
consideration in excess of $20 million, any sale, transfer, license, sublicense,
encumbrance or other disposition of any of the Corporation’s intellectual
property, including, without limitation, patents, trademarks, service marks,
copyrights, trade secrets, technologies, compounds and trade names, whether
owned outright by the Corporation or licensed from another person or entity,
whether in registered or unregistered form, and whether or not an application
for registration has been filed; or”
Section 5(b) of the
Certificate of Designations of the Company's charter, as amended by the charter
amendment, is modified to replace the first sentence of Section 5(b) as set
forth below. The remainder of Section 5 will remain unchanged.
“(b) Mandatory
Conversion. With the prior written consent of holders of not less than a
majority of the Series A Preferred Stock at such time outstanding, if a
Conversion Triggering Event (as defined below) has occurred, and provided that
the Corporation has delivered a written notice to the holders of the Series A
Preferred Stock (the “Notice”) that the Corporation intends to convert all of
the outstanding Series A Preferred Stock into Common Stock, then, subject to the
limitations set forth in Section 5(i) hereof, as of the date that is sixty-five
days following the date that such Notice is given (the “Mandatory Conversion
Date”), the Series A Preferred Stock shall be converted into such number of
fully paid and non-assessable shares of Common Stock as is determined by
dividing (i) the aggregate Liquidation Preference of the shares of Series A
Preferred Stock to be converted plus accrued and unpaid dividends thereon by
(ii) the applicable Conversion Value (as hereinafter defined) then in effect for
such Series A Preferred Stock (the “Mandatory Conversion”).
The Board of Directors
believes that it is in the best interest of the Company that all of its
shareholders approve the charter amendment because it would give the Company the
added flexibility to issue additional shares of our Series A Preferred Stock and
because we agreed to seek such approval of this amendment from stockholders when
we entered into the most recent sale of our Series A Preferred
Stock.
Without this amendment,
investors may be unwilling to buy shares of our Series A Preferred Stock if they
are not afforded these protections which will prohibit certain major corporate
actions or conversion of their shares into Common Stock without their prior
approval. Holders of Common Stock do not have any of these rights and will not
receive any of these rights as a result of the amendment.
UNLESS
OTHERWISE INDICATED THEREON, THE ACCOMPANYING PROXY WILL BE VOTED FOR APPROVAL
OF THE AMENDMENT TO THE COMPANY’S CERTIFICATE OF DESIGNATION. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT TO THE COMPANY’S CERTIFICATE OF
DESIGNATION.
Proposal 2 will be
approved upon the affirmative vote of a majority in interest of the outstanding
shares of Common Stock and Preferred Stock voting together.
PROPOSAL
3
PROPOSED
AMENDMENT OF THE COMPANY’S 2005 EQUITY INCENTIVE PLAN
The Board has authorized,
subject to stockholder approval, an increase in the number of shares available
under the Company’s 2005 Equity Incentive Plan (the “Plan”) from 1,675,000
to 3,150,000, such number representing approximately 56.1% of the current number
of issued and outstanding shares of Common Stock and 18.2% of the number of
issued and outstanding shares of the Common Stock assuming the conversion of all
currently outstanding Preferred Stock pursuant to their current terms of
conversion. The Plan is a successor plan to the Company’s 1995 Stock Option Plan
under which the Company could have granted a total of 500,000 options through
December 31, 2005.
Purpose. The
purpose of the Plan is to attract and retain the best available personnel for
positions of substantial responsibility and to provide additional incentive to
employees and directors of and advisers and consultants to the Company. The
purpose of the proposed amendment is to provide the Company with additional
capacity to award stock options to existing personnel and to attract qualified
new employees, directors, advisers and consultants through grants of stock
options.
Administration. The
Plan is administered by the Compensation Committee. The Compensation Committee
presently is composed of Jeffrey B. Davis, David P. Luci and Stephen
B. Howell, MD. Subject to the provisions of the Plan, the Compensation Committee
has discretion to determine when awards are made, which employees are granted
awards, the number of shares subject to each award and all other relevant terms
of the awards. The Compensation Committee also has broad discretion to construe
and interpret the Plan and adopt rules and regulations thereunder. The
Compensation Committee approved the 2007 Special Stock Option Plan and the grant
of 450,000 options to Mr. Seiler, the Company’s former President and Chief
Executive Officer.
Eligibility. Awards
may be granted to persons who are employees of the Company whether or not
officers or members of the Board and directors of or advisers or consultants to
the Company or of any of the Company’s subsidiaries. No election by
any such person is required to participate in the Plan.
Shares Subject to the
Plan. The shares issued or to be issued under the Plan
are shares of Common Stock, which may be newly issued shares or shares held in
the treasury or acquired in the open market. Currently, no more than 1,675,000
shares may be issued under the Plan. The foregoing limit is subject to
adjustment for stock dividends, stock splits or other changes in the Company’s
capitalization.
Stock
Options. The Compensation Committee in its discretion
may issue stock options which qualify as incentive stock options under the
Internal Revenue Code or non-qualified stock options. The Compensation 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 10 years after it is granted and no other options shall be exercised more
than 10 years and one day after it is granted, and further provided that the
exercise price of any incentive stock option shall not be less than the fair
market value of the Common Stock on the date of grant. The closing price of the
Common Stock on the OTC Bulletin Board on April 7, 2008 was $1.70 per
share.
Payment for shares purchased upon
exercise of an option must be made in full in cash or check, by payment through
a broker in accordance with Regulation T of the Federal Reserve Board or by such
other mode of payment as the Committee may approve, including payment in whole
or in part in shares of the Common Stock, 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 defined by the Code or in
Title I of the Employee Retirement Income Security Act of 1974, as
amended.
Notwithstanding
any other provision of the Plan, each non-employee director is also entitled to
receive options to purchase 2,500 shares of Common Stock on the date of each
annual meeting of stockholders and options to purchase 25,000 shares of Common
Stock when he or she is first appointed as a director.
Tax
Considerations. The following is a brief and general
discussion of the federal income tax rules applicable to awards under the Plan.
With respect to an incentive stock option, an employee will generally not be
taxed at the time of grant or exercise, although exercise of an incentive option
will give rise to an item of tax preference that may result in an alternative
minimum tax. If the employee holds the shares acquired upon exercise of an
incentive stock option until at least one year after issuance and two years
after the option grant, he or she will have long-term capital gain (or loss)
based on the difference between the amount realized on the sale or disposition
and his or her option price. If these holding periods are not satisfied, then
upon disposition of the shares the employee will recognize ordinary income
equal, in general, to the excess of the fair market value of the shares at time
of exercise over the option price, plus capital gain in respect of any
additional appreciation. With respect to a non-qualified option, an employee
will not be taxed at the time of grant; upon exercise, he or she will generally
realize compensation income to the extent the then fair market value of the
stock exceeds the option price. The Company will generally have a tax deduction
to the extent that, and at the time that, an employee realizes compensation
income with respect to an award.
Any tax
deductions the Company may be entitled to in connection with awards under the
Plan may be limited by the $1 million limitation under Section 162(m) of the
Code on compensation paid to any of our chief executive officer or other named
officers. This limitation is further discussed in the Compensation Committee
Discussion on Executive Compensation.
For
purposes of this summary, we have assumed that no award will be considered “deferred
compensation”
as that term is defined for purposes of the federal tax rules governing
nonqualified deferred compensation arrangements, Section 409A of the Code, or,
if any award were considered to any extent to constitute deferred compensation,
its terms would comply with the requirements of that legislation (in general, by
limiting any flexibility in the time of payment). For example, the award of a
non-qualified stock option with an exercise price which is less than the market
value of the stock covered by the option would constitute deferred compensation.
If an award includes deferred compensation, and its terms do not comply with the
requirements of these tax rules, then any deferred compensation component of the
award will be taxable when it is earned and vested (even if not then payable)
and the recipient will be subject to a 20% additional tax.
In all
cases, recipients of awards should consult their tax advisors regarding the tax
treatment of any awards received by them.
UNLESS
OTHERWISE INDICATED THEREON, THE ACCOMPANYING PROXY WILL BE VOTED FOR APPROVAL
OF THE AMENDMENT TO THE COMPANY’S 2005 EQUITY INCENTIVE PLAN. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT TO THE COMPANY’S 2005 EQUITY
INCENTIVE PLAN.
Proposal 3 will be
approved upon the affirmative vote of a majority in interest of shares of Common
Stock and Preferred Stock present in person or represented by proxy at the
Meeting and entitled to vote on such proposal.
PROPOSAL
4
RATIFICATION
OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Whitley
Penn LLP, independent registered public accounting firm, has been the
independent registered public accounting firm of the Company since September
2006. The Board has recommended that the stockholders ratify the reappointment
of Whitley Penn LLP as the Company’s independent registered public accounting
firm for the current year.
A
representative of Whitley Penn LLP is expected to be present at the Meeting and
will be afforded an opportunity to make a statement, if such representative
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
RATIFICATION OF WHITLEY PENN LLP. YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
RATIFICATION OF THE APPOINTMENT OF WHITLEY PENN LLP AS THE PRINCIPAL INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31,
2008.
RATIFICATION
BY STOCKHOLDERS IS NOT REQUIRED. IF PROPOSAL 4 IS NOT APPROVED BY THE
STOCKHOLDERS, THE BOARD DOES NOT PLAN TO CHANGE THE APPOINTMENT FOR FISCAL YEAR
2008 BUT WILL CONSIDER SUCH VOTE IN SELECTING OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR FISCAL YEAR 2009.
Proposal 4
will be approved upon the affirmative vote of a majority in interest of shares
of Common Stock and Preferred Stock present in person or represented by proxy at
the Meeting and entitled to vote on such proposal.
PROPOSAL
5
OTHER
MATTERS
As of the date of this Proxy
Statement, the Board has no knowledge of any matters to be presented for
consideration at the Meeting other than those referred to above. If (i) any
matters not within the knowledge of the Board 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 Certificate of Incorporation 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 by the persons named in
the enclosed form of proxy, or their substitutes acting thereunder, in
accordance with the recommendations of the Board, or, if no such recommendations
are made, in accordance with their best judgment.
STOCKHOLDER PROPOSALS FOR 2009 ANNUAL
MEETING
The 2009 annual meeting of
stockholders is expected to be held on or about May 13, 2009. The Board will
make provisions for the presentation of proposals submitted by eligible
stockholders who have complied with the relevant rules and regulations of the
SEC. We must receive such proposals no later than December 12, 2008 to be
considered for inclusion in the Company's proxy statement and form of proxy
relating to that meeting, and no later than March 13, 2009 for all other
proposals.
Our
Annual Report on Form 10-K for the 2007 fiscal year is available without
charge to each stockholder, upon written request to the Company, c/o Investor
Relations, at our principal executive offices at 2600 Stemmons Freeway, Suite
176, Dallas, Texas 75207 and is also available on our website at http://www.accesspharma.com
under the heading “Investor
Relations”.
FINANCIAL
STATEMENTS
The financial statements of the
Company are contained in the Company’s Form 10-K for the 2007 fiscal year end
which accompany this Proxy Statement and are incorporated herein by
reference.
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 COMPANY, 40 WALL STREET, 46TH FLOOR, NEW
YORK, NEW YORK 10005. A PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION IS
APPRECIATED.
By Order of the Board,
/s/ Jeffrey B.
Davis
Jeffrey B. Davis
Chief Executive
Officer
ACCESS
PHARMACEUTICALS, INC.
2600
Stemmons Freeway, Suite 176, Dallas, Texas 75207
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder, having
received the Notice of Annual Meeting of Stockholders and Proxy Statement dated
April 21, 2008, and revoking any proxy heretofore given, hereby appoints each of
Jeffrey B. Davis and Stephen B. Thompson, or either of them, Proxies of the
undersigned with full power of substitution, to cumulate votes and to vote all
shares of Common Stock and Preferred Stock of Access Pharmaceuticals, Inc. which
the undersigned is entitled to vote at the Annual Meeting of Stockholders to be
held Wednesday, May 21, 2007 at 10:00 a.m., local time, at the offices of
Bingham McCutchen LLP, 399 Park Avenue, 19th Floor,
New York, New York 10022, (212) 705-7000, or any postponement or 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 each Director nominee listed
in Proposal 1, and FOR Proposals 2, 3 and 4.
In their discretion, the named
Proxies are authorized to vote on any other matters which may properly come
before the Meeting or any postponement or adjournment thereof as set forth in
the Proxy Statement.
(continued
and to be signed on the reverse side)
The
Board Recommends a vote “For” the election of
Directors listed in Proposal 1, and “For” Proposals 2, 3
and 4. Please sign, date and return this Proxy promptly in the
enclosed envelope. Please mark your vote in blue or black ink as shown here.
x
1.
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Election
of Directors:
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[ ] FOR
ALL
NOMINEES Nominees:
____ Jeffrey B.
Davis
Class 1 –
3 Year Term
____ Esteban
Cvitkovic, MD
[ ] WITHHOLD
AUTHORITY
[ ] FOR
ALL NOMINEES EXCEPT
(INSTRUCTION:
To withhold authority to vote for any individual nominee(s), mark “FOR ALL NOMINEES
EXCEPT” and
fill in the circle next to each nominee you wish to withhold, as shown here:
[X]
2.
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Proposal
to consider and act upon a proposal to
amend
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the Company’s Certificate of
Incorporation to make
certain changes to the terms of the
Company’s FOR AGAINST ABSTAIN
outstanding
Series of Preferred
Stock.
[ ] [ ]
[ ]
3. Proposal
to amend our 2005 Equity Incentive Plan,
to increase the number of shares
authorized FOR AGAINST ABSTAIN
for
issuance.
[ ] [ ]
[ ]
4. Proposal
to ratify the appointment
of Whitley Penn LLP as our
independent
registered public accounting
firm FOR AGAINST ABSTAIN
for the fiscal year ending December
31,
2008. [ ] [ ]
[ ]
5. To
consider and act upon any other matters which
may properly come before the Meeting
or any
postponement or adjournment
thereof.
PLEASE
MARK, SIGN AND DATE BELOW AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
Proxies
will also be accepted by transmission of a facsimile provided that such
facsimile contains sufficient information from which it can be determined that
the transmission was authorized by the stockholder delivering such Proxy.
Telegrams or cablegrams may be addressed to American Stock Transfer & Trust
Company at the address appearing on the attached envelope or via telecopy at
(718) 234-2287.
Shares
Held: ___________ Common Stock; _____________ Preferred
Stock
THIS
PROXY IS SOLICITED ON BEHALF OF ACCESS PHARMACEUTICALS, INC.'S BOARD OF
DIRECTORS AND MAY BE REVOKED BY THE STOCKHOLDER PRIOR TO BEING VOTED AT THE 2008
ANNUAL MEETING OF STOCKHOLDERS 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.
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Date
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Signature if
held jointly |
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Date |
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NOTE:
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Please
sign exactly as name or names appear on this Proxy. When shares are held
jointly each holder must 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 duly authorized
officer, giving full title as such. If signer is a partnership, please
sign in partnership name by authorized
person.
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