SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ACCESS PHARMACEUTICALS, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and state
how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the
date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
ACCESS PHARMACEUTICALS, INC.
2600 Stemmons Freeway, Suite 176
Dallas, Texas 75207
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders
of Access Pharmaceuticals, Inc. (the "Company" or "Access") to be held on
May 29, 1997 at 10:00 a.m. local time, at the New York Athletic Club, 180
Central Park South, New York, New York 10019, (212) 247-5100 (the
"Annual Meeting").
The Notice of Annual Meeting and the Proxy Statement that follow
describe the business to be considered and acted upon by the stockholders at
the Annual Meeting. The Board of Directors unanimously recommends that
Access' stockholders approve the proposals. Please carefully review the
information contained in the Proxy Statement.
Proposal 1, to be addressed at the Annual Meeting, is to consider and
act upon a proposal to amend Access' Certificate of Incorporation, as
amended, to effect a recapitalization of the Company through a one-for-
four reverse stock split of Access common stock (the "Common Stock") and
a decrease the number of authorized shares of Common Stock from 60.0
million to 25.0 million. This proposal will decrease the number of outstanding
shares of Common Stock from approximately 31.4 million to 7.9 million.
PLEASE NOTE THAT THE REVERSE STOCK SPLIT WILL NOT CHANGE YOUR
PROPORTIONATE EQUITY INTERESTS IN ACCESS, EXCEPT AS MAY RESULT FROM THE
ELIMINATION OF FRACTIONAL SHARES.
The Board of Directors believes that the recent per share price of the
Company's Common Stock and the fact that it is not listed on NASDAQ or
an exchange have had a negative effect on the marketability of Access'
Common Stock. Management of the Company believes that a reverse split
could position Access more attractively with institutional investors and retail
stock brokers who generally have restrictions on investing in low-priced stocks
and stocks not listed on NASDAQ or an exchange. A higher stock price also
could increase broker/dealer interest in maintaining markets in Access' stock.
Individual stockholders would then benefit as transaction costs relative to the
total value of stock trades may be reduced. The reverse split also could
improve Access's ability to finance the Company's research activities by
increasing the number of potential investors and investment vehicles. The
terms under which financing transactions could be concluded may also be
more favorable with a higher priced stock. Additionally, the reverse split
would improve Access' prospects for being relisted on the NASDAQ
SmallCap Market or an alternate stock exchange.
The Board of Directors unanimously recommends that Access'
stockholders approve the amendment to the Certificate of Incorporation to
effect the reverse stock split. The enclosed Proxy Statement sets forth more
detailed information regarding the amendment and the reverse stock split and
other proposals. Please carefully review the information contained in the
Proxy Statement.
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WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, IT IS VERY
IMPORTANT THAT YOU MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN
THE ENVELOPE PROVIDED AS SOON AS POSSIBLE. IF YOU ATTEND THE MEETING, YOU
MAY REVOKE THE PROXY AT THAT TIME BY REQUESTING THE RIGHT TO VOTE IN PERSON.
Sincerely,
/s/ Herbert H. McDade, Jr.
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Herbert H. McDade, Jr.
Chairman of the Board of Directors
<PAGE>
ACCESS PHARMACEUTICALS, INC.
2600 Stemmons Freeway, Suite 176
Dallas, Texas 75207
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held on May 29, 1997
PLEASE TAKE NOTICE that the Annual Meeting of Stockholders
(the "Annual Meeting") of Access Pharmaceuticals, Inc. (the "Company" or
"Access") will be held at the New York Athletic Club, 180 Central Park South,
New York, New York 10019, (212) 247-5100, on May 29, 1997, at 10:00 a.m.
local time. The meeting will convene at 10:00 a.m. for the following purposes:
1. To consider and vote upon a proposal to amend the Company's
Certificate of Incorporation, as amended, (the "Amendment") to effect a
recapitalization (the "Recapitalization") through a one-for-four reverse stock
split (the "Reverse Stock Split") pursuant to which every four shares of
Common Stock outstanding on the effective date of the Amendment would
be converted into one share of Common Stock ("New Common Stock"). This
proposal will decrease the number of outstanding shares of Common Stock
from approximately 31.4 million to 7.9 million. The Amendment would also
reduce the number of authorized shares of Common Stock from 60,000,000
shares, par value $.04 per share, to 25,000,000 shares, par value $.01 per
share. The reduction in authorized shares of Common Stock would in fact
proportionately increase the number of authorized but unissued shares when
compared with the number of issued and outstanding shares before and after
the Amendment. To avoid the existence of fractional shares of New Common
Stock, stockholders who would otherwise be entitled to receive fractional
shares of New Common Stock shall receive cash in lieu thereof.
2. To elect two Class 2 Directors, to hold office for a term of
three years.
3. To consider and act upon a proposal to ratify the appointment
of KPMG Peat Marwick LLP as independent accountants for the Company
for the fiscal year ending December 31, 1997.
4. To transact such other business as may properly come before the
meeting or any postponements or adjournments thereof.
Stockholders of record at the close of business on April 23, 1997, the
record date for the Annual Meeting, are entitled to receive notice of, and to
vote at the Annual Meeting and any adjournment or postponement thereof.
The Company's Annual Report for the fiscal year ended December 31, 1996
accompanies the Proxy Statement.
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Information relating to the Reverse Stock Split and the other proposals
is set forth in the accompanying Proxy Statement dated April ___, 1997.
Please carefully review the information contained in the Proxy Statement,
which is incorporated into this Notice.
By Order of the Board of Directors,
/s/ Herbert H. McDade, Jr.
-----------------------------------
Herbert H. McDade, Jr.
Chairman of the Board of Directors
Dallas, Texas
April ___, 1997
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Stockholders are cordially invited to attend the Annual Meeting in
person. YOUR VOTE IS IMPORTANT. If you do not expect to attend the
Annual Meeting, or if you do plan to attend but wish to vote by proxy, please
complete, date, sign and mail the enclosed proxy card in the return envelope
provided addressed to Access Pharmaceuticals, Inc., c/o American Stock
Transfer & Trust Co., 40 Wall Street, 46th Floor, New York, New York 10005
("American Stock Transfer"). Proxies will also be accepted by transmission
of a telegram, cablegram or telecopy provided that such telegram, cablegram
or telecopy contains sufficient information from which it can be determined
that the transmission was authorized by the stockholder. American Stock
Transfer & Trust Company's telecopy number is (718) 234-2287.
<PAGE>
ACCESS PHARMACEUTICALS, INC.
2600 Stemmons Freeway, Suite 176
Dallas, Texas 75207
_________________
PROXY STATEMENT
__________________
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 29, 1997
This Proxy Statement is furnished by Access Pharmaceuticals, Inc., a
Delaware corporation (the "Company" or "Access"), to holders of Common
Stock, par value $.04 per share (the "Common Stock"), in connection with the
solicitation of proxies by the Board of Directors of the Company for use at
the Annual Meeting of Stockholders of the Company, and at any and all
adjournments or postponements thereof (the "Annual Meeting"). The Annual
Meeting will be held on Thursday, May 29, 1997 at 10:00 a.m., local time,
at the New York Athletic Club, 180 Central Park South, New York, New
York 10019, (212) 247-5100. This Proxy Statement and the accompanying
form of proxy is first being sent to holders of Common Stock on or about
April , 1997. The Company's mailing address and the location of its
principal executive offices are 2600 Stemmons Freeway, Suite 176, Dallas,
Texas 75207, (214) 905-5100.
A stockholder signing and returning the enclosed proxy may revoke it
at any time before it is exercised by voting in person at the Annual Meeting,
by submitting another proxy bearing a later date or by giving notice in writing
to the Secretary of the Company not later than the day prior to the Annual
Meeting. All proxies returned prior to the meeting will be voted in
accordance with instructions contained therein.
At the close of business on April 23, 1997, the record date for the
Annual Meeting, there were outstanding and entitled to vote 31,391,324
shares of common stock, $0.04 par value per share, of the Company (the
"Common Stock"). The Company has no other outstanding voting securities.
Each outstanding share of Common Stock is entitled to one vote. A complete
list of stockholders entitled to vote at the meeting will be available for
examination by any stockholder for any purpose germane to the meeting at
the Company's principal executive offices, during normal business hours, at
least ten business days prior to the Annual Meeting. The Bylaws of the
Company require that a majority of the shares entitled to vote, present in
person or by proxy, shall constitute a quorum for the conduct of business at
the meeting. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of
business. Abstentions are counted in tabulations of the votes cast on
proposals presented to the stockholders, whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved.
Because the proposal relating to the Amendment (as defined below) requires
the affirmative vote of a majority of the outstanding shares, broker non-votes
and abstentions will have the effect of a vote against such proposal.
Stockholders have the right to vote cumulatively for the election of
Directors. This means that in the voting at the Annual Meeting each
stockholder, or his proxy, may multiply the number of his shares by two (the
number of directors to be elected) and then cast the resulting total number
of for a single nominee, or distribute such votes on the ballot among the two
nominees as desired. The proxies submitted to the Board of Directors in
response to this solicitation may, at the discretion of the proxy holder,
accumulate the votes of the shares they represent. However, the Board of
Directors requires any stockholder otherwise electing to exercise his
cumulative voting rights, if voting in person, to so indicate prior to the
beginning of the Annual Meeting or if voting by proxy given to someone other
than those designated by the Board of Directors in this solicitation
to so indicate on said proxy.
<PAGE>
All expenses in connection with solicitation of proxies will be borne by
the Company. The Company will also request brokers, dealers, banks and
voting trustees, and their nominees, to forward this Proxy Statement, the
accompanying form of proxy and the Annual Report for the fiscal year of the
Company ended December 31, 1996 to beneficial owners and will reimburse
such record holders for their expense in forwarding solicitation material. The
Company expects to solicit proxies primarily by mail, but Directors, officers
and regular employees of the Company may also solicit in person, by
telephone or by telecopy.
The Board of Directors does not know of any matters which will be
brought before the Annual Meeting other than those matters specifically set
forth in the Notice of Annual Meeting. However, if any other matter properly
comes before the Annual Meeting, it is intended that the persons named in
the enclosed form of proxy, or their substitutes acting thereunder, will vote on
such matter in accordance with their best judgement.
This proxy statement should be read in conjunction with the Annual
Report of the Company, including financial statements and managements's
discussion and analysis of financial condition and results of operations for the
fiscal year ended December 31, 1996.
PROPOSAL 1
Proposed Amendment to the Certificate of Incorporation
to Effect the Recapitalization
General
The Company proposes to effect a recapitalization through the adoption
of a proposed amendment (the "Amendment") to the Company's Certificate
of Incorporation, as amended, (the "Certificate"), as specified in the
accompanying Notice of Annual Meeting of Stockholders. The Amendment
will effect a recapitalization (the "Recapitalization") of the Company through
a one-for-four reverse stock split (the "Reverse Stock Split") and will also
provide for reducing the authorized number of shares of Common Stock after
the Reverse Stock Split to 25,000,000, which would in fact proportionately
increase the number of authorized but unissued shares of Common Stock
when compared with the number of issued and outstanding shares before and
after the Amendment. A form of the Amendment is attached hereto as
Exhibit A to this Proxy Statement. If the Amendment is approved by the
stockholders, each FOUR shares of Common Stock, par value $.04 per share,
("Old Common Stock") outstanding on effective date of the Amendment (the
"Effective Date") will be converted automatically into ONE share of Common
Stock, par value $.01 per share, ("New Common Stock") and the number of
authorized shares of Common Stock will be reduced from 60,000,000 to
25,000,000. To avoid the existence of fractional shares of New Common
Stock, stockholders who would otherwise be entitled to receive fractional
shares of New Common Stock shall receive a cash distribution in lieu thereof.
The Effective Date of the Reverse Stock Split will be the date on which the
Amendment is filed with the Secretary of State of Delaware, which is
anticipated to be as soon as practicable following the date of the Annual
Meeting. The number of authorized Preferred Stock will not be changed by
the Amendment.
Background of and Reasons for the Reverse Stock Split
On January 16, 1997 the Board of Directors adopted resolutions
approving the Amendment and directing that the Amendment be placed on
the agenda for the consideration of the stockholders.
The Board of Directors believes that the recent per share price of the
Common Stock has had a negative
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<PAGE>
effect on the marketability of the existing shares, the amount and percentage
of transaction costs paid by individual stockholders and the potential ability
of the Company to raise capital by issuing new shares. The Company believes
there are several reasons for these effects, as summarized below.
There are significant restrictions imposed by most brokerage houses on
the ability of their brokers to solicit orders or recommend the purchase of
stocks that trade on the NASD Over-The-Counter ("OTC") Bulletin Board.
In the majority of cases the purchase of stock is limited to unsolicited offers
from private investors, who have to comply with policies and practices
involving the completion of time-consuming forms that make the handling of
lower-priced stocks economically unattractive. Additionally, most brokerage
houses do not permit lower-priced stocks to be used as collateral for margin
accounts or to be purchased on margin. Further, the Board of Directors
believes that the current per share price of the Common Stock may limit the
effective marketability of the Common Stock because of the reluctance of
many brokerage firms and institutional investors to recommend lower-priced
stocks to their clients or to hold them in their own portfolios. The brokerage
commission on the purchase or sale of a lower-priced stock may also
represent a higher percentage of the price than the brokerage commission on
a higher-priced issue.
The opportunity to raise capital to support the Company's development
activities has been reduced as a result of the delisting of the stock from
NASDAQ, the recent price per share of the stock and the thin trading of the
stock. These facts have significantly reduced the number of potential
investors, increases the cost of raising capital limits and the types of
offerings that can be made. It is the Company's intention to seek re-listing
of the Common Stock on the NASDAQ SmallCap Market or an exchange, if this
proposal is approved and the Company meets such requirements for relisting.
The Board of Directors is optimistic that the reduction in the number
of shares of Common Stock outstanding as a consequence of the proposed
Reverse Stock Split and the resulting anticipated increased price level will
result in greater interest in the Common Stock by the financial community
and the investing public.
There can be no assurances, however, that the foregoing will occur or
that the market price of the Common Stock immediately after implementation
of the proposed Reverse Stock Split will increase, and if it increases, no
assurance that such increase can be maintained for any period of time, or that
such market price will approximate four times the market price before the
proposed Reverse Stock Split.
Dissenting stockholders have no appraisal rights under Delaware law
or under the Company's Certificate and Bylaws in connection with Reverse
Stock Split.
The Company's Common Stock is currently traded on the NASD
Over-the-Counter ("OTC") Bulletin Board and as of February 1, 1996 trades
under the trading symbol AXCS. The Common Stock was traded on the
National Association of Securities Dealers, Inc. Automated Quotation System
("Nasdaq") SmallCap Market under the trading symbol CHMX until April 27,
1995. Access' securities were delisted from the Nasdaq SmallCap Market on
April 27, 1995 for failure to meet certain financial requirements. The
following table sets forth the high and low closing prices per share for the
Common stock as reported by the OTC for the Company's past two fiscal
years.
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<TABLE>
<CAPTION>
Common Stock
-------------------------------
High Low
-------------- --------------
<S> <C> <C>
Fiscal Year Ended December 31, 1995
First quarter $ 3/4 $ 7/16
Second quarter(1) 1/2 7/16
Second quarter(2) 9/16 1/16
Third quarter 19/32 9/32
Fourth quarter 1- 1/8 1/4
Fiscal Year Ended December 31, 1996
First quarter 2-11/16 7/8
Second quarter 2- 9/16 1-5/8
Third quarter 1-11/16 7/8
Fourth quarter 1- 5/16 3/4
Fiscal Year Ended December 31, 1997
First quarter 11/16 1-1/4
Second quarter (thru April __, 1997) _____ _____
</TABLE>
(1) Through April 27, 1995 on NASDAQ SmallCap Market.
(2) After April 27, 1995 on OTC Bulletin Board.
The Reverse Stock Split may be abandoned by the Board of Directors
pursuant to Section 242(a) of the Delaware General Corporation Code at any
time before, during or after the Special Meeting and prior to the filing of the
Certificate of Amendment to the Company's Certificate of Incorporation with
the Secretary of State of the State of Delaware giving effect to the Reverse
Stock Split if, for any reason, the Board of Directors deems it advisable to do
so.
The Board of Directors has determined that it would be appropriate for
the Company to increase the proportionate number of authorized shares of
Common Stock in order to have additional shares available for possible future
acquisition or financing transactions and other issuances, or to satisfy
requirements for additional reservations of shares by reason of future
transactions which might require increased reservations. The Board of
Directors believes that the complexity of customary financing, employment
and acquisition transactions requires that the directors be able to respond
promptly and effectively to opportunities that involve the issuance of shares
of Common Stock. For example, if the proposal is approved, the Company
will have the flexibility to authorize stock splits and stock dividends and to
enter into joint ventures and corporate financing involving the issuance of
shares of Common Stock. The Company has no present plans, agreements,
understandings or arrangements regarding transactions expected to require the
issuance of additional shares of Common Stock that would be authorized by
the proposed amendment.
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Effects of the Reverse Stock Split and Recapitalization
General Effects. If the Amendment is approved by the stockholders,
the principal effect of the Reverse Stock Split will be to decrease the number
of outstanding shares from 31,391,324 shares to approximately 7,847,800
shares, based on share information as of March 31, 1997, and reduce the
number of authorized shares of Common Stock from 60,000,000 to 25,000,000.
In order that the Company may avoid the expense and inconvenience
of issuing and transferring fractional shares of New Common Stock,
stockholders who would otherwise be entitled to receive a fractional share of
New Common Stock ("Fractional Stockholders") shall receive payment in cash
in lieu of receiving a fractional share of New Common Stock. See "Exchange
of Shares and Payment in Lieu of Issuance of Fractional
Shares."
Effect on Market for Common Stock. The Reverse Stock Split may
leave certain stockholders with one or more "odd-lots" of new Common Stock,
i.e. stock in amounts of less than 100 shares. These odd-lots may be more
difficult to sell or require greater transaction cost per share to sell, than
shares in even multiples of 100. On March 31, 1997, the closing sale price of
the Common Stock on the OTC was $.75 per share. Upon the effectiveness
of the Reverse Stock Split, the Compensation Committee of the Board of
Directors shall make a proportional downward adjustment to the number of
shares subject to outstanding options and a corresponding upward adjustment
in the per share exercise prices to reflect the Reverse Stock Split.
Changes in Stockholders' Equity. As an additional result of the Reverse
Stock Split, the Company's stated capital, which consists of the par value per
share of Common Stock multiplied by the number of shares of Common Stock
issued, will be reduced by approximately $1,177,175 to $78,478 on the
Effective Date. Following the Reverse Stock Split the stated capital will be
decreased because the number of shares issued and outstanding will be
reduced and because the par value of the Common Stock will change to $.01
per share. Correspondingly, the Company's capital in excess of par value,
which consists of the difference between the Company's stated capital and the
aggregate amount paid to the Company upon the issuance by the Company
of all currently outstanding Common Stock, will be increased by
approximately $1,177,175.
FEDERAL INCOME TAX CONSEQUENCES
The following summary of the federal income tax consequences of the
Reverse Stock Split is based on current law, including the Internal Revenue
Code of 1986, as amended (the "Code"), and is for general information only.
The tax treatment of a stockholder may vary depending upon the particular
facts and circumstances of such stockholder. Certain stockholders, including
insurance companies, tax-exempt organizations, financial institutions,
broker-dealers, non-resident aliens, foreign corporations and persons who do
not hold the Common Stock as a capital asset, may be subject to special rules
not discussed below.
ACCORDINGLY, EACH STOCKHOLDER SHOULD CONSULT HIS TAX ADVISOR TO DETERMINE
THE PARTICULAR TAX CONSEQUENCES TO HIM OF THE REVERSE STOCK SPLIT, INCLUDING
THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL OR FOREIGN INCOME TAX AND
OTHER LAWS.
The receipt of shares of New Common Stock (excluding fractional
shares of New Common Stock) in the Reverse Stock Split should be a
nontaxable transaction under the Code for federal income tax purposes.
Consequently, a stockholder receiving shares of New Common Stock should
not recognize either gain or loss, or any other type of income, with respect to
whole shares of New Common Stock received as a result of the Reverse Stock
Split. In addition, the aggregate tax basis of such stockholder's shares of
Common Stock prior to the Reverse Stock Split will carry over as the tax basis
of the stockholder's shares of New Common Stock. Each Stockholder will be
required to allocate his basis in his shares of Common Stock ratably among
the total number of shares of new Common Stock owned following the
Reverse Stock Split. The holding period of the shares of New Common Stock
will also include the holding period during which the stockholder held the
Common stock, provided that such Common Stock was held by the
stockholder as a capital asset on the Effective Date.
The receipt by a Fractional Stockholder of cash in lieu of a fractional
share of New Common Stock pursuant to the Reverse Stock Split will be a
taxable transaction for federal income tax purposes. The receipt of cash in
lieu of fractional shares of New Common Stock will result in gain or loss
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<PAGE>
(rather than dividend income) to the Fractional Stockholders assuming, as the
Company believes, that such cash distribution is undertaken solely for the
purpose of saving the Company the expense and inconvenience of issuing and
transferring fractional shares of New Common Stock. Capital gain or loss will
be long-term capital gain or loss if on the Effective Date the shares of
Common Stock have been held by the Fractional Stockholder for longer than
one year.
Based on certain exceptions contained in regulations issued by the
Internal Revenue Service, the Company does not believe that it or Fractional
Stockholders will be subject to backup withholding or informational reporting
with respect to the cash distributed to a Fractional Stockholder.
EXCHANGE OF SHARES AND PAYMENT IN LIEU OF
ISSUANCE OF FRACTIONAL SHARES
On or after the Effective Date, the Company will mail to each
stockholder a letter of transmittal. A stockholder will be able to receive his
shares of New Common Stock and, if applicable, cash in lieu of a fractional
share of New Common Stock only by transmitting to the Transfer Agent such
stockholder's stock certificate(s) for shares of Common Stock outstanding
prior to the Reverse Stock Split, together with the properly executed and
completed letter of transmittal and such evidence of ownership of such shares
as the Company may require. Stockholders will not receive certificates for
shares of New Common Stock unless and until the certificates representing
their shares of Common Stock outstanding prior to the Reverse Stock Split
are surrendered.
STOCKHOLDERS SHOULD NOT FORWARD THEIR CERTIFICATES TO THE TRANSFER
AGENT UNTIL THE LETTER OF TRANSMITTAL IS RECEIVED AND SHOULD SURRENDER
THEIR CERTIFICATES ONLY WITH SUCH LETTER OF TRANSMITTAL.
No scrip or fractional share certificates for New Common Stock will be
issued in connection with the Reverse Stock Split. A payment in lieu of a
fractional shares of New Common Stock will be made to a Fractional
Stockholder promptly after receipt of a properly completed letter of
transmittal and stock certificate(s) for all of his shares of Common Stock
outstanding prior to the Reverse Stock Split.
There will be no service charges payable by the stockholders of the
Company in connection with the exchange of their certificates.
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FOR THE REASONS STATED ABOVE, THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT ALL STOCKHOLDERS VOTE "FOR" THE APPROVAL FOR THE AMENDMENT.
PROPOSAL 2
Election of Directors
The Company's Certificate of Incorporation and Bylaws presently
provide that the Board of Directors of the Company (the "Board of Directors"
or the "Board") shall consist of three to fifteen members, shall be divided into
three classes as nearly equal in number as possible, and that each Director
shall serve for a term of three years and until his successor is elected and
qualified or until his earlier resignation, death or removal. By resolution,
the Board has set the number of its members at seven. The term of office of
one class of Director expires each year in rotation so that one class is
elected at each annual meeting for a three-year term. The Board presently
consists of six members. Dr. David Ranney, through a Stockholders' Agreement
with the Company, (see Certain Relationships and Related Transactions), has
the right to be nominated or to have his nominee nominated for election to
the Board of Directors. This position is currently vacant.
Nominees for Term Expiring at the Annual Meeting of Stockholders in 2000
(Class 2 Directors)
Mrs. Elizabeth M. Greetham and Dr. Stephen B. Howell are the
members of the Class 2 Directors. Mrs. Greetham has served as a Director
since 1992 and Dr. Howell was appointed to serve as a Director by the Board
of Directors effective November 13, 1996. Mrs. Greetham's and Dr. Howell's
terms expire at the Annual Meeting. If elected at the Annual Meeting, both
will serve for a term of three years expiring on the date of the Annual
Meeting of Stockholders in 2000. The terms of the other four Directors will
continue as indicated below.
Business and Experience of Nominees for Director
Mrs. Elizabeth M. Greetham has served as a Director of the Company
since 1992 and is President of Libracorn Financial Consultants. One of her
present clients is Weiss, Peck & Greer, a New York-based money
management firm. With over twenty years of worldwide experience as a
health care analyst and portfolio manager, she currently is responsible for
Weiss, Peck & Greer's health care investments for institutional, mutual, and
selected individual accounts. Prior to her association with Weiss, Peck &
Greer, Mrs. Greetham consulted for a number of years for F. Eherstadt &
Co., a New York institutional brokerage house. She is a member of the
Board of Directors of Progenics Pharmaceuticals, Inc., ChiRex, Inc.,
PathoGenesis Corporation and SangStat Medical Corporation. She is a
member of the Company's Audit & Finance and Compensation Committees.
Stephen B. Howell, M.D. has served as a Director of the Company
since November 4, 1996. Dr. Howell is a professor of medicine at the
University of California, San Diego, and Director of the Clinical Investigation
and Development Therapeutics 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 also serves on the National Research
Council of the American Cancer Society and the editorial boards of several
medical journals. Dr. Howell also serves on the Board of Directors of
DepoTech Corporation and Beacon Laboratories.
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<PAGE>
The nominees have consented to serve as Directors of the Company
and the Board of Directors has no reason to believe that the nominees will
be unavailable. There is no family relationship among any of the Directors
or nominees.
The Board recommends a vote "FOR" the proposed nominees to the
Board.
UNLESS OTHERWISE INDICATED THRERON, THE ACCOMPANYING PROXY WILL BE
VOTED FOR THE NOMINEES NAMED ABOVE. HOWEVER, THE PERSONS DESIGNATED AS
PROXIES RESERVE THE RIGHT TO CAST VOTES FOR ANOTHER PERSON DESIGNATED BY
THE BOARD OF DIRECTORS IN THE EVENT ANY NOMINEES ARE UNABLE OR UNWILLING
TO SERVE.
Information With Respect to Directors Whose Terms Continue and Executive
Officers
Directors Whose Terms Expire at the Annual Meeting in 1998 (Class 3
Directors)
Mr. Herbert H. McDade, Jr. was elected a Director of the Company in
January 1988 and presently is Chairman of the Board of Directors. In
February 1989, he was elected Vice-Chairman of the Board of Directors and
Chief Executive Officer of the Company. In June 1989, he was elected
Chairman of the Board of Directors and Treasurer in addition to his
responsibilities as Chief Executive Officer, and from 1990 to January 1996 he
was President of the Company. Mr. McDade served in such capacities until
January 25, 1996. He is also a member of the Audit & Finance Committee
of the Board of Directors. He is currently President and Chief Executive
Officer of the Thoma Corporation, a closely-held health care consulting
company. In addition, he also serves on the Boards of CytRx Corporation,
Shaman Pharmaceuticals, Inc., Discovery Laboratories, Inc. and Clarion
Pharmaceuticals, Inc. From 1986 to 1987 he served as Chairman of the Board
of Directors and President of Armour Pharmaceutical Co., a wholly-owned
subsidiary of Rorer Group, Inc. Prior to 1986 he served for approximately 13
years in various executive positions at Revlon, Inc., including President of the
International Division of the Revlon Health Care Group from 1979 to 1986.
He was also previously associated for twenty years in various executive
capacities with The Upjohn Company. From January 1989 to July 1995 he
served on the Board of API.
Mr. Kerry P. Gray has been President and a Chief Executive Officer
and a Director of the Company since January 25, 1996. Prior to such time,
from June 1993, he served as President and Chief Executive Officer of Access
Pharmaceuticals, Inc., a Texas corporation ("API"). Previously, Mr. Gray
served as Vice President and Chief Financial Officer of PharmaSciences, Inc.,
a company he co-founded to acquire technologies in the drug delivery area.
From May 1990 to August 1991, Mr. Gray was Senior Vice President,
Americas, Australia and New Zealand of Rhone-Poulenc Rorer, Inc. Prior
to the Rorer/Rhone Poulenc merger, he had been Area Vice President
Americas of Rorer International Pharmaceuticals. Previously, from January
1986 to May 1988, he was Vice President, Finance of Rorer International
Pharmaceuticals, having served in that same capacity for the Revlon Health
Care Group of companies before their acquisition by Rorer Group. Between
1975 and 1985, he held various senior financial positions in Revlon Health
Care Group. Mr. Gray's experience in the pharmaceutical industry totals 22
years.
Mr. J. Michael Flinn has served as a Director of the Company since
1983. He also is a member of the Audit & Finance, Nominating and
Compensation Committees of the Board of Directors.
8
<PAGE>
Since 1970 he has been an investment counselor. Previously from 1970 to 1996
he was a principal with the investment counseling firm of Sirach Capital
Management, Inc. He assisted in the management of pension, profit sharing,
individual, corporate and foundation accounts totaling over $4.5 billion. He
is also a board member of Oridigm Corporation.
Director Whose Term Expires at the Annual Meeting in 1999 (Class 1
Director)
Max Link, Ph.D. has been a director of the Company since June 1996.
He also is a member of the Compensation and Nominating Committees of the
Board of Directors. He has held a number of executive positions with
pharmaceutical and health care companies. Most recently, he served as Chief
Executive Officer of Corange Limited, from May 1993 until June 1994. Prior
to joining Corange, Dr. Link served in a number of positions with Sandoz
Pharma Ltd., including Chief Executive Officer, from 1987 until April 1992,
and Chairman, from April 1992 until May 1993. Dr. Link currently serves on
the board of directors of five other publicly-traded life science companies:
Alexion Pharmaceuticals, Inc., Protein Design Labs, Inc., Procept, Inc. CytRx
Corporation and Human Genome Sciences, Inc. Dr. Link received this Ph.D.
in Economics from the University of St. Gallen in 1970.
Executive Officers
In addition to executive officers of the company who are also directors,
set forth below is the business experience of the other executive officers of
the Company.
Mr. W. Eric Bowditch has been Vice President Business Development
of the Company since June 1996. He has over 23 years experience in the
pharmaceutical industry. From 1992 to 1996, he was with Ohmeda
Pharmaceutical Products Division Inc., a company focused on anesthesia and
acute care pharmaceuticals, as Director Business Development. From 1984
to 1991, Mr. Bowditch was Worldwide Director, Strategic Marketing and
Business Development with Rhone-Poulenc Rorer. Previously, Mr. Bowditch
held a number of marketing and business development positions with Revlon
Healthcare Group, Squibb and Boehringer Ingelheim in the UK.
Mr. Stephen B. Thompson has been Chief Financial Officer of the
Company since January 25, 1996. Previously from 1990 to 1996 he was
Controller and Administration Manager of API. From 1989 to 1990, he was
Controller of Robert E. Woolley, Inc. a hotel real estate company where he
was responsible for accounting, finances and investor relations. Previously,
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.
Richard G. Van Inwegen, Ph.D. joined the Company in May 1996 as
Vice President Pre-Clinical and Clinical Development. Prior to joining Access
he was with Chemex from 1991 to 1995 as Vice President of Clinical
Research. Previously, Dr. Van Inwegen held positions with Roberts
Pharmaceuticals for two years as assistant director of clinical research, the
Rorer Company as department manager of immunology specializing in
hypersensitivity for three years, and the Revlon Health Care Group where he
was involved in various areas of pharmaceutical research and development for
ten years. He holds a B.A. in biology and an M.A. in cell physiology from
State University of New York, Binghampton, and a Ph.D. from the University
of Illinois in physiology.
9
<PAGE>
Glynn Wilson, Ph.D. joined the Company in June 1996 as Vice
President Research & Development. Previously from 1994 to 1996 he was
Executive Vice President of Tacora Corporation. From 1989 to 1994, Dr.
Wilson was with SmithKline Beecham, ultimately as Worldwide Head of Drug
Delivery. Previously, he held positions in drug delivery with Ciba-Geigy, cell
biology research with Unilever and was Assistant Professor at Rockefeller
University where he was involved in protein and carbohydrate chemistry
research. Dr. Wilson has a degree in Biochemistry from the University of
London and a Ph.D. from Heriot-Watt University, Edinburgh, Scotland.
Officers and Directors
The directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position Held with ACCESS
- - --------------------------- ------ ------------------------------
<S> <C> <C>
Herbert H. McDade, Jr 70 Chairman of the Board of Directors
Kerry P. Gray 44 President, Chief Executive Officer,
Treasurer, Director
J. Michael Flinn 63 Director
Elizabeth M. Greetham 54 Director
Stephen. B. Howell. M.D. 52 Director
Max Link, Ph.D. 56 Director
W. Eric Bowditch 50 Vice President Business Development
Stephen B. Thompson 43 Chief Financial Officer
Richard G. Van Inwegen, Ph.D. 52 Vice President Preclinical &
Clinical Development
Glynn Wilson, Ph.D. 50 Vice President Research &
Development
</TABLE>
Meetings of The Board of Directors and Committees
The Board of Directors of the Company held a total of eight meetings
in 1996. The Company has a new Nominating Committee comprised of J.
Michael Flinn and Max Link. The Company also has an Audit & Finance
Committee comprised of J. Michael Flinn, Elizabeth M. Greetham and
Herbert H. McDade, Jr. The members of the Audit & Finance committee
met one time during 1996 to review auditing activities. The Board of
Directors in 1996, appointed the Compensation Committee, presently
composed of J. Michael Flinn, Elizabeth M. Greetham and Max Link. The
Committee met twice in 1996. During the fiscal year ended December 31,
1996 each Director attended at least 75% of the aggregate of the total
number of such meetings of the Board and the total number of meetings held
by all committees on which the individual director served.
10
<PAGE>
Compensation of Directors
Each Director who is not an employee of the Company receives a
quarterly fee of $1,250, plus $1,000 for each board meeting which he attends
and plus $500 for each committee meeting he attends as member of the Audit
and Finance and/or Compensation Committees. Each Committee Chairman
also received $250 for each meeting he attends.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Directors, Executive officers and persons who own more than ten
percent of a registered class of the Company's equity securities ("10%
holders"), to file with the Securities and Exchange Commission initial reports
of ownership and reports of changes in ownership of common stock and other
equity securities of the Company. Directors, officers and 10% holders are
required by SEC regulation to furnish the Company with copies of all of the
Section 16(a) reports they file.
Based solely on a review of reports furnished to the Company or written
representatives from the Company's Directors and executive officers during
the fiscal year ended December 31, 1996, all Section 16(a) filing requirements
applicable to its Directors, officers and 10% holders for such year were
complied with except for: Dr. Max Link, W. Eric Bowditch, Dr. Richard G.
Van Inwegen and Dr. Glynn Wilson, each filed a late Form 3 and Stephen B.
Thompson filed a late Form 4 reporting one transaction.
Executive Compensation
The following table sets forth the aggregate compensation paid by the
Company to the CEO and each of the most highly compensated executive
officers of the Company whose aggregate salary and bonus exceeded $100,000
for services rendered in all capacities to the Company for the years ended
December 31, 1996, 1995 and 1994.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation Long-term
- - ---------------------------------------------- Compensation
Awards
- - ----------------------------------------------------------------------------
Securities All
Name and Underlying Other
Principal Position Year Salary Bonus Options/SARs (#) Compens.
- - ---------------------- ----- ------ ----- --------------- --------
<S> <C> <C> <C> <C> <C>
Kerry P. Gray
President and CEO(1) 1996 $201,250 $0 200,000 $2,616 (5)
Herbert H. McDade, Jr.
Chairman of the Board
& Former CEO(2) 1996 $ 9,214 $0 0 $ 240 (3)
1995 110,571 (3) 0 0 57,165 (3)
1994 131,714 (3) 0 226,829 46,122 (3)
</TABLE>
(1) Mr. Gray, President and CEO, became an officer of the Company on
January 25, 1996. Previously he held the same position at API.
11
<PAGE>
(2) Effective January 25, 1996, Mr. McDade resigned as officer of the
Company. Mr. McDade remains as Chairman of the Board of Directors.
See Certain Relationships and Related transactions for a consulting
agreement Mr. McDade has with the Company. In consideration for the
termination of his employment with Access, Mr. McDade and Access
entered into an agreement on October 4, 1995, pursuant to which, among
other things, (i) Mr. McDade became a consultant to Access, providing
consulting services to Access at least four days each month; (ii) Mr.
McDade is paid a base of $1,500 per day of consulting; and (iii) the
period for exercise of all options and SARs owned by Mr. McDade was
extended from three months after the termination of his employment with
Access to the expiration of the option or SAR. During 1996 Thoma
Corporation, of which Mr. McDade is a principal, was paid an aggregate
amount of $60,000 in consulting fees.
(3) Mr. McDade's salary and other compensation for the years 1995 and
1994 represent his salary and other compensation paid by Chemex.
These salary amounts are prior to reduction for deferred employer
contributions under the Company's Employee Stock Ownership Plan
Pursuant to Section 401(k) of the Internal Revenue Code of 1986, as
amended (the "Code"). Pursuant to Mr. McDade's employment
agreement with Chemex, Mr. McDade was reimbursed for certain
expenses. In 1995, he was reimbursed for insurance payments ($49,682)
and auto allowance ($6,000) and auto insurance reimbursement ($440),
in addition, the Company made ESOP contributions in stock of $1,043.
In 1994, he was reimbursed for life insurance payments ($23,000) and
auto allowance ($6,000) and auto insurance reimbursement ($658), in
addition, the Company made ESOP contributions in stock of $16,464.
(4) Mr. McDade's awards for stock options in 1994 were granted by Chemex.
(5) The Company paid Mr. Gray for certain expenses for life insurance and
long-term disability in the aggregate amount of $2,616 for 1996.
Options/SARs Grants in 1996
The following table provides information regarding stock options granted
to the named executive officers
during 1996.
<TABLE>
<CAPTION>
INDIVIDUAL OPTION GRANTS IN LAST FISCAL YEAR
Percent of Potential Realizable
Total Options Value at Assumed
Number of Granted to Annual Rates of
Securities Employees in Stock Appreciation
Underlying Fiscal Exercise Expiration For Option Term (3)
Name Options Year Price Date 5% 10%
- - ------------- -------- ------- ------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
K. Gray (1) 200,000 35% 1.15 01/25/06 144,646 366,561
H. McDade (2) 6,666 - 1.81 06/21/06 7,588 19,229
</TABLE>
12
<PAGE>
(1) Mr. Gray's options will become exercisable in five successive annual
installments of 25,000, 50,000, 50,000, 50,000 and 25,000, respectively.
(2) Mr. McDade received no options while he was an employee during 1996.
He received 6,666 options as a director under the Company's
Non-employee Director Compensation Plan.
(3) Potential realizable value is based on the assumption that the price per
share of Common Stock appreciates at the assumed annual rate of stock
appreciation for the option term. There is no assurance that the assumed
5% and 10% annual rates of appreciation (compounded annually) will
actually be realized over the term of the option. The assumed 5% and
10% annual rates are set forth in accordance with the rules and
regulations adopted by the Securities and Exchange Commission and do
not represent the Company's estimate of stock price appreciation.
Options/SARs Exercise and Year-End Value Table
This table includes the number of shares covered by both exercisable and
non-exercisable stock options/SARs as of December 31, 1996. Also reported
are the values for "in-the-money" stock options/SARs which represent the
positive spread between the exercise price of any such existing stock
options/SARs and the year-end price of the Company's common stock. There
were no SARs granted or exercised by the officers during 1996.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Number of Value of
Securities Underlying Unexercised In-
Unexercised The-Money
Number of Options/SARs (#) Options/SARs ($) (1)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable Unexercisable
- - --------- --------- ------------ -------------- ---------------
<S> <C> <C> <C> <C>
K. Gray - - 0 / 200,000 $0 / $0
H. McDade, Jr. - - 496,670 / 0 $113,871 / $0
</TABLE>
(1) Amounts disclosed in these columns do not reflect amounts actually
received by the named executive officers but are calculated based on the
difference between fair market value of the Company's Common Stock at
the end of 1996, as determined by the Company's Board of Directors, less
the exercise price payable for such shares, in accordance with the rules
and regulations adopted by the Securities and Exchange Commission.
Employment Agreements
Mr. Herbert H. McDade, Jr. Effective February 1, 1989 the Company and
Mr. McDade entered into an employment agreement, as amended (the
"McDade Agreement"), which provided that he would serve as the Chief
Executive Officer of the Company and Vice Chairman or Chairman of the
Board of Directors. The McDade Agreement was amended, effective June
25, 1991, to provide for a term ending June 30, 1994, and was extended to
January 31, 1996. Mr. McDade left the Company as President and Chief
Executive Officer
13
<PAGE>
on January 25, 1996 after the merger of the Company and API was completed
on January 25, 1996. Mr. McDade was eligible to participate in all Company
employee benefit and welfare programs available to executives. The
Company also paid insurance premiums on $1 million of life insurance
payable to his estate, medical expenses coverage for Mr. McDade and his
spouse and long-term disability coverage for Mr. McDade. The McDade
Agreement provided that, upon termination, a cash severance payment equal
to one year's salary would be paid if Mr. McDade was terminated by the
Company without cause and a cash severance equal to two years' salary would
be paid if he terminated his employment for good reason. Mr. McDade
waived the severance provisions when leaving the Company. Upon Mr.
McDade's termination of employment, all options and SARs immediately
vested and become exercisable.
Certain Relationships and Related Transactions
Dr. David Ranney. Dr. David Ranney, former director and officer of
Access, beneficially owns, 9,147,608 shares of Common Stock which represents
29.2% of the outstanding shares of Common Stock. See "Security Ownership
of Certain Beneficial Owners and Management." Dr. Ranney and Access
have entered into a Stockholder's Agreement providing for, among other
matters, (1) certain rights of Dr. Ranney to be nominated or to have his
nominee nominated for election to the Board of Directors of Access at any
election of Access Directors; (2) so long as Dr. Ranney beneficially owns 15%
or more of the issued and outstanding stock of the Company he agrees to vote
all such shares for which he has voting power on any proposal presented to
the stockholders of the Company in the manner recommended by a majority
of the Board of Directors, as defined; and, (3) a right of first refusal of Dr.
Ranney to license or purchase certain technology and intellectual property of
Access under certain conditions.
In April 1994, the Company and Dr. Ranney entered into a Patent
Purchase Agreement, as amended, which provides for the assignment of the
rights to certain patents to Access. Under the terms of the Patent Purchase
Agreement Dr. Ranney has retained certain rights and interests in the
intellectual property as provided in the Stockholder's Agreement, including a
non-exclusive right to use the inventions and technology covered by or relating
to the patents for his own research, teaching or other academic related
purposes, and after he is no longer a full-time employee of Access for
research and development of uses or implementations of the inventions or
technology improvements. Access maintains the first right to negotiate the
acquisition of any new inventions or technology improvements developed by
Dr. Ranney relating to the technology. Access has agreed to pay Dr. Ranney
a royalty of three quarters of one percent (0.75%) of Access gross revenues
derived from products covered by the patents and to pay certain minimum
payments which began in 1994, and which are subject to further modifications.
In addition the Patent Purchase Agreement, as amended, establishes
certain additional rights of Dr. Ranney. The patent assignment will terminate
in the event Access fails to pay the amounts due to Dr. Ranney pursuant to
the Agreement, files a petition in bankruptcy, fails to commercially develop
the patents or creates a security interest in the patents without Dr. Ranney's
approval. Also, in the event that parts of the Access technology are not being
developed after January 25, 2000, Dr. Ranney has the right of first refusal to
license or acquire at fair market value development rights to such parts of the
Access technology.
14
<PAGE>
Dr. Ranney has signed an Assignment of Intellectual Property whereby all
rights, title and interest in and to all subsequent inventions and confidential
information will become the sole and exclusive property of Access at the
earlier of the date of conception or development, while he was an employee
of Access and until May 31, 1998 for inventions related to the Access
technology.
Herbert McDade. In consideration for the termination of his employment
with Access, Mr. McDade and Access entered into an agreement on October
4, 1995, pursuant to which, among other things, (i) Mr. McDade became a
consultant to Access, providing consulting services to Access at least four days
each month; (ii) Mr. McDade is paid a base of $1,500 per day of consulting;
and (iii) the period for exercise of all options and SARs owned by Mr.
McDade was extended from three months after the termination of his
employment with Access to the expiration of the option or SAR. During
1996, Thoma Corporation, of which Mr. McDade is a principal, was paid an
aggregate amount of $60,000 in consulting fees.
Security Ownership of Certain Beneficial Owners and Management
Based solely upon information made available to the Company, the
following table sets forth certain information with respect to the beneficial
ownership of Common Stock as of March 31, 1996 by (i) each person who is
known by the Company to beneficially own more than five percent of
Common Stock; (ii) each director of the Company; (iii) each of the named
executive officers; and (iv) all executive officers and directors as a group.
Except as otherwise indicated, the holders listed below have sole voting and
investment power with respect to all shares of Common Stock beneficially
owned by them.
<TABLE>
<CAPTION>
Common Stock Beneficially Owned
- - --------------------------------------------------------------
Name Number of Shares(1) % of Class
- - ------------------------- ------------------- ----------
<S> <C> <C>
Herbert H. McDade. Jr.(2) 1,018,998 3.2%
Kerry P. Gray(3) 1,095,790 3.5%
J. Michael Flinn(4) 70,166 *
Elizabeth M. Greetham(5) 59,333 *
Stephen B. Howell 30,000 *
Max Link(6) 30,000 *
David F. Ranney 9,147,608 29.1%
Nicholas Madonia, Individually
and as Trustee(10) 6,617,729 20.3%
All Directors and Executive
Officers as a group (consisting
of 10 persons) 2,490,663 7.7%
- - ---------------------------------------------------------------
* Less than 1%.
</TABLE>
(1) Includes Common Stock held plus all options and warrants exercisable
within 60 days after March 31, 1996. Unless otherwise indicated, the
persons listed have sole voting and investment powers with respect to all
such shares.
(2) Including presently exercisable options for the purchase of 24,216 shares
of Common Stock pursuant to the Non-Employee Director Plans of 1987
and 1995, and 320,625 shares of Common Stock and 151,829 SARs
exercisable pursuant to the 1987 Stock Option Plan.
(3) Including presently exercisable options for the purchase of 25,000 shares
of Common Stock pursuant to the 1995 Stock Option Plan.
(4) Including presently exercisable options for the purchase of 60,666 shares
of Common Stock pursuant to the Non-Employee Director Plans of 1987
and 1995.
(5) Including presently exercisable options for the purchase of 53,333 shares
of Common Stock pursuant to the Non-Employee Director Plans of 1987
and 1995.
15
<PAGE>
(6) Including presently exercisable options for the purchase of 30,000 shares
of Common Stock pursuant to the Non-Employee Director Plans of 1995.
(7) Mr. Nicholas Madonia owns 18,800 shares of Common Stock. Mr
Madonia is the trustee of the Sentinel Charitable Remainder Trust
("Sentinel"), 30 Outwater Lane, Garfield, New Jersey, which is known to
Access to be the beneficial owner of more than five percent of the
Common Stock. In addition to 1,569,999 shares of Common Stock held
by Sentinel, Sentinel has an option to purchase until January 1, 1999, up
to 500,000 units at $2.50 per unit. The units consist of 500,000 shares of
Common Stock, 500,000 warrants with an expiration date of January 1,
2000 and an exercise price of $6.25 and 200,000 Warrants with an
expiration date of January 1, 2000 and an exercise price of $2.50.
Mr. Madonia is also the trustee of the Century Charitable Remainder
Trust, the Ocean Charitable Remainder Trust, the Lake Charitable
Remainder Trust, the Beacon Charitable Remainder Trust, the Freedom
Charitable Remainder Trust, the Oak Charitable Remainder Trust and
the Celestial Charitable Remainder Trust (together, the
"Charitable Remainder Trusts"). The Charitable Remainder Trusts are
known by Access to be the beneficial owners of an aggregate of 807,839
shares of Common Stock and as such Mr. Madonia, as trustee is deemed
to be a beneficial owner of the securities held by them. Mr. Madonia is
also the trustee of the Blech Family Trust, beneficial owner of 1,537,691
shares of Common Stock, and as such may be deemed to be a beneficial
owner of the securities held by it. Mr. Madonia disclaims beneficial
ownership of all shares held by the trusts. The information set forth
in this footnote is based on a Schedule 13D filed by Mr. Madonia on
April 9, 1997.
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC
ACCOUNTANTS
The Board of Directors has appointed, subject to ratification by the
stockholders at the Annual Meeting, the accounting firm of KPMG Peat
Marwick as principal independent accountants for the Company for the fiscal
year ending December 31, 1997. KPMG Peat Marwick has served in this
capacity since 1979.
Representatives of KPMG Peat Marwick are expected to be present at
the Annual Meeting and to be available to respond to appropriate questions
concerning the 1996 audit. Such representatives will have the opportunity to
make a statement if they desire to do so at the meeting and to respond to
appropriate questions.
UNLESS OTHERWISE INDICATED THEREON, THE ACCOMPANYING PROXY WILL BE
VOTED FOR THE APPROVAL OF KPMG PEAT MARWICK LLP. YOUR BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK
LLP AS PRINCIPAL INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING
DECEMBER 31, 1997.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of the
Company has no knowledge of any matters to be presented for consideration
at the Annual Meeting other than those referred to above. If (i) any matters
not within the knowledge of the Board of Directors as of the date of this
Proxy Statement should properly come before the meeting; (ii) a person not
named herein is nominated at the meeting for election as a Director because
a nominee named herein is unable to serve or for good cause will not serve;
(iii) any proposals properly omitted from this Proxy Statement and the form
of proxy should come before the meeting; or (iv) any matters should arise
incident to the conduct of the meeting, then the proxies will be voted in
accordance with the recommendations of the Board of Directors of the
Company.
16
<PAGE>
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
The Annual Meeting of Stockholders in 1998 is expected to be held on
or about May ___, 1998. Stockholder proposals to be considered for
presentation to the Annual Meeting of Stockholders in 1998 must be received
by the Board of Directors of the Company for inclusion in the Company's
Proxy Statement and form of proxy relating to the 1998 Annual Meeting on
or before February __, 1998.
EACH STOCKHOLDER IS URGED TO COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE PROVIDED FOR THAT PURPOSE AND
ADDRESSED TO ACCESS PHARMACEUTICALS, INC. c/o AMERICAN STOCK TRANSFER &
TRUST CO., 40 WALL STREET, 46TH FLOOR, NEW YORK, NEW YORK 10005, A PROMPT
RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE APPRECIATED.
By Order of the Board of Directors,
/s/ Herbert H. McDade, Jr.
----------------------------------
Herbert H. McDade, Jr.
Chairman of the Board of Directors
17
<PAGE>
Exhibit A
PROPOSED CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
ACCESS PHARMACEUTICALS, INC.
Access Pharmaceuticals, Inc. (the "Corporation"), a Delaware corporation,
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the directors of the Corporation, a
resolution was duly adopted setting forth a proposed amendment
of the Certificate of Incorporation of the Corporation, as
previously amended, and declaring such amendment to be
advisable and calling a meeting of the stockholders of the
Corporation for consideration thereof. The resolution setting
forth the proposed amendment is as follows:
RESOLVED: Upon this Certificate of Amendment to the Certificate
of Incorporation becoming effective pursuant to the Delaware
General Corporate Law (the "Effective Time"), each FOUR
outstanding shares of common stock par value $.04 per share
("Common Stock"), shall thereupon be reclassified and changed
into ONE share of common stock, par value $.01 per share ("New
Common Stock"). Upon such Effective Time, each holder of
Common Stock shall thereupon automatically be and become the
holder of ONE share of New Common
Stock for every FOUR shares of Common Stock then held by such
holder. Upon such Effective Time, each certificate formerly
representing a stated number of shares of Common Stock shall
thereupon be deemed for all corporate purposes to evidence
ownership of New Common Stock in the appropriately reduced
whole number of shares. As soon as practicable after such
Effective Time, stockholders as of the date of the reclassification
will be notified thereof and, upon their delivery of their
certificates of Common Stock to the Company, will be
sent stock certificates representing their shares of
New Common Stock, rounded down to the nearest whole
number, together with cash representing the fair
value of such holder's fractional shares of Common Stock. No
scrip or fractional share certificates for Common Stock will be
issued in connection with this reverse stock split.
RESOLVED: That it is advisable that Article V. Section
A of the Corporation's Certificate of Incorporation, as amended,
be amended to read in its entirety as follows; and that such
Article V, Section A of the Corporation's Certificate of
Incorporation, as amended, be amended to read in its
entirety as follows:
A. The aggregate number of shares of Common Stock
which the Corporation shall have authority to issue is Twenty-five
Million (25,000,000) shares with a par value of one cent ($0.01)
per share.
SECOND: That thereafter, pursuant to resolution of the Board of
Directors, a meeting of the stockholders of the Corporation was
duly called and held, upon notice in accordance with Section 222
of the General Corporation Law of the State of Delaware at
which meeting the necessary number of shares as required by
the General Corporation Law of the State of Delaware voted in
favor of the amendment.
THIRD: That such amendment was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law
of the State of Delaware.
FOURTH: That the effective date of this amendment shall be ______,
1997.
<PAGE>
ACCESS PHARMACEUTICALS, INC.
2600 Stemmons Freeway, Suite 176, Dallas, Texas 75207
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned having received the Notice of Annual Meeting of
Stockholders and Proxy Statement dated April __, 1997, and revoking any
proxy heretofore given, hereby appoints each of Herbert H. McDade, Jr. and
Kerry P. Gray or either of them, proxies of the undersigned with full power
of substitution, to cumulate votes and to vote all shares of common stock of
Access Pharmaceuticals, Inc. which the undersigned is entitled to vote at a
Annual Meeting of Stockholders to be held May 29, 1997 at 10:00 a.m., at the
New York Athletic Club, 180 Central Park South, New York, New York
10019, (212) 247-5100, or any adjournment thereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this Proxy will
be voted FOR the Proposal.
In their discretion, the Proxies are authorized to vote on any other
matters which may properly come before the Annual Meeting or any
adjournment thereof as set forth in the Proxy Statement.
(continued, and to be signed on the reverse side)
SEE REVERSE SIDE
[ X ] PLEASE MARK YOUR VOTE THIS WAY
1. Proposal to amend the Certificate of Incorporation
to effect a recapitalization whereby the Company
would effect a one-for-four reverse stock split and
the number of authorized shares of Common Stock would
be decreased from 60,000,000 shares, par value $.04
per share, to 25,000,000 shares, par value $.01 per
share (the Recapitalization).
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. Election of Directors
Nominee: Elizabeth M. Greetham
FOR WITHHOLD AUTHORITY
[ ] [ ]
Nominee: Stephen B. Howell
FOR WITHHOLD AUTHORITY
[ ] [ ]
3. Proposal to ratify and approve the appointment
of KPMG Peat Marwick LLP as the Independent
Public Accountants of the Company for the year
ending December 31, 1997.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
PLEASE MARK, SIGN AND DATE BELOW AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
Proxies will also be accepted by transmission of a telegram, cablegram or
telecopy provided that such telegram, cablegram or telecopy contains
sufficient information from which it can be determined that the transmission
was authorized by the stockholder. Telegrams or cablegrams may be
addressed to American Stock Transfer & Trust Co. ("American Stock
Transfer") at the address appearing on the attached envelope. American Stock
Transfer's telecopy number is (718) 234-2287.
Shares Held: ___________
THIS PROXY IS SOLICITED ON BEHALF OF ACCESS
PHARMACEUTICALS, INC.'S BOARD OF DIRECTORS AND MAY BE
REVOKED BY THE STOCKHOLDER PRIOR TO EXERCISE.
Signature ____________________________ ________
Date
____________________________ ________
Signature (if held jointly) Date
NOTE: Please sign exactly as name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
