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ACURA PHARMACEUTICALS, INC.

616 N. North Court, Suite 120

Palatine, Illinois 60067

NOTICE OF SPECIALANNUAL MEETING OF SHAREHOLDERS

Notice is hereby given that a Specialthe 2021 Annual Meeting of Shareholders (the “Special Meeting”“Meeting”) of Acura Pharmaceuticals, Inc., a New York corporation (the “Company”), will be held at the offices of LeclairRyan, 885 Third Avenue, New York, New York 10022, 16^th FloorSills Cummis & Gross, One Riverfront Plaza, 1037 Raymond Blvd., Newark, NJ 07102 on August 24, 2015May 25, 2021 at 9:0030 a.m., Eastern Time, for the purposes listed below:

1. To grantelect five directors to the Board of Directors authority to amend our Certificatewho shall serve until the 2022 Annual Meeting of Incorporation to effect a reverse stock split at one of five ratios;Shareholders, or until their successors have been elected and qualified;

2. To approve ancast a non-binding advisory vote on executive compensation (“say-on-pay”);

3. To adopt the Company’s 2021 Restricted Stock Unit Award Plan;

4. To ratify the appointment of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021; and

5. To transact such other business as may properly come before the Meeting or any adjournment of the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the Special Meeting to approve Proposal 1.thereof.

Only shareholders of record at the close of business on JuneMarch 29, 20152021 are entitled to notice of and to vote at the Special Meeting or any adjournment thereof.

For

We are pleased to take advantage of the U.S. Securities and Exchange Commission rule that allows companies to furnish proxy materials to their shareholders over the Internet. As a periodresult, we are mailing to our shareholders a Notice of 10 days priorInternet Availability of Proxy Materials (the “Notice”) instead of paper copies of this proxy statement and our 2020 Annual Report. We believe this process allows us to provide our shareholders with the Special Meeting, a shareholders list will be kept atrequired information more promptly, reduces adverse environmental impact, and reduces costs associated with printing and distributing our administrative office and shall be available for inspection by shareholders during normal business hours. A shareholders list shall also be present and available for inspection at the Special Meeting.

Your attention is directedproxy materials. The Notice contains instructions on how to the accompanyingaccess our Proxy Statement forand 2020 Annual Report over the textInternet. The Notice also contains instructions on how to request a paper copy of the resolutions to be proposed at the Special Meetingour proxy materials, including our Proxy Statement, 2020 Annual Report and further information regarding each proposal to be made.a form of proxy card or voting instruction card.

SHAREHOLDERS UNABLE TO ATTEND THE SPECIAL MEETING ARE URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE. YOU MAY ALSO VOTE YOUR SHARES VIA A TOLL-FREE TELEPHONE NUMBER OR VIA THE INTERNET AS FURTHER DESCRIBED IN THE PROXY CARD. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE DAY OF THE SPECIAL MEETING. IF YOU ATTEND THE SPECIAL MEETING, YOU MAY ALSO REVOKE YOUR PROXY AND VOTE IN PERSON IF YOU WISH.

Your vote is important. Whether or not you plan to attend the Special Meeting, we encourage you to vote as soon as possible. You may vote your shares via a toll-free telephone number or via the Internet as further described in the enclosed proxy card.Notice. If you received a proxy card or voting instruction card by mail, you may submit your proxy card or voting instruction card by completing, signing, dating and mailing your proxy card or voting instruction card in the envelope provided. Any shareholder attending the Special Meeting may vote in person, even if you have already returned a proxy card or voting instruction card.

Your attention is directed to the Proxy Statement for information regarding each proposal to be made at the meeting.

		Peter A. Clemens
	Senior Vice President, Chief Financial Officer and Secretary
July 14, 2015
April 12, 2021
Palatine, Illinois

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ACURA PHARMACEUTICALS, INC.

616 N. North Court, Suite 120

Palatine, Illinois 60067

PROXY STATEMENT

SPECIAL

2021 ANNUAL MEETING OF SHAREHOLDERS

This Proxy Statement is furnished in connection with the solicitation by the Board of Directors of ACURA PHARMACEUTICALS, INC. (the “Company”) of proxies to be voted at the Special2021 Annual Meeting of Shareholders (the “Meeting”) of the Company (the “Meeting”) to be held on August 24, 2015May 25, 2021 at 9:30 a.m., Eastern Time and at any adjournment(s) thereof, for the purposes set forth in the accompanying Notice of SpecialAnnual Meeting of Shareholders. This

In accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission (the “SEC”), we have elected to provide our shareholders access to our proxy statement andmaterials over the formInternet. Accordingly, a Notice of proxy are being firstInternet Availability of Proxy Materials (the “Notice”) will be mailed to shareholderscommencing on or about July 20, 2015.April 12, 2021 to our shareholders who owned our common stock at the close of business on March 29, 2021. Shareholders will have the ability to access the proxy materials on a website referred to in the Notice or request a printed set of the proxy materials be sent to them by following the instructions in the Notice.

The close of business on JuneMarch 29, 20152021 has been fixed as the record date (the “Record Date”) for the determination of shareholders entitled to notice of and to vote at the Special Meeting. On the Record Date, our outstanding voting securities consisted of 49,216,81722,104,668 shares of common stock, $0.01 par value per share (the “Common Stock”). Under the New York Business Corporation Law and our Certificate of Incorporation and Bylaws, each stockholdershareholder will be entitled to one vote for each share of Common Stock held at the Record Date, for all matters.matters, including the election of directors. The required quorum for the transaction of business at the Special Meeting is a majority of the votes eligible to be cast by holders of shares of Common Stock outstanding on the Record Date. Shares that are voted“FOR,” “AGAINST,” “WITHHELD”or“ABSTAIN”are treated as being present at the Special Meeting for the purposes of establishing a quorum and are also treated as shares entitled to vote at the Special Meeting (the “Votes Cast”) with respect to such matter. Abstentions will have the same effect as voting against a proposal. Broker non-votes will be counted for purposes of determining the presence or absence of a quorum for the transaction of business, but such non-votes will not be counted for purposes of determining the number of Votes Cast with respect to the particular proposal on which a broker has expressly not voted. Thus a broker non-vote will not affectHolders of Common Stock have no cumulative voting rights in the outcomeelection of the voting on a proposal.directors. Shareholders have no appraisal rights with respect to any matter being voted upon.

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TABLE OF CONTENTS

		PAGE
VOTING OF PROXIES	3
THE BOARD OF DIRECTORS	14
Board Committees	4
Separation of Roles of Chairman and CEO	5
Board’s Role in Risk Assessment	5
Shareholder Communications to the Board	5
Code of Ethics	6
Section 16(a) Beneficial Ownership Reporting Compliance	6
PROPOSAL 1 TO GRANT THE BOARDELECTION OF DIRECTORS AUTHORITY TO AMEND THE COMPANY’S CERTIFICATE	6
Executive Officers	7
Agreements Governing Appointment of Directors	8
COMPENSATION OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT AT ONE OF FIVE RATIOSEXECUTIVE OFFICERS AND DIRECTORS	8
Compensation Discussion and Analysis	28
Summary Compensation Table and Discussion of Employment and Incentive Arrangements	12
Other Compensatory Arrangements	12
Employment Agreements	12
Stock Option Plans	15
Restricted Stock Unit Award Plan	16
Outstanding Equity Awards at 2020 Year-End	20
Securities Authorized For Issuance under Equity Compensation Plans	20
Director Compensation	20
Compensation Committee Interlocks and Insider Participation	21
Compensation Committee Report	21
Certain Relationships and Related Transactions, and Director Independence	21
Vote Required and Board Recommendation	24
PROPOSAL 2 TO APPROVE OF AN ADJOURNMENTADVISORY VOTE ON A RESOLUTION APPROVING EXECUTIVE COMPENSATION	24
Effect of Proposal	24
Vote Required and Recommendation of the Board of Directors	25
PROPOSAL 3 ADOPTION OF THE SPECIAL MEETING2021 RESTRICTED STOCK UNIT AWARD PLAN	25
General	1025
Dilutive Effect	26
Administration	28
RSU Plan Eligibility	28
Terms	29
Amendment and Termination of the RSU Plan	30
Adjustments upon Changes in Capitalization or Merger	30
Tax Status of the RSU Plan	30
RSU Awards – New Plan Benefits	31
Vote Required	31
Recommendation of the Board of Directors	31
PROPOSAL 4 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	32
Audit Committee’s Pre-Approval Policies and Procedures	32
Audit Committee Report	32
Recommendation of the Board of Directors	33
Vote Required	33
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	33
Security Ownership of Certain Beneficial Owners and Management	1133
GENERAL	35
IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS	1336
SHAREHOLDER PROPOSALS FOR 20162022 ANNUAL MEETING			1536
APPENDIXAppendix A CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF ACURA PHARMACEUTICALS, INC.- 2021 restricted Stock Unit Award Plan	A-1

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VOTING OF PROXIES

Whether you hold shares directly as a registered shareholder

We are pleased to take advantage of the SEC rule that allows companies to furnish their proxy materials over the Internet. Accordingly, we have sent to our shareholders of record or beneficially in street name, you may vote atand beneficial owners a Notice regarding Internet availability of proxy materials. Instructions on how to access the Special Meeting or without attending the Special Meeting. You may also submit your proxy by mail by signing your proxy card if your shares are registered. If you have telephone or Internet access, you may submit your proxy by following the instructions provided in with your proxy materials and on your proxy card or voting instruction card. You may vote by granting a proxy or, for shares held beneficially in street name, by submitting voting instructions to your stockbroker, trustee or nominee. In most cases, you will be able to do this by telephone, by usingover the Internet or by mail. If you provide specific voting instructions, your shares willto request a paper copy may be voted as you have instructed.

Shareholdersfound in the Notice. In addition, shareholders may request to receive proxy materials in printed form by mail or electronically on an ongoing basis. A shareholder’s election to receive proxy materials by mail or electronically by e-mail will remain in effect until the stockholdershareholder terminates such election.

To sign up for electronic delivery, please follow the instructions provided with your proxy materials and on your proxy card or voting instruction card to vote using the Internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years.

You can also view the proxy materials for the Special Meeting on the Internet atwww.proxyvote.com after the mailing date. www.proxyvote.com. Please have your 1216 digit control number available. Your 1216 digit control number can be found on your Notice. If you received a paper copy of your proxy materials, your 16 digit control number can be found on your proxy card or voting instruction card.

Whether you hold shares directly as a registered shareholder of record or beneficially in street name, you may vote without attending the meeting. You may vote by granting a proxy or, for shares held beneficially in street name, by submitting voting instructions to your stockbroker, trustee or nominee. In most cases, you will be able to do this by telephone, by using the Internet or by mail if you received a printed set of the proxy materials.

If you have telephone or Internet access, you may submit your proxy by following the instructions provided in the Notice, or if you received a printed version of the proxy materials by mail, by following the instructions provided with your proxy materials and on your proxy card or voting instruction card.

If you received printed proxy materials, you may submit your proxy by mail by signing your proxy card if your shares are registered or, for shares held beneficially in street name, by following the voting instructions included by your stockbroker, trustee or nominee, and mailing it in the enclosed envelope. If you provide specific voting instructions, your shares will be voted as you have instructed.

You may revoke your proxy and change your vote at any time before the final vote at the Special Meeting. If you are a shareholder of record, you may do this by signing and submitting a new proxy card with a later date; by voting by telephone or by using the Internet, either of which must be completed by 11:59 p.m. Eastern Time on August 23, 2015May 24, 2021 (the latest telephone or Internet proxy is counted); or by attending the Special Meeting and voting in person. Attending the Special Meeting alone will not revoke your proxy unless you specifically request your proxy to be revoked. If you hold shares through a bank or brokerage firm, you will need to request a proxy from the bank or broker and bring it with you to vote at the Special Meeting.meeting.

If you properly sign and return your proxy card or complete your proxy via the telephone or Internet, your shares will be voted as you direct. IF NO INSTRUCTIONS ARE INDICATED AND YOU ARE A SHAREHOLDER OF RECORD, THE COMMON STOCK REPRESENTED THEREBY WILL BE VOTED (i)FORgranting the Board of Directors the authority to amend our Certificate of Incorporation to effect a reverse stock split at one of five ratios, and (ii)FOR the approval of an adjournmentelection of the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes at nominees for Directors, (ii) FOR the timeresolution approving executive compensation, (iii) FOR the adoption of the Special MeetingCompany’s 2021 Restricted Stock Unit Award Plan; and (iv) FOR the ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021.

The proposal to approve Proposal 1.

Both the proposal to implementappointment of independent auditors is considered a reverse stock split and to approve an adjournment“discretionary” item. This means that brokerage firms may vote in their discretion on this matter on behalf of clients who have not furnished voting instructions at least 10 days before the date of the Special meeting, if necessaryMeeting. In contrast, all other proposals are “non-discretionary” items. This means brokerage firms that have not received voting instructions from their clients on this proposalthese proposals may not vote on it.them. These so-called “broker non-votes” will be included in the calculation of the number of votes considered to be present at the meeting for purposes of determining a quorum, but will not be considered in determining the number of votes necessary for approval and will have no effect on the outcome of the vote on such proposal.approval.

PROPOSAL 1

TO GRANT THE BOARD OF DIRECTORS

In 2020, the Company’s Board of Directors held 10 meetings. Each of the Company’s Directors attended at least 75% of the sum of (1) all 2020 Board meetings held during the period they served as directors and (2) all meetings held by Board committees on which a Director served. Directors are strongly encouraged to attend all Board meetings, Board committee meetings, and shareholder meetings.

Board Committees

In 2020, the Company had an Audit Committee and a Compensation Committee of the Board of Directors. In 2020, the Audit Committee met 6 times and the Compensation Committee met 1 time. The Charters of our Audit Committee and Compensation Committee are available on our website, at www.acurapharm.com under the menu item “Corporate Governance” under the “Investors” tab.

Audit Committee

The Audit Committee is composed of George K. Ross, Chairman, Bruce F. Wesson and William G. Skelly. The Audit Committee is responsible for selecting the Company’s registered independent public accounting firm, approving the audit and other fees payable to the auditors, working with independent auditors and other corporate officials, reviewing the scope and results of the audit by, and the recommendations of, our independent auditors, approving the services provided by the auditors, reviewing our financial statements and reporting on the results of the audits to the Board, reviewing our insurance coverage, financial controls and filings with the SEC, including, meeting quarterly prior to the filing of our quarterly and annual reports containing financial statements filed with the SEC, and submitting to the Board its recommendations relating to our financial reporting, accounting practices and policies and financial, accounting and operational controls.

In assessing the independence of the Audit Committee in 2020, our Board followed the standards for independence provided in NASDAQ Marketplace Rule 5605(a) and applicable SEC regulations. Based on this analysis, our Board has determined that each of Messrs. Ross, Wesson and Skelly satisfies such standards for independence. Our Board also determined that Mr. Ross is a “financial expert” as provided in NASDAQ Marketplace Rule 5605(c)(3) and SEC regulations.

Compensation Committee

The Compensation Committee is composed of William Skelly, Chairman, Bruce F. Wesson and Immanuel Thangaraj. This committee is responsible for consulting with and making recommendations to the Board of Directors about executive and director compensation and compensation of employees. See “Compensation of Executive Officers and Directors-Compensation Discussion and Analysis” for a summary of the procedures for approving compensation for our executive officers appearing in the Summary Compensation Table (“2020 named executive officers”). In light of the decision of the Officers and Directors to accept voluntary compensation reductions in 2019 and 2020, the Compensation Committee did not retain a compensation consulting firm, to assist in evaluating stock option and other incentives for our directors, executive officers and other employees.

Our Board determined that each of Messrs. Skelly, Wesson and Thangaraj were independent directors under the Nasdaq Marketplace Rules. The Board has also determined that each of Messrs. Skelly, Thangaraj and Wesson meet the more stringent independence standards for compensation committees imposed under NASDAQ Rule 5605(d)(2)(A).

Nominating Committee

Currently our entire Board of Directors functions as our nominating committee. The Board will perform the functions typical of a nominating committee, including the identification, recruitment and selection of nominees for election to our Board. Our Board determined that all members of the Board were independent other than Mr. Jones, our CEO. We believe that a nominating committee separate from the Board is not necessary at this time given our relative size, the size of our Board, and our opinion that an additional committee of the Board would not add to the effectiveness of the evaluation and nomination process. The Board’s process for recruiting and selecting nominees for Board members, if required, would be to identify individuals who are thought to have the business background and experience, industry specific knowledge and general reputation and expertise allowing them to contribute as effective directors to our governance, and who would be willing to serve as directors of a public company. To date, we have not engaged any third party to assist in identifying or evaluating potential nominees. If a possible candidate is identified, the individual will meet with each member of the Board and be sounded out concerning his/her possible interest and willingness to serve, and Board members would discuss amongst themselves the individual’s potential to be an effective Board member. If the discussions and evaluation are positive, the individual would be invited to serve on the Board. To date, no shareholder has presented any candidate for Board membership for consideration, and we do not have a specific policy on shareholder-recommended director candidates. The Board believes its process for evaluation of nominees proposed by shareholders would be no different than the process of evaluating any other candidate, and therefore the Board believes it is appropriate to not have a policy on shareholder-recommended director candidates. The Board of Directors does not have a policy regarding diversity in identifying nominees for director.

The experience, qualifications, attributes or skills that led the Board to conclude that the current board members should serve are: (i) their pharmaceutical industry and senior level management experience in the case of Messrs. Jones, Skelly, and Wesson; (ii) financial and senior level management expertise in the case of Mr. Ross and Mr. Thangaraj; (iii) their experience in overseeing management as principals of private equity firms in the case of Mr. Wesson and Mr. Thangaraj. In addition, pursuant to the Second and Amended and Restated Voting Agreement, described in “Certain Relationships and Related Transactions and Director Independence” the Board is required to nominate and recommend for election one designee of John Schutte and one designee of Essex Woodlands Health Ventures V, L.P. (“Essex”), as long as each holds 600,000 shares of our common stock (including warrants to purchase shares). Mr. Thangaraj serves as the designee of Essex. As of April 8, 2021, Mr. Schutte has not exercised his right to designate a director. See also “Proposal 1 Election of Directors” for a further description of the experience of our directors.

Separation of Roles of Chairman and CEO

Mr. Jones serves as Chief Executive Officer. The Chairman of our Board of Directors resigned on March 11, 2013. A replacement Chairman has not been elected. We believe the separation of offices is beneficial because a separate chairman (i) can provide the Chief Executive Officer with guidance and feedback on his performance, (ii) provides a more effective channel for the Board to express its views on management and (iii) allows the chairman to focus on shareholder interests and corporate governance while the Chief Executive Officer leads the Company’s strategy development and implementation. It is our intention to seek to add to our Board additional members having significant senior level pharmaceutical experience, and that one of such additional Board members will be entrusted by the Board to serve as Chairman.

Board’s Role in Risk Assessment

The Board as a whole engages in risk oversight as part of its functions. As an emerging pharmaceutical development company we face numerous risks identified in our Annual Report on Form 10-K, many of which are outside of our control. In addition, the Audit Committee reviews our insurance coverage and the Board and Audit Committee regularly monitor our liquidity position and operating expenses and review our capital-funding needs. The Company believes the Board leadership structure effectively enables it to oversee risk management.

Shareholder Communications to the Board

Shareholders who wish to send communications to our Board of Directors may do so by sending them in care of our Secretary at Acura Pharmaceuticals, Inc., 616 N. North Court, Suite 120 Palatine, Illinois 60067. The envelope containing such communication must contain a clear notation indicating that the enclosed letter is a “Shareholder-Board Communication” or “Shareholder-Director Communication” or similar statement that clearly and unmistakably indicates the communication is intended for the Board. All such communications must clearly indicate the author as a shareholder and state whether the intended recipients are all members of the Board or just certain specified directors. Our Secretary will have the discretion to screen and not forward to Directors communications which the Secretary determines in his or her discretion are communications unrelated to our business or our governance, commercial solicitations, or communications that are offensive, obscene, or otherwise inappropriate. The Secretary will, however, compile all shareholder communications which are not forwarded and such communications will be available to any Director.

Code of Ethics

Our Code of Ethics applicable to our principal executive officer, principal financial officer, principal accounting officer and all of our other employees is available on our website, www.acurapharm.com, by clicking on “Corporate Governance” under the “Investors” tab.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our Directors and executive officers, and persons who own beneficially more than ten percent (10%) of our Common Stock, to file reports of ownership and changes of ownership with the SEC. Copies of all filed reports are required to be furnished to us pursuant to Section 16(a). Based solely on the reports received by us and on written representations from reporting persons, we believe that our Directors, executive officers and greater than ten percent (10%) beneficial owners of our Common Stock complied with all Section 16(a) filing requirements during the year ended December 31, 2020.

PROPOSAL 1

ELECTION OF DIRECTORS

At the Meeting, five individuals will be elected to serve as Directors until the next annual meeting, and until their successors are elected and qualified. During 2020, each of Messrs. Jones, Wesson, Skelly, Thangaraj, and Ross served as a Director. There has not been an annual meeting of shareholders since November 8, 2017.

Unless a shareholder WITHHOLDS AUTHORITY, TO AMEND THE COMPANY’S CERTIFICATE a properly delivered proxy will be voted FOR the election of the persons named below, unless the proxy contains contrary instructions. Management has no reason to believe that any of the nominees will not be a candidate or will be unable to serve as a Director. However, in the event any nominee is not a candidate or is unable or unwilling to serve as a Director at the time of the election, unless the shareholder withholds authority from voting, the proxies will be voted for any nominee who shall be designated by the present Board of Directors to fill such vacancy.

Although our Certificate of Incorporation provides for a maximum of 11 directors, in accordance with the terms of a Second Amended and Restated Voting Agreement dated as of July 24, 2017 executed by us, John Schutte (“Schutte”), Essex and Galen (the “Second Amended and Restated Voting Agreement”), we have agreed that the Board of Directors shall be comprised of not more than seven members (or such greater number that is required to assure that we have a majority of independent directors after giving effect to the various designation rights described herein), one of whom shall be the designee of Schutte and one of whom shall be the designee of Essex, one of whom shall be our Chief Executive Officer and three of whom shall be independent directors. The Second Amended and Restated Voting Agreement provides that each of Schutte’s and Essex’s right to designate one director will terminate when it or its affiliates (determined separately for each of Schutte and Essex) fail to hold at least 600,000 shares of our common stock (including warrants exercisable for such shares). The Board is required to nominate an independent director upon forfeiture of a designation right. Mr. Schutte has not designated a nominee.

The name and age of each of the five nominees, his principal occupation and the period during which such person has served as a Director are set forth below.

(1) Member of Compensation Committee

(2) Member of Audit Committee

Robert B. Jones has been our President and Chief Executive Officer since July 7, 2011. From April 2011 through July 6, 2011, Mr. Jones was our Interim President and Chief Executive Officer. Mr. Jones was our Senior Vice President and Chief Operating Officer from April 2008 to April 2011. From May, 2003 to March, 2008, Mr. Jones served first as the Vice President, Finance and then as Vice President, Strategy and Business Analysis of Adolor Corporation. From November 2000 to May 2003 he served as Vice President, Finance and then as Chief Operating Officer of Opt-E-Script, Inc., a privately held personalized medicine company where Mr. Jones was responsible for all commercialization activities. Prior to that, Mr. Jones was Vice President, Sales and Marketing for Purepac Pharmaceutical Company. Mr. Jones received his M.B.A. from the University of North Carolina and a B.S. from Cornell University. Mr. Jones was appointed a director of the Company in July 2011.

Bruce F. Wesson has been a member of our Board of Directors since March 1998. From January 1991 until June 30, 2011, Mr. Wesson was a Partner of Galen Associates, a health care venture firm, and a General Partner of Galen Partners III, L.P. Prior to January 1991, he was Senior Vice President and Managing Director of Smith Barney, Harris Upham & Co. Inc., an investment banking firm. From May 2006 until June 2016 he served on the Board of Derma Sciences, Inc. From June 1999 until January 2016 he served on the Board of MedAssets, Inc. and for over eight years until January 2016 served on the board and as Vice Chairman of MedAssets, Inc. Mr. Wesson earned a Bachelor of Arts degree from Colgate University and a Masters of Business Administration from Columbia University.

William G. Skelly has been a member of our Board of Directors since May 1996 and served as our Chairman from October 1996 through June 2000. Since 1990, Mr. Skelly has served as Chairman, President and Chief Executive Officer of Central Biomedia, Inc. and its subsidiary SERA, Inc. which contract manufacture private labeled animal serum. From 1985 to 1990, Mr. Skelly served as President of Martec Pharmaceutical, Inc. Mr. Skelly earned a Bachelor of Arts degree from Michigan State University and a Masters of Business Administration from the University of Missouri-Kansas City.

Immanuel Thangaraj has been a member of our Board of Directors since December, 2002. Mr. Thangaraj has been a Managing Director of Essex Woodlands Health Ventures, a venture capital firm specializing in the healthcare industry, since 1997. Prior to joining Essex Woodlands Health Ventures, he helped establish a telecommunication services company, for which he served as its CEO. Mr. Thangaraj holds a Bachelor of Arts and a Masters in Business Administration from the University of Chicago.

George K. Ross has been a member of our Board of Directors since January, 2008. Since April 2002, Mr. Ross has been a consultant to early stage businesses and a financial investor. From April 1, 2015 until its sale in March 2017, Mr. Ross was an advisor to GP Shopper LLC, a provider of mobile solutions for retail and brands. From July 2005 through December 2010 he served as Executive Director, Foundations and Partnerships for World Vision U.S. in New York City. His business career has included senior financial officer and board member positions with both public and private companies in diverse industries. Mr. Ross was Executive Vice President and Chief Financial Officer and a board member of Tier Technologies Inc. from February 1997 to January 2000, which became a public company during this period. Mr. Ross is a Certified Public Accountant and earned a Bachelor of Arts degree from Ohio Wesleyan University and a Masters of Business Administration from Ohio State University.

The Board had determined that Messrs. Skelly, Wesson, Ross and Thangaraj are independent directors.

Executive Officers

Robert B. Jones, President and Chief Executive Officer.

Peter A. Clemens has been Senior Vice President, Chief Financial Officer and Secretary since April 2004. Mr. Clemens was our Vice President, Chief Financial Officer and Secretary from February 1998 to March 2004 and a member of our Board of Directors from June, 1998 to August, 2004. Mr. Clemens is a Certified Public Accountant and earned a Bachelor of Business Administration degree from the University of Notre Dame and a Masters of Business Administration from Indiana University. Age 68.

Albert W. Brzeczko, Ph.D., has been Vice President, Pharmaceutical Sciences of Acura Pharmaceutical Technologies, Inc. since January 2019. From February 2009 to January 2019, Mr. Brzeczko was our Vice President, Technical Affairs. From 1999 through 2009, Dr. Brzeczko was Vice President, Global Pharma New Product Development and Pharma Technologies for International Specialty Products, Inc., a contract services group specializing in the development of technologies for the bioenhancement of poorly soluble drugs. Prior to 1999, Dr. Brzeczko held various positions of increasing responsibility in pharmaceutical product development with UPM Pharmaceuticals, Banner Pharmacaps, Mylan Laboratories, and DuPont Merck. Dr. Brzeczko received a Bachelor of Science degree in biochemistry and a Ph.D. in pharmaceutical sciences from the University of Maryland. Age 64.

Robert A. Seiser has been a Vice President, Treasurer and Corporate Controller since April 2004. Mr. Seiser joined us in March 1998 as our Treasurer and Corporate Controller. Mr. Seiser is a Certified Public Accountant and earned a Bachelor of Business Administration degree from Loyola University of Chicago. Age 57.

James F. Emigh has been Vice President of Corporate Development since October 2011. From April 2004 to October 2011, Mr. Emigh was our Vice President of Marketing and Administration. Prior to such time, Mr. Emigh was our Vice President of Sales and Marketing. Mr. Emigh joined us in May, 1998, serving first as Executive Director of Customer Relations and then as Vice President of Operations. Mr. Emigh holds a Bachelor of Pharmacy degree from Washington State University and a Masters of Business Administration from George Mason University. Age 65.

The term of office of each person elected as a director will continue until the next annual meeting of shareholders and until such person’s successor has been elected and qualified. Officers are appointed by the Board of Directors and serve at the discretion of the Board, although the employment of Robert B. Jones, our President and Chief Executive Officer and Peter A. Clemens, our Senior Vice President and Chief Financial Officer, are subject to the provisions of their respective Employment Agreements. See “Compensation of Executive Officers and Directors — Employment Agreements.”

Agreements Governing Appointment of Directors

See “Election of Directors” above, for a discussion of the Second Amended and Restated Voting Agreement that entitles each of Mr. Schutte and Essex to designate one director.

COMPENSATION OF INCORPORATION TO EFFECT EXECUTIVE OFFICERS AND DIRECTORS

Compensation Discussion and Analysis

Our current executive compensation program consists of (i) an annual salary and bonus compensation, and (ii) equity incentives represented by the issuance of stock options and restricted stock units (“RSUs”). The salary, bonuses, and equity incentives serve to link executive pay to corporate performance.

Policies for Allocating Between Various Forms of Compensation

We award bonuses and salary increases for performance in the prior year, cash permitting. Recently, our cash position has not allowed us to award substantial bonuses under our non-equity incentive compensation plan or otherwise substantially increase salaries. In 2020, no bonuses were awarded or salary increases made to our executive officers. We may award stock options as well as Restricted Stock Units to incentivize long term performance. We may award RSUs to employees in 2021 as part of our efforts to retain and incentivize employees, if the 2021 Restricted Stock Unit Award Plan (the “2021 RSU Plan”) is approved by shareholders – See Proposal 3. We generally also award options to executives upon commencement of employment.

Salary and Bonus

Each of Robert Jones and Peter Clemens are parties to an employment agreement, described under the caption “Employment Agreements” below, which provide the minimum annual base salary to be payable to such officers, subject to increase at the discretion of the Board. In addition, the Jones and Clemens employment agreements provide for annual bonus payments, in the discretion of the Compensation Committee or the Board, subject to the satisfaction of such targets, conditions or parameters as may be agreed upon from time to time by the employee and the Compensation Committee, which are the basis for the organizational goals. Each of Mr. Jones’ and Mr. Clemens’ bonuses are weighted 100% to achievement of the foregoing goals, while the bonuses for Dr. Brzeczko, is weighted 50% to the achievement of organizational goals and 50% to the achievement of individual goals.

Material organizational goals for 2020 included completion of LTX-03 development/clinical testing and submission of a new drug application for LTX-03 to the FDA, completion of a second LIMITx license agreement or securing an alternative financing transaction, advance the intellectual property portfolio and maintain compliance with all SEC regulations. While the Company was able to expand the IP portfolio and comply with all SEC regulatory regulations, the Covid -19 pandemic significantly impacted the LTX-03 development timeline and we were unable to meet our LTX-03 goals.

The Compensation Committee determined that while certain of the organizational goals were met in 2020, due to the desire to preserve cash, no bonuses were paid in 2020 to our executive officers.

Material organizational goals for 2021 include arranging for a licensing partner for other LIMITx products in development or third party financing by July 2021, completing all clinical activities for LTX-03 and submission and acceptance by the FDA of the NDA for LTX-03 by September 30, 2021, and successfully managing our intellectual property.

No compensation will be earned with respect to a performance measure unless a performance “floor” for that measure is exceeded; the incentive opportunity with respect to a measure will be earned if the target is achieved; achievement between the floor and the target results in a lower amount of award with respect to that performance measure. An amount larger than the incentive opportunity for each performance measure can be earned, up to and possibly exceeding a specified limit, for exceeding the target for that measure. Depending on market conditions and other circumstances, performance criteria may be modified during the course of the year, and other performance criteria reweighted. In setting compensation levels, the Compensation Committee compares our Company to companies of comparable business focus, market capitalization, technological capabilities and market in which we compete for executives. As part of this process, the Compensation Committee and the Board does not use the compensation levels of comparable companies as benchmarks, but rather as a factor in evaluating the compensation levels of the named executive officer.

In ascertaining the achieved level of performance against the targets, the effects of certain extraordinary events, as determined by the Compensation Committee, such as (i) major acquisitions and divestitures, (ii) significant one-time charges, and (iii) changes in accounting principles required by the Financial Accounting Standards Board, are “compensation neutral” for the year in which they occurred; that is, they are not taken into account in determining the degree to which the targets are met in that year.

The Compensation Committee may, after a review of an executive’s performance, recommend to the Board that a bonus award be made to such executives based upon other non-enumerated performance targets (whether or not they are parties to employment agreements). This could result in the award of salary increases or bonuses above a targeted range amount. In addition, the Compensation Committee may recommend to the Board of Directors special bonuses outside the bonus plan for interim exemplary performance. No such special bonuses were awarded in 2020 and none are anticipated for 2021

Dr. Brzeczko is not party to an employment agreement but is eligible for annual bonuses of up to 50% of his base salary. Dr. Brzeczko’s bonus is based on the achievement of such targets, conditions, or parameters as may be set from time to time by the Board of Directors or the Compensation Committee of the Board of Directors. The maximum bonus payable to Messrs. Jones and Clemens is 100% and 70% respectively, of their base salary. The maximum bonus payable to Dr. Brzeczko is 50% of base salary.

During 2018, in order to preserve cash, Messrs. Jones, Clemens and Brzeczko took voluntary salary reductions bringing their base salary for each of 2019 and 2020 to $150,000, $200,000 and $220,000 for Messrs. Jones, Clemens and Brzeczko, respectively. These salaries remain in effect for 2021.

A REVERSE STOCK SPLIT AT ONE OF FIVE RATIOS

General

It is the Company’s practice to grant stock options to executives upon commencement of employment. In addition, we have generally granted options in December of each year to executives and other employees although we did not grant any options in 2020.

Timing Policies with Respect to Options

We have no plan or practice to time option grants in coordination with the release of non-public information and we do not time the release of non-public information to affect the value of executive compensation. Option grant dates for options issued to any new executive officers will likely be the starting date of their employment.

Restricted Stock Units

We currently maintain two RSU Plans adopted in 2014 and 2017. Under these RSU Plans we made annual awards in each of 2014, 2015, 2016, 2017, 2018, 2019 and 2020 to our non-employee directors. We also made grants in 2017 and 2018 to employees under the 2017 RSU Plan. As the availability of RSUs under the 2014 and 2017 RSU Plans have been exhausted we are seeking approval of our 2021 RSU Plan in Proposal 3. If the 2021 RSU Plan is approved by shareholders we intend to use the Plan to distribute RSUs to our non-employee directors for calendar years commencing 2021.

We are requestingalso likely to grant RSUs to employees under the 2021 RSU Plan to incentivize or retain employees.

Termination/Severance Benefits

The employment agreement of each of Mr. Jones and Clemens provide severance benefits under certain circumstances. The severance benefits provided to each such executive differ, but each includes payments of a pro-rata bonus or non-equity incentive compensation, one to two years of salary and one to two years of benefits. In addition, Mr. Clemens has severance benefits in the event of death. See “Employment Agreements” under “Summary Compensation Table and Discussion of Employment and Incentive Arrangements” below. We believe severance arrangements for the highest level officers help them to focus on their respective job functions and give them comfort that we will not lightly terminate their employment. We believe these severance benefits were necessary to be able to initially hire and to retain these executives. In turn Messrs. Jones and Clemens have agreed that after their employment with us ends under certain circumstances not to compete or solicit our employees for hire for a limited period of time. We believe that such non-compete and non-solicit provisions are important to protect our business. We believe such severance benefits are standard within the pharmaceutical industry and were the results of negotiations between us and each of our executives.

Dr. Brzeczko has no contractual severance benefits if terminated by us.

Retirement Plans

We maintain a 401(k) plan that allows us to make both discretionary and matching contributions, but we have not done so since inception. We have no pension plans or non-qualified deferred compensation plans and, as a result, the columns relating to such plans in the Summary Compensation Table are blank.

Change in Control

Currently unexercisable stock options will vest with respect to all underlying shares upon a change of control in the case of Mr. Jones, Mr. Clemens and Dr. Brzeczko and other employees. In addition, Messrs. Jones and Clemens receive severance and bonuses if they terminate their employment after a change of control (as defined in their employment agreements), or we terminate their employment after a change of control. We believe our change of control provisions incentivize our executives to seek opportunities for us and realize benefits from a change of control transaction even though such change of control may lead to the termination of their positions.

Tax Reimbursements

Because of the excise tax imposed by Internal Revenue Code Section 280G, our executive officers may be subject to such tax upon the payment of severance and exercise of options and distributions under RSUs upon a change of control. We currently have no agreements to reimburse our executive officers for any taxes imposed as a result of these additional excise taxes. We also allow our employees to elect to have shares withheld upon exercise of options in satisfaction of the statutory minimum withholding tax obligations of such employees relating to such option exercises.

Perquisites and Other Benefits

Our executive officers receive no perquisites. We have not made either discretionary or matching contributions to their 401(k) plans, although our plan provides that we may do so. Our executive officers are not provided auto allowances and they receive no country club or golf club memberships. We may, however, consider such perquisites in the future.

Board Process

The Compensation Committee of the Board of Directors approves all compensation and awards to our executive officers and other employees and thereafter submits its recommendation to the full Board for approval (excluding Mr. Jones in the case of his compensation). All such decisions are made with the consultation of the Chief Executive Officer, except those relating to the compensation of the Chief Executive Officer. Except for salary adjustments and cash bonus and equity awards to the Chief Executive Officer, these items are generally based upon the recommendation of the Chief Executive Officer. Our Chief Executive Officer does not attend or participate in discussions with the Compensation Committee relating to his compensation. With respect to salary adjustments and cash bonus and equity items to the Chief Executive Officer, the Compensation Committee establishes such awards for the Chief Executive Officer subject to review and approval of the Board.

Summary Compensation Table and Discussion of Employment and Incentive Arrangements

The following table sets forth a summary of the compensation paid by us for services rendered in all capacities to us during each of the two fiscal years ended December 31, 2020, to our Chief Executive Officer, and the two most highly compensated executive officers other than the Chief Executive Officer who were serving as executive officers at the end of the last completed fiscal year (collectively, the “2020 named executive officers”) whose total annual compensation for 2020 exceeded $100,000:

(1)  There were no RSU stock awards in 2020 or 2019.

(2)  There were no stock option awards in 2020 or 2019.

(3) The current base salary is $150,000, $200,000 and $220,000 for Messrs. Jones, Clemens and Brzeczko, respectively and reflect voluntary salary reductions originally enacted in 2018. The 2019 salaries also reflect unpaid leave of absences.

Other Compensatory Arrangements

Our executive officers participate in medical, dental, life and disability insurance plans provided to all of our employees.

Employment Agreements

Robert B. Jones commenced employment with us on April 7, 2008 pursuant to an Employment Agreement dated March 18, 2008 as our Senior Vice President and Chief Operating Officer. On April 28, 2011, Mr. Jones was appointed our Interim President and Chief Executive Officer. On July 7, 2011, Mr. Jones was named President and Chief Executive Officer. Mr. Jones’ annual salary for 2021 is $150,000 (a temporary reduction from his salary under the Employment Agreement of $393,000 because of our need to preserve cash). The term of the Employment Agreement is currently scheduled to expire December 31, 2021, and provides for automatic one year renewals in the absence of written notice to the contrary from us (which would give Mr. Jones the right to terminate his employment for Good Reason) or from Mr. Jones at least ninety days prior to the expiration of the then renewal period. Pursuant to the Employment Agreement Mr. Jones is eligible for annual bonuses of up to 100% of his base salary on the achievement of such targets, conditions, or parameters as may be set from time to time by the Board of Directors or the Compensation Committee of the Board of Directors. In 2019 and 2020, Mr. Jones did not receive a bonus

The Employment Agreement contains standard termination provisions, including upon death, disability, for Cause, for Good Reason and without Cause. In the event that we terminate the Employment Agreement without Cause or Mr. Jones terminates the Employment Agreement for Good Reason, we are required to pay Mr. Jones an amount equal to the bonus for such year, calculated on a pro-rata basis assuming full achievement of the bonus criteria for such year (to the extent it has not already been paid), as well as Mr. Jones’ base salary for one year (such salary amount being the “Severance Pay”). Pursuant to an amendment to Mr. Jones’ Employment Agreement entered into in 2012, in case of termination without Cause and for Good Reason or for voluntary termination more than two years after a Change of Control, such Severance Pay and bonus is payable in equal monthly installments over a period of twelve months. However, if such termination is without Cause, for Good Reason or for voluntary termination within two years of a qualifying Change of Control, then the Severance Pay and bonus is payable in a lump sum 31 days after termination. In addition, upon a termination without Cause or for Good Reason or voluntarily after a Change of Control, any shares remaining unvested under stock options and restricted stock units granted to Mr. Jones will vest in full and Mr. Jones will be entitled to continued coverage under our then-existing benefit plans, including medical and life insurance, for twelve months from the date of termination.

The Employment Agreement restricts Mr. Jones from disclosing, disseminating or using for his personal benefit or for the benefit of others, confidential or proprietary information (as defined in the Employment Agreement) and, provided we have not breached the terms of the Employment Agreement, from competing with us at any time prior to one year after the termination of his employment with us. In addition, Mr. Jones has agreed not to (and not to cause or direct any person to) hire or solicit for employment any of our employees or those of our subsidiaries or affiliates (i) for six months following the termination of his employment by us without Cause or by him for Good Reason, prior to a Change of Control, (ii) for twelve months following the termination of his employment for Cause, prior to a Change of Control, or (iii) twenty-four months following a Change of Control. The table entitled “Events Affecting Stock Option Vesting and Exercise,” below, summarizes the vesting and exercisability of Mr. Jones’ options following a number of termination scenarios or a Change of Control.

Peter A. Clemens is employed pursuant to an Employment Agreement effective as of March 10, 1998, as amended, which provides that Mr. Clemens will serve as our Senior Vice President and Chief Financial Officer for a term currently scheduled to expire December 31, 2021, and provides for automatic one year renewals in the absence of written notice to the contrary from the Company or Mr. Clemens at least ninety (90) days prior to the expiration of any renewal period. Pursuant to a 2008 amendment to the Employment Agreement, our non-renewal of the Employment Agreement is considered as a termination without Cause for all purposes under the Employment Agreement. Mr. Clemens’ annual salary for 2021 is $200,000 (a temporary reduction from his salary under the Employment Agreement of $286,000 because of our need to preserve cash). His maximum bonus under our bonus plan is 70% of base salary. Mr. Clemens’ bonus is based on the achievement of such targets, conditions, or parameters as may be set from time to time by the Board of Directors or the Compensation Committee of the Board of Directors.

The Employment Agreement contains standard termination provisions, including upon death, disability, for Cause, for Good Reason and without Cause. In the event the Employment Agreement is terminated by us without Cause or by Mr. Clemens for Good Reason, we are required to pay Mr. Clemens an amount equal to twice his then base salary, payable in the case of termination without Cause or for Good Reason six months and one day after termination (unless he is not a specified employee at termination in which case payment is in a lump sum within 30 days following termination) and to continue to provide Mr. Clemens coverage under our then existing benefit plans, including medical and life insurance, for a term of 24 months. The Employment Agreement permits Mr. Clemens to terminate the Employment Agreement in the event of a Change in Control (as defined in the Employment Agreement), in which case he would receive the same payments on the same schedule as on a termination for Good Reason. In addition, Mr. Clemens’ estate is entitled to six month’s salary upon his death as well as a pro rata bonus for the number of months he worked in the year of his death. The Employment Agreement also restricts Mr. Clemens from disclosing, disseminating or using for his personal benefit or for the benefit of others confidential or proprietary information (as defined in the Employment Agreement) and, provided we have not breached the terms of the Employment Agreement, from competing with us at any time prior to two years after the earlier to occur of the expiration of the term and the termination of his employment. In addition, for a period of two years from and after the effective date of the termination of his employment with us (for any reason whatsoever), (i) induce or attempt to influence any employee of the Corporation or any of its subsidiaries or affiliates to leave its employ, or (ii) aid any person, business, or firm, including a supplier, a competitor, licensor or customer of or our manufacturer for the Corporation, in any attempt to hire any person who shall have been employed by us or any of our subsidiaries or affiliates within the period of one year of the date of any such requested aid. The table entitled “Events Affecting Stock Option Vesting and Exercise,” below, summarizes the vesting and exercisability of Mr. Clemens’ options following a number of termination scenarios or a Change of Control.

For purposes of Mr. Jones and Mr. Clemens severance pay, a Change of Control is generally defined, with certain exceptions, as

Events Affecting Stock Option Vesting and Exercise (For Messrs. Jones and Clemens)

Dr. Brzeczko is not party to an employment agreement. Dr. Brzeczko is eligible for annual bonuses of up to 50% of his base salary. Dr. Brzeczko’s bonus is based on the achievement of such targets, conditions, or parameters as may be set from time to time by the Board of Directors or the Compensation Committee of the Board of Directors. In 2019 and 2020 he received no bonus.

Dr. Brzeczko’s annual salary for 2021 is $220,000 (a temporary reduction from his salary of $291,000 because of our need to preserve cash).

Stock Option Plans

We maintain two stock option plans adopted in 2008 and 2016, respectively. Our option plans are administered by the Compensation Committee. The Compensation Committee selects the employees, directors and consultants to be granted options under the plans and, subject to the provisions of each plan, determines the terms and conditions and number of shares subject to each option. Any of our employees or employees of our subsidiary are eligible to receive incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, or the Code (“ISOs”). Non-qualified stock options may be granted to employees as well as non-employee directors and consultants under the plans as determined by the Board. Any person who has been granted an option may, if they are otherwise eligible, be granted an additional option or options.

Each grant of an option is evidenced by an option agreement, and each option agreement specifies whether the option is an ISO or a non-qualified stock option and incorporates such other terms and conditions as the Board of Directors acting in its absolute discretion deems consistent with the terms of the plan, including, without limitation, a restriction on the number of shares of Common Stock subject to the option which first become exercisable during any calendar year.

To the extent that the aggregate fair market value of the Common Stock of the Company underlying a grant of ISOs (determined as of the date such an ISO is granted), which first become exercisable in any calendar year, exceeds $100,000, such Options shall be treated as non-qualified stock options. This $100,000 limitation shall be administered in accordance with the rules under Section 422(d) of the Code.

Upon the grant of an option to an employee, director or consultant the Board will fix the number of shares of Common Stock that the optionee may purchase upon exercise of the option and the price at which the shares may be purchased. The option exercise price for ISOs shall not be less than the fair market value of the Common Stock at the time the option is granted, except that the option exercise price shall be at least 110% of the fair market value where the option is granted to an employee who owns more than 10% of the voting power of all of our classes of stock or any parent or subsidiary. The option exercise price for non-qualified stock options granted under the plans may be less than the fair market value of our Common Stock (“Discounted Options”) although such Discounted Options have never been granted "Fair market value" is the closing price for a share of the Common Stock on the exchange or quotation system which reports or quotes the closing prices for a share of the Common Stock (or alternate methodologies if no such quote is available).

All options available to be granted under each plan must be granted within ten years after shareholder approval of the applicable plan. The Board will determine the actual term of the options but no option will be exercisable after the expiration of 10 years from the date of grant. No ISO granted to an employee who owns more than 10% of the combined voting power of all of our outstanding classes of stock may be exercised after five years from the date of grant. Our grants to directors generally vest in equal quarterly installments over the calendar year. Since 2015 our option agreements include vesting upon a change of control (as defined in the 2016 Stock Option Plan). In addition, the plans provide options may be accelerated by the Board of Directors in their discretion, including, upon a change of control, a proposed dissolution or liquidation of the Company, in the event of a proposed sale of all or substantially all of the assets of the Company, or a merger of the Company.

All of our option plans allow the participant to elect to exercise options on a net exercise basis by allowing shares subject to the option to be withheld by the Company in satisfaction of the option exercise price, and to satisfy the participant’s withholding tax payment obligations relating to the option exercise.

Options granted to employees, directors or consultants under the plans may be exercised during the optionee’s lifetime only by the optionee during his employment or service with us or for a period not exceeding one year if the optionee ceased employment or service as a director or consultant because of permanent or total disability within the meaning of Section 22(e)(3) of the Code. Options may be exercised by the optionee's estate, or by any person who acquired the right to exercise such option by bequest or inheritance from the optionee for a period of twelve months from the date of the optionee's death. If such option shall by its terms expire sooner, such option shall not be extended as a result of the optionee's death.

The 2008 Stock Option Plan

The Company’s 2008 Stock Option Plan was adopted by the Board of Directors on March 14, 2008 and approved by our shareholders on April 30, 2008. The 2008 Stock Option Plan permits the grant of ISO’s and non-qualified stock options to purchase up to 1,200,000 shares of our common stock. On June 25, 2009, the 2008 Stock Option Plan was amended to allow participants to require us to withhold common stock upon exercise of options for payment of exercise price and statutory minimum withholding taxes. In April 2018, the 2008 Stock Option Plan expired and the remaining 73,200 unissued shares allocated to the Plan were terminated. As of December 31, 2020, stock options to purchase 689,628 shares of common stock were outstanding under the 2008 Stock Option Plan and 36,000 options were non-qualified and 653,628 options were ISOs. The weighted average exercise price per share for all outstanding options under the 2008 Stock Option Plan as of December 31, 2020 was $5.90.

The 2016 Stock Option Plan

The Company’s 2016 Stock Option Plan, as amended, was adopted by the Board of Directors and approved by our shareholders in April 2016. The 2016 Stock Option Plan permits the grant of ISO’s and non-qualified stock options to purchase in the aggregate up to 600,000 shares of our common stock. As of December 31, 2020, stock options to purchase 564,356 shares of common stock were outstanding under the 2016 Stock Option Plan and all are ISOs. Up to 60,000 shares underlying options may be granted to any participant in a calendar year under the 2016 Stock Option Plan. The weighted average exercise price per share for all outstanding options under the 2016 Stock Option Plan as of December 31, 2020 was $0.47.

Restricted Stock Unit Award Plan

The 2014 Restricted Stock Unit Award Plan

The Company’s 2014 Restricted Stock Unit Award Plan (the “2014 RSU Plan”) was approved by the Company’s Board of Directors in February 2014 and by our shareholders in May 2014. Under the 2014 RSU Plan, a Restricted Stock Unit (“RSU”) represents the right to receive (upon payment of $0.01 par value per share) a share of the Company’s common stock (or under certain circumstances, cash in lieu thereof (“Cash Settled RSUs”)) at a designated time or upon designated events.

The maximum aggregate number of shares which may be subject to RSUs granted under the 2014 RSU Plan is 400,000 shares of authorized, but unissued common stock. Payment of Cash Settled RSUs will reduce such limit. If an RSU should expire or become forfeited for any reason without the underlying shares of common stock or cash subject to such RSU having been distributed, the underlying shares shall, unless the 2014 RSU Plan shall have been terminated, become available for further grant under the 2014 RSU Plan. Unless terminated earlier by the Board of Directors, the authority to effect a reverse stock splitRSUs may be distributed under the 2014 RSU Plan until April 30, 2024.

As of December 31, 2018 we had granted RSUs under the 2014 RSU Plan providing for our issuance of an aggregate of 400,000 shares of our common stock and there are no remaining shares available for grant. At December 31, 2020, 3,156 RSU awards remain outstanding under our 2014 RSU Plan.

Because there were a limited number of shares available for issuance under the 2014 RSU Plan, our shareholders approved the 2017 Restricted Stock Unit Award Plan in November 2017. The description of the 2017 Restricted Stock Unit Award Plan, under the captions, “Terms”, “Administration”, “Amendment and Termination”, and “Adjustment upon Capitalization and Merger”, below are similar to the provisions of the 2014 RSU Plan, with the significant differences noted under such captions.

The 2017 Restricted Stock Unit Award Plan

The Company’s 2017 Restricted Stock Unit Award Plan (the “2017 RSU Plan”) was approved by the Company’s Board of Directors on September 8, 2017 and approved by shareholders on November 8, 2017. Under the 2017 RSU Plan, a Restricted Stock Unit (“RSU”) represents the right to receive (upon payment of $0.01 par value per share) a share of the Company’s common stock (or under certain circumstances, cash in lieu thereof (“Cash Settled RSUs”)) at a designated time or upon designated events.

Number of RSUs that may be granted. The maximum aggregate number of shares which may be subject to RSUs granted under the 2017 RSU Plan is 1,500,000 shares of authorized, but unissued, or reacquired common stock. (See “Adjustments Upon Changes in Capitalization or Merger” below.) If an RSU should expire or become forfeited for any reason without the underlying shares of common stock or cash subject to such RSU having been distributed, the underlying shares shall, unless the 2017 RSU Plan shall have been terminated, become available for further grant under the 2017 RSU Plan. The 2017 RSU Plan has no limit on the number of RSUs that may be granted to an individual employee, consultant or director in any calendar year. Payment of Cash Settled RSUs (as hereinafter defined) will reduce such limit. As of December 31, 2020 we had granted RSUs under the 2017 RSU Plan providing for our issuance of an aggregate of 1,500,000 shares of our common stock and there were no remaining shares available for grant. At December 31, 2020, approximately 836,000 awards remain outstanding under our 2017 RSU Plan.

Purpose. The 2017 RSU Plan is intended to assist the Company in securing and retaining employees, consultants and directors by allowing them to participate in the ownership and growth of the Company through the RSUs. The granting of RSUs serves as partial consideration for and gives key employees, directors and consultants an additional inducement to, remain in the service of the Company and will provide them with an increased incentive to work for the Company’s success. Cash Settled RSUs give Non-Employee Directors the ability to pay tax on their other RSUs distributed simultaneously therewith. Employees have a separate right to have stock withheld in payment of withholding taxes.

Administration

The 2017 RSU Plan is administered by the Company’s Board of Directors, or, except with respect to matters involving non-employee Directors (“Non-Employee Directors”), the Compensation Committee, provided it is comprised of not less than two members of the Board, each of whom must be Non-Employee Directors as that term is defined in Rule 16b-3(b)(3)(i) of the Exchange Act (the “Committee”).

Powers of the Board/Committee. The Board/Committee has the authority, subject to the provisions of the 2017 RSU Plan, to establish, adopt and revise such rules, regulations and forms and agreements and to interpret the 2017 RSU Plan and make all determinations relating to the 2017 RSU Plan as it may deem necessary or advisable. The Board/Committee also has the authority, subject to the provisions of the 2017 RSU Plan, to delegate ministerial, day-to-day administrative details and non-discretionary duties and functions to officers and employees of the Company. In the administration of the 2017 RSU Plan with respect to Non-Employee Directors, the Board has all of the authority and discretion otherwise granted to the Committee with respect to the administration of the 2017 RSU Plan. All decisions, determinations and interpretations of the Board/Committee are binding and conclusive on participants in the 2017 RSU Plan and on their legal representatives and beneficiaries.

Director Participation in the RSU Plan. Non-Employee Directors are eligible to receive RSU grants under the 2017 RSU Plan, and it is expected that RSU awards under the 2017 RSU Plan will represent the annual equity compensation component of Non-Employee Directors’ compensation.

RSU Plan Eligibility. RSUs may be granted to any of the Company’s Non-Employee Directors, any of the Company’s employees or consultants, or any employees or consultants of any of the Company’s subsidiary corporations, including officers (collectively, “Eligible Participants”). For purposes of the 2017 RSU Plan employees or consultants of the Company also mean employees or consultants of the Company’s subsidiary. As of December 31, 2020 all of the Company’s 12 full-time employees and four Non-Employee Directors of the Company were eligible participants (“Participants”) in the 2017 RSU Plan. Any Eligible Participant who has been granted an RSU may be granted additional RSUs. The RSU Plan does not confer any rights upon any Participant with respect to continuation of employment or service as an employee, consultant or a Non-Employee Director.

Terms

RSU Award Agreement. Each RSU granted under the 2017 RSU Plan is evidenced by a written award agreement (“RSU Award Agreement”), which contains the terms and conditions of the specific RSU granted.

Vesting of RSUs. RSUs generally vest as set forth in the RSU Award Agreement. In addition, unless expressly provided otherwise in the RSU Award Agreement, each RSU immediately vests and is nonforfeitable to the Participant upon the occurrence of any of the following events:

(1) a Participant’s service as an employee of the Company is terminated by the Company without Cause (as defined) or due to the Participant’s death or Disability (as defined), or in the case of a Non-Employee Director, upon the Participant’s death or Disability or if the Participant is not renominated as a director (other than for “Cause” or refusal to stand for re-election) or is not elected by the Company’s shareholders, if nominated; or

(2) a qualifying change of control, referred to as a Change in Control-Plan (as defined in the 2017 RSU Plan)

Accelerated vesting does not directly translate into accelerated distribution of shares subject to an RSU Award. For instance if the Company terminates an employee’s employment without Cause, such employee’s RSUs will immediately vest (unless otherwise provided in the RSU Award Agreement) but, absent a qualifying change of control the employee will not commence to receive the shares underlying his RSU award until the scheduled distribution date.

Distribution of Shares Underlying RSUs. Under the 2017 RSU Plan, (unless an award provides otherwise, vesting is accelerated as provided above under “Vesting of RSUs” or a Change of Control-Plan occurs as described below), stock underlying vested RSUs is generally distributed on the first business day of the year after they vest. Hence, if an award to a Non-Employee Director vests as scheduled in full over four quarters during 2019, it will be generally be distributed the first business day of January 2020. However, the Company may set other distribution dates, with respect to awards to Participants, including Non-Employee Directors. Non-Employee-Directors may elect to take payment in cash instead of stock for up to 40% of the RSUs in an award (rendering such RSUs as “Cash Settled RSUs”). With respect to Participants for whom the Company is required to withhold taxes (generally employees) the Company may mandate such Participants or such Participants may elect that the Company withhold stock otherwise payable on exchange of an RSU to pay withholding taxes. The cash payment election or withholding election may be made at any time before distribution, but any such cash payment or withholding is subject to any limits on redemption under any preferred stock, loan or other financing agreement. The Company has the option of establishing a RSU award that defers distributions to a Participant, including in installments (e.g., 25% of RSUs to be paid in 2019, 2020, 2021 and 2022). If a Change of Control-Plan which is also a Change in Control-409A occurs, all vested shares of common stock underlying an RSU (after payment or withholding of $0.01 per share par value) will be distributed by the Company to the holder of the RSU at or about the time of the Change in Control-Plan. No dividends accrue on shares of common stock underlying RSUs prior to distribution. Participants need not be employees, consultants or directors of the Company on a distribution date. A Change in Control-409A for distribution purposes is generally the same as a Change in Control-Plan for vesting purposes, except that in order to have a Change in Control-409A for distribution purposes, a change in control qualifying under Section 409A of the Code must occur. In lieu of requiring cash payment of par value, the Company may, in its discretion or shall at the Participant’s request, accept payment of any such par value by withholding from stock payments a number of whole shares of stock whose value is equal to the amount of such par value, provided the same does not cause the Redemption Limit to be exceeded.

Non Transferability of RSUs. RSUs may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner by the Participant other than by will or by the laws of descent or distribution and the Committee may, in its discretion, authorize all or a portion of the RSUs to be granted to a Participant to be on terms which permit transfer by such Participant to (i) the spouse, children or grandchildren of the awardee (the “Immediate Family Members”), (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members, or (iii) a partnership in which such Immediate Family Members are the only partners, provided that (x) there may be no consideration for any such transfer, (y) subsequent transfers of transferred RSUs shall be prohibited except those made by will or by the laws of descent or distribution, and (z) such transfer is approved in advance by the Committee (or Board in absence of a Committee). A married Participant may generally designate only a spouse as a beneficiary unless spousal consent is obtained.

Termination of Status as an Employee or Non-Employee Director. See “Vesting of RSUs”, above for a discussion of vesting upon termination of employment or service as a Non-Employee Director.

Dividend and Voting Rights. Unless other provided in an RSU Award Agreement, Participants have no dividend rights and no voting rights with respect to the shares underlying RSUs until the RSUs settle in shares of common stock.

Amendment and Termination of the 2017 RSU Plan

The Board may terminate and, without shareholder approval, unless the same is required by the rules of the exchange where the Company’s stock trades, or applicable law, amend the 2017 RSU Plan.

Adjustments upon Changes in Capitalization or Merger

Upon or in contemplation of any reclassification, recapitalization, stock split (including a stock split in the form of a stock dividend) or reverse stock split; any merger, combination, consolidation or other reorganization; any split-up; spin-off, or similar extraordinary dividend distribution with respect to the common stock (whether in the form of securities or property); any exchange of stock or other securities of the Company, or any similar, unusual or extraordinary corporate transaction with respect to the common stock; or a sale of substantially all the assets of the Company as an entirety; then the Board shall proportionately adjust any or all of (a) the number and type of shares of common stock (or other securities or property) that thereafter may be made the subject of RSUs, (b) the number, amount and type of shares of common stock (or other securities or property) payable with respect to RSUs, and (c) and the number and type of RSUs (both credited and vested) under the 2017 RSU Plan.

Outstanding Equity Awards at 2020 Year End

The following table presents information regarding outstanding restricted stock unit and stock option awards at December 31, 2020 for each of the 2020 named executive officers.

Securities Authorized For Issuance under Equity Compensation Plans

The following table includes information as of December 31, 2020 relating to our 2008 Stock Option Plan, our 2016 Stock Option Plan, our 2014 Restricted Stock Unit Award Plan, and our 2017 Restricted Stock Award Plan, which comprise all of our equity compensation plans. The table provides the number of securities to be issued upon the exercise of outstanding options and distributions under outstanding Restricted Stock Unit Awards under such plans, the weighted-average exercise price of outstanding options and the number of securities remaining available for future issuance under such equity compensation plans:

Director Compensation

The following table sets forth a summary of the compensation paid by us to our Directors (other than Robert Jones, whose compensation, is reflected in the Summary Compensation Table) for services rendered in all capacities to us during the fiscal year ended December 31, 2020:

2020 DIRECTOR COMPENSATION

As of December 31, 2020, Messrs. Skelly, Wesson, Thangaraj and Ross each held 54,790 fully vested RSUs which were distributed to them on January 2, 2021.

(2)  Each of Messrs. Skelly, Wesson, Thangaraj and Ross held vested options with respect to 9,000 underlying shares as of December 31, 2020.

Directors receive the following compensation:

In addition, directors receive annual equity awards valued at $50,000 in the form of stock options or RSUs. For RSUs this is determined by dividing $50,000 by the greater of (i) the Company’s closing stock price on the date of grant, or (ii) the minimum stock price or floor (if any) imposed by the Board.

We also reimburse directors for travel and lodging expenses, if any, incurred in connection with attendance at Board meetings. Directors who are also our employees receive no additional or special remuneration for their services as directors.

Compensation Committee Interlocks and Insider Participation

During 2020, no member of the Compensation Committee was or currently is, an officer or employee of the Company, and no member of the Compensation Committee had any relationship with us requiring disclosure under Item 404 of SEC Regulation S-K. During 2020 none of our executive officers served on the Board of Directors or Compensation Committee of any other entity that has or had one or more executive officers who served as a member of our Board of Directors.

Compensation Committee Report

The following report of the Compensation Committee is not deemed to be “soliciting material” or to be “filed” with the Commission or subject to Regulation 14A or 14C [17 CFR 240.14a-1 et seq. or 240.14c-1 et seq.], other than as specified, or to the liabilities of Section 18 of the Exchange Act [15 U.S.C. 78r].

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis in this Proxy Statement with Company management. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

William Skelly, Bruce Wesson and Immanuel Thangaraj.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Transactions

The Company and certain investors are party to a Voting Agreement. As amended in October 2012 (but prior to the 2017 amendment), the Voting Agreement provided our Board of Directors will be comprised of not more than seven (7) members one of whom shall be the CEO, three of whom would be independent under Nasdaq standards, and that Essex had the right to designate one director as a member of our Board of Directors as long as such shareholder held 600,000 shares of our common stock (including warrants to purchase shares), provided that once such shareholder no longer held such securities, the additional forfeited seat would become a seat for an independent director to thereafter be nominated and elected to the Board of Directors from time to time by the then current directors and, as applicable to be elected by the directors to fill the vacancy created by the forfeited seat or submitted to the Company’s shareholders at the next annual meeting. The Voting Agreement provided that if the majority of the Board of Directors were not independent under Nasdaq Marketplace Rules then, the Board would be expanded so that additional independent directors would be added. At the time of the October 2012 amendment, Mr. Thangaraj became the designee of Essex, as one of three remaining successors to GCE Holdings, LLC (an entity controlled by others including Essex). In addition, Essex has the right to designate a member to any committee of our Board of Directors, provided that in the case of the Audit and Compensation committees they are independent under applicable NASDAQ rules.

Mr. Schutte is chief executive officer and owner of MainPointe Pharmaceuticals, LLC. (“MainPointe”), a Kentucky Limited Liability Company. In March 2017, prior to Mr. Schutte becoming a shareholder, we entered into a License, Commercialization and Option Agreement (the “MainPointe Agreement”) with MainPointe to commercialize Nexafed® and Nexafed® Sinus Pressure + Pain in the United States and Canada. Nexafed® and Nexafed® Sinus Pressure + Pain utilize our Impede Technology and were previously marketed by us in the United States. Our Impede Technology is directed at minimizing the extraction and conversion of pseudoephedrine, or PSE, into methamphetamine. Under the terms of the Agreement we transferred existing inventory and equipment relating to such products to MainPointe and licensed our Impede Technology intellectual property rights to MainPointe for such products as well as certain future PSE-containing products. MainPointe is responsible for all development, manufacturing and commercialization activities with respect to products covered by the Agreement.

On signing, MainPointe paid us an upfront licensing fee of $2.5 million plus approximately $425,000 for inventory and equipment being transferred. We will receive a 7.5% royalty on sales of licensed products. The royalty payment for each product will expire on a country-by-country basis when the Impede® patent rights for such country have expired or are no longer valid; provided that if no Impede patent right exists in a country, then the royalty term for that country will be the same as the royalty term for the United States. After the expiration of a royalty term for a country, MainPointe retains a royalty free license to our Impede® Technology for products covered by the Agreement in such country.

MainPointe has the option to expand the territory beyond the United States and Canada to the European Union (and the United Kingdom), Japan and South Korea for payments of $1.0 million, $500,000 and $250,000, respectively. In addition, MainPointe has the option to add to the Agreement certain additional products, or Option Products, containing PSE and utilizing the Impede Technology for a fee of $500,000 per product (for all such product strengths). If the territory has been expanded prior to the exercise of a product option, the option fee will be increased to $750,000 per product. If the territory is expanded after the payment of the $500,000 product option fee, a one-time $250,000 fee will be due for each product. If a third party is interested in developing or licensing rights to an Option Product, MainPointe must exercise its option for that product or its option rights for such product will terminate.

On July 24, 2017 we completed the sale to Mr. Schutte of 8,912,655 shares and warrants to purchase 1,782,531 shares exercisable at $0.528 per share and expiring in July 23, 2022 for $4 million and amended the Voting Agreement described above (as so amended the “Second Amended and Restated Voting Agreement”) in connection with that purchase. The Second Amended and Restated Voting Agreement provides that our Board of Directors will be comprised of not more than seven (7) members, one of whom shall be the CEO, three of whom would be independent under Nasdaq standards, and that each of Mr. Schutte and Essex had the right to designate one director as a member of our Board of Directors as long as such shareholder continues to hold 600,000 shares of our common stock (including warrants to purchase shares), provided that once such shareholder no longer holds such securities, the additional forfeited seat would become a seat for an independent director to thereafter be nominated to the Board of Directors from time to time by the then current directors and as applicable, to be elected by the directors to fill the vacancy created by the forfeited seat or submitted to the vote of shareholders at the Company’s next annual meeting. The Second Amended and Restated Voting Agreement provides that in the event the majority of the Board of Directors were not independent under Nasdaq Marketplace Rules then, the Board would be expanded so that additional independent directors would be added. In addition, each of Essex and Mr. Schutte has the right to designate a member to any committee of our Board of Directors, provided that in the case of the Audit and Compensation committees they are independent under applicable NASDAQ rules.

We borrowed an aggregate $6.0 million (including accrued interest) as of June 28, 2019 from Mr. Schutte, a related-party, and issued various promissory notes (the Schutte Notes). The Schutte Notes bear interest at prime plus 2.0%, and had a maturity date of January 2, 2020, at which time all principal and interest was due, and was unsecured until all obligations to Oxford were satisfied at which time we were required to grant a security interest to Mr. Schutte in all of our assets. On October 5, 2018 we borrowed $1.8 million from Mr. Schutte and used $1.5 million of the loan to fully pay-off the debt outstanding under the Oxford Loan Agreement and therefore, all our assets are pledged as collateral under the Schutte Notes, including our intellectual property.

At June 28, 2019, we entered into a Promissory Note with Mr. Schutte that consolidated existing promissory notes into a single Note for $6.0 million (after including accrued and unpaid interest). To secure our performance of our obligations under the Note, we granted Mr. Schutte a security interest in all of our assets. Terms of the consolidated Promissory Note provide for a July 1, 2023 maturity date instead of January 2, 2020 in the previous notes, interest at fixed rate of 7.5% per annum with all payments of principle and interest deferred to maturity. The Promissory Note is convertible into Acura common stock at $0.16 per share. As additional consideration, Mr. Schutte received a warrant to purchase 10 million shares of the Company’s common stock at a price of $0.01 per shares.

With our consent, Mr. Schutte assigned and transferred to Abuse Deterrent Pharma, LLC (“AD Pharma”) all of his right, title and interest in this Note, its associated Security Agreement and the Warrant to purchase 10.0 million common shares of our stock, effective June 28, 2019. Mr. Schutte is an investor in AD Pharma.

On June 28, 2019, we entered into License, Development and Commercialization Agreement (the "Agreement") with Abuse Deterrent Pharma, LLC, a Kentucky limited liability company (“AD Pharma”), a special purpose company representing a consortium of investors that will finance Acura’s operations and completion of development of LTX-03. In October 2020, the Agreement was amended. Mr. Schutte is an investor in AD Pharma.

The Agreement, as amended, grants AD Pharma exclusive commercialization rights in the United States to LTX-03. Financial arrangements include a monthly license payment of $350,000 from AD Pharma to us for a period from inception up to April 2020 at which time the payment became $200,000 per month up to the earlier of July 31, 2021 or FDA’s acceptance of a New Drug Application (“NDA”) for LTX-03 and reimbursement by AP Pharma of Acura’s LTX-03 outside development expenses. Upon commercialization of LTX-03, Acura is eligible to receive stepped royalties on sales and certain sales related milestones.

AD Pharma may terminate the Agreement at any time. Additionally, if the NDA for LTX-03 is not accepted by the FDA by July 31, 2021, AD Pharma has the option to terminate the Agreement and take ownership of the LIMITx intellectual property. Should AD Pharma choose not to exercise this option to terminate and the NDA for LTX-03 is subsequently accepted by the FDA, such option expires.

Our Board has not adopted formalized written policies and procedures for the review or approval of related party transactions. As a matter of practice, however, our Board has required that all related party transactions, be subject to review and approval by a committee of independent directors established by the Board. The Board’s practice is to evaluate whether a related party (including a director, officer, employee, Essex or other significant shareholder) will have a direct or indirect interest in a transaction in which we may be a party. Where the Board determines that such proposed transaction involves a related party, the Board may establish a committee comprised solely of independent directors to review and evaluate such proposed transaction. Currently, the Board is comprised of 4 independent directors and the CEO and as such, the entire Board, with the exception of the CEO, may perform the function of an Independent Committee. In this capacity, the 4 independent directors are authorized to review any and all information deemed necessary and appropriate to evaluate the fairness of the transaction to us and our shareholders (other than the interested related party to such transaction), including meeting with management, retaining third- party experts (including counsel and financial advisors if determined necessary) and evaluating alternative transactions, if any. They are also empowered to negotiate the terms of such proposed related party transaction on our behalf. The proposed related party transaction may proceed only following the approval and recommendation of the 4 independent directors. Following such approval, the related party transaction is subject to final review and approval of the Board as a whole. As the transactions described above with Abuse Deterrent Pharma LLC and Mr. Schutte involved a related party (Mr. Schutte being a significant shareholder at the time such transactions were entered into), such transactions were reviewed and approved solely by the Board as a whole.

Director Independence

In assessing the independence of our Board members, our Board has reviewed and analyzed the standards for independence required under the NASDAQ Capital Market, including NASDAQ Marketplace Rule 5605 and applicable SEC regulations. Based on this analysis, our Board has determined that during 2020, each of Messrs. Bruce F. Wesson, Immanuel Thangaraj, William Skelly and George Ross met the standards for independence provided in the listing requirements of the NASDAQ Capital Market and SEC regulations.

Our Board has determined that during 2020 with respect to our Compensation Committee that Messrs. Skelly, Wesson, and Thangaraj meet the standards for independence described above and that Messrs. Skelly, Wesson and Thangaraj meet the additional independence standards of NASDAQ Rule 5605 relating to Compensation Committees.

Vote Required and Board Recommendation

Directors are elected by a plurality of the votes cast. The five ratios: 1 for 10, 1 for 5, 1 for 4, 1 for 3 or 1 for 2. candidates receiving the highest number of votes will be elected as directors.

The Board of Directors wouldrecommends that the shareholders vote FOR each of the above nominees for Director.

PROPOSAL 2

ADVISORY VOTE ON A RESOLUTION APPROVING EXECUTIVE COMPENSATION

Section 14A of the Securities Act requires that we hold a non-binding advisory vote of our stockholders to approve the compensation (“say-on-pay”) as disclosed in the Compensation Discussion and Analysis (“CD&A”), tabular disclosures, and other narrative executive compensation disclosures in this Proxy Statement. Since the required vote is advisory, the result of the vote is not binding upon the Board of Directors.

Our compensation philosophy is to pay for performance, support our business strategies, and offer competitive compensation arrangements. In the CD&A, we have sole discretionprovided shareholders with a description of our compensation programs, including the philosophy and strategy underpinning the programs, the individual elements of the compensation programs, and how our compensation plans are administered.

Our compensation programs consist of elements designed to elect,complement each other and reward achievement of short-term and long-term objectives tied to our performance through association with an operating metric or as it determinesa function of the Company’s stock price. We have chosen the selected metrics to bealign employee compensation, including compensation for the executives named in the Summary Compensation Table of this Proxy Statement (the “2020 named executive officers”), to our business strategy.

Our Compensation Committee and Board of Directors believe that our compensation programs and policies are designed and carried out to allow us to achieve our business goals and reflect the guiding principles of our compensation philosophy.

FOR THE REASONS STATED, OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE FOLLOWING NON-BINDING RESOLUTION:

“RESOLVED, that the compensation paid to the Company’s 2020 named executive officers as described in the CD&A, tabular disclosures, and narrative discussion in this Proxy Statement is hereby approved.

Effect of Proposal

The say-on-pay resolution is non-binding. The approval or disapproval of this proposal by stockholders will not require the Board of Directors or the Compensation Committee to take any action regarding the Company’s executive compensation practices. The final decision on the compensation and benefits of our 2020 named executive officers and on whether, and if so, how, to address stockholder disapproval remains with the Board of Directors and the Compensation Committee.

The Board of Directors believes that the Compensation Committee is in the best position to consider the extensive information and factors necessary to make independent, objective, and competitive compensation recommendations and decisions that are in the best interest of the Company and its shareholders, whether or not to effect the reverse stock split, and if so, at which of the approved exchange ratios, at any time before December 31, 2015. If the Board of Directors elects to implement the reverse stock split, it would be authorized to do so without need for any further shareholder action. The Board of Directors believes that approval of the reverse stock split proposal granting this discretion to the Board of Directors, rather than approval of an immediate reverse stock split at a specific ratio, provides the Board of Directors with maximum flexibility to react to then-current market conditions and therefore to act in the best interest of the Company and its shareholders. Notwithstanding approval of this Proposal by shareholders, the Board of Directors may, in its discretion, determine not to effect, and abandon, the reverse stock split without further action by our shareholders.stockholders.

If this Proposal 1 is approved, we would be authorized to effect any one, but not more than one, of the alternative reverse stock split ratios. Once one of the reverse stock split ratios is effected, none of the others will be able to be effected unless we were again to seek and obtain shareholder approval.

The proposed Amendment to our Certificate of Incorporation to effect the reverse stock split is attached to this proxy statement asAppendix A. If the Board of Directors elects to implement the reverse stock split, the number of issued and outstanding shares of common stock would be reduced in accordance with the exchange ratio adopted by the Board and reflected in the Amendment. The total number of authorized shares of common stock would not be correspondingly reduced. The reverse stock split would become effective upon filing the amendment with the New York State, Department of State, Division of Corporations.

The Board of Directors approvedvalues the proposed Amendment to our Certificate of Incorporation, subject to shareholder approval.

Purpose and Backgroundopinions of the Reverse Stock Split

Our primary objective in proposingCompany’s stockholders as expressed through their votes and other communications. Although the reverse stock splitresolution is to attempt to raise the per share trading price of our common stock in order to maintain our listing on the NASDAQ Capital Market (“NASDAQ”). To maintain our listing, the NASDAQ requires, among other things, that our common stock have a minimum bid price of $1.00 per share, as set forth in NASDAQ Listing Rule 5550(a)(2) (the “Rule”). On September 18, 2014 we received a written notification from NASDAQ notifying us that we had failed to comply with the Rule because the bid price for our common stock over a period of 30 consecutive business days prior to such date had closed below the minimum $1.00 per share requirement for continued listing. In accordance with NASDAQ’s Listing Rule 5810(c)(3)(A), we had a period of 180 calendar days, or until March 17, 2015, to regain compliance with the Rule. After determining that we would not be in compliance with the Rule by March 17, 2015, we notified NASDAQ and applied for an extension of the cure period, as permitted under the original notification. In accordance with NASDAQ Listing Rule 5810(c)(3)(A), NASDAQ granted a second grace period of 180 calendar days, or until September 14, 2015, to regain compliance with the minimum closing bid price requirement for continued listing. In order to regain compliance, the minimum closing bid price per share of our common stock must be at least $1.00 for a minimum of 10 consecutive business days. If we fail to regain compliance by September 14, 2015, our stock will be subject to delisting by NASDAQ. On July 6, 2015, the closing bid price for our common stock, as reported NASDAQ, was $0.87.

The Company intends that the reverse split will increase the bid price per share of its common stock above the $1.00 per share minimum price, thereby satisfying that continued listing requirement of the NASDAQ Capital Market. However, there can be no assurance that the reverse split will have that effect, initially or in the future. If we fail to regain compliance by September 14, 2015, our stock will be subject to

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delisting by NASDAQ. In such event, our common stock would likely trade in the over-the-counter market. If our common stock were to trade on the over-the-counter market, selling our common stock could be more difficult because smaller quantities of shares would likely be bought and sold, and transactions could be delayed. In addition, in the event our common stock is delisted, broker-dealers have certain regulatory burdens imposed upon them, which may discourage broker-dealers from effecting transactions in our common stock, further limiting the liquidity of our common stock. These factors could result in lower prices and larger spreads in the bid and ask prices for our common stock. Such delisting from The NASDAQ Capital Market and continued or further decline in our stock price could also greatly impair our ability to raise additional necessary capital through equity or debt financing.

In addition to the desire to maintain a listing on the NASDAQ Capital Market,non-binding, the Board of Directors believes thatwill carefully consider the low per share market price of our common stock impairs its marketability to and acceptance by institutional investors and other membersoutcome of the investing publicadvisory vote on executive compensation and creates a negative impression of the Company. Theoretically, decreasing the number of shares of common stock outstanding should not, by itself, affect the marketability of the shares, the type of investor who would be interested in acquiring them, orthose opinions when making future compensation decisions. These compensation decisions will also take into account existing contractual obligations and our reputation in the financial community. In practice, however, many investors and market makers consider low-priced stocks as unduly speculative in nature and, as a matter of policy, avoid investment and trading in such stocks. The presence of these negative perceptions may be adversely affecting, and may continue to adversely affect, not only the pricing of our common stock but also its trading liquidity. In addition, these perceptions may affect our commercial business and its ability to raise additional capital through the sale of stock or the cost of debt it may incur.

We hope that the decrease in the number of shares of our outstanding common stock resulting from the reverse split,retain and the anticipated increase in the price per share, will encourage greater interest in our common stock among members of the financial community and the investing public and possibly create a more liquid market for our shareholders with respect to those shares presently held by them. However, the possibility exists thatattract qualified personnel. The next say-on-pay shareholder liquidity may be adversely affected by the reduced number of shares which would be outstanding if the reverse split is effected, particularly if the price per share of the Company’s common stock begins a declining trend after the reverse split is effected. Companies which effect reverse stock splits often experience such a declining trend.

There can be no assurance that the reverse split will achieve any of the desired results. There also can be no assurance that the price per share of the Company’s common stock immediately after the reverse split will increase proportionately with the reverse split, or that any increase will be sustained for any period of time.

If our shareholders approve this Proposal 1, the Board of Directors would effect a reverse stock split only upon the Board’s determination that a reverse stock split is necessary to maintain our listingvote must occur on the NASDAQ Capital Market and would be in the best interests of our shareholders at that time. To effect a reverse stock split, the Board would set the timing for such a split and select the specific ratio from among the five ratios set forth herein. No further action on the part of shareholders will be required to either implement or abandon the reverse stock split. If the proposal is approved by our shareholders, and the Board of Directors determines to implement any of the reverse stock split ratios, we would communicate to the public, prior to the effective date of the reverse split, additional details regarding the reverse split, including the specific ratio the Board selects. If the Board of Directors does not implement the reverse stock split prior to December 31, 2015, the authority granted in this Proposal to implement the reverse stock split will terminate. The Board of Directors reserves its right to elect not to proceed, and abandon, the reverse stock split if it determines, in its sole discretion, that this Proposal is no longer in the best interests of our shareholders.

Certain Risk Factors Associated with the Reverse Stock Split

There can be no assurance that the total market capitalization of Acura common stock (the aggregate value of all Acura common stock at the then market price) after the proposed reverse stock split will be equal to or greater than the total market capitalization before the proposed reverse stock split or that the per share market price of Acura common stock following the reverse stock split will either equal or exceed the current per share market price or the $1.00 minimum bid required by NASDAQ.

There can be no assurance that the market price per new share of our common stock after the reverse stock split will increase in proportion to the reduction in the number of old shares of our common stock

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outstanding before the reverse stock split. For example, based on the closing price and asked prices on the NASDAQ Capital Market our common stock on May 28, 2015 of $0.76 per share, if the Board of Directors decided to implement the reverse stock split and selects a reverse stock split ratio of one-for-five there can be no assurance that the post-split market price of our common stock would be $3.80 per share or greater. By decreasing the number of outstanding shares of common stock without altering the aggregate economic interest represented by the shares, we believe the market price will be proportionally increased. The higher the market price rises above $1.00 the less risk there will be that we will fail to meet the minimum-bid-price requirement to continuetimetable to be listed on the NASDAQ Capital Market, as that minimum bid must be maintained for 10 trading days. However, there can be no assurance that the market price of the common stock will rise to or maintain any particular level or that we will at any time or at all times be able to meet the minimum-bid-price and other requirements for continued a listing of our common stock on the NASDAQ Capital Market.

Accordingly, the total market capitalization of our common stock after the proposed reverse stock split may be lower than the total market capitalization before the proposed reverse stock split and, in the future, the market price of our common stock following the reverse stock split may not exceed or remain higher than the market price prior to the proposed reverse stock split.

If the reverse stock split is effected, the resulting per-share stock price may not attract institutional investors or investment funds and may not satisfy the investing guidelines of such investors.

While the Board of Directors believes that a higher stock price may help generate investor interest, there can be no assurance that the reverse stock split will result in a per-share price that will attract institutional investors or investment funds or that such share price will satisfy the investing guidelines of institutional investors or investment funds.

Impact of the Proposed Reverse Stock Split if Implemented

If approved and effected, the reverse stock split will be implemented simultaneously for all of our common stock and the ratio will be the same for all of our common stock. The reverse stock split will affect all of our shareholders uniformly and will not affect any shareholder’s percentage ownership interests in the Company, except to the extent that the reverse stock split would otherwise result in any of our shareholders owning a fractional share. As described below, Company shareholders otherwise entitled to fractional shares as a result of the reverse stock split will receive cash payments in lieu of such fractional shares. These cash payments will reduce the number of post-reverse stock split shareholders to the extent there are presently shareholders who would otherwise receive less than one share of our common stock after the reverse stock split. In addition, the reverse stock split will not affect any shareholder’s percentage ownership or proportionate voting power (subject to the treatment of fractional shares). However, because the number of authorized shares of our common stock will not be reduced, the reverse stock split will increase the Board of Directors’ ability to issue authorized and unissued shares without further shareholder action. Such shares could be used for employee incentivization, acquisitions, future equity financings, or any other proper corporate purpose.

The principal effect of the reverse stock split will be that:

Proposed Reverse Stock Split Ratio		Shares of Common Stock to be Outstanding
1 for 10			4,921,681
1 for 5			9,843,363
1 for 4			12,304,204
1 for 3			16,405,605
1 for 2			24,608,408

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In addition, the reverse stock split will increase the number of shareholders who own odd lots (less than 100 shares). Shareholders who hold odd lots may experience an increase in the cost of selling their shares and may have greater difficulty in effecting sales.

Effect on Fractional Shareholders; Payment for Fractional Shares

The total number of sharesawarded immediately to each of our common stock each shareholder holds will be reclassified if the reverse stock split is implemented by the Board of Directors into the number of shares equal to the number of shares each shareholder held immediately before the reverse split, reducedfour non-employee directors ($200,000 in accordance with the exchange ratio selected by the Board of Directors. If the total number of shares a shareholder holds is not evenly divisible by the stock split ratio chosentotal). Unless terminated earlier by the Board of Directors, the shareholderRSUs may be distributed under the 2021 RSU Plan until December 31, 2031, however we expect that RSUs available under the Plan will not receive a fractional share, but instead will receive cash in an amount equal to the fraction of a share that the shareholder otherwise would have been entitled to receive, multiplieddistributed within the next five years. The 2021 RSU Plan allows for amendment by the closing priceBoard of one share of our common stock, as reported by NASDAQDirectors, provided shareholder approval for the business day immediately precedingamendment is not required under the effectiverules of an exchange on which our stock is listed or applicable law or regulation.

Purpose. The 2021 RSU Plan is intended to assist the Company in securing and retaining employees, consultants and directors by allowing them to participate in the ownership and growth of the Company through the RSUs. The granting of RSUs serves as partial consideration for and is intended to give key employees, directors and consultants an additional inducement to, remain in the service of the Company and will provide them with an increased incentive to work for the Company’s success. Cash Settled RSUs give Non-Employee Directors the ability to pay tax on their other RSUs distributed simultaneously therewith. Employees have a separate right to have stock withheld in payment of withholding taxes.

Dilutive Effect

As of the date of this Proxy Statement, we had three equity incentive plans but only the reverse stock split2016 Stock Option Plan has any shares remaining available for which transactions inissuance. Our 2016 Stock Option Plan has 34,478 shares available for the common stock are reported. Each shareholder's proportionate ownershipgrant of outstanding sharesoptions under such Plan. We make annual awards to each Non-Employee Director of common stock would remainequity valued at $50,000. In the same, except for minor differences resulting from the eliminationcase of fractional shares. We will appoint Broadridge Corporate Issuer Solutions, Inc., P.O. Box 1342, Brentwood, NY 11717, telephone: 877-830-4935 to act as the Exchange Agent for holders of common stock in connection with the reverse split. We will deposit with the Exchange Agent, as soon as practicable after the effective date of the reverse split, cash in an amount equal toRSUs, we determine value by the value of the estimatedshares underlying the RSUs. The value of each share of stock underlying an RSU issued under our Director compensation program will be deemed to be at least $0.75 for 2021 and $1.00 for 2022 and beyond, if our stock price is lower than these thresholds, subject to change by our Board.

Because of limited cash resources over the past few years, we have been unable to utilize cash bonuses to fully compensate our employees and directors, resulting in our need to expand our equity incentive plans so that we have sufficient options and RSUs to incentive our employees and Non-Employee Directors.

We recognize the dilutive impact of our equity plans on our stockholders and continuously strive to balance this concern with the competition for attracting and retaining talent. In its determination to adopt the 2021 Restricted Stock Award Plan our Compensation Committee reviewed the gross burn rate (as described below), outstanding awards and awards available for grant. If Proposal 3 is approved by our shareholders, our equity overhang (as described below) will increase from 6.2% to 12.5% based on the outstanding equity awards, shares available for grant under our active employee equity incentive plans, and the total weighted-average number of shares outstanding (“WSO”) for the period ended December 31, 2020.

Potential dilution to stockholders is measured by the two metrics: gross burn rate and equity overhang.

Gross Burn Rate

Gross burn rate is calculated by dividing the total number of shares subject to equity awards granted during the applicable fiscal year by the WSO. The gross burn rate measure indicates the rate at which Acura is creating potential future stockholder dilution. The following table shows our gross burn rate during our last four fiscal years.

Our gross burn rate was calculated by treating each RSU and option equally. In calculating burn rate, Institutional Shareholder Services (“ISS”), multiplies full value awards, such as RSUs, by a factor depending on a stock’s volatility. For a volatility of over approximately 54.6, such as is the case for Acura the factor is 1.5. See “ISS United States Summary Proxy Voting Guidelines, Published November 18, 2019, updated February 1, 2020.”

Had we weighted RSUs at 1.5 times the value of options, our burn rate for the years ending December 31, 2020, 2019, 2018 and 2017 would have been 1.0%, 1.9%, 6.5%, and 5.3%, respectively. 2021 ISS burn rate benchmarks (applicable to full fiscal years) for a non-Russell 3000 Company in the pharmaceutical and biotechnology sector, such as the Company is the greater of (i) two percent of the WSO and (ii) 9.46% (with a mean of 6.02% and a standard deviation of 3.44%). In addition the ISS benchmark indicates that the burn rate should not increase by more than 2% per year.

Equity Overhang

The Board and executive officers have worked to maintain a reasonable equity overhang amount, which is a measure of future dilutive impact. We define overhang as (a) outstanding equity awards, plus shares available for grant under our active equity plans divided by (b) the sum of outstanding equity awards, plus shares available for grant under our active equity plans, plus the Company’s WSO during the period. The following table shows information regarding our overhang during our last four fiscal years.

If Proposal 3 is approved by our shareholders, our equity overhang (based on the outstanding equity awards, shares available for grant under our active equity plans (including those in the proposed 2021 RSU Plan), will increase by 6.3% (from 6.2% to 12.5%) at December 31, 2020. However, if we adjust the WSO at December 31, 2020 as we have done in the above table then our equity overhang (based on the outstanding equity awards) shares available for grant under our active equity plans (including those in the proposed 2021 RSU Plan) will increase by 4.7% (from 6.2% to 10.9%) at December 31, 2020. Of the shares underlying options issued and outstanding at December 31, 2020, 674,000 are at an exercise price greater than $0.915 per share and as they are considerably out of the money, are substantially less likely to be exercised in the future. Removing these out of the money options from the calculation as of December 31, 2020 would result in an overhang of 4.3% prior to giving effect to Proposal 3 and an overhang of 10.9% after giving effect to shareholder approval of Proposal 3. Removing these out of the money options from the calculation as of December 31, 2019 would result in an overhang of 6.5% prior to giving effect to Proposal 3 and an overhang of 14.0% after giving effect to shareholder approval of Proposal 3.

Determination of Shares Issuable Under the 2021 RSU Plan

For 2018, 2019 and 2020, the aggregate number of fractionalRSUs granted to non-employee directors was 819,156, or an average of 204,789 per year. The Board determined to set the number of shares available under the 2021 Plan to be 2,500,000, so that will result fromit is sufficient to grant an average per year of approximately 280,000 shares underlying RSUs in the reverse split.aggregate to our four non-employee directors and approximately 220,000 shares underlying RSUs to our employees (including executive officers), in each case for each of the next 5 years. The funds requirednumber of RSUs granted to purchasenon-employee directors is based on our share price on the fractionaldate of grant. However, the value of each share interests are available andof stock underlying an RSU issued under our Director compensation program will be deemed to be at least $0.75 for 2021 and $1.00 for 2022 and beyond, if our stock price is lower than these thresholds, subject to change by our Board.

We may grant more or less Restricted Stock Units than our historical average. One factor in determining the number of RSUs to be issued is the number and value of stock options, if any, to be granted to employees in tandem with an RSU award. Currently under our stock option plans there remains only 34,478 shares underlying our options to be granted. The lower our stock price (assuming similar volatility and interest free risk rates) the more options we need to issue to employees to give the same value as options delivered at a higher stock price, as measured in our financial statements. As our stock price increases, all other things (risk rate free interest and volatility) being the same, we can grant more value to employees with fewer options. We are unlikely to have sufficient options to issue to employees, until we seek approval of another option plan, and we are likely to issue RSUs to employees instead of, in tandem with, or as well as options.

In issuing RSUs, as well stock options, the Board will consider an employee’s aggregate compensation. In a year in which we offer small salary increases and smaller than targeted bonuses, the Board is more likely to award a greater value of stock options or RSUs as a form of compensation.

With respect to our non-employee directors, our compensation plan provides for the grant of $50,000 of equity value per year. As a result, the form of equity to be paid from our cash reserves. Our shareholder list shows that someto directors could be in RSUs or options. For 2020, the Board established a minimum stock value, to be used to compute the number of RSUs to be granted to directors, regardless of the then current stock price.

Similarly for 2021, a minimum stock price of $0.75 has been established by our Board for computing the number of RSUs to be awarded to non-employee directors and for 2022 and beyond, a minimum stock price of $1.00 has been established by our Board for computing the number RSUs to be awarded to non-employee directors. These floors are subject to change by the Board and are a component of Director compensation and not the 2021 RSU Plan.

In determining the number of shares to be covered by the 2021 Plan, the Board believes the potential dilution to stockholders is reasonable, especially given that the overwhelming majority of our outstanding common stock option awards to our employees are significantly out of the money and based upon recent stock prices are not likely to be exercised. The Board also considered that the Company’s current burn rate is below ISS benchmarks.

The following discussion of the principal features and effects of the 2021 RSU Plan is qualified in its entirety by reference to the text of the 2021 RSU Plan, set forth in Appendix A attached hereto.

Administration

The 2021 RSU Plan is administered by the Company’s Board of Directors, or, except with respect to matters involving non-employee Directors (“Non-Employee Directors”), the Compensation Committee, provided it is comprised of not less than two members of the Board, each of whom must be Non-Employee Directors as that term is defined in Rule 16b-3(b)(3)(i) of the Exchange Act (the “Committee”).

Powers of the Board/Committee. The Board or Compensation Committee has the authority, subject to the provisions of the 2021 RSU Plan, to establish, adopt and revise such rules, regulations and forms and agreements and to interpret the 2021 RSU Plan and make all determinations relating to the 2021 RSU Plan as it may deem necessary or advisable. The Board or Compensation Committee also has the authority, subject to the provisions of the 2021 RSU Plan, to delegate ministerial, day-to-day administrative details and non-discretionary duties and functions to officers and employees of the Company. In the administration of the 2021 RSU Plan with respect to Non-Employee Directors, the Board has all of the authority and discretion otherwise granted to the Committee with respect to the administration of the 2021 RSU Plan.

All decisions, determinations and interpretations of the Board/Committee are binding and conclusive on participants in the 2021 RSU Plan and on their legal representatives and beneficiaries.

Director Participation in the RSU Plan. Non-Employee Directors are eligible to receive RSU grants under the 2021 RSU Plan, and it is expected that RSU awards under the 2021 RSU Plan will represent the annual equity compensation component of Non-Employee Directors’ compensation.

RSU Plan Eligibility

RSUs may be granted to any of the Company’s Non-Employee Directors, any of the Company’s employees or consultants, or any employees or consultants of any of the Company’s subsidiary corporations, including officers (collectively, “Eligible Participants”). For purposes of the discussion under this Proposal 3, employees or consultants of the Company also mean employees or consultants of the Company’s subsidiary. As of the date of this Proxy Statement all of the Company’s 12 full-time employees and four Non-Employee Directors of the Company will be eligible participants (“Participants”) in the 2021 RSU Plan. Any Eligible Participant who has been granted an RSU may be granted additional RSUs.

The RSU Plan does not confer any rights upon any Participant with respect to continuation of employment or service as an employee, consultant or a Non-Employee Director.

Terms

RSU Award Agreement. Each RSU granted under the 2021 RSU Plan is evidenced by a written award agreement (“RSU Award Agreement”), which contains the terms and conditions of the specific RSU granted.

Vesting of RSUs. RSUs generally vest as set forth in the RSU Award Agreement.

In addition, unless expressly provided otherwise in the RSU Award Agreement, each RSU immediately vests and is nonforfeitable to the Participant upon the occurrence of any of the following events:

(1) a Participant’s service as an employee of the Company is registeredterminated by the Company without Cause (as defined) or due to the Participant’s death or disability (as defined), or in the namecase of clearing agencies and broker nominees. Because we doa Non-Employee Director, upon the Participant’s death or Disability or if the Participant is not knowrenominated as a director (other than for “Cause” or refusal to stand for re-election) or is not elected by the numberCompany’s stockholders, if nominated; or

(2) a qualifying change of control, referred to as a Change in Control-Plan (as defined in the 2021 RSU Plan)

Accelerated vesting does not directly translate into accelerated distribution of shares held by each beneficial ownersubject to an RSU Award. For instance if the Company terminates an employee’s employment without Cause, such employee’s RSUs will immediately vest (unless otherwise provided in the RSU Award Agreement) but, absent a qualifying change of control the employee will not commence to receive the shares underlying his RSU award until the scheduled distribution date.

Distribution of Shares Underlying RSUs. Under the 2021 RSU Plan, (unless an award provides otherwise, vesting is accelerated as provided above under “Vesting of RSUs” or a Change of Control-Plan occurs as described below), stock underlying vested RSUs is generally distributed on the first business day of the year after they vest. Hence, if an award to a Non-Employee Director vests as scheduled in full over four quarters during 2021, it will be generally be distributed the first business day of January 2022. However, the Company may set other distribution dates, with respect to awards to Participants, including Non-Employee Directors. Non-Employee-Directors may elect to take payment in cash instead of stock for up to 40% of the RSUs in an award (rendering such RSUs as “Cash Settled RSUs”). With respect to Participants for whom the clearing agencies and broker nominees are record holders, we cannot predict with certaintyCompany is required to withhold taxes (generally employees) the numberCompany may mandate if such Participants may elect that the Company withhold stock otherwise payable on exchange of fractional shares that will resultan RSU to pay withholding taxes (this differs from the reverse split or2017 RSU Plan where the total amount it will be requiredCompany could not mandate withholding stock to pay for fractional share interests. However, we do not expect that the amount will be material.

As of the Record Date, we had approximately 360 holders of record of our common stock (including approximately 85 banks and brokers holding through nominees) (although we had significantly more beneficial holders)withholding taxes). We do not expect the reverse split and the payment of cash in lieu of fractional shares to result in a significant reduction in the number of record holders. We presently do not intend to seek any change in its status as a reporting company for Federal securities law purposes, either before or after the reverse split.

Effect on Acura Employees and Directors of Acura

The number of shares reserved for issuance under our 1995 Stock Option Plan, 1998 Stock Option Plan, the 2008 Stock Option Plan, the 2005 Restricted Stock Unit Award Plan and the 2014 Restricted Stock Unit Award Plan will be reduced proportionately based on the reverse stock split ratio selected by the Board of Directors. In addition, the number of shares issuable upon the exercise of options issued under our outstanding stock options, and the exercise price for such options, and the number of shares issuable in satisfaction of restricted stock unit awards, will be adjusted based on the reverse stock split ratio selected by the Board of Directors.

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Effect on Registered and Beneficial Shareholders

Upon a reverse stock split, the Company intends to treat shareholders holding our common stock in “street name,” through a bank, broker or other nominee, in the same manner as registered shareholders whose shares are registered in their names. Banks, brokers or other nominees will be instructed to effect the reverse stock split for their beneficial holders holding our common stock in “street name.” However, these banks, brokers or other nominees may apply their own specific procedures for processing the reverse stock split. Shareholders that hold shares of our common stock with a bank, broker or other nominee are encouraged to contact such nominee with any questions in this regard.

Effect on Registered “Book-entry” Shareholders

Our registered shareholders may hold some or all of their shares electronically in book-entry form under the direct registration system for securities. These shareholders will not have stock certificates evidencing their ownership of our common stock. They are, however, provided with a statement reflecting the number of shares registered in their accounts.

Shareholders holding registered shares of common stock in book-entry form need not take any action to receive such shareholder's post-reverse stock split shares or cash payment in lieu ofelection or withholding election may be made at any fractional share interest, if applicable. Fortime before distribution, but any such shareholders entitled to post-reverse stock split shares, a transaction statement will automatically be sent to your address of record indicating the number of shares you hold.

Shareholders entitled to acash payment in lieu of any fractional share interest will be mailed a check to his registered address as soon as practicable after the effective date of the reverse split. By signing and cashing this check, such shareholder will warrant that he owned the shares for which he received a cash payment. This cash paymentor withholding is subject to applicable federalany limits on redemption under any preferred stock, loan or other financing agreement. The Company has the option of establishing a RSU award that defers distributions to a Participant, including in installments (e.g., 25% of RSUs to be paid in 2022, 2023, 2024 and state income tax and state abandoned property laws. In addition, shareholders2025). If a Change of Control-Plan which is also a Change in Control qualifying409A occurs, all vested shares of Common Stock underlying an RSU (after payment or withholding of $0.01 per share par value) will be distributed by the Company to the holder of the RSU at or about the time of the Change in Control-Plan. No dividends accrue on shares of Common Stock underlying RSUs prior to distribution. Participants need not be entitled to receive interest for the period of time between the effective dateemployees, consultants or directors of the reverse stock split andCompany on a distribution date. A Change in Control-409A for distribution purposes is generally the date of payment.

Effect on Registered Certificated Shares

Some of our registered shareholders hold all their sharessame as a Change in certificate form orControl-Plan for vesting purposes, except that in order to have a combination of certificate and book-entry form. Shareholders holding shares of common stockChange in certificate form will receiveControl-409A for distribution purposes, a transmittal letter from our Exchange Agent as soon as practicable after the effective datechange in control qualifying under Section 409A of the reverseCode must occur. In lieu of requiring cash payment of par value, the Company may, in its discretion or shall at the Participant’s request, accept payment of any such par value by withholding from stock split for use in transmitting the existing certificates representing shares of our common stock (the “Old Certificates”) to our Exchange Agent. The letter of transmittal will contain instructions for the surrender of the Old Certificates to our Exchange Agent in exchange for new certificates representing the appropriatepayments a number of whole shares of new common stock giving effectwhose value is equal to the amount of such par value.

Non-Transferability of RSUs. RSUs may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner by the Participant other than by will or by the laws of descent or distribution and the Committee may, in its discretion, authorize all or a portion of the RSUs to be granted to a Participant to be on terms which permit transfer by such Participant to (i) the spouse, children or grandchildren of the Participant (the “Immediate Family Members”), (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members, or (iii) a partnership in which such Immediate Family Members are the only partners, provided that (x) there may be no consideration for any such transfer, (y) subsequent transfers of transferred RSUs shall be prohibited except those made by will or by the laws of descent or distribution, and (z) such transfer is approved in advance by the Committee (or Board in absence of a Committee). A married Participant may generally designate only a spouse as a beneficiary unless spousal consent is obtained.

Termination of Status as an Employee or Non-Employee Director. See “Vesting of RSUs”, above for a discussion of vesting upon termination of employment or service as a Non-Employee Director.

Dividend and Voting Rights. Unless other provided in an RSU Award Agreement, Participants have no dividend rights and no voting rights with respect to the shares underlying RSUs until the RSUs settle in shares of Common Stock.

Amendment and Termination of the RSU Plan

The Board may terminate and, without shareholder approval, unless the same is required by the rules of the exchange where the Company’s stock trades, or applicable law, amend the 2021 RSU Plan.

Adjustments upon Changes in Capitalization or Merger

Upon or in contemplation of any reclassification, recapitalization, stock split (including a stock split in the form of a stock dividend) or reverse stock split. No newsplit; any merger, combination, consolidation or other reorganization; any split-up; spin-off, or similar extraordinary dividend distribution with respect to the Common Stock (whether in the form of securities or property); any exchange of stock certificatesor other securities of the Company, or any similar, unusual or extraordinary corporate transaction with respect to the Common Stock; or a sale of substantially all the assets of the Company as an entirety; then the Board shall proportionately adjust any or all of (a) the number and type of shares of Common Stock (or other securities or property) that thereafter may be made the subject of RSUs, (b) the number, amount and type of shares of Common Stock (or other securities or property) payable with respect to RSUs, and (c) and the number and type of RSUs (both credited and vested) under the 2021 RSU Plan.

Tax Status of the RSU Plan

The following is a summary of the effect of Federal income tax consequences to the holders of RSUs and the Company with respect to the grant of RSUs and the purchase and sale of shares under the 2021 RSU Plan. The following summary does not purport to be complete, and reference is made to the applicable provisions of the IRS Code. The summary does not address other taxes that may affect recipients of RSUs such as state and local income taxes, Federal and state estate, inheritance and gift taxes and foreign taxes.

Tax Treatment of RSUs. A holder will not recognize any taxable income at the time an RSU is granted. Upon distribution or withholding (for tax payments or par value) of shares of Common Stock underlying an RSU (“Shares”), a holder, will recognize ordinary income for federal tax purposes equal to the difference, if any, between the then fair market value of the Shares and the $0.01 par value of the Common Stock, which the holder must pay for each Share, or in the case of a Cash Settled RSU, the cash received. A holder’s tax basis in the shares acquired under an RSU will be issuedequal to the fair market value of the Shares on the date of issuance. Upon a resale of the Shares acquired pursuant to a distribution under an RSU, any shareholder until such shareholder has surrendered all certificates, together with a properly completeddifference between the sale price and executed letter of transmittal, to our Exchange Agent. The shareholdersthe holder’s tax basis in the Shares will then receive a new certificatebe treated as capital gain or certificates representingloss, and will qualify for long-term capital gain or loss treatment if the number of whole shares of common stock into which their pre-reverse stock split shares have been converted as a resultheld for more than 12 months. The Company will generally withhold the applicable employee’s Medicare portion of the reverse stock split. Until surrendered,FICA tax (generally 1.45% for employees plus an additional 0.9% on wages in excess of $200,000) on an employee holder’s total compensation and the employee’s applicable share of Social Security portion of FICA (6.2% for employees up to the FICA wage base). Non-employee holders are responsible for payment of the Social Security and Medicare tax. The Company will deem outstanding Old Certificates held by shareholders to be cancelled and only to representreceives no tax deduction on the numbergrant of whole shares of post-reverse stock split common stock to which the shareholders are entitled.

If a shareholderan RSU, but is entitled to a paymenttax deduction when the RSU holder recognizes taxable income on the settlement of the RSU, in lieuthe same amount as the income recognized by the holder of the RSU, subject to disallowance as provided below.

Section 162(m) Disallowance. For a smaller reporting company, such as Acura, Section 162(m) of the Internal Revenue Code generally disallows a public corporation's tax deduction for compensation to its Chief Executive Officer or any of its two other most highly compensated officers in excess of $1,000,000 within a year. Compensation that qualifies as "performance-based compensation" is excluded from the $1,000,000 deductibility cap, and therefore remains fully deductible by the corporation that pays it. RSUs and stock issued or withheld in exchange therefor under the Plan will not qualify as “performance based compensation.” As such, as provided in Section 162(m) of the Internal Revenue Code such awards will be subject to the $1,000,000 deductibility cap. To the extent the value of the Shares distributed to such person in a tax year in settlement of the RSUs together with other non-qualifying performance based consideration paid to such person exceed $1 million, the Company will not be able to deduct such amounts.

Excess Parachute Payments. Under Section 280G and 4999 of the Code, compensatory payments to employees or other individuals who perform services for a corporation and who are officers, highly-compensated individuals or significant stockholders of the corporation may be treated as “excess parachute payments,” if the payments are contingent on a change in control of the corporation and exceed threshold amounts specified in the Code. Payments are not considered parachute payments if the taxpayer can show by clear and convincing evidence that they constitute reasonable compensation for personal services to be performed after the change in control or that they otherwise are not contingent on the change in control. The value of any fractional share interest,accelerated vesting of an RSU is considered a compensatory payment will be made as described abovefor this purpose. The Treasury regulations under the caption “Effect on Fractional Shareholders; Payment for Fractional Shares.”

SHAREHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY CERTIFICATE(S) UNTIL REQUESTED TO DO SO.

No Effect on Legal Ability to Pay Dividends

Our Board of Directors has not in the past declared, nor does it have any plans to declare in the foreseeable future, any distributions of cash, dividends or other property, and we is not in arrears on any dividends. The Company does not believeSection 280G provide that, the reverse split will have any effect with respect to future distributions, if any, to our shareholders.

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Authorized Shares

The reverse stock split would affect all issued and outstandingthe acceleration of vesting of shares, of our common stock and outstanding rights to acquire our common stock. Upon the effectivenessamount treated as contingent on a change in control of the reverse stock split,Company is the numbersum of authorized shares of our common stock that are not issued or outstanding will remain unchanged. However, due to the reduction in the number of outstanding shares as a result of the reverse stock split, the number of authorized shares will increase in relative terms after giving effect to the reverse stock split. As of the Record Date, we had 100 million shares of authorized common stock and approximately 49.2 million shares of common stock issued and outstanding. An additional 8 million shares are reserved for issuance under outstanding warrants and our equity plans. Authorized but unissued shares will be available for issuance, and may be issued in the future. If we issue additional shares the ownership interest of holders of our common stock will be diluted. We have outstanding a shelf registration statement pursuant to which we can sell up to $75 million of stock, warrants and debt (“universal shelf”), which was declared effective by the Securities and Exchange Commission (“SEC”) on March 15, 2013. On July 7, 2014, pursuant to a prospectus supplement filed with the SEC we took down and sold 9,790,000 shares of common stock from our universal shelf for net proceeds after expenses of approximately $7.05 million. Before and after any reverse split we may continue to sell shares under other takedowns of our universal shelf, through other public offerings or in private transactions. We believe we have sufficient authorized shares available and have no present intention of utilizing(a) the increase in shares available for issuance as a consequencethe present value resulting from the acceleration of vesting (the “Time Value Component”) plus (b) an amount that reflects the elimination of the reverseobligation to perform services in order to continue vesting (the “Forfeiture Risk Component”). With respect to each unvested share or RSU, the Time Value Component equals the excess of (a) the value of the share or RSU on the accelerated vesting date divided by (b) the discounted present value of the share or RSU on its original vesting date (assuming that the fair market value of the underlying stock split described in this Proposal 1 in any such capital raising transactions. However, if our product sales and licensing arrangements dodoes not produce sufficient revenuechange). The present value generally is discounted based on an interest rate equal to fund our operations120% of the applicable federal rate (as defined in the future,Code) in effect on the date of the change in control. The Treasury regulations provide that the value of the Forfeiture Risk Component is 1% of the value of the payment for each full calendar month during which the RSU holder no longer needs to perform services in order to vest in the shares underlying the RSU. Excess parachute payments are not deductible by the Company and the recipient must pay a nondeductible excise tax equal to 20% of the excess parachute payments (in addition to regular income taxes on such payments). Further, the Company may have a withholding and reporting obligation, depending on the type of payment.

Section 409A. The RSUs are subject to Section 409A of the Code. RSUs granted under the 2021 RSU Plan are intended to comply with the provisions of that Section with respect to deferred compensation. If the 2021 RSU Plan did not comply with the provisions of 409A, among other things, compensation under the 2021 RSU Plan would be subject to a 20% excise tax.

RSU Awards – New Plan Benefits

The following table reflects the anticipated issuance of awards under the 2021 RSU Plan to Non-Employee Directors and employees. Although the lifespan of the Plan is ten years we believe that based upon recent prices of our stock, the RSUs to be distributed under the Plan may be forced to utilize the increasefully distributed in shares available for issuance as a consequence of the reverse split. Except as described above, or for warrants or equity plans for which shares are already reserved for issuance,five years.

NEW PLAN BENEFITS

(1) While this amount cannot be determined as of the date of this Proxy Statement, we have no commitment, arrangement, understanding or agreement in place, either oral or written, regardingif RSUs are granted under the issuance2021 RSU Plan to employees, instead of our securities subsequentstock options, the number of RSUs is expected to be lower that the number of stock options than would otherwise be granted to employees. It is expected that the allocation of RSUs among the employees will be consistent with the Company’s historical allocation of stock options among the employees (For example, the December 2018 stock option awards allocated 73% and 27% of such option awards to the reverseexecutive officers and the non-executive officer employees, respectively, with Messrs. Jones, Clemens and Brzeczko receiving 22%, 18% and 15%, respectively, of such December 2018 stock split describedoption awards). Assuming 1,400,000 RSUs of the 2,500,000 proposed to be authorized RSUs under the 2021 RSU Plan are distributed to Non-Employee Directors, 1,100,000 RSUs will remain available for distribution under the 2021 RSU Plan. If these 1,100,000 RSUs are distributed to employees over the next five years, using the above percentages, Mr. Jones, Clemens and Brzeczko would receive 242,000, 198,000 and 165,000 RSUs, respectively and the executive group and non-executive group would receive 803,000 and 297,000 RSUs respectively.

(2) Under our director compensation program, directors’ equity awards may be in this Proposal 1.

Accounting Matters

The reverse stock split will not affectoptions or RSUs. In the parcase of RSUs, we determine value by the value of our common stock. Asthe shares underlying the RSUs. Assuming equity awards are in RSUs, and not in options, on the first business day of each year each Non-Employee Director will receive a result, asgrant of RSUs whose underlying shares have $50,000 in deemed value, vesting in equal installments on the last day of each calendar quarter, subject to a minimum stock price to be used in determining deemed value, or floor, of $0.75 in effect for the 2021 grant and a floor of $1.00 in effect for grants after 2021. If the 2021 RSU Plan is adopted by shareholders it is anticipated that each of the effective timefour Non-Employee Directors will receive a grant on the first business day of 2021 after shareholder approval, of RSUs (the number of units is determined by dividing 50,000 by the greater of (x) the $0.75 floor and (y) the stock price on the date of grant, with 50% of such units vesting for 2021 on June 30, 2021 and 25% on each of September 30, 2021 and December 31, 2021. The entry in the table assumes that (i) each of the reverseCompany’s four Non-Employee Directors will receive an aggregate of RSU grants whose underlying shares are valued at $200,000 in the aggregate for 2021, 2022, 2023, 2024 and 2025, subject to a minimum stock split,price to be used in determining deemed value; (ii) a minimum stock price of $0.75 is in effect for the stated capital attributable2021 grant and a minimum stock price of $1.00 is in effect for grants to our commonNon-Employee Directors in 2022 and beyond; (iii) Non-Employee director equity compensation is issued in RSUs; (iv) the number of Non-Employee directors remains at four; and (v) the director compensation plan does not change. If the stock price is less than the minimum stock price for a certain year then the actual dollar value wil be less than $50,000 per director for such year, and less than $200,000 in total for that year. For example, if the stock price were less than the applicable minimum stock price for the next five years, and the stock price was at $0.50 on its balance sheet will be reduced proportionately based on the reverse stock split ratio selectedeach date of grant, Non-Employee Directors would only receive approximately $533,000 in value, instead of $1,000,000. For purposes of this table and this footnote, value of RSU grants disregards effect of payment by the BoardRSU recipient of Directors, and$.01 in par value.

Vote Required

The majority of Votes Cast at the additional paid-in capital account will be credited withMeeting is required for adoption of the amount by which the stated capital is reduced. The per-share net income or loss and net book value of our common stock will be impacted because there will be fewer shares of our common stock outstanding.2021 RSU Plan.

Potential Anti-Takeover Effect

The increased proportion of unissued authorized shares to issued shares could, under certain circumstances, have an anti-takeover effect. For example, the issuance of a large block of common stock could dilute the stock ownership of a person seeking to effect a change in the composition

Recommendation of the Board of Directors or contemplating a tender offer or other transaction for the combination of the Company with another company. However, the reverse stock split proposal is not being proposed in response to any effort of which the Company is aware to accumulate our shares of common stock or obtain control of the Company, nor is it part of a plan by management to recommend to the Board and shareholders a series of amendments to our Certificate of Incorporation. Other than the proposal for the reverse stock split, the Board of Directors does not currently contemplate recommending the adoption of any other amendments to our Certificate of Incorporation that could be construed to reduce or interfere with the ability of third parties to take over or change the control of the Company.

Procedure for Effecting Reverse Stock Split

If our shareholders approve the proposal to authorize the reverse stock split and the Board of Directors decides to implement the reverse stock split at any time prior to December 31, 2015, we will promptly file a Certificate of Amendment with the New York State, Department of State, Division of Corporations to amend our existing Certificate of Incorporation. The reverse stock split will become effective on the date of filing the Certificate of Amendment, which is referred to as the “effective date.” Beginning on the effective date, each certificate representing pre-reverse stock split shares will be deemed for all corporate purposes to evidence

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ownership of post-reverse stock split shares. The text of the Certificate of Amendment is attached asAppendix A to this Proxy Statement. The text of the Certificate of Amendment is subject to modification to include such changes as may be required by the office of the New York State, Department of State, Division of Corporations and as the Board of Directors deems necessary and advisable to effect the reverse stock split, including inserting the applicable ratio for the reverse stock split.

No Appraisal Rights

No appraisal rights are available under the Business Corporation Law of the State of New York or under our Certificate of Incorporation or bylaws to any shareholder in connection with the reverse stock split. However, New York law requires that the Company pay the fair value of fractional shares if a cash payment is to be made in lieu of issuing fractional shares.

Federal Income Tax Consequences of the Reverse Stock Split

The following is a summary of certain material United States federal income tax consequences of the reverse stock split. It does not purport to be a complete discussion of all of the possible federal income tax consequences of the reverse stock split and is included for general information only. Further, it does not address any state, local or foreign income or other tax consequences. Also, it does not address the tax consequences to shareholders that are subject to special tax rules, such as banks, insurance companies, regulated investment companies, personal holding companies, foreign entities, nonresident alien individuals, broker-dealers and tax-exempt entities. The discussion is based on the provisions of the United States federal income tax law as of the date hereof, which is subject to change retroactively as well as prospectively. This summary also assumes that the pre-reverse stock split shares were, and the post-reverse stock split shares will be, held as a “capital asset,” as defined in the Internal Revenue Code of 1986, as amended (i.e., generally, property held for investment). The tax treatment of a shareholder may vary depending upon the particular facts and circumstances of such shareholder. Each shareholder is urged to consult with such shareholder’s own tax advisor with respect to the tax consequences of the reverse stock split. As used herein, the term United States holder means a shareholder that is, for federal income tax purposes: a citizen or resident of the United States; a corporation or other entity taxed as a corporation created or organized in or under the laws of the United States, any State of the United States or the District of Columbia; an estate the income of which is subject to federal income tax regardless of its source; or a trust if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust.

Other than the cash payments for fractional shares discussed below, no gain or loss should be recognized by a shareholder upon such shareholder's exchange of pre-reverse stock split shares for post-reverse stock split shares pursuant to the reverse stock split. The aggregate tax basis of the post-reverse stock split shares received in the reverse stock split (including any fraction of a post-reverse stock split share deemed to have been received) will be the same as the shareholder’s aggregate tax basis in the pre-reverse stock split shares exchanged therefor. In general, shareholders who receive cash in exchange for their fractional share interests in the post-reverse stock split shares as a result of the reverse stock split will recognize gain or loss based on their adjusted basis in the fractional share interests redeemed. The shareholder’s holding period for the post-reverse stock split shares will include the period during which the shareholder held the pre-reverse stock split shares surrendered in the reverse stock split. The receipt of cash instead of a fractional share of our common stock by a United States holder of our common stock will result in a taxable gain or loss to such holder for federal income tax purposes based upon the difference between the amount of cash received by such holder and the adjusted tax basis in the fractional shares as set forth above. The gain or loss will constitute a capital gain or loss and will constitute long-term capital gain or loss if the holder’s holding period is greater than one year as of the effective date.

EACH SHAREHOLDER SHOULD CONSULT WITH HIS OR HER OWN TAX ADVISOR WITH RESPECT TO ALL OF THE POTENTIAL TAX CONSEQUENCES TO HIM OR HER OF THE REVERSE STOCK SPLIT.

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Interests of Certain Persons in the Proposal

Certain of our officers and directors have an interest in this Proposal 1 as a result of their ownership of shares of our common stock, as set forth below in the section entitled “Stock Ownership of Certain Beneficial Owners and Management” below. However, we do not believe that our officers or directors have interests in Proposal 1 that are different from or greater than those of any of our other stockholders.

Vote Required and Recommendation of Board of Directors.

The affirmative vote of a majority of all outstanding shares of our common stock entitled to vote on this Proposal will be required for approval of this Proposal.

The Board of Directors recommends a vote “FOR” FOR the Proposal to amend the Certificate of Incorporationadoption of the Company to effect a reverse stock split2021 RSU Plan.

PROPOSAL 4

RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

There will also be submitted for consideration and voting at onethe Meeting, the ratification of the following five ratios: 1appointment by our Audit Committee and our Board of Directors of BDO USA, LLP as our independent registered public accounting firm for 10, 1the purpose of auditing and reporting upon our financial statements for 5, 1the fiscal year ending December 31, 2021. Our Audit Committee and Board of Directors selected and approved the accounting firm of BDO USA, LLP as our independent registered public accounting firm to audit and report upon our financial statements for 4, 1 for 3our fiscal year ending December 31, 2021. BDO USA, LLP has no direct or 1 for 2.indirect financial interest in the Company.

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PROPOSAL 2

TO APPROVE OF AN ADJOURNMENT OF THE SPECIAL MEETING

Representatives of BDO USA, LLP are expected to be present at the Meeting, and they will be afforded an opportunity to make a statement at the Meeting if they desire to do so. It is also expected that such representatives will be available at the Meeting to respond to appropriate questions by shareholders.

Our shareholders are being asked to considerregistered independent public accounting firm is BDO USA, LLP. The fees billed by this firm in 2020 and vote upon an adjournment2019 were as follows:

Audit Fees include professional services rendered in connection with the annual audit of our financial statements, and the review of the Special Meeting, if necessary,financial statements included in our Form 10-Qs for the related periods. Additionally, Audit Fees include other services that only an independent registered public accounting firm can reasonably provide, such as services associated with our SEC registration statements or other documents filed with the SEC or used in connection with financing activities. We had no Audit-Related Fees which would include accounting consultations related to solicit additional proxies if there areaccounting, financial reporting or disclosure matters not sufficient votes atclassified as Audit Fees. Tax Fees include tax compliance, tax advice and tax planning services. These services related to the timepreparation of various state income tax returns, our federal income tax return, and reviews of IRC Section 382.

Audit Committee’s Pre-Approval Policies and Procedures

Consistent with policies of the Special MeetingSEC regarding auditor independence and the Audit Committee Charter, the Audit Committee has the responsibility for appointing, setting compensation and overseeing the work of the registered independent public accounting firm (the “Firm”). The Audit Committee’s policy is to approve Proposal 1.

Vote Requiredpre-approve all audit and permissible non-audit services provided by the Firm. Pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The Audit Committee may also pre-approve particular services on a case-by-case basis. In assessing requests for services by the Firm, the Audit Committee considers whether such services are consistent with the Firm’s independence, whether the Firm is likely to provide the most effective and efficient service based upon their familiarity with the Company, and whether the service could enhance the Company’s ability to manage or control risk or improve audit quality.

All of the audit-related, tax and other services provided by BDO USA, LLP in 2020 and 2019 and related fees (as described in the captions above) were approved in advance by the Audit Committee.

Audit Committee Report

The members of our Audit Committee are George K. Ross, Chairman, Bruce F. Wesson and William G. Skelly. The Audit Committee operates under a written charter adopted by the Board of Directors. The charter is available on our website at www.acurapharm.com under the menu item “Corporate Governance” under the “Investors” tab. Management is responsible for our internal control and financial reporting process. Our independent registered public accounting firm is responsible for performing an independent audit of our consolidated financial statements in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes.

In this context, the Audit Committee has met and held discussions with Management and our independent registered public accounting firm. Management represented to the Audit Committee that our consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with Management and our independent registered public accounting firm. The Audit Committee discussed with the independent registered public accounting firm the matters required to be discussed by PCAOB Auditing Standard No. 1301, Communications with Audit Committees, and the Audit Committee discussed with the independent registered public accounting firm that firm’s independence. The Audit Committee has also considered whether the independent registered public accounting firm’s provision of non-audit services to us is compatible with the auditor’s independence.

Based upon the Audit Committee’s discussions with Management and the independent registered public accounting firm and the Audit Committee’s review of the representation of Management and the report of the independent registered public accounting firm, the Audit Committee recommended that the Board of Directors include our audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission.

The foregoing has been approved by all current members of the Audit Committee.

George K. Ross (Chairman)

Bruce F. Wesson

William G. Skelly

Recommendation of the Board of Directors

The Board of Directors recommends a voteFORthe adjournmentratification of the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes atappointment of BDO USA, LLP as our independent registered public accounting firm for the time of the Special Meeting to approve Proposal 1. fiscal year ending December 31, 2021.

Vote Required

A majority of the Votes Cast at the Meeting is required to approve an adjournmentratify the appointment of BDO USA, LLP as our independent registered accounting firm for the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the Special Meeting to approve Proposal 1.fiscal year ending December 31, 2021.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information regarding the beneficial ownership of the Common Stock,common stock, as of June 1, 2015,March 31, 2021, for individuals or entities in the following categories: (i) each of ourthe Company’s Directors; (ii) ourthe Company’s principal executive officer, our principal financial officer, and the next fourtwo highest paid executive officers of the Company whose total annual compensation for 20142020 exceeded $100,000 (the “2014“2020 named executive officers”); (iii) all Directors and executive officers as a group; and (iv) each person known by the Company to be a beneficial owner of more than 5% of the Common Stock.common stock. Unless indicated otherwise, each of the shareholders has sole voting and investment power with respect to the shares beneficially owned. At June 1, 2015,March 31, 2021, there were 49,216,81722,104,668 shares of our Common Stockcommon stock outstanding. Shares of common stock issuable pursuant to stock options, warrants and restricted stock units exercisable or exchangeable within 60 days are deemed outstanding and held by the holder of such options, warrants or restricted stock units for computing the percentage of the person holding such options, warrants or restricted stock units, but are not deemed outstanding for computing the percentage of any other person.

Name of Beneficial Owner		Amount Owned				Percent of Class(1)				Amount Owned				Percent of Class (1)
Galen Partners III, LP 680 Washington Boulevard, Stamford, CT 06901			11,083,497	(2)			22.5	%
Care Capital II, LLC 47 Hulfish Street, Suite 310 Princeton, New Jersey 08542			3,335,622	(3)			6.8	%
John Schutte c/o MainPointe Pharmaceuticals, LLC 333 E. Main Street, Suite 200 Louisville, KY 40202											10,695,186	(2)			44.8	%
Abuse Deterrent Pharma, LLC 333 E. Main Street, Suite 220 Louisville, KY 40202											47,500,000	(3)			68.2	%
Essex Woodlands Health Ventures Fund V, L.P. 21 Waterway Avenue, Suite 225 Woodlands, TX 77380			9,781,985	(4)			19.9	%			1,956,396	(4)			8.9	%
Robert B. Jones			1,031,361	(5)			2.0	%			815,789	(5)			3.6	%
William G. Skelly			124,412	(6)				*			398,657	(6)			1.8	%
Bruce F. Wesson			221,678	(7)				*			664,716	(7)			3.0	%
Peter A. Clemens			747,023	(8)			1.5	%			602,097	(8)			2.7	%
Immanuel Thangaraj			112,059	(9)				*			270,315	(9)			1.2	%
Robert A. Seiser			442,975	(10)				*
Albert W. Brzeczko			369,500	(11)				*			587,468	(10)			2.6	%
George K. Ross			103,784	(12)				*			318,171	(11)			1.4	%
J. Bradley Rivet			205,668	(13)				*
James F. Emigh			498,554	(14)			1.0	%
All Officers and Directors as a Group (10 persons)			3,857,014	(15)			7.4	%
All Officers and Directors as a Group (9 persons)											4,646,277	(12)			20. 2	%

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GENERAL

We do not know of any matters other than those stated in this Proxy Statement that are to be presented for action at the Special Meeting. If any other matters should properly come before the Special Meeting, proxies will be voted on those other matters in accordance with the judgment of the persons voting the proxies. Discretionary authority to vote on such matters is conferred by such proxies upon the persons voting them.

We will bear the cost of preparing, printing, assembling, posting and mailing all proxy materials that may be sent to shareholders in connection with this solicitation. Arrangements will also be made with brokerage houses, other custodians, nominees and fiduciaries, to forward soliciting material to the beneficial owners of our Common Stock held by such persons. We will reimburse such persons for reasonable out-of-pocket expenses incurred by them. In addition to the solicitation of proxies by use of the mails, our officers and regular employees of wethe Company may solicit proxies without additional compensation, by telephone or facsimile. We do not expect to pay any compensation for the solicitation of proxies.

We have adopted a procedure approved by the SEC known as “householding.” This procedure allows multiple stockholders residing at the same address the convenience of receiving a single copy of our Notice, Annual Report on Form 10-K and proxy materials, as applicable. This allows us to save money by reducing the number of documents we must print and mail, and helps reduce the environmental impact as well. Householding is available to both registered stockholders and beneficial owners of shares held in streetname.

If you are a registered stockholder and have consented to our mailing of proxy materials and other stockholder information to only one account in your household, as identified by you, we will deliver or mail a single copy of our Notice, Annual Report on Form 10-K and proxy materials, as applicable, for all registered stockholders residing at the same address. Your consent will be perpetual unless you revoke it, which you may do at any time by calling Broadridge Financial Solutions, Inc. at 1-800-542-10611-866-540-7095 (toll free) or by writing to Broadridge Financial Solutions, Inc., Householding Dept, 51 Mercedes Way, Edgewood, NY 11717.

If you revoke your consent, we will begin sending you individual copies of future mailings of these documents within 30 days after we receive your revocation notice. If you received a householded mailing this year, and you would like to receive additional copies of our Notice, Annual Report on Form 10-K and proxy materials, as applicable, mailed to you, please submit your request to Broadridge who will promptly deliver the requested copies.

Registered stockholders who have not consented to householding will continue to receive copies of our Notice, Annual Reports on Form 10-K and proxy materials, as applicable for each registered stockholder residing at the same address. As a registered stockholder, you may elect to participate in householding and receive only a single copy of annual reports or proxy statements for all registered stockholders residing at the same address by contacting Broadridge as outlined above.

Stockholders who hold their shares through a brokerage account may elect to participate in householding or revoke their consent to participate in householding by contacting their respective brokers.

You may also request copies

A copy of our Annual Report this Proxy Statement and a Proxy and future proxy materials and annual reports, when available, by contacting Broadridge atwww.investor.broadridge.com, by e-mail at shareholder@broadridge.com or by phone at 1-877-830-4935.

All properly executed proxies delivered pursuant to this solicitation and not revoked, will be voted atShareholders on Form 10-K for the Meeting and will be voted in accordancefiscal year ended December 31, 2020, as filed with the specifications made thereon. With respect to either Proposal 1 or Proposal 2, shareholders may vote in favor of, may vote against or may abstain from voting on such proposal. Shareholders should specify their choices on the enclosed proxy card or when voting by telephone or through the internet as provided in the proxy card or voting instruction card. If no specific instructions are given with respect to the matters to be acted upon, the shares represented by the Proxy will be voted (i)FORthe granting to the Board of Directors the authority to amend our Certificate of Incorporation to effect a reverse stock split at one of five ratios, and (ii)FOR the approval of an adjournment of the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the Special Meeting to approve Proposal 1. See “Voting of Proxies” inSEC, accompanies this Proxy Statement, if you are a beneficial ownerbeing sent by paper or email copy and not a record holder, as other rules applycan be accessed on the web together with respect to your non-votes.

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If you need directions on how to get to the Meeting please call Peter Clemensthis Proxy Statement at 847-705-7709.

www.proxyvote.com. Upon written request, we will provide each shareholder being solicited by this Proxy Statement with a free copy of any exhibits and schedules thereto and to those to our Annual Report on Form 10-K.thereto. All such requests should be directed to Acura Pharmaceuticals, Inc., 616 N. North Court, Suite 120, Palatine, Illinois 60067, Attention: Mr. Peter A. Clemens, Senior Vice President and Chief Financial Officer, telephone (847) 705-7709.

All properly executed proxies delivered pursuant to this solicitation and not revoked, will be voted at the Meeting and will be voted in accordance with the specifications made thereon. In voting by proxy in regard to the election of directors, shareholders may vote in favor of each nominee or withhold votes as to all nominees or votes as to a specific nominee. With respect to voting on the ratification of our independent public accountants, shareholders may vote in favor of, may vote against or may abstain from voting on such proposal. Shareholders should specify their choices on the enclosed Proxy or when voting by telephone or through the internet as provided in the Notice of Internet Availability of Proxy Materials. If no specific instructions are given with respect to the matters to be acted upon, the shares represented by the Proxy will be voted FOR the election of all directors, FOR the resolution approving executive compensation, FOR the adoption of the Company’s 2021 Restricted Stock Unit Award Plan and FOR the ratification of the appointment of BDO USA, LLP as our independent certified public accountants for the fiscal year ending December 31, 2021. See “Voting of Proxies” in this Proxy Statement, if you are a beneficial owner and not a record holder, as other rules apply with respect to your non-votes.

TABLEIMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF CONTENTSPROXY MATERIALS

This proxy statement and our 2020 Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the SEC, will be available at www.proxyvote.com on or about April 15, 2021

SHAREHOLDER PROPOSALS FOR 20162022 ANNUAL MEETING

Any shareholder proposals intended to be presented at our 20162022 Annual Meeting of Shareholders must be received by us on or before November 19, 2015December 31, 2021 in order to be considered for inclusion in our proxy statement and proxy relating to such meeting.

SEC rules establish a different deadline for submission of stockholder proposals that are not intended to be included in our proxy statement with respect to discretionary voting. The deadline for these proposals for the year 20162022 Annual meeting is February 2, 2016.December 16, 2021. If a stockholder gives notice of such a proposal after this deadline, our proxy holders will be allowed to use their discretionary authority to vote for or against the stockholder proposal when and if the proposal is raised at our 20162022 Annual Meeting of Shareholders.

By Order of the Board of Directors

PETER A. CLEMENS,

Secretary

July 14, 2015

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APPENDIXAppendix A
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
OF ACURA PHARMACEUTICALS, INC.

[BOLDED AND BRACKETED ITEMS IN THE AMENDMENT, INCLUDING EXCHANGE RATIO, NUMBER OF ISSUED AND OUTSTANDING SHARES AND NUMBER OF UNISSUED SHARES, BEFORE AND AFTER THE REVERSE SPLIT AND INCREASE IN NUMBER OF UNISSUED SHARES AFTER THE REVERSE SPLIT WILL BE INSERTED AT TIME OF FILING]

CERTIFICATE OF AMENDMENT OF

CERTIFICATE OF INCORPORATION

OF

ACURA PHARMACEUTICALS, INC.

Under Section 805(NOT EFFECTIVE UNTIL APPROVED BY STOCKHOLDERS)

The Plan provides for grants of restricted stock units to employees, consultants and Non-Employee Directors of the Business Corporation LawCompany and its Subsidiaries.

WE, THE UNDERSIGNED, Robert B. Jones

The purpose of the Plan is to attract, motivate and Peter A. Clemens,retain experienced and knowledgeable employees and consultants by offering additional stock based compensation and incentives to defer and potentially enhance their compensation and to encourage stock ownership in the Company, and to attract and retain qualified directors.

This Plan is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended, in order to avoid compensation deferred under the Plan which is subject to Code Section 409A from being respectivelyincluded in the Presidentgross income of Participants under Code Section 409A and the SecretaryPlan shall be interpreted consistent with such intent.

The following definitions shall be applicable throughout the Plan:

“Board” means the Board of Acura Pharmaceuticals, Inc., hereby certify:

1. The nameDirectors of the CorporationCompany.

“Cash Settled Restricted Stock Units” is defined in Section 7(d).

“Cause” means, with respect to termination of a Participant's employment, or termination of a Participant’s service as a Non-Employee Director, or termination of a Participant’s consulting relationship with the Company or a Subsidiary, the occurrence of any one or more of the following:

(a)            in the case of a (A) Non-Employee Director, (B) a non-employee consultant, or (C) an employee where there is no employment, change in control or similar agreement in effect between the Participant and the Company or a Subsidiary at the time of the grant of the Restricted Stock Unit award, or where there is such an agreement but the agreement does not define “cause” (or similar words), the finding by the Board or the Committee, in the exercise of good faith and reasonable judgment, that: (1) except in the case of a Non-Employee Director, Participant breached his or her employment or service contract or any other agreement (whether verbal or written) with the Company or a Subsidiary, (2) Participant has been engaged in disloyalty to the Company or a Subsidiary, including, without limitation, fraud, embezzlement, theft, or proven dishonesty in the course of his or her employment or service with the Company or a Subsidiary; (3) Participant has been convicted of a felony; (4) Participant has committed gross negligence or willful misconduct in the course of his or her employment or service with the Company or a Subsidiary, or (5) Participant has disclosed trade secrets or confidential information of the Company, a Subsidiary or a third party to persons not entitled to receive such information.

(b)            in the case of an employee where there is a written employment, change in control or similar agreement in effect between the Participant and the Company or a Subsidiary at the time of the grant of the Restricted Stock Unit award that defines “cause” (or similar words), the termination of an employment arrangement that is or would be deemed to be for “cause” (or similar words) as defined in such agreement.

“Change in Control - Plan” means in one or a series of related transactions any of the following: (a) the acquisition (other than solely from the Company) by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) other than the Company or any Subsidiary of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than sixty-six and 2/3 percent (66.66%) of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Voting Securities”); (b) a reorganization, merger, consolidation, share exchange, recapitalization, business combination or similar combination involving the Company or its capital stock (a “Business Combination”), other than a Business Combination in which more than thirty-three and 1/3 percent (33.33%) of the combined voting power of the outstanding voting securities of the surviving or resulting entity immediately following the Business Combination is held by the persons who, immediately prior to the Business Combination, were the holders of the Voting Securities; (c) a sale or other transfer (other than license) of all or substantially all of the Company’s assets (measured by the value or earning power of the assets), including, without limitation, the sale by the Company of its rights under license agreements or similar agreements relating to its technology (including the sale of royalty payment amounts payable to the Company or its shareholders under such agreements); (d) the license or similar agreement by the Company to a third party or third parties, in one or more transactions, of all rights in and to the Company’s technology and, as a result of such transactions, all or substantially all of the Company’s activities consist of monitoring such arrangements and collecting fees and payments due thereunder; or (e) a complete liquidation or dissolution of the Company.

“Change in Control – Section 409A” shall mean a Change in Control – Plan, except to the extent that (and only to the extent that) such Change in Control – Plan does not qualify as a change (a) in the ownership or effective control of the Company, or (b) in the ownership of a substantial portion of the assets of the Company, under Section 409A of the Code.

“Code” means the Internal Revenue Code of 1986, as amended.

“Committee” shall mean the Compensation Committee, if any, appointed by the Board under Section 4 hereof.

“Common Stock” or “Stock” means shares of common stock, par value $.01 per share, of the Company, including any rights attendant thereto upon issuance of the shares, together with any restrictions, limitations or conditions of and to such rights and such other stock or other securities or property into which the Stock (or such rights) may be converted or for which it is exchanged or substituted (and any credits thereon), pursuant to Section 10.

“Company” means Acura Pharmaceuticals, Inc. The Corporation was originally incorporatedand its successors.

“Disability” means

(a)            in the case of (A) a Non-Employee-Director or (B) an employee where there is no employment, change in control or similar agreement in effect between the Participant and the Company or a Subsidiary at the time of the grant of the Restricted Stock Unit award, or where there is such an agreement but the agreement does not define “disability” (or similar words), then “Disability” means the Participant: (1) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; (2) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees and/or directors of the Company or a Subsidiary; (3) is determined to be totally disabled by the Social Security Administration; or (4) any other permitted definition of disability under Section 409A of the Code and the regulations promulgated thereunder, and

(b)            in the case where there is a written employment, change in control or similar agreement in effect between the Participant and the Company or a Subsidiary at the time of the grant of the Restricted Stock Unit award that defines “disability” (or similar words), the termination of an employment arrangement that is or would be deemed to be for “disability” (or similar words) as defined in such agreement.

“Effective Date” shall be the date this Plan is approved by the shareholders of the Company.

“Eligible Participant” means a Non-Employee Director serving as a director on the date of grant, a consultant providing services to the Company or a Subsidiary on the date of grant, or an employee employed by the Company or a Subsidiary on the date of grant.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Fair Market Value” means, as of any date, the fair market value of Common Stock determined as follows:

“Non-Employee Director” has the definition set forth in Rule 16b-3(b)(3)(i) of the Exchange Act.

“Participant” means each Company or Subsidiary employee, consultant or Non-Employee Director who has been granted a Restricted Stock Unit award.

“Plan” means the Acura Pharmaceuticals, Inc. 2021 Restricted Stock Unit Award Plan, as set forth herein and as it may be amended from time to time.

“Restricted Stock Unit Award Agreement” means an agreement described in Section 5(a) and Section 9(j).

“Restricted Stock Units” or “RSUs” means an award of Stock Units credited pursuant to Section 5, which Stock Units are subject to vesting and other restrictions as set forth herein.

“Securities Act” means the Securities Act of 1933, as amended.

“Stock Unit” means a non-voting unit of measurement that is (a) deemed for bookkeeping purposes to be equivalent to one outstanding share of Stock solely for purposes of determining benefits under the namePlan, (b) credited to a Participant's Stock Unit Account pursuant to the grant of Halsey Drug Co. Inc.Restricted Stock Units under Section 5; and (c) payable solely in a share of Stock, on a one-for-one basis, except in the case of Cash Settled Restricted Stock Units which are settled in cash (as provided herein).

2. The Certificate of Incorporation was filed

“Stock Unit Account” means the bookkeeping account maintained by the DepartmentCompany for each Eligible Participant that is credited with Stock Units in accordance with the Plan.

“Subsidiary” means any entity of Statewhich a majority of the outstanding voting stock or voting power is beneficially owned directly or indirectly by the Company.

The Effective Date shall be the date on April 10, 1935which the Company’s shareholders approve this Plan. RSUs may be distributed under the Plan until December 31, 2031. The Plan shall continue in effect until all matters relating to Stock Units and hasthe administration of the Plan have been amended at various timescompleted and all payments of such compensation have been made.

The Company’s Board of Directors or the Compensation Committee of the Board, as designated by actionthe Board, shall administer the Plan. If appointed by the Board, the Committee shall be constituted so as to permit the Plan to continue to comply with Rule 16b-3, as currently in effect or as hereafter modified or amended. The Committee appointed by the Board of Directors shall consist of not less than two members of the Board of Directors, and shareholdersto administer the Plan on behalf of the Corporation.Board of Directors, subject to such terms and conditions as the Board of Directors may prescribe. Once appointed, the Committee shall continue to serve until otherwise directed by the Board of Directors. From time to time, the Board of Directors may increase the size of the Committee and appoint additional members thereof, remove members (with or without cause), and appoint new members in substitution therefor, fill vacancies however caused, or remove all members of the Committee and thereafter directly administer the Plan; provided, however, that at no time shall a Committee of less than two members administer the Plan. Notwithstanding anything to the contrary contained herein, no member of the Committee shall serve as such under this Plan unless such person is a “Non-Employee Director” within the meaning of Rule 16b-3(b)(3)(i) of the Exchange Act.

3.

A majority of the entire Committee shall constitute a quorum, and the action of the majority of the Committee members present at any meeting at which a quorum is present shall be the action of the Committee. The purposeCommittee shall have all of the powers and duties set forth herein, as well as such additional powers and duties as the Board of Directors may delegate to it; provided, however, that the Board of Directors expressly retains the right in its sole discretion (i) to elect and to replace the members of the Committee, and (ii) to terminate or amend this Plan in any manner consistent with applicable law.

The Committee shall have the authority, subject to the provisions of this amendmentPlan, to Article THIRDestablish, adopt and revise such rules, regulations and forms and agreements and to interpret the Plan and make all such determinations relating to the Plan as it may deem necessary or advisable. The Committee shall also have the authority, subject to the provisions of the CertificatePlan, to delegate ministerial, day-to-day administrative details and non-discretionary duties and functions to officers and employees of Incorporation, relatingthe Company. The Committee's interpretation of the Plan or any awards granted pursuant hereto and all decisions and determinations by the Committee with respect to the Plan shall be final, binding, and conclusive on all parties. Notwithstanding any provisions of this Plan or any Restricted Stock Unit Award Agreement to the contrary, all discretionary interpretations, decisions or determinations of the Board or the Committee with respect to the Plan and all RSUs awarded under the Plan shall be made in accordance with the express terms of the Plan and applicable Restricted Stock Unit Award Agreement in the exercise of good faith and reasonable judgment.

Notwithstanding any contrary provision of this Section 4, the Board shall administer the Plan, and the Committee shall exercise no discretion with respect to any grants to Non-Employee Directors. In the administration of the Plan with respect to Non-Employee Directors, the Board shall have all of the authority and discretion otherwise granted to the Committee with respect to the administration of the Plan.

(a)            Restricted Stock Units may be granted at any time and from time to time as determined by the Board or the Committee. Each Restricted Stock Units grant will be evidenced by a Restricted Stock Award Agreement that will specify such other terms and conditions as Board or the Committee, in its sole discretion, will determine, including all other applicable terms, conditions and restrictions related to the grant, vesting and the number of Restricted Stock Units not otherwise set forth in this Plan.

(b)           Vesting Period. The Board or the Committee shall determine the vesting of a Restricted Stock Unit award granted under Section 5(a), and shall set forth such vesting in the Restricted Stock Unit Award Agreement.

(c)           Acceleration of Vesting. Notwithstanding Section 5(b), unless expressly provided otherwise in the Restricted Stock Unit Award Agreement, each Restricted Stock Unit award shall become fully and immediately vested and nonforfeitable to the Participant upon the occurrence of any of the following events:

(1)            a Participant's service as an employee of the Company is terminated by the Company without Cause or due to Participant’s death or Participant’s Disability, or in the case of a Non-Employee Director, Participant’s death or Disability or Participant is not renominated as a director (other than for “Cause” or refusal to stand for re-election) or is not elected by the Company’s stockholders, if nominated; or

(2)            a Change in Control - Plan.

Unless expressly provided for in a Participant’s Restricted Stock Unit Award Agreement, a Participant shall have no rights as a stockholder of the Company, no dividend rights and no voting rights, with respect to the RSUs and any shares of Common Stock underlying or issuable in respect of such RSUs until such shares of Common Stock are actually issued to and held of record by the Participant. No adjustments will be made for dividends or other rights of a holder for which the record date is prior to the date of issuance of the stock certificate for such RSU.

(a)            Time and Manner of Distribution. Payment of vested Stock Units in a Participant's Stock Unit Account in accordance with Section 7(b) shall be made on the earlier of (i) a Change in Control – Section 409A, or (ii) the distribution dates specified in Section 7(b) and 7(c) as applicable, subject to Section 7(e). In the event of a payment pursuant to a Change in Control – Section 409A under Section 7(a)(i), such payment shall be made in a lump sum payment as soon as administratively practicable following consummation of said Change in Control – Section 409A, subject to Section 7(e). The date of the Change in Control – Section 409A is the scheduled distribution date for purposes of the Plan. In the event of a payment under Section 7(a)(ii), such payment shall be made as specified in Section 7(b) and 7(c) as applicable; provided, however, that in the event of a Change in Control – Section 409A all of Participant’s undistributed Stock Units as of consummation of said Change in Control – Section 409A shall be paid to Participant in a lump sum as soon as administratively practicable, regardless of the payment dates set forth in Section 7(b) or 7(c), subject to Section 7(e).

(b)            Standard Payments. Subject to Sections 7(a) and 7(c) hereof, unless a Restricted Stock Unit Award Agreement otherwise provides, with respect to any Restricted Stock Units granted to a Participant that become vested and non-forfeitable pursuant to the terms hereof and the applicable Restricted Stock Unit Award Agreement, such Restricted Stock Units shall be paid on the first business day of the year after the year in which they become vested and non-forfeitable (which is the scheduled distribution date for purposes of the Plan), or as soon thereafter as administratively practicable, subject to Section 7(e).

(c)            Deferral By Company. Subject to Section 7(a), at the discretion of the Committee, a Restricted Stock Unit Award for a Participant may provide for a date or dates of distribution occurring after the vesting date, and in such case payment shall be made on such distribution dates as specified in the applicable Restricted Stock Unit Award Agreement (which are the scheduled distribution dates for purposes of the Plan), subject to Section 7(e).

(d)            Cash Settled Restricted Stock Units. Unless otherwise provided in a Restricted Stock Unit Award Agreement, and subject to the restrictions provided in Section 9(n) a Non-Employee Director may elect, at any time prior to payment of Restricted Stock Units granted in a Restricted Stock Units Award Agreement that up to 40% of such Restricted Stock Units be settled in cash (“Cash Settled Restricted Stock Units”).

(e)            Payment of Units. Upon the occurrence of the distribution events set forth in Section 7(a), 7(b), and 7(c), other than with respect to Cash Settled Restricted Stock Units, the Company shall deliver a number of shares of Stock equal to the number of vested Stock Units to which the Participant is then entitled under the terms of the Plan and the Restricted Stock Unit Award Agreement upon receipt from Participant of the par value of such shares of Stock, which amount must be received or withheld within thirty days of the scheduled distribution date, set forth in Section 7(a), 7(b) or 7(c), as applicable, and in the Participant’s tax year in which the scheduled distribution date falls. In lieu of requiring cash payment of such par value, the Company may, it its discretion or shall at the Participant’s election, subject to Section 9(n), accept payment of any such par value by withholding from Stock payments a number of whole shares of Stock whose value is equal to the amount of authorized capital stocksuch par value. Valuation for these purposes shall be the Fair Market Value on the scheduled distribution date referenced in Sections 7(a), 7(b) and 7(c). Upon the occurrence of the Corporation, is amended so that (i) every[2, 3, 4, 5,distribution events set forth in Section 7(a), 7(b) or 7(c) with respect to Cash Settled Restricted Stock Units, the Company shall deliver to the Participant cash equal to (A) Fair Market Value of the Common Stock on the scheduled distribution date less one cent par value multiplied by (B) the number of such Cash Settled Restricted Stock Units as calculated pursuant to the Participant’s election form.

(f)            Forfeiture of Unvested Units. Except as provided in Section 5(c) of the Plan or in a Participant’s Restricted Stock Unit Award Agreement, to the extent any portion of a Participant's RSUs have not become vested upon the date the Participant's services as an employee, consultant or Non-Employee Director terminate, such RSUs shall be forfeited and the unvested portion of the RSU award shall automatically terminate without any other action by the Participant or the Participant’s Beneficiary as the case may be and without payment of consideration by the Company.

(a)            Share Limits. Subject to the provisions of Section 10 as applicable]of the Plan, the maximum aggregate number of shares of Common Stock which may be issued under the Corporation’s common stock,Plan is 2,500,000 (the “Pool”) of Common Stock. Such shares may be authorized, but unissued, or reacquired Common Stock. Shares issued in payment of any Restricted Stock Units granted under the Plan shall be counted against the Pool as one share for every one share actually issued in payment of such Restricted Stock Units. Issuance of cash for Cash Settled Restricted Stock Units shall diminish the Pool as if a share had been exchanged for each RSU settled in cash.

(b)            Shares withheld by the Company as payment of par value $0.01 per shareor applicable withholding taxes in connection with any award under the Plan, shall not be available for subsequent awards under the Plan. Shares that are subject to or underlie awards which expire or for any reason are cancelled or terminated, are forfeited, fail to vest, or for any other reason are not paid or delivered under the Plan shall again be available for subsequent awards under the Plan.

(a)            Government and Other Regulations. The obligation of the Company to credit Stock Units, issue or deliver Stock or otherwise make payments under the Plan are subject to compliance with all applicable laws, rules, and regulations (including, without limitation, federal and state securities laws), and to such approvals by any listing, agency, or regulatory or governmental authorities as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Any securities issued or delivered under the Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company, as the Company may deem necessary or advisable to assure compliance with all applicable legal requirements.

(b)            Tax and Withholding. The Company has the right to require the person receiving Stock to pay to the Company the amount of any federal, state and local taxes which the Company is required to withhold upon the delivery of Stock. In lieu of requiring cash payment of any such taxes, the Company shall at its election or at the Participant’s election, instead withhold from said Participant’s Stock payments a number of shares of Stock whose value is equal to the amount of such taxes. Valuation for this purpose shall be the Fair Market Value on the scheduled distribution date.

(c)            Beneficiaries.

(1)            Beneficiary Designation. Each Eligible Participant may designate in writing the Beneficiary or Beneficiaries (as defined in Section 9(c)(2)) whom such Eligible Participant desires to receive any amounts payable under the Plan after his or her death. Beneficiary designations shall be effective on the date such written designation is received by the Corporate Secretary. An Eligible Participant may from time to time change his or her designated Beneficiary or Beneficiaries without the consent of such Beneficiary or Beneficiaries by filing a new designation in writing with the Corporate Secretary. However, if a married Eligible Participant wishes to designate a person other than his or her spouse as Beneficiary, such designation shall be consented to in writing by the spouse. The Eligible Participant may change any election designating a Beneficiary or Beneficiaries without any requirement of further spousal consent if the spouse's consent so provides. Notwithstanding the foregoing, spousal consent shall not be necessary if it is established that the required consent cannot be obtained because the spouse cannot be located or because of other circumstances prescribed by the Board or the Committee. The Company and the Board or the Committee may rely on the Eligible Participant's designation of a Beneficiary or Beneficiaries last filed in accordance with the terms of the Plan.

(2)            Definition of Beneficiary. An Eligible Participant's “Beneficiary” or “Beneficiaries” shall be the person, persons, trust or trusts so designated by the Eligible Participant or, in the absence of such designation, entitled by will or the laws of descent and distribution to receive the Eligible Participant's benefits under the Plan in the event of the Eligible Participant's death, and shall mean the Eligible Participant's executor or administrator if no other Beneficiary is identified and able to act under the circumstances.

(d)            Non-transferability. Except as provided in Section 9(c) and in this Section 9(d), a Participant’s rights and interests under the Plan in respect of RSUs, including Stock or cash deliverable under or in respect thereof, may not be assigned, pledged, or transferred. The Committee may, in its discretion, authorize all or a portion of the RSUs to be granted to a Participant to be on terms which permit transfer by such Participant to (i) the spouse, children or grandchildren of the Participant (the “Old Common Stock”“Immediate Family Members”), issued(ii) a trust or trusts for the exclusive benefit of such Immediate Family Members, or (iii) a partnership in which such Immediate Family Members are the only partners, provided that (x) there may be no consideration for any such transfer, (y) subsequent transfers of transferred of RSUs shall be prohibited except those made by will or by the laws of descent or distribution, and outstanding(z) such transfer is approved in advance by the Committee. Following transfer, any such RSUs shall continue to be subject to the same terms and conditions as were applicable immediately prior to this Certificatetransfer, provided that for purposes of Amendmentdetermining the party entitled to exercise under the RSU, the term “Participant” shall be deemed to refer to the Certificatetransferee. The termination of Incorporationservice as an employee, non-employee director or consultant shall continue to be applied with respect to the original Participant, following which the RSUs shall be exchangeable for Stock by the transferee only to the extent, and for the periods specified in Section 7 of the Corporation becoming effective pursuantPlan and in the Restricted Stock Unit Award Agreement.

(e)            Expenses. All expenses incurred by the Company associated with adoption and administration of this Plan, including all legal expenses related to drafting this Plan and related documents, shall be borne solely by the Business Corporation LawCompany.

(f)            Titles and Headings. The titles and headings of the sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.

(g)            Governing Law. The validity of the Plan or any of its provisions and any agreements entered into under the Plan shall be construed, administered and governed in all respects under the laws of the State of New York (the “Effective Time”),York. If any provisions of the Plan shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall continue to be fully effective.

(h)            Limitation on Participants’ Rights; Unfunded Plan. Participation in the Plan shall not give any person the right to continued employment or any rights or interests other than as expressly provided herein. No Participant shall have any right to any payment or benefit hereunder except to the extent provided herein. The Plan shall create only a contractual obligation on the part of the Company as to such amounts and shall not be construed as creating a trust or fiduciary relationship between the Company, the Board, the Committee, and any Participant or other person. Participants and their Beneficiaries shall have no legal or equitable rights, claims, or interest in any specific property or assets of the Company. No assets of the Company shall be held under any trust, or held in any way as collateral security for the fulfilling of the obligations of the Company under this Plan. Any and all of the Company's assets shall be, and remain, the general unpledged, unrestricted assets of the Company. The Company's obligation under the Plan shall be merely that of an unfunded and unsecured promise of the Company to pay benefits in the future, and the rights of the Participants and Beneficiaries shall be no greater than those of unsecured general creditors.

(i)            Rights with Respect to Stock Units. A Participant's Stock Unit Account shall be a memorandum account on the books of the Company. The Stock Units credited to such account shall be used solely as a device to determine the number of shares of Stock (or cash in the case of Cash Settled Restricted Stock Units) to be eventually distributed to the Participant, subject to applicable vesting requirements, in accordance with the Plan. The Stock Units shall not be treated as property or as a trust fund of any kind. No Participant shall be entitled to any voting dividend, or other stockholder rights with respect to Stock Units credited under the Plan.

(j)            Restricted Stock Unit Award Agreements. Each Restricted Stock Unit award granted to an Eligible Participant under the Plan shall be evidenced by a writing approved by the Board or the Committee and will contain the terms and conditions consistent with the Plan as approved by the Board or the Committee relating to the RSUs. This Plan and each Restricted Stock Unit Award Agreement granted to an Eligible Participant under the Plan shall be binding upon, and inure to the benefit of, any successor or successors of the Company, except to the extent that the Board or the Committee and each Participant having executed a Restricted Stock Unit Award Agreement determine otherwise as evidenced by a writing signed by both parties.

(k)            Plan Construction. By its approval of the Plan, the Board intends that the transactions contemplated by the Plan satisfy and be interpreted in a manner that satisfies the applicable requirements of Rule 16b-3 promulgated under the Exchange Act so that, among other transactions, the crediting of Stock Units and payment in Stock will be automatically reclassifiedentitled to the benefits of Rule 16b-3 or other exemptive rules under the Exchange Act.

(l)            Notices. Any notice to be given under the terms of this Plan shall be in writing and addressed to the Company at its principal office, to the attention of the Corporate Secretary, and to the Participant at his or her last address of record, or at such other address as and converted into one shareeither party may designate in writing to the other for the purposes of common stock,notices in respect of RSUs.

(m)            In the event the Board determines that it is not necessary to collect par value $0.01 per share. Asin exchange for issuances of Stock hereunder in exchange for RSUs then the Board may eliminate (i) the par value payment required in connection with a distribution of Stock, and (ii) the deduction of par value in calculating amounts to be paid under Cash Settled Restricted Stock Units.

(n)             In the event the Board determines that under the terms of any preferred stock that may be issued by the Company or the terms of any credit agreement, loan agreement or financing arrangement (collectively, “Loan”), whether existing on the Effective Time there are [OutstandingDate or entered into or amended thereafter, that (i) withholding of RSUs or shares prior to reverse split] sharesof stock exchangeable for RSUs for payment of taxes or par value or (ii) settlement of Cash Settled Restricted Stock Units, would violate a covenant, representation, warranty or other agreement contained in such Loan (including, without limitation, limits on repurchase or redemption of Common Stock issued and outstanding, which willor derivatives thereof), then in the case of subparagraph (i) the Company shall not be reclassified into [Outstanding shares priorrequired to reverse split divided by 2, 3, 4, 5 withhold such RSUs and/or 10, as applicable] shares of Common Stock, subject to elimination of fractional shares.

4. Prior to the Effective Time, there were[Authorized, but unissued shares prior to reverse split], par value $.01, unissued shares of Common Stock and after the Effective Time there willParticipant shall make such payment in cash, and in the case of subparagraph (ii), such Cash Settled Restricted Stock Units shall be[Subtract settled in Common Stock.

Upon or in contemplation of any reclassification, recapitalization, stock split (including a stock split in the form of a stock dividend) or reverse stock split; any merger, combination, consolidation or other reorganization; any split-up; spin-off, or similar extraordinary dividend distribution in respect of the Stock (whether in the form of securities or property); any exchange of Stock or other securities of the Company, or any similar, unusual or extraordinary corporate transaction in respect of the Stock; or a sale of substantially all the assets of the Company as an entirety; then the Board shall, in such manner, to such extent (if any) and at such time as it deems appropriate and equitable in the circumstances in the Board’s exercise of good faith and reasonable judgment, proportionately adjust any or all of (a) the number of shares to be outstanding after reverse split from 100,00,000] shares of unissued Common Stock, par value $.01. The unissued shares of Common Stock are not being reclassified or converted. As a result, the number of unissued shares of Common Stock will increase by [Subtract unissued shares at time of Amendment from new number of unissued shares after reverse split], subject to elimination of fractional shares.

5. Upon this Certificate of Amendment to the Certificate of Incorporation of the Corporation becoming effective pursuant to the Business Corporation Law of the State of New York (the “Effective Time”), every[2, 3, 4, 5, 10, as applicable] shares of the Corporation’s common stock, par value $0.01 per share (the “Old Common Stock”), issued and outstanding immediately prior to the Effective Time, will be automatically reclassified as and converted into one share of common stock, par value $0.01 per share, of the Corporation (the “New Common Stock”). Notwithstanding the immediately preceding sentence, no fractional shares of New Common Stock shall be issued to the holders of record of Old Common Stock in connection with the foregoing reclassificationtype of shares of Old Common Stock. In lieu thereof,Stock (or other securities or property) that thereafter may be made the Company shall pay cash forsubject of Stock Units and Stock Unit Accounts (including the specific maximum and numbers of shares set forth elsewhere in the Plan), (b) the number, amount and type of shares of Stock (or other securities or property) payable in respect of Stock Units, and (c) and the number and type of Stock Units (both credited and vested) under the Plan.

The Board (but only upon shareholder approval if such fractional interests as soon as practicable afterapproval is required by (i) the Effective Time on the basisrules of the closing price of one share ofexchange on which the Company’s common stock as reported by the Nasdaq Capital Market, for the trading day immediately preceding the effective date of the reclassification.

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6. Each stock certificate that, immediately prior to the Effective Time, represented shares of Old Common Stock shall, from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent that number of whole shares ofis listed, (ii) under New Common Stock into which the shares of Old Common Stock represented by such certificateYork law or (iii) any other applicable law or regulation) shall have been reclassified (as well as the right to receive cashamend the Plan (including outstanding awards) in lieu ofwhole or in part from time to time or may at any fractional shares of New Common Stock as set forth above),time suspend or terminate the Plan; provided, however, that each holderno amendment or termination shall cancel or otherwise adversely affect in any way, without his or her written consent, any Participant's rights with respect to Stock Units credited to his or her Stock Unit Account and no amendment or termination shall accelerate payment of record of a certificate that represented shares of Old Common Stock shall receive, upon surrender of such certificate, a new certificate representing the number of whole shares of New Common Stock intoany benefit which the shares of Old Common Stock represented by such certificate shall have been reclassified, as well as any cash in lieu of fractional shares of New Common Stock to which such holder may be entitled pursuantis subject to the immediately preceding paragraph.

7. The reclassification will not affect the authorized capital stockrules of Section 409A of the corporation. To effectCode in a manner that would violate the distribution rules of Section 409A of the Code. Notwithstanding the foregoing, Article THIRD isParticipant consent shall not be required to the extent that the Board determines that applicable law requires amendment or termination of the Plan to preserve the intended tax benefits to the Participants and the Company hereunder. Any amendments authorized hereby amended by restating the first two sentences thereof as follows:

THIRD:  The Corporation is authorized to issue one class of stock, to be designated, “Common Stock”. The total number of shares which the Corporation is authorized to issue is 100,000,000 all of which shares shall be Common Stock, $0.01 par value (the “Common”).stated in an instrument in writing, and all Participants (subject to any applicable consent requirement above) shall be bound thereby upon receipt of notice thereof. Changes contemplated by Section 10 shall not be deemed to constitute changes or amendments for purposes of this Section 11.

8. The foregoing amendments to the Certificate of Incorporation were authorized by the unanimous written consent of the Board of Directors followed by an affirmative vote of the holders of a majority of the outstanding shares of common stock of the Corporation entitled to vote thereon.

BROADRIDGE CORPORATE ISSUER SOLUTIONS C/O ACURA PHARMACEUTICALS, INC. P.O. BOX 1342 BRENTWOOD, NY 11717 VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D48196-P55968 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY ACURA PHARMACEUTICALS, INC. The Board of Directors recommends you vote FOR the following: For Withhold For All AllAllExcept To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. 1. Election of Directors Nominees: Immanuel Thangaraj Bruce F. Wesson Robert B. Jones !!! William G. Skelly George K. Ross The Board of Directors recommends you vote FOR the following proposals: For Against Abstain Non-binding advisory vote to approve executive compensation. Approval of the Acura Pharmaceuticals, Inc. 2021 Restricted Stock Unit Award Plan. 4.Ratification of the appointment of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021. !!! !!! !!! NOTE: IN THEIR DISCRETION PROXIES ARE AUTHORIZED TO VOTE AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY POSTPONEMENT OR ADJOURNMENT THEREOF. THE PROXY WILL BE VOTED AS SPECIFIED, OR IF NO CHOICE IS SPECIFIED, FOR THE ELECTION OF THE NOMINEES, AND FOR PROPOSALS 2, 3 AND 4. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com. D48197-P55968 ACURA PHARMACEUTICALS, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned appoints Robert B. Jones and Peter Clemens, and each of them, as proxies, each with the power to appoint his substitute, and authorizes each of them to represent and to vote, as designated on the reverse hereof, the number of shares of common stock of Acura Pharmaceuticals, Inc., that the undersigned would be entitled to vote, and with all the power the undersigned would possess, if personally present, at the 2021 Annual Meeting of Shareholders of Acura Pharmaceuticals, Inc. to be held at Sills Cummis & Gross, One Riverfront Plaza, 1037 Raymond Blvd., Newark, NJ 07102 on May 25, 2021 at 9:30 AM ET or at any adjournment thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. Continued and to be signed on reverse side