Exhibit 10.24

 

EMPLOYMENT AGREEMENT

 

AGREEMENT dated as of June 1, 2005 between ACCESS Pharmaceuticals, Inc. a
Delaware Corporation located at 2600 Stemmons Freeway, Suite 176, Dallas, Texas
75207-2107, (the “Company”), and Stephen B. Thompson, an individual residing at
4231 Bowser Avenue, Dallas, Texas 75219 (the “Executive”).

 

WITNESSETH:

 

WHEREAS, the Company desires that Executive serve as the Company’s Vice
President Chief Financial Officer; and

 

WHEREAS, in order to induce Executive to agree to serve in such capacity, the
Company hereby offers Executive certain compensation and benefits of employment,
as described herein.

 

WHEREAS, Executive is willing to service in this position on the terms and
conditions hereinafter set forth;

 

NOW, THEREFORE, in condition of the premises and of the mutual convenants
contained herein, the Company and Executive hereby agree as follows:

 

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1.                                      Employment

 

The Company agrees to employ Executive and Executive hereby agrees to be
employed upon the terms and conditions hereinafter set forth. During the term of
this Agreement, Executive shall serve as the Vice President Chief Financial
Officer of the Company. Executive shall be responsible to the President and CEO
of the Company, rendering the services and performing the duties prescribed by
the President and CEO of the Company.

 

The Executive agrees, while employed hereunder, to perform his duties faithfully
and to the best of his ability. The Executive shall be employed at the Company’s
offices in Dallas, Texas, and his principal duties shall be performed primarily
in Dallas, Texas except for business trips reasonable in number and duration.

 

2.                                       Term

 

The employment of the Executive hereunder shall begin on the date hereof and
shall continue in full force and effect for a period of one (1) year, and
thereafter shall be automatically renewed for successive one-year periods unless
the Company gives the Executive written notice of termination within six (6)
months prior to the end of any such period or until the occurrence of a
Termination Date, as defined in Section 5 ( the “Term”).

 

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3.                                       Compensation

 

3.1           As compensation for the Executive’s services during the Term, the
Company shall pay the Executive an annual base salary at the rate of $154,000,
payable monthly on the last day of each month during the Term. Prior to the end
of each year during the Term, the Compensation Committee of the Company shall
undertake an evaluation of the services of the Executive during the year then
ended in accordance with the Company’s compensation program at the date hereof
(the “Program”). The Company shall consider the performance of the Executive,
his contribution to the success of the Company and entities under common control
with the Company (collectively, “Affiliates”), and other factors and shall fix
an annual base salary to be paid to the Executive during the ensuring year.

 

3.2           Notwithstanding the foregoing, the Company may change the Program
from time to time or institute a successor to the Program, but the Executive’s
annual base salary shall in no event be less than his annual base salary in
effect on the date of change, adjusted regularly to reflect increases in the
cost of living and comparable compensation for like positions.

 

3.3           The Executive shall participate in the Company incentive
compensation programs in accordance with the following subparagraphs (i) and
(ii):

 

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(i)            Incentive Plan – the Executive shall be covered by the cash bonus
plan currently maintained by the Company and shall be afforded the opportunity
thereunder to receive a target award of 13.5% of annual base salary payable in
cash and 13.5% of annual base salary payable in Access Common Stock, to be
awarded upon the achievement of reasonable performance goals; provided that the
Company may from time to time change the Program or institute a successor to the
Program, so long as the Executive continues to be eligible to receive bonus
awards of percentages of annual base salary in amounts at least equal to those
specified as in effect on the date hereof.

 

(ii)           Stock Option Plan – Executive shall be entitled to participate in
the Company’s stock option plan. In accordance with this plan the Board may from
time to time, but without any obligation to do so, grant additional stock
options to the executive upon such terms and conditions as the Board shall
determine in its sole discretion. If the Company no longer has a class of stock
publicly-traded by reason of a Change of Control of the Company, as defined in
Section 5.3, the Company’s obligation under this Section 3.3 will be satisfied
through options granted by the issuer with public stock then in control of the
Company.

 

3.4           If the Executive is prevented by disability, for a period of six
consecutive months, from continuing fully to perform his obligations hereunder,
the Employee shall perform his obligations hereunder to the extent he is able
and after six months the Company may reduce his annual base salary to reflect
the extent of the disability; provided that in no

 

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event may such rate, when added to payments received by him under any disability
or qualified retirement or pension plan to which the Company or an Affiliate
contributes or has contributed, be less than $90,000. If there should be a
dispute about the Executive’s disability, disability shall be determined by the
Board of Directors of the Company based upon a report from a physician,
reasonably acceptable to the Executive, who shall have examined the Executive.
If the Executive claims disability, the Executive agrees to submit to a physical
examination at any reasonable time or times by a qualified physician designated
by the President and CEO of the Company and reasonably acceptable to the
Executive. Notwithstanding any provision in the Section, the Company shall not
be obligated to make any payment to Executive on account of disability after the
expiration of this Agreement.

 

4.                                       Executive Benefits

 

The Executive shall be entitled to participate in all “employee pension benefit
plans”, all “employee welfare benefit plans” (each as defined in the Employee
Retirement Income Security Act of 1974) and all pay practices and other
compensation arrangements maintained by the Company, on a basis at least as
advantageous to the Executive as the basis on which other executive employees of
the Company are eligible to participate. Executive shall, during the term of his
employment hereunder, continue to be provided with such benefits at a level at
least equivalent to the initial benefits provided or to be provided hereunder.
Without limiting the generality of the foregoing, the Executive shall

 

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be entitled to the following employee benefits (collectively, with the benefits
contemplated by this Section 4, the “Benefits”):

 

4.1           The Executive and the Executive’s dependents shall be covered by
medical insurance, with only such contribution by the Executive toward the cost
of such insurance as may be required from time to time from other executive
officers of the Company.

 

4.2           Life Insurance  Executive shall be entitled to group term life
insurance coverage of $154,000, all premiums being paid by the Company.

 

4.3           Long Term Disability Insurance. The Company shall maintain in
effect long-term disability insurance providing Executive in the event of his
disability (as defined in Section 3 hereof) with compensation annually equal to
at least $90,000.

 

4.4           The Executive shall be entitled to legal holidays and to annual
paid vacation aggregating at least four (4) weeks during any calendar year.

 

4.5           The Company shall reimburse the Executive from time to time for
the reasonable expenses incurred by the Executive in connection with the
performance of his obligations hereunder.

 

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4.6           During such times as the Company is eligible and financially
qualified to obtain the same, the Company shall maintain directors and officers
liability insurance applicable to the Executive in amounts established by the
Board of Directors.

 

Notwithstanding the foregoing, the Company may from time to time change or
substitute a plan or a program under which one or more of the Benefits are
provided to the Executive, provided that the Company first obtains the written
consent of the Executive, which the Executive agrees not unreasonably to
withhold, taking into account his personal situation.

 

5.                                      Termination Date; Consequences for
Compensation and Benefits

 

5.1           Definition of Termination Date  The first to occur of the
following events shall be the Termination Date:

 

5.1.1        The date on which the Executive becomes entitled to receive
long-term disability payment by reason of total and permanent disability.

 

5.1.2        The Executive’s death;

 

5.1.3        Voluntary resignation after one of the following events shall have
occurred, which event shall be specified to the Company by the Executive at the
time of resignation:  material reduction in the responsibility, authority, power
or duty of the executive or a material breach by the Company of any provision of

 

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this Agreement, which breach continues for 30 days following notice by the
Executive to the Company setting forth the nature of the breach (“Resignation
with Reason”)

 

5.1.4        Voluntary resignation not accompanied by a notice of reason
described in Section 5.1.3 (“General Resignation”).

 

5.1.5        Discharge of the Executive by the Company after one of the
following events shall have occurred, which event shall be specified in writing
to the Executive by the Company at the time of discharge:

 

(i)  a felonious act committed by Executive during his employment hereunder,
(ii) any act or omission on the part of the Executive not requested or approved
by the Company constituting willful malfeasance or gross negligence in the
performance of his duties hereunder, (iii) conviction of the Executive or the
entry of a plea of guilt or nolo contendere by the Executive to any crime
involving moral turpitude, (iv) any material breach of any term of this
Agreement by the Executive which is not cured within 30 days after written
notice from the President and CEO of the Company to the Employee setting forth
the nature of the breach (“Discharge for Cause”).

 

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For purposes of this subparagraph (5.1.5), no act or failure to act on the
Executive’s part shall be considered “willful” unless done or omitted to be done
by Executive not in good faith and without reasonable belief that Executive’s
action or omission was in the best interest of the Company. Notwithstanding the
foregoing, Executive shall not be deemed to have been discharged for Cause
unless and until there shall have been delivered to Executive a copy of a Notice
of Termination (as defined below) from the President and CEO of the Company
stating that in his good faith opinion Executive was guilty of conduct set forth
in clauses (i), (ii), (iii) or (iv) above of this subparagraph (5.1.5) and
specifying the particulars thereof in detail.

 

5.1.6        Discharge of the Executive by the Company not accompanied by a
notice of cause described in Section 5.1.5 (“General Discharge”).

 

For purposed of the Agreement “Notice of Termination” shall mean a notice which
indicates the specific termination provision in this Agreement relied upon and
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive’s employment under the provision so
indicated. Each Notice of Termination shall be delivered at least sixty (60)
days prior to the effective date of termination.

 

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5.2           Consequences for Compensation and Benefits

 

(a)           If the Termination Date occurs by reason of disability, death,
General Resignation or Discharge for Cause, the Company shall pay compensation
to the Executive through the Termination Date and shall pay to the Executive all
Benefits accrued through the Termination Date, payable in accordance with the
respective terms of the plans, practices and arrangements under which the
Benefits were accrued.

 

(b)           If the Termination Date occurs by reason of General Discharge or
Resignation with Reason (i) all stock options held by the Executive shall become
immediately exercisable and shall remain exercisable for one (1) year after the
Termination Date, (ii) the Company shall continue the health coverage
contemplated by Section 4.1 for a period of 6 months thereafter, and (iii) the
Executive shall be entitled to receive, within 60 days after the Termination
Date, the amount set forth in Section 5.2.1.

 

5.2.1  The Executive’s annual base salary at the Termination Date, multiplied by
one half (0.5) (i.e., .5 times base salary).

 

5.3           Change in Control. In the event of the occurrence of a Change of
Control (as defined below), the Agreement may be terminated by Executive upon
the occurrence thereafter of one or more of the following events;

 

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1)             Termination of Executive of his employment with the Company may
be made within (1) year after a Change in Control and upon the occurrence of any
of the following events:

 

(a)           A significant adverse change in the nature or scope of the
Executive’s authorities, powers, functions, responsibilities or duties as a
results of the Change in Control, a reduction in the aggregate of Executive’s
existing Base Salary and existing Incentive Compensation received from the
Company, or termination of Executive’s rights to any existing Executive Benefit
to which he was entitled immediately prior to the Change in Control or a
reduction in scope or value thereof without the prior written consent of
Executive.

 

(b)           The merger, consolidation or reorganization of the Company or
transfer of all or a significant portion of its business and/or assets (by
liquidation, merger, consolidation, reorganization or otherwise) unless the
successor or successors to which all or a significant portion of its business
and/or assets have been transferred (directly or by operation of law) shall have
assumed all duties and obligations of the Company under this Agreement pursuant
to Section 11.5 hereof; or:

 

(c)           The Company shall relocate its principal executive offices or
require Executive to have as his principal location of work any location

 

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which is in excess of 50 miles from the location thereof immediately prior to
the relocation date or to travel from his office in the course of discharging
his responsibilities or duties hereunder more than thirty (30) consecutive
calendar days or an aggregate of more than ninety (90) calendar days in any
consecutive 365-calendar day period without in either case his prior consent.

 

2)             Subsequent to a change in control of the Company, the failure by
the Company to obtain the assumption of the obligation to perform this Agreement
by any successor as contemplated in Section 11.5 hereof or otherwise; or

 

3)             Subsequent to a Change in Control of the Company, any purported
termination of Executive’s employment which is not effected pursuant to a Notice
of Termination satisfying the requirement of Section 5.1.5 hereof:

 

5.3.1        A Change in Control of the Company shall occur upon the first to
occur of the date when (a) a person or group “beneficially owns” (as defined in
Rule 13d-3 promulgated under the Securities Exchange Act of 1934) in the 
aggregate 50% or more of the outstanding shares of capital stock entitled to
vote generally in the election of the Directors of the Company or (b) there
occurs a sale of all or substantially all of the business and/or assets of the
Company.

 

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5.3.2        If a Change in Control of the Company shall have occurred within
six (6) months prior to the Termination Date or the Executive terminates this
Agreement under Section 5.3 the Executive will be entitled to receive, within 60
days after the Termination Date, the Executive’s annual base salary at the
Termination Date multiplied by one (1) (i.e., one times base salary), all stock
options held by the Executive shall become immediately exercisable and shall
remain exercisable for 30 days after the Termination Date. The Company shall
continue the health coverage contemplated by Section 4.1 for a period of one (1)
year thereafter.

 

5.4           Liquidated Damages:  No Duty to Mitigate Damages  The amounts
payable pursuant to Section 5.2 and 5.3 shall be deemed liquidated damages for
the early termination of this Agreement and shall be paid to the Executive
regardless of any income the Executive may receive from any other employer, and
the Executive shall have no duty of any kind to seek employment from any other
employer during the balance of the Term.

 

6.             Indemnification

 

To the fullest extent permitted by law, the Company shall indemnify the
Executive and hold him harmless from and against all loss, cost, liability and
expense (including reasonable attorney’s fees) arising from the Executive’s
service to the Company or any Affiliates, whether as officer, director, employee
fiduciary of any employee benefit plan or otherwise.

 

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7.             Agreement Not to Compete

 

The Executive agrees that, while serving as an Executive of the Company he will
not, without the written consent of the President and CEO of the Company, serve
as an employee or director of any business entity other than the company and its
Affiliates, but may serve as a director of a reasonable number of not-for-profit
corporations and may devote a reasonable amount of time to charitable and
community service.

 

8.                                      Agreement Not to Solicit

 

For one year following any Terminate Date, regardless of the reason, the
Executive shall not solicit any employee of the Company or an Affiliate to leave
such employment and to provide service to the Executive or any business entity
by which the Executive is employed or in which the Executive has a material
financial interest. Soliciting a former employee of the Company and its
Affiliates to provide such services shall not be a violation of this Agreement.

 

9.             Confidential Information

 

Unless the Executive shall first secure the consent of the Company, the
Executive shall not disclose or use, either during or after the Term for a
period of five (5) years, any secret or confidential information of the Company
or any Affiliate, whether or not developed by the Executive, except as required
by his duties to the Company or the Affiliate.

 

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Executive will sign a Confidential Disclosure and Limited Use Agreement, which
shall control over this Agreement if any conflict exists between it and this
Agreement.

 

10.          Arbitration

 

Any dispute or differences concerning any provision of this Agreement which
cannot be settled by mutual accord between the parties shall be settled by
arbitration in Dallas, Texas in accordance with the rules then in effect of the
American Arbitration Association, except  as otherwise provided herein. The
dispute or difference shall be referred to a single arbitrator, if the parties
agree upon one, or otherwise to three arbitrators, one to be appointed by each
party and a third arbitrator to be appointed by the first named arbitrators; and
if either party shall refuse or neglect to appoint an arbitrator within 30 days
after the other party shall have appointed an arbitrator and shall have served
written notice upon the first mentioned party requiring such party to make such
appointment, then the arbitrator first appointed shall,  at the request of the
party appointing him, proceed to her and determine the matters in difference as
if he were a  single arbitrator appointed by both parties for the purpose, and
the award or determination which shall be made by the arbitrator shall be final
and binding upon the parties hereto. The arbitrator or arbitrators shall each
have not less than five (5) year’s experience in dealing with the subject matter
of the dispute or differences to be arbitrated. Any award maybe enforced in any
court of competent jurisdiction. The expenses of any such arbitration shall be
paid by the non-prevailing party, as determined by the final order of the
arbitrators.

 

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11.          Miscellaneous

 

11.1         Notes

 

All notices in connection with this Agreement shall be in writing and sent by
postage prepaid first class mail, courier, or telefax, and if relating to
default or termination, by certified mail, return receipt requested, addressed
to each party at the address indicated below:

 

If to the Company:

 

Access Pharmaceuticals, Inc.

 

2600 Stemmons Freeway

 

Suite 176

 

Dallas, Texas 75207

 

Attn:       Chief Executive Officer

 

Copy to:

 

John J. Concannon III, Esq.,

 

150 Federal Street

 

Bingham Dana LLP

 

Boston, MA  02110

 

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If to the Executive:

 

Stephen B. Thompson

 

4231 Bowser Avenue

 

Dallas, Texas 75219

 

Or to such other address as the addressee shall last have designated by notice
to the communicating party. The date of giving of any notice shall be the date
of actual receipt.

 

11.2         Governing Law

 

This Agreement shall be deemed a contract made and performed in the State of
Texas, and shall be governed by the internal and substantive laws of the State
of Texas.

 

11.3         Severability

 

Whenever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other provision or in the
interpretation in any other jurisdiction; however, such provision shall be
deemed amended to conform to applicable laws and to accomplish the intentions of
the parties.

 

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11.4         Entire Agreement, Amendment

 

The Agreement and the offer letter dated November 8, 1990, constitutes the
entire agreement of the parties and may be altered or amended or any provision
hereof waived only by an agreement in writing signed by the party against whom
enforcement of any alteration, amendment, or waiver is sought. No waiver by any
party of any breach of this Agreement shall be considered as a waiver of any
subsequent breach.

 

11.5         Successors and Assigns

 

11.5.1      The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle
Executive to compensation from the Company in the same amount and on the same
terms as Executive would be entitled hereunder if Executive terminated his
employment for Change of Control. As used in Section 11.5.1., “Company” shall
mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which executes and delivers the Agreement provided
for in this Section 11.5.1 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.

 

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11.5.2      This Agreement is intended to bind and inure to the benefit of and
be enforceable by Executive and the Company, and their respective successors and
assigns, except that Executive may not assign any of his rights or delegate any
of his duties without the prior written consent of the Company.

 

11.6         Assignability

 

Neither this Agreement nor any benefits payable to the Executive hereunder shall
be assigned, pledged, anticipated, or otherwise alienated by the Executive, or
subject to attachment or other legal process by any creditor of the Executive,
and notwithstanding any attempted assignment, pledge, anticipation, alienation,
attachment, or other legal process, any benefit payable to the Executive
hereunder shall be paid only to the Executive or his estate.

 

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IN WITNESSES WHEREOF, the Company and its officers hereunto duly authorized, 
and the Employee have signed and sealed this Agreement as of the date first
written above.

 

 

 

ACCESS PHARMACEUTICALS

 

 

 

 

BY:

 

/s/ Stephen B. Thompson

 

BY:

 

/s/ Rosemary Mazanet

 

 

Stephen B. Thompson

 

Rosemary Mazanet

 

 

 

 

 

 

TITLE:

 

Executive

 

TITLE:

 

Acting Chief Executive Officer

 

 

 

 

 

 

 

DATE:

 

June 24, 2005

 

DATE:

 

June 24, 2005

 

 

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