**Exhibit 10.24**

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**EMPLOYMENTAGREEMENT**

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AGREEMENT dated as ofJune 1, 2005 between ACCESS Pharmaceuticals, Inc. a Delaware Corporationlocated 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 Companydesires that Executive serve as the Company’s Vice President Chief FinancialOfficer; and

 

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

 

WHEREAS, Executive iswilling to service in this position on the terms and conditions hereinafter setforth;

 

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

 

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**1.****                                      Employment**

 

The Company agrees to employ Executive and Executivehereby agrees to be employed upon the terms and conditions hereinafter setforth. During the term of this Agreement, Executive shall serve as the VicePresident Chief Financial Officer of the Company. Executive shall beresponsible to the President and CEO of the Company, rendering the services andperforming the duties prescribed by the President and CEO of the Company.

 

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

 

2.                                       **Term**

 

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

 

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3.                                       **Compensation**

 

3.1           As compensation for the Executive’sservices during the Term, the Company shall pay the Executive an annual basesalary at the rate of $154,000, payable monthly on the last day of each monthduring the Term. Prior to the end of each year during the Term, theCompensation Committee of the Company shall undertake an evaluation of the servicesof the Executive during the year then ended in accordance with the Company’scompensation program at the date hereof (the “Program”). The Company shallconsider the performance of the Executive, his contribution to the success ofthe 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 theExecutive during the ensuring year.

 

3.2           Notwithstanding the foregoing, theCompany may change the Program from time to time or institute a successor tothe Program, but the Executive’s annual base salary shall in no event be lessthan his annual base salary in effect on the date of change, adjusted regularlyto reflect increases in the cost of living and comparable compensation for likepositions.

 

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

 

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(i)            IncentivePlan – the Executive shall be covered by the cash bonus plan currentlymaintained by the Company and shall be afforded the opportunity thereunder toreceive 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 theachievement of reasonable performance goals; provided that the Company may fromtime to time change the Program or institute a successor to the Program, solong as the Executive continues to be eligible to receive bonus awards ofpercentages of annual base salary in amounts at least equal to those specifiedas in effect on the date hereof.

 

(ii)           StockOption Plan – Executive shall be entitled to participate in the Company’s stockoption plan. In accordance with this plan the Board may from time to time, butwithout any obligation to do so, grant additional stock options to theexecutive upon such terms and conditions as the Board shall determine in itssole discretion. If the Company no longer has a class of stock publicly-tradedby reason of a Change of Control of the Company, as defined in Section 5.3, theCompany’s obligation under this Section 3.3 will be satisfied through optionsgranted by the issuer with public stock then in control of the Company.

 

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

 

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event may suchrate, when added to payments received by him under any disability or qualifiedretirement or pension plan to which the Company or an Affiliate contributes orhas contributed, be less than $90,000. If there should be a dispute about theExecutive’s disability, disability shall be determined by the Board ofDirectors of the Company based upon a report from a physician, reasonablyacceptable to the Executive, who shall have examined the Executive. If theExecutive claims disability, the Executive agrees to submit to a physicalexamination at any reasonable time or times by a qualified physician designatedby the President and CEO of the Company and reasonably acceptable to theExecutive. Notwithstanding any provision in the Section, the Company shall notbe obligated to make any payment to Executive on account of disability afterthe expiration of this Agreement.

 

4.                                       **Executive Benefits**

 

The Executive shall be entitled to participate in all “employeepension benefit plans”, all “employee welfare benefit plans” (each as definedin the Employee Retirement Income Security Act of 1974) and all pay practicesand other compensation arrangements maintained by the Company, on a basis atleast as advantageous to the Executive as the basis on which other executiveemployees of the Company are eligible to participate. Executive shall, duringthe term of his employment hereunder, continue to be provided with suchbenefits at a level at least equivalent to the initial benefits provided or tobe provided hereunder. Without limiting the generality of the foregoing, theExecutive shall

 

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be entitled to thefollowing employee benefits (collectively, with the benefits contemplated bythis Section 4, the “Benefits”):

 

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

 

4.2           Life Insurance  Executive shall be entitled to group termlife 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 providingExecutive in the event of his disability (as defined in Section 3 hereof) withcompensation annually equal to at least $90,000.

 

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

 

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

 

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4.6           During such times as the Company iseligible and financially qualified to obtain the same, the Company shallmaintain directors and officers liability insurance applicable to the Executivein amounts established by the Board of Directors.

 

Notwithstanding the foregoing, the Company may fromtime to time change or substitute a plan or a program under which one or moreof the Benefits are provided to the Executive, provided that the Company firstobtains the written consent of the Executive, which the Executive agrees notunreasonably 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 eventsshall be the Termination Date:

 

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

 

5.1.2        TheExecutive’s death;

 

5.1.3        Voluntaryresignation after one of the following events shall have occurred, which eventshall be specified to the Company by the Executive at the time ofresignation:  material reduction in theresponsibility, authority, power or duty of the executive or a material breachby the Company of any provision of

 

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

 

5.1.4        Voluntaryresignation not accompanied by a notice of reason described in Section 5.1.3 (“GeneralResignation”).

 

5.1.5        Dischargeof the Executive by the Company after one of the following events shall haveoccurred, which event shall be specified in writing to the Executive by theCompany at the time of discharge:

 

(i)  a feloniousact committed by Executive during his employment hereunder, (ii) any act oromission on the part of the Executive not requested or approved by the Companyconstituting willful malfeasance or gross negligence in the performance of hisduties hereunder, (iii) conviction of the Executive or the entry of a plea ofguilt or nolo contendere by the Executive to any crime involving moralturpitude, (iv) any material breach of any term of this Agreement by theExecutive which is not cured within 30 days after written notice from thePresident and CEO of the Company to the Employee setting forth the nature of thebreach (“Discharge for Cause”).

 

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For purposes of this subparagraph (5.1.5), no act orfailure to act on the Executive’s part shall be considered “willful” unlessdone or omitted to be done by Executive not in good faith and withoutreasonable belief that Executive’s action or omission was in the best interestof the Company. Notwithstanding the foregoing, Executive shall not be deemed tohave been discharged for Cause unless and until there shall have been deliveredto Executive a copy of a Notice of Termination (as defined below) from thePresident and CEO of the Company stating that in his good faith opinionExecutive 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 indetail.

 

5.1.6        Dischargeof the Executive by the Company not accompanied by a notice of cause describedin 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 thisAgreement relied upon and sets forth in reasonable detail the facts andcircumstances claimed to provide a basis for termination of Executive’semployment under the provision so indicated. Each Notice of Termination shallbe delivered at least sixty (60) days prior to the effective date oftermination.

 

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5.2           Consequencesfor Compensation and Benefits

 

(a)           If the Termination Date occurs byreason of disability, death, General Resignation or Discharge for Cause, theCompany shall pay compensation to the Executive through the Termination Dateand shall pay to the Executive all Benefits accrued through the TerminationDate, payable in accordance with the respective terms of the plans, practicesand arrangements under which the Benefits were accrued.

 

(b)           If the Termination Date occurs byreason of General Discharge or Resignation with Reason (i) all stock optionsheld by the Executive shall become immediately exercisable and shall remainexercisable for one (1) year after the Termination Date, (ii) the Company shallcontinue the health coverage contemplated by Section 4.1 for a period of 6months thereafter, and (iii) the Executive shall be entitled to receive, within60 days after the Termination Date, the amount set forth in Section 5.2.1.

 

5.2.1  TheExecutive’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 theevent of the occurrence of a Change of Control (as defined below), theAgreement may be terminated by Executive upon the occurrence thereafter of oneor more of the following events;

 

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1)             Terminationof Executive of his employment with the Company may be made within (1) yearafter a Change in Control and upon the occurrence of any of the followingevents:

 

(a)           Asignificant adverse change in the nature or scope of the Executive’sauthorities, powers, functions, responsibilities or duties as a results of theChange in Control, a reduction in the aggregate of Executive’s existing BaseSalary and existing Incentive Compensation received from the Company, ortermination of Executive’s rights to any existing Executive Benefit to which hewas entitled immediately prior to the Change in Control or a reduction in scopeor value thereof without the prior written consent of Executive.

 

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

 

(c)           TheCompany shall relocate its principal executive offices or require Executive tohave as his principal location of work any location

 

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

 

2)             Subsequentto a change in control of the Company, the failure by the Company to obtain theassumption of the obligation to perform this Agreement by any successor ascontemplated in Section 11.5 hereof or otherwise; or

 

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

 

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

 

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5.3.2        If aChange in Control of the Company shall have occurred within six (6) monthsprior to the Termination Date or the Executive terminates this Agreement underSection 5.3 the Executive will be entitled to receive, within 60 days after theTermination Date, the Executive’s annual base salary at the Termination Datemultiplied by one (1) (i.e., one times base salary), all stock options held bythe Executive shall become immediately exercisable and shall remain exercisablefor 30 days after the Termination Date. The Company shall continue the healthcoverage 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 5.2and 5.3 shall be deemed liquidated damages for the early termination of thisAgreement and shall be paid to the Executive regardless of any income theExecutive may receive from any other employer, and the Executive shall have noduty of any kind to seek employment from any other employer during the balanceof the Term.

 

**6.             Indemnification**

 

To the fullest extent permitted by law, the Companyshall indemnify the Executive and hold him harmless from and against all loss,cost, liability and expense (including reasonable attorney’s fees) arising fromthe 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.             AgreementNot to Compete**

 

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

 

**8.****                                     ****Agreement Not to Solicit**

 

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

 

**9.             ConfidentialInformation**

 

Unless the Executive shall first secure the consent ofthe Company, the Executive shall not disclose or use, either during or afterthe Term for a period of five (5) years, any secret or confidential informationof 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 LimitedUse Agreement, which shall control over this Agreement if any conflict existsbetween it and this Agreement.

 

**10.          Arbitration**

 

Any dispute or differences concerning any provision ofthis Agreement which cannot be settled by mutual accord between the partiesshall be settled by arbitration in Dallas, Texas in accordance with the rulesthen in effect of the American Arbitration Association, except  as otherwise provided herein. The dispute ordifference shall be referred to a single arbitrator, if the parties agree uponone, or otherwise to three arbitrators, one to be appointed by each party and athird arbitrator to be appointed by the first named arbitrators; and if eitherparty shall refuse or neglect to appoint an arbitrator within 30 days after theother party shall have appointed an arbitrator and shall have served writtennotice upon the first mentioned party requiring such party to make suchappointment, 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 partiesfor the purpose, and the award or determination which shall be made by thearbitrator shall be final and binding upon the parties hereto. The arbitratoror arbitrators shall each have not less than five (5) year’s experience indealing with the subject matter of the dispute or differences to be arbitrated.Any award maybe enforced in any court of competent jurisdiction. The expensesof any such arbitration shall be paid by the non-prevailing party, asdetermined by the final order of the arbitrators.

 

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**11.          Miscellaneous**

 

11.1         Notes

 

All notices in connection with this Agreement shall bein writing and sent by postage prepaid first class mail, courier, or telefax,and if relating to default or termination, by certified mail, return receiptrequested, 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:       ChiefExecutive 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 otheraddress as the addressee shall last have designated by notice to thecommunicating party. The date of giving of any notice shall be the date ofactual receipt.

 

11.2         Governing Law

 

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

 

11.3         Severability

 

Whenever possible, each provision of this Agreementshall be interpreted in such manner as to be effective and valid underapplicable 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 anyjurisdiction, such invalidity, illegality or unenforceability shall not affectany other provision or in the interpretation in any other jurisdiction;however, such provision shall be deemed amended to conform to applicable lawsand 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 oramended or any provision hereof waived only by an agreement in writing signedby the party against whom enforcement of any alteration, amendment, or waiveris sought. No waiver by any party of any breach of this Agreement shall beconsidered as a waiver of any subsequent breach.

 

11.5         Successorsand Assigns

 

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

 

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11.5.2      ThisAgreement is intended to bind and inure to the benefit of and be enforceable byExecutive and the Company, and their respective successors and assigns, exceptthat Executive may not assign any of his rights or delegate any of his dutieswithout the prior written consent of the Company.

 

11.6         Assignability

 

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

 

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IN WITNESSES WHEREOF, the Company and its officershereunto duly authorized,  and theEmployee have signed and sealed this Agreement as of the date first writtenabove.

 

 
|   | 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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