SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): September 8, 2006
CEL-SCI CORPORATION
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(Exact name of Registrant as specified in its charter)
Colorado 0-11503 84-0916344
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(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
8229 Boone Blvd. #802
Vienna, VA 22182
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(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code: (703) 506-9460
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N/A
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(Former name or former address if changed since last report)
Item 1.01 Entry Into a Material Definitive Agreement
On September 8, 2006 CEL-SCI agreed to extend its employment agreement
with Geert R. Kersten, CEL-SCI's Chief Executive Officer, to September 8, 2011.
During the term of the employment agreement CEL-SCI will pay Mr. Kersten an
annual salary of $370,585. In the event there is a change in the control of
CEL-SCI, the agreement allows Mr. Kersten to resign from his position at CEL-SCI
and receive a lump-sum payment from CEL-SCI equal to 24 months salary. For
purposes of the employment agreement a change in the control of CEL-SCI means:
(1) the merger of CEL-SCI with another entity if after such merger the
shareholders of CEL-SCI do not own at least 50% of voting capital stock of the
surviving corporation; (2) the sale of substantially all of the assets of
CEL-SCI; (3) the acquisition by any person of more than 50% of CEL-SCI's common
stock; or (4) a change in a majority of CEL-SCI's directors which has not been
approved by the incumbent directors.
The employment agreement will also terminate upon the death of Mr.
Kersten, Mr. Kersten's physical or mental disability, willful misconduct, an act
of fraud against CEL-SCI, or a breach of the employment agreement by Mr.
Kersten. If the employment agreement is terminated for any of these reasons Mr.
Kersten, or his legal representatives, as the case may be, will be paid the
salary provided by the employment agreement through the date of termination.
On September 8, 2006 CEL-SCI agreed to extend its employment agreement with
Maximilian de Clara, CEL-SCI's President, to April 30, 2010. During the term of
the employment agreement, CEL-SCI will pay Mr. de Clara an annual salary of
$363,000. The employment agreement, as amended, also provided that on September
8, 2006, March 8, 2007, September 8, 2007, March 8, 2008, September 8, 2008 and
March 8, 2009, each date being a "Payment Date", CEL-SCI will issue Mr. de Clara
shares of its common stock equal in number to the amount determined by dividing
$200,000 by the average closing price of CEL-SCI's common stock for the twenty
trading days preceding the Payment Date.
Should Mr. de Clara's employment with CEL-SCI end for any reason, other
than Mr. de Clara taking an executive position at a competing biopharmaceutical
company, the date his employment terminates will be considered a Final Payment
Date and within 10 days of the Final Payment Date CEL-SCI will issue Mr. de
Clara shares of its common stock equal in number to the amount determined by
dividing:
(i) $200,000 multiplied by the number of Payment Dates listed above
which are subsequent to the Final Payment Date;
(ii) by the average closing price of CEL-SCI's common stock for the
twenty trading days preceding the Final Payment Date.
The shares to be issued to Mr. de Clara will be issued pursuant to
CEL-SCI's Stock Bonus Plan. Notwithstanding the foregoing, Mr. de Clara has
agreed that he may not sell any shares he receives pursuant to the amended
employment agreement in the public market for a period of three years after the
date the shares were issued.
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In the event that there is a material reduction in Mr. de Clara's
authority, duties or activities, or in the event there is a change in the
control of CEL-SCI, then the agreement allows Mr. de Clara to resign from his
position at CEL-SCI and receive a lump-sum payment from CEL-SCI equal to 18
months salary. For purposes of the employment agreement, a change in the control
of CEL-SCI means the sale of more than 50% of the outstanding shares of
CEL-SCI's common stock, or a change in a majority of CEL-SCI's directors.
The employment agreement with Mr. de Clara will also terminate upon the
death of Mr. de Clara, Mr. de Clara's physical or mental disability, the
conviction of Mr. de Clara for any crime involving fraud, moral turpitude, or
CEL-SCI's property, or a breach of the employment agreement by Mr. de Clara. If
the employment agreement is terminated for any of these reasons, Mr. de Clara,
or his legal representatives, as the case may be, will be paid the salary and
shares of common stock provided by the employment agreement through the date of
termination. Notwithstanding the above, Mr. de Clara will not be entitled to any
additional shares of CEL-SCI's common stock in the event Mr. de Clara's
employment with CEL-SCI ends due to Mr. de Clara taking an executive position at
a competing biopharmaceutical company.
The amendment to Mr. de Clara's and Mr. Kersten's employment agreements
were approved by CEL-SCI's Compensation Committee.
Item 9.01 Financial Statements and Exhibits
Exhibit Number Description
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10(d) Amendment to Employment Agreement with Maximilian
de Clara
10(e) Amendment to Employment Agreement with Geert R. Kersten
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: September 8, 2006
CEL-SCI CORPORATION
By: /s/ Geert R. Kersten
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Geert R. Kersten, Chief Executive Officer
CEL-SCI CORPORATION
FORM 8-K
EXHIBITS