Blueprint
 
 

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
 
SCHEDULE 14A INFORMATION
 
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
 
Filed by the Registrant   ☒
Filed by a Party other than the Registrant   ☐
 
Check the appropriate box:
 
☐  Preliminary Proxy Statement
☐  Confidential, For Use of the Commission Only (As Permitted by Rule 14a-6(e)(2))
☒  Definitive Proxy Statement
☐  Definitive Additional Materials
☐  Soliciting Material under Rule 14a-12
 
CEL-SCI CORPORATION
(Name of Registrant as Specified In Its Charter)
 
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
 
☒  No fee required
 
☐  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
(1)  Title of each class of securities to which transaction applies:
(2)  Aggregate number of securities to which transaction applies:
(3)  Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
(4)  Proposed maximum aggregate value of transaction:
(5)  Total fee paid:
 
☐  Fee paid previously with preliminary materials.
 
☐  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.
 
(1)  Amount Previously Paid:
(2)  Form, Schedule or Registration Statement No.: 
(3)  Filing Party: 
(4)  Date Filed:
 

 
 
 
 
CEL-SCI CORPORATION
8229 Boone Blvd., Suite 802
Vienna, Virginia 22l82
(703) 506-9460
 
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 20, 2019
 
To the Shareholders of CEL-SCI Corporation:
 
Notice is hereby given that the annual meeting of the shareholders of CEL-SCI Corporation (“CEL-SCI”) will be held at 4820-C Seton Drive, Baltimore, MD 21215, on May 20, 2019 at 10:30 a.m. local time, for the following purposes:
 
(1) 
to elect the directors who shall constitute CEL-SCI’s Board of Directors for the ensuing year;
 
(2) 
to approve the adoption of CEL-SCI’s 2019 Non-Qualified Stock Option Plan which provides that up to 3,000,000 shares of common stock may be issued upon the exercise of options granted pursuant to the Plan;
 
(3) 
to approve the adoption of CEL-SCI’s 2019 Stock Compensation Plan which provides that up to 500,000  shares of common stock may be issued pursuant to the Plan;
 
(4) 
to ratify the appointment of BDO USA, LLP as CEL-SCI’s independent registered public accounting firm for the fiscal year ending September 30, 2019; and
 
to transact such other business as may properly come before the meeting or any adjournments or postponements thereof.
 
March 26, 2019 is the record date for the determination of shareholders entitled to notice of and to vote at the meeting. Shareholders are entitled to one vote for each share held. As of March 26, 2019, there were 29,769,709 outstanding shares of CEL-SCI’s common stock.
 
 
CEL-SCI CORPORATION
 
 
March 26, 2019
Geert R. Kersten, Chief Executive Officer
 
The Board of Directors solicits the enclosed proxy. Your vote is important no matter how large or small your holdings. To assure your representation at the meeting, please vote promptly.
 
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be held on May 20, 2019. This Proxy Statement is available at: https://cel-sci.com/sec-filings/.
 
If you need additional copies of this Proxy Statement or the enclosed proxy card, or if you have other
questions about the proposals or how to vote your shares, you may contact our proxy solicitor:
ADVANTAGE PROXY
(877) 870-8565 (toll free) or (206) 870-8565 (collect)
Or by email at: ksmith@advantageproxy.com
 
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ATTACHED PROXY CARD,
AND SIGN, DATE AND RETURN THE PROXY CARD, OR VOTE VIA THE INTERNET
OR BY TELEPHONE
 
TO SAVE THE COST OF FURTHER SOLICITATION, PLEASE VOTE PROMPTLY

 
 
CEL-SCI CORPORATION
8229 Boone Blvd., Suite 802
Vienna, Virginia 22l82
(703) 506-9460
 

  PROXY STATEMENT

 
The accompanying proxy is solicited by CEL-SCI’s directors for voting at the annual meeting of shareholders to be held on May 20, 2019, and at any and all adjournments of such meeting. If the proxy is executed and returned, it will be voted at the meeting in accordance with any instructions, and if no specification is made, the proxy will be voted for the proposals set forth in the accompanying notice of the annual meeting of shareholders. Shareholders who execute proxies may revoke them at any time before they are voted, either by writing to CEL-SCI at the address shown above or in person at the time of the meeting. Additionally, any later dated proxy will revoke a previous proxy from the same shareholder. This proxy statement was posted on the CEL-SCI’s website on or about March 26, 2019.
 
There is one class of capital stock outstanding. Provided a quorum consisting of one-third of the shares entitled to vote is present at the meeting, the affirmative vote of a majority of the shares of common stock voting in person or represented by proxy is required to elect directors. Cumulative voting in the election of directors is not permitted. The other proposals to come before the meeting will be adopted if votes cast in favor of the proposal exceed the votes cast against the proposal.
 
Shares of CEL-SCI’s common stock represented by properly executed proxies that reflect abstentions or "broker non-votes" will be counted as present for purposes of determining the presence of a quorum at the annual meeting. “Broker non-votes” represent shares held by brokerage firms in "street-name" with respect to which the broker has not received instructions from the customer or otherwise does not have discretionary voting authority. Abstentions and broker non-votes will not be counted as having voted against the proposals to be considered at the meeting.
 
Preliminary voting results will be announced at the Annual Meeting. In addition, final voting results will be published in a current report on Form 8-K that we expect to file within four business days after the Annual Meeting.
 
 
 
2
 
 
PRINCIPAL SHAREHOLDERS
 
The following table lists, as of March 26, 2019, information with respect to the persons owning beneficially 5% or more of CEL-SCI’s outstanding common stock and the number and percentage of outstanding shares owned by each director and officer of CEL-SCI and by the officers and directors as a group. Unless otherwise indicated, each owner has sole voting and investment powers over his or her shares of common stock.
 
Name and Address
Number of Shares (1)
Percent of Class
 
 
 
Geert R. Kersten
8229 Boone Blvd., Suite 802
Vienna, VA 22182
2,415,570 (2)
7.8%
 
 
 
Patricia B. Prichep
8229 Boone Blvd., Suite 802
Vienna, VA 22182
387,990
1.3%
 
 
 
Eyal Talor, Ph.D.
8229 Boone Blvd., Suite 802
Vienna, VA 22182
 
283,203
*
 
 
 
Daniel H. Zimmerman, Ph.D.
8229 Boone Blvd., Suite 802
Vienna, VA 22182
178,122
*
 
 
 
John Cipriano
8229 Boone Blvd., Suite 802
Vienna, VA 22182
210,842
*
 
 
 
Peter R. Young, Ph.D.
208 Hewitt Drive, Suite 103-143
Waco, TX 76712
83,792
*
 
 
 
Bruno Baillavoine
8229 Boone Blvd., Suite 802
Vienna, VA 22182
55,001
*
 
 
 
Robert Watson
245 N. Highland Ave. NE
Suite 230-296
Atlanta, GA 30307
30,001
*
 
 
 
All Officers and Directors
as a Group (8 persons)
3,644,521
11.46%
 
* Less than 1% of outstanding shares.
 
(1) 
Includes shares issuable prior to July 31, 2019 upon the exercise of options or warrants held by the following persons:
 
Name
 
Options or Warrants Exercisable
Prior to July 31, 2019
 
Geert R. Kersten, Esq.
  1,338,689(3)
Patricia B. Prichep
  196,230 
Eyal Talor, Ph.D.
  166,208 
Daniel Zimmerman, Ph.D.
  73,533 
John Cipriano
  114,649 
Peter R. Young, Ph.D.
  66,701 
Bruno Baillavoine
  55,001 
Robert Watson
  30,001 
 
(2) 
Amount includes shares held in trust for the benefit of Mr. Kersten's children and securities held in a separate trust, for which Mr. Kersten is a beneficiary.
 
(3) 
Amount includes shares issuable upon the exercise of warrants held by Mr. Kersten directly and in the trust.

 
3
 
 
OFFICERS AND DIRECTORS
 
Information concerning CEL-SCI’s officers and directors follows:
 
Name
Age
Position
Committees
Geert R. Kersten, Esq.
60
Director, Chief Executive Officer and Treasurer
 
Patricia B. Prichep
68
Senior Vice President of Operations and Corporate Secretary
 
Eyal Talor, Ph.D.
63
Chief Scientific Officer
 
Daniel H. Zimmerman, Ph.D.
78
Senior Vice President of Research, Cellular Immunology
 
John Cipriano
77
Senior Vice President of Regulatory Affairs
 
Peter R. Young, Ph.D. (1)
74
Director, Independent
Audit, Compensation, and Nominating
Bruno Baillavoine
65
Director, Independent
Audit, Compensation, and Nominating
Robert Watson
62
Director, Independent
Audit, Compensation, and Nominating
 
(1) 
Dr. Young is the chairman of the Audit, Compensation and Nominating committees.
 
The directors of CEL-SCI serve in such capacity until the next annual meeting of CEL-SCI's shareholders and until their successors have been duly elected and qualified. The officers of CEL-SCI serve at the discretion of CEL-SCI's directors. CEL-SCI’s officers devote substantially all of their time to CEL-SCI’s business.
 
Geert Kersten has served in his current leadership role at CEL-SCI since 1995. Mr. Kersten has been with CEL-SCI since 1987. He has been involved in the pioneering field of cancer immunotherapy for over two decades and has successfully steered CEL-SCI through many challenging cycles in the biotechnology industry. Mr. Kersten also provides CEL-SCI with significant expertise in the fields of finance and law and has a unique vision of how CEL-SCI's Multikine product could potentially change the way cancer is treated. Prior to joining CEL-SCI, Mr. Kersten worked at the law firm of Finley & Kumble and worked at Source Capital, an investment banking firm located in McLean, VA. He is a native of Germany, graduated from high school in England, and completed his studies in the US. Mr. Kersten received his Undergraduate Degree in Accounting and an M.B.A. from George Washington University and a law degree (J.D.) from American University in Washington, DC. Mr. Kersten’s experience overseeing the financing and research and development of CEL-SCI for over 25 years qualifies him to continue to serve on CEL-SCI’s board of directors. Mr. Kersten is also the inventor of a patent on the potential use of Multikine® (Leukocyte Interleukin, Injection) in managing cholesterol.  
 
Patricia B. Prichep joined CEL-SCI in 1992 and has been CEL-SCI's Senior Vice President of Operations since March 1994. Between December 1992 and March 1994, Ms. Prichep was CEL-SCI's Director of Operations. Ms. Prichep became CEL-SCI's Corporate Secretary in May 2000. She is responsible for all day-to-day operations of CEL-SCI, including human resources and is the liaison with CEL-SCI’s independent registered public accounting firm for financial reporting. From June 1990 to December 1992, Ms. Prichep was the Manager of Quality and Productivity for the NASD’s Management, Systems and Support Department and was responsible for the internal auditing and work flow analysis of operations. Between 1982 and 1990, Ms. Prichep was Vice President and Operations Manager for Source Capital, Ltd. She handled all operations and compliance for Source Capital and was licensed as a securities broker. Ms. Prichep received her B.A. from the University of Bridgeport in Connecticut.
 
 
 
4
 
 
Eyal Talor, Ph.D. joined CEL-SCI in October 1993. In October 2009, Dr. Talor was promoted to Chief Scientific Officer. Between this promotion and March of 1994 he was the Senior Vice President of Research and Manufacturing. He is a clinical immunologist with over 19 years of hands-on management of clinical research and drug development for immunotherapy application; pre-clinical to Phase III, in the biopharmaceutical industry. His expertise includes; biopharmaceutical R&D and Biologics product development, GMP (Good Manufacturing Practices) manufacture, Quality Control testing, and the design and building of GMP manufacturing and testing facilities. He served as Director of Clinical Laboratories (certified by the State of Maryland) and has experience in the design of clinical trials (Phase I – III) and GCP (Good Clinical Practices) requirements. He also has broad experience in the different aspects of biological assay development, analytical methods validation, raw material specifications, and QC (Quality Control) tests development under FDA/GMP, USP, and ICH guidelines. He has extensive experience in the preparation of documentation for IND and other regulatory submissions. His scientific area of expertise encompasses immune response assessment. He is the author of over 25 publications and has published a number of reviews on immune regulations in relation to clinical immunology. Before coming to CEL-SCI, he was Director of R&D and Clinical Development at CBL, Inc., Principal Scientist - Project Director, and Clinical Laboratory Director at SRA Technologies, Inc. Prior to that he was a full time faculty member at The Johns Hopkins University, Medical Institutions; School of Public Health. He has invented technologies which are covered by two US patents; one on Multikine’s composition of matter and method of use in cancer, and one on a platform Peptide technology (‘Adapt’) for the treatment of autoimmune diseases, asthma, allergy, and transplantation rejection. He also is responsible for numerous product and process inventions as well as a number of pending US and PCT patent applications. He received his Ph.D. in Microbiology and Immunology from the University of Ottawa, Ottawa, Ontario, Canada, and had post-doctoral training in clinical and cellular immunology at The Johns Hopkins University, Baltimore, Maryland, USA. He holds an Adjunct Associate teaching position at the Johns Hopkins University Medical Institutions.
 
Daniel H. Zimmerman, Ph.D. was CEL-SCI's Senior Vice President of Cellular Immunology between 1996 and December 2008 and again since November 2009. He joined CEL-SCI in January 1996 as the Vice President of Research, Cellular Immunology. Dr. Zimmerman founded CELL-MED, Inc. and was its president from 1987-1995. From 1973-1987, Dr. Zimmerman served in various positions at Electronucleonics, Inc. His positions included: Scientist, Senior Scientist, Technical Director and Program Manager. Dr. Zimmerman held various teaching positions at Montgomery College between 1987 and 1995. Dr. Zimmerman has invented technologies which are covered by over a dozen US patents as well as many foreign equivalent patents. He is the author of over 40 scientific publications in the area of immunology and infectious diseases. He has been awarded numerous grants from NIH and DOD. From 1969-1973, Dr. Zimmerman was a Senior Staff Fellow at NIH. For the following 25 years, he continued on at NIH as a guest worker. Dr. Zimmerman received a Ph.D. in Biochemistry in 1969, and a Masters in Zoology in 1966 from the University of Florida as well as a B.S. in Biology from Emory and Henry College in 1963.
 
John Cipriano was CEL-SCI’s Senior Vice President of Regulatory Affairs between March 2004 and December 2008 and again since October 2009. Mr. Cipriano brings to CEL-SCI over 30 years of experience with both biotech and pharmaceutical companies. In addition, he held positions at the United States Food and Drug Administration (FDA) as Deputy Director, Division of Biologics Investigational New Drugs, Office of Biologics Research and Review and was the Deputy Director, IND Branch, Division of Biologics Evaluation, Office of Biologics. Mr. Cipriano completed his B.S. in Pharmacy from the Massachusetts College of Pharmacy in Boston, Massachusetts and his M.S. in Pharmaceutical Chemistry from Purdue University in West Lafayette, Indiana.
 
Peter R. Young, Ph.D. has been a Director of CEL-SCI since August 2002. Dr. Young has been a senior executive within the pharmaceutical industry in the United States and Canada for most of his career, originally in organizations that are now part of Sanofi S.A. Over the last 20 years he has primarily held positions of Chief Executive Officer or Chief Financial Officer and has extensive experience with acquisitions and equity financing. Since November 2001, Dr. Young has been the President of Agnus Dei, LLC, which has acted as a partner in an organization managing immune system clinics which treats patients with diseases such as cancer, multiple sclerosis and hepatitis. Dr. Young was also the President and Chief Executive Officer of SRL Technology, Inc., a company involved in the development of pharmaceutical drug delivery systems. Between 1998 and 2001, Dr. Young was the Chief Financial Officer of Adams Laboratories, Inc., the developer of Mucinex®. Dr. Young received his Ph.D. in Organic Chemistry from the University of Bristol, England after obtaining his Bachelor's degree in Honors Chemistry, Mathematics and Economics. Subsequently, he qualified as a Fellow of the Chartered Institute of Management Accountants. CEL-SCI believes Dr. Young’s extensive knowledge of the life sciences industry, coupled with his business acumen and financial expertise, gives him the qualifications and skills to serve as a director, and the chair of CEL-SCI’s audit nominating and compensation committees.
 
 
 
5
 
 
Bruno Baillavoine joined CEL-SCI’s board of directors in June 2015. Since 2017 Mr. Baillavoine has been the Director, Head of Pericles Group UK the subsidiary of the Paris based leading French consulting firm, Pericles Consulting Holdings SAS. Pericles is an expert in the field of Banking, Finance, Asset Management and Insurance with over 350 institutional clients. He has also been an advisor to the Board of CSL Inc, Combatives Sports League a US Mix Martial Arts company since 2017 and was appointed to the Board in 2019. Between 2010-2016, Mr. Baillavoine was a partner of Globomass Holdings Limited, a London, England based developer of renewable energy projects from concept through final operations. From 2012-2016 Mr. Baillavoine was the Executive Chairman of Globomass Holdings. Globomass was acquired by CleanBay Inc. in 2016. Mr. Baillavoine remains a significant sharehold in CleanBay Inc. Between 1978 and 1982 he was the marketing manager of Ravenhead Ltd., a manufacturer of glass tableware, and part of United Distillers Group (later acquired by Grand Metropolitan). During this time Mr. Baillavoine became the UK Business Manager where he restored market share and profit for United Distillers. From 1982 to 1986 Mr. Baillavoine was Group Corporate Planning and Group Marketing Director for Prontaprint where he expanded the number of shops to 500 locations in four years. Mr. Baillavoine joined Grand Metropolitan Plc between 1986-1988 (now Diageo Plc), an FTSE 100 beverage, food, hotel and leisure company, as director in the Special Operations division. In this capacity, he developed plans for Grand Met’s trouble-shooting division for over 20,000 Grand Met retail outlets. From 1988-1991 he was the Managing Director of Nutri Systems (UK) Ltd., a subsidiary of the US based provider of professionally supervised weight loss programs. Between 1991 and 1995, Mr. Baillavoine was Director of BET Group plc, a multinational business support services group, and in 1992, was promoted to the Managing Director for the manufacturing businesses. The £2.3 billion turnaround of BET during his tenure is one of the most successful turnarounds of a top 100 FTSE company. Since 1995, Mr. Baillavoine has held a number of CEO positions across a wide range of industries and geographical locations. Mr. Baillavoine has European and American educations (US high school and University of Wisconsin Eau Claire 1972-1976). CEL-SCI believes Mr. Ballavoine is qualified to act as a director due to his extensive business experience and success in the turnaround and growth of global businesses.
 
Robert Watson has been a director of CEL-SCI since December 2017. Mr. Watson joined Intermedix, Inc. in July 2017 as President of its Preparedness Technology Division. Immediately prior to joining Intermedix, he was the President and Chief Growth Officer of NantHealth, Inc. (Nasdaq: NH) from January 2015 to May 2017. Prior to NantHealth, he was President and CEO of Streamline Health, Inc. (Nasdaq: STRM) from January 2011 to January 2015. Mr. Watson has over 35 years of experience in the healthcare information technology industry as a CEO, board member and advisor to multiple healthcare information technology companies. He has participated in over 75 acquisitions, raised nearly $750 million in capital, completed three public offerings and successfully sold four companies. Mr. Watson holds a MBA from the Wharton School of Business at the University of Pennsylvania and a BA degree from Syracuse University. Mr. Watson’s business experience and educational background makes him qualified to serve as a director of CEL-SCI.
 
CEL-SCI’s nominating committee, consisting of Mr. Baillavoine, Dr. Young and Mr. Watson, has nominated Geert R. Kersten, Peter R. Young, Bruno Baillavoine and Robert Watson to stand for election as directors at the annual meeting. Unless the proxy contains contrary instructions, it is intended that the proxies will be voted for the election of the nominees to the board of directors. In case any nominee shall be unable or shall fail to act as a director by virtue of an unexpected occurrence, the proxies may be voted for such other person or persons as shall be determined by the persons acting under the proxies in their discretion. All nominees to the board of directors have consented to stand for election. CEL-SCI’s Nominating Committee Charter can be reviewed at CEL-SCI’s website: https://cel-sci.com/new-investor-information/.
 
 
 
6
 
 
CEL-SCI does not have any policy regarding the consideration of director candidates recommended by shareholders since a shareholder has never recommended a nominee to the Board of Directors and under Colorado law, any shareholder can nominate a person for election as a director at the annual shareholders’ meeting. However, CEL-SCI’s nominating committee will consider candidates recommended by shareholders. To submit a candidate for the Board of Directors the shareholder should send the name, address and telephone number of the candidate, together with any relevant background or biographical information, to Dr. Peter Young at the address shown on the cover page of this proxy statement. CEL-SCI’s nominating committee has not established any specific qualifications or skills a nominee must meet to serve as a director. Although CEL-SCI does not have any process for identifying and evaluating director nominees, CEL-SCI does not believe there would be any differences in the manner in which CEL-SCI evaluates nominees submitted by shareholders as opposed to nominees submitted by any other person.
 
CEL-SCI’s Board of Directors does not have a “leadership structure”, as such, since each director is entitled to introduce resolutions to be considered by the Board and each director is entitled to one vote on any resolution considered by the Board. CEL-SCI’s Chief Executive Officer is not the Chairman of CEL-SCI’s Board of Directors.
 
CEL-SCI’s Board of Directors has the ultimate responsibility to evaluate and respond to risks facing CEL-SCI. CEL-SCI’s Board of Directors fulfills its obligations in this regard by meeting on a regular basis and communicating, when necessary, with CEL-SCI’s officers.
 
Peter R. Young, Bruno Baillavoine and Robert Watson are independent as that term is defined in section 803 of the listing standards of the NYSE American.
 
CEL-SCI’s Board of Directors met 5 times during the fiscal year ended September 30, 2018. All of the Directors attended these meetings, either in person or by telephone conference call. In addition, the Board of Directors had a number of informal telephonic meetings during the course of the year.
 
CEL-SCI has adopted a Code of Ethics which is applicable to CEL-SCI’S principal executive, financial, and accounting officers and persons performing similar functions. The Code of Ethics is available on CEL-SCI’s website, located at https://cel-sci.com/new-investor-information/.
 
If a violation of this code of ethics act is discovered or suspected, the person suspecting the violation should (anonymously, if desired) send a detailed note, with relevant documents, to CEL-SCI’s Audit Committee, c/o Dr. Peter Young, 208 Hewitt Drive, Suite 103-143, Waco, TX 76712.
 
CEL-SCI does not have a policy with regard to Board member’s attendance at annual meetings. All Board members attended the last annual shareholder’s meeting held on September 20, 2018.
 
Holders of CEL-SCI’s common stock can send written communications to CEL-SCI’s entire Board of Directors, or to one or more Board members, by addressing the communication to “the Board of Directors” or to one or more directors, specifying the director or directors by name, and sending the communication to CEL-SCI’s offices in Vienna, Virginia. Communications addressed to the Board of Directors as whole will be delivered to each Board member. Communications addressed to a specific director (or directors) will be delivered to the director (or directors) specified.
 
Security holder communications sent to specified Board members and not sent to the Board of Directors as a whole are not relayed to other Board members.
 
 
7
 
 
Executive Compensation
 
Components of Compensation - Executive Officers
 
CEL-SCI’s executive officers are compensated through the following three components:
 
 
Base Salary
 
Long-Term Incentives (stock options and/or grants of stock)
 
Benefits
 
These components provide a balanced mix of base compensation and compensation that is contingent upon each executive officer’s individual performance. A goal of the compensation program is to provide executive officers with a reasonable level of security through base salary and benefits. CEL-SCI wants to ensure that the compensation programs are appropriately designed to encourage executive officer retention and motivation to create shareholder value. The Compensation Committee believes that CEL-SCI’s stockholders are best served when CEL-SCI can attract and retain talented executives by providing compensation packages that are competitive but fair.
 
Base Salaries
 
Base salaries generally have been targeted to be competitive when compared to the salary levels of persons holding similar positions in other pharmaceutical companies and other publicly traded companies of comparable size. Each executive officer’s respective responsibilities, experience, expertise and individual performance are considered.
 
A further consideration in establishing compensation for the senior employees is their long term history with CEL-SCI. Taken into consideration are factors that have helped CEL-SCI survive in times when it was financially weak, such as: willingness to accept salary cuts, willingness not to be paid at all for extended time periods, and in general an attitude that helped CEL-SCI survive during financially difficult times.
 
Long-Term Incentives
 
Stock grants and option grants help to align the interests of CEL-SCI’s employees with those of its shareholders.  Options and stock grants are made under CEL-SCI’s Stock Option, Incentive Stock Bonus, Stock Bonus and Stock Compensation Plans.  Options are granted with exercise prices equal to the closing price of CEL-SCI’s common stock on the day immediately preceding the date of grant, with pro rata vesting at the end of each of the following three years.  
 
CEL-SCI believes that grants of equity-based compensation:
 
 
Enhance the link between the creation of shareholder value and long-term executive incentive compensation;
 
Provide focus, motivation and retention incentive; and
 
Provide competitive levels of total compensation.
 
Benefits
 
In addition to cash and equity compensation programs, executive officers participate in the health and welfare benefit programs available to other employees. In a few limited circumstances, CEL-SCI provides other benefits to certain executive officers, such as car allowances.
 
All executive officers are eligible to participate in CEL-SCI’s 401(k) plan on the same basis as its other employees. CEL-SCI matches 100% of each employee’s contribution up to 6% of his or her salary.
 
 
 
8
 
 
Compensation Table
 
The following table sets forth in summary form the compensation received by (i) the Chief Executive and Financial Officer of CEL-SCI and (ii) by each other executive officer of CEL-SCI who received in excess of $100,000 during either of the two fiscal years ended September 30, 2018.
 
Name and
Principal Position
Fiscal Year
 
Salary (1)
 
 
Bonus (2)
 
 
Stock Awards (3)
 
 
Option Awards (4)
 
 
All Other Compen-sation
(5)
 
 
Total
 
 
 
 
 
 
 
 
 
    
    
    
    
    
    
Geert R. Kersten,
2018
  557,756 
  -- 
  16,350 
  1,011,048 
  55,631 
  1,640,784 
Chief Executive
2017
  437,461 
  -- 
  15,900 
  326,961 
  55,631 
  835,953 
Officer and Treasurer
 
    
    
    
    
    
    
 
    
    
    
    
    
    
Patricia B. Prichep,
2018
  162,374 
  -- 
  14,679 
  424,557 
  9,031 
  610,641 
Senior Vice President
2017
  171,028 
  -- 
  13,704 
  217,974 
  9,031 
  411,737 
of Operations and
 
    
    
    
    
    
    
Secretary
 
    
    
    
    
    
    
 
    
    
    
    
    
    
Eyal Talor, Ph.D.,
2018
  264,927 
  -- 
  9,600 
  681,389 
  6,031 
  961,946 
Chief Scientific Officer
2017
  270,163 
  -- 
  9,600 
  217,974 
  6,031 
  503,768 
 
    
    
    
    
    
    
Daniel Zimmerman, Ph.D.,
2018
  276,159 
  -- 
  13,666 
  240,677 
  6,031 
  536,534 
Senior Vice President of
2017
  166,320 
  -- 
  13,333 
  35,989 
  6,031 
  221,673 
Research, Cellular
 
    
    
    
    
    
    
Immunology
 
    
    
    
    
    
    
 
    
    
    
    
    
    
John Cipriano,
2018
  234,207 
  -- 
  -- 
  282,928 
  31 
  517,166 
Senior Vice President of
2017
  185,592 
  -- 
  -- 
  163,480 
  31 
  349,103 
Regulatory Affairs
 
    
    
    
    
    
    
 
    
    
    
    
    
    
(1) 
The dollar value of base salary (cash and non-cash) earned. As of September 30, 2018, the Company owed back salaries to the following employees:
 
Name
 
  Salary
 
Geert Kersten
 $148,888 
Patricia Prichep
 $155,078 
Eyal Talor, Ph.D.
 $71,696 
Daniel Zimmerman, Ph.D.
 $20,337 
John Cipriano
 $9,041 
 
(2) 
The dollar value of bonus (cash and non-cash) earned.
 
(3) 
For all persons listed in the table, the shares were issued as CEL-SCI's contribution on behalf of the named officer who participates in CEL-SCI's 401(k) retirement plan. The value of all stock awarded during the periods covered by the table is calculated according to ASC 718-10-30-3 which represented the grant date fair value.
 
(4) 
The fair value of all stock options granted during the periods covered by the table are calculated on the grant date in accordance with ASC 718-10-30-3 which represented the grant date fair value.
 
(5) 
All other compensation received that CEL-SCI could not properly report in any other column of the table including the dollar value of any insurance premiums paid by, or on behalf of, CEL-SCI with respect to term life insurance for the benefit of the named executive officer and car allowances paid by CEL-SCI. Includes board of director fees for Mr. Kersten.
 
 
 
9
 
 
Employee Pension, Profit Sharing or Other Retirement Plans
 
CEL-SCI has a defined contribution retirement plan, qualifying under Section 401(k) of the Internal Revenue Code and covering substantially all CEL-SCI’s employees. CEL-SCI’s contribution to the plan is made in shares of CEL-SCI's common stock. Each participant's contribution is matched by CEL-SCI with shares of common stock which have a value equal to 100% of the participant's contribution, not to exceed the lesser of $1,000 or 6% of the participant's total compensation. CEL-SCI's contribution of common stock is valued each quarter based upon the closing price of its common stock. The fiscal 2018 expenses for this plan were approximately $144,000. Other than the 401(k) Plan, CEL-SCI does not have a defined benefit, pension plan, profit sharing or other retirement plan.
 
Compensation of Directors During Year Ended September 30, 2018
 
Name
 
Fees
 
 
Stock Awards (1)
 
 
Option
Awards (2)
 
 
 Total
 
Geert Kersten
 $40,000 
  - 
  1,011,048 
 $1,051,048 
Peter R. Young
 $50,000 
  - 
  152,576 
 $202,576 
Bruno Baillavoine
 $50,000 
  - 
  152,576 
 $202,576 
Robert Watson (3)
 $30,000 
  - 
  168,332 
 $198,332 
 
(1) 
The fair value of stock issued for services.
 
(2) 
The fair value of options granted computed in accordance with ASC 718-10-30-3 on the date of grant which represents their grant date fair value.
 
(3) 
Mr. Watson joined CEL-SCI’s Board of Directors in December 2017.
 
Directors’ fees paid to Geert Kersten are included in the Executive Compensation table.
 
Employment Contracts
 
Geert Kersten
 
On August 31, 2016, CEL-SCI entered into a three-year employment agreement with Geert Kersten, CEL-SCI’s Chief Executive Officer. The employment agreement with Mr. Kersten, which is essentially the same as Mr. Kersten’s prior employment agreement, as amended on August 30, 2013, provided that, during the term of the agreement, CEL-SCI would pay Mr. Kersten an annual salary of $559,052, plus any increases in proportion to salary increases granted to other senior executive officers of CEL-SCI, as well any increases approved by the Board of Directors during the term of the employment agreement.
 
During the employment term, Mr. Kersten will be entitled to receive any other benefits which are provided to CEL-SCI's executive officers or other full time employees in accordance with CEL-SCI's policies and practices and subject to Mr. Kersten’s satisfaction of any applicable conditions of eligibility.
 
If Mr. Kersten resigns within ninety (90) days of the occurrence of any of the following events: (i) a reduction in Mr. Kersten’s salary (ii) a relocation (or demand for relocation) of Mr. Kersten’s place of employment to a location more than ten (10) miles from his current place of employment, (iii) a significant and material reduction in Mr. Kersten’s authority, job duties or level of responsibility or the imposition of significant and material limitations on the Mr. Kersten’s autonomy in his position, or (iv) a Change in Control, then the employment agreement will be terminated and Mr. Kersten will be entitled to receive a lump-sum payment from CEL-SCI equal to 24 months of salary ($1,118,104) and the unvested portion of any stock options would vest immediately. 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.
 
 
 
10
 
 
The employment agreement will also terminate upon the death of Mr. Kersten or Mr. Kersten’s physical or mental disability.
 
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, any options or bonus shares of CEL-SCI then held by Mr. Kersten will become fully vested and the expiration date of any options which would expire during the four year period following his termination of employment will be extended to the date which is four years after his termination of employment. The employment agreement will also terminate upon the willful misconduct, an act of fraud against CEL-SCI, or a breach of the employment agreement by Mr. Kersten, in which case Mr. Kersten will be paid the salary provided by the employment agreement through the date of termination.
 
Patricia B. Prichep / Eyal Talor, Ph.D.
 
On August 31, 2016, CEL-SCI entered into a three-year employment agreement with Patricia B. Prichep, CEL-SCI’s Senior Vice President of Operations. The employment agreement with Ms. Prichep, which is essentially the same as Ms. Prichep’s prior employment agreement entered into on August 30, 2013 provided that, during the term of the agreement, CEL-SCI would pay Ms. Prichep an annual salary of $245,804 plus any increases approved by the Board of Directors during the period of the employment agreement.
 
On August 31, 2016, CEL-SCI entered into a three-year employment agreement with Eyal Talor, Ph.D., CEL-SCI’s Chief Scientific Officer. The employment agreement with Dr. Talor, which is essentially the same as Dr. Talor’s prior employment agreement entered into on August 30, 2013, provided that, during the term of the agreement, CEL-SCI would pay Dr. Talor an annual salary of $303,453 plus any increases approved by the Board of Directors during the period of the employment agreement.
 
If Ms. Prichep or Dr. Talor resigns within ninety (90) days of the occurrence of any of the following events: (i) a relocation (or demand for relocation) of employee’s place of employment to a location more than ten (10) miles from the employee’s current place of employment, (ii) a significant and material reduction in the employee’s authority, job duties or level of responsibility or (iii) the imposition of significant and material limitations on the employee’s autonomy in her or his position, the employment agreement will be terminated and the employee will be paid the salary provided by the employment agreement through the date of termination and the unvested portion of any stock options held by the employee will vest immediately.
 
In the event there is a change in the control of CEL-SCI, the employment agreements with Ms. Prichep and Dr. Talor allow Ms. Prichep and/or Dr. Talor (as the case may be) to resign from her or his position at CEL-SCI and receive a lump-sum payment from CEL-SCI equal to 18 months of salary ($368,706 and $455,180 respectively). In addition, the unvested portion of any stock options held by the employee will vest immediately. For purposes of the employment agreements, 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 agreements with Ms. Prichep and Dr. Talor will also terminate upon the death of the employee, the employee’s physical or mental disability, willful misconduct, an act of fraud against CEL-SCI, or a breach of the employment agreement by the employee. If the employment agreement is terminated for any of these reasons the employee, or her or his legal representatives, as the case may be, will be paid the salary provided by the employment agreement through the date of termination.
 
 
 
11
 
 
Compensation Committee Interlocks and Insider Participation
 
CEL-SCI has a compensation committee comprised of Mr. Bruno Baillavoine Dr. Peter Young and Mr. Watson, all of whom are independent directors.
 
During the year ended September 30, 2018, no director of CEL-SCI was also an executive officer of another entity, which had an executive officer of CEL-SCI serving as a director of such entity or as a member of the compensation committee of such entity.
 
Stock Option, Bonus and Compensation Plans
 
CEL-SCI has Incentive Stock Option Plans, Non-Qualified Stock Option, Stock Bonus Plans, Stock Compensation Plans and an Incentive Stock Bonus Plan. All Stock Option, Bonus and Compensation Plans have been approved by the stockholders. A summary description of these Plans follows. In some cases these Plans are collectively referred to as the "Plans".
 
Incentive Stock Option Plan. The Incentive Stock Option Plans authorize the issuance of shares of CEL-SCI's common stock to persons who exercise options granted pursuant to the Plans. Only CEL-SCI’s employees may be granted options pursuant to the Incentive Stock Option Plans.
 
Options may not be exercised until one year following the date of grant. Options granted to an employee then owning more than 10% of the common stock of CEL-SCI may not be exercisable by its terms after five years from the date of grant. Any other option granted pursuant to the Plans may not be exercisable by its terms after ten years from the date of grant.
 
The purchase price per share of common stock purchasable under an option is determined by CEL-SCI’s Compensation Committee but cannot be less than the fair market value of the common stock on the date of the grant of the option (or 110% of the fair market value in the case of a person owning more than 10% of CEL-SCI's outstanding shares).
 
Non-Qualified Stock Option Plans. The Non-Qualified Stock Option Plans authorize the issuance of shares of CEL-SCI's common stock to persons that exercise options granted pursuant to the Plans. CEL-SCI's employees, directors, officers, consultants and advisors are eligible to be granted options pursuant to the Plans, provided however that bona fide services must be rendered by such consultants or advisors and such services must not be in connection with a capital-raising transaction or promoting CEL-SCI’s common stock. The option exercise price is determined by CEL-SCI’s Compensation Committee.
 
Stock Bonus Plan. Under the Stock Bonus Plans, shares of CEL-SCI’s common stock may be issued to CEL-SCI's employees, directors, officers, consultants and advisors, provided however that bona fide services must be rendered by consultants or advisors and such services must not be in connection with a capital-raising transaction or promoting CEL-SCI’s common stock.
 
Stock Compensation Plan. Under the Stock Compensation Plan, shares of CEL-SCI’s common stock may be issued to CEL-SCI’s employees, directors, officers, consultants and advisors in payment of salaries, fees and other compensation owed to these persons. However, bona fide services must be rendered by consultants or advisors and such services must not be in connection with a capital-raising transaction or promoting CEL-SCI’s common stock.
 
Incentive Stock Bonus Plan. Under the 2014 Incentive Stock Bonus Plan, shares of CEL-SCI’s common stock may be issued to executive officers and other employees who contribute significantly to the success of CEL-SCI. The purpose of the Plan is to provide long term incentive for outstanding service to CEL-SCI and its shareholders and to assist in recruiting and retaining people of outstanding ability and initiative in executive and management positions.
 
 
 
12
 
 
Other Information Regarding the Plans. The Plans are administered by CEL-SCI's Compensation Committee (“the Committee”), each member of which is a director of CEL-SCI. The members of the Committee were selected by CEL-SCI's Board of Directors and serve for a one-year tenure and until their successors are elected. A member of the Committee may be removed at any time by action of the Board of Directors. Any vacancies which may occur on the Committee will be filled by the Board of Directors. The Committee is vested with the authority to interpret the provisions of the Plans and supervise the administration of the Plans. In addition, the Committee is empowered to select those persons to whom shares or options are to be granted, to determine the number of shares subject to each grant of a stock bonus or an option and to determine when, and upon what conditions, shares or options granted under the Plans will vest or otherwise be subject to forfeiture and cancellation.
 
In the discretion of the Committee, any option granted pursuant to the Plans may include installment exercise terms such that the option becomes fully exercisable in a series of cumulating portions. The Committee may also accelerate the date upon which any option (or any part of any options) is first exercisable. Any shares issued pursuant to the Stock Bonus Plans or Stock Compensation Plan and any options granted pursuant to the Incentive Stock Option Plans or the Non-Qualified Stock Option Plans will be forfeited if the "vesting" schedule established by the Committee administering the Plans at the time of the grant is not met. For this purpose, vesting means the period during which the employee must remain an employee of CEL-SCI or the period of time a non-employee must provide services to CEL-SCI. At the time an employee ceases working for CEL-SCI (or at the time a non-employee ceases to perform services for CEL-SCI), any shares or options not fully vested will be forfeited and cancelled. At the discretion of the Committee payment for the shares of common stock underlying options may be paid through the delivery of shares of CEL-SCI's common stock having an aggregate fair market value equal to the option price, provided such shares have been owned by the option holder for at least one year prior to such exercise. A combination of cash and shares of common stock may also be permitted at the discretion of the Committee.
 
Options are generally non-transferable except upon death of the option holder. Shares issued pursuant to the Stock Bonus Plans will generally not be transferable until the person receiving the shares satisfies the vesting requirements imposed by the Committee when the shares were issued.
 
The Board of Directors of CEL-SCI may at any time, and from time to time, amend, terminate, or suspend one or more of the Plans in any manner it deems appropriate, provided that such amendment, termination or suspension will not adversely affect rights or obligations with respect to shares or options previously granted.
 
Stock Options
 
The following table show information concerning the options granted during the fiscal year ended September 30, 2018, to the persons named below:
 
Options Granted
 
 
 
 
Options
 
 
Price Per
 
Expiration
Name
 
Grant Date
 
 
Granted
 
 
Share
 
 
Date
 
 
 
 
 
 
 
 
 
 
Geert Kersten
5/1/2018
  530,121 
 $2.45 
4/30/2028
 
    
    
 
Patricia Prichep
5/1/2018
  222,607 
 $2.45 
4/30/2028
 
    
    
 
Eyal Talor
5/1/2018
  193,934 
 $2.45 
4/30/2028
Eyal Talor
9/21/2018
  100,000 
 $3.55 
9/20/2028
 
    
    
 
Daniel Zimmerman
5/1/2018
  126,194 
 $2.45 
4/30/2028
 
    
    
 
John Cipriano
5/1/2018
  148,347 
 $2.45 
4/30/2028
 
    
    
 
Peter Young
5/1/2018
  80,000 
 $2.45 
4/30/2028
 
    
    
 
Bruno Baillavoine
5/1/2018
  80,000 
 $2.45 
4/30/2028
 
    
    
 
Robert Watson
12/18/2017
  10,000 
 $1.84 
12/17/2027
Robert Watson
5/1/2018
  80,000 
 $2.45 
4/30/2028
 
    
    
 
 
 
13
 
 
The following table shows the outstanding options held by the persons named below as of September 30, 2018:
 
 
 
Shares underlying unexercised
 
 
 
 
 
 
 
Option which are:
 
 
Exercise
 
Expiration
Name
 
Exercisable
 
 
Unexercisable
 
 
Price
 
 
Date
 
Geert Kersten
  7,354 
 
 
 
  62.50 
04/23/19
 
  10,667 
  5,333 
  95.00 
07/06/19
 
  1,200 
    
  95.00 
07/20/19
 
  1,200 
    
  120.00 
07/20/20
 
  1,200 
    
  172.50 
04/14/21
 
  1,800 
    
  3.90 
05/17/22
 
  14,336 
  5,664 
  70.00 
12/17/22
 
  1,800 
    
  52.50 
06/30/23
 
  3,600 
    
  27.25 
02/25/24
 
  60,000 
  120,000 
  2.18 
7/27/2027
 
    
  530,121 
  2.45 
04/30/28
 
    
    
    
 
Patricia B. Prichep
  2,868 
    
  62.50 
04/23/19
 
  8,000 
  4,000 
  95.00 
07/06/19
 
  600 
    
  95.00 
07/20/19
 
  600 
    
  120.00 
07/20/20
 
  600 
    
  172.50 
04/14/21
 
  1,200 
    
  97.50 
05/17/22
 
  6,000 
    
  70.00 
12/17/22
 
  1,200 
    
  52.50 
06/30/23
 
  2,400 
    
  27.25 
02/25/24
 
  40,000 
  80,000 
  2.18 
07/27/27
 
    
  222,607 
  2.45 
04/30/28
 
    
    
 
Eyal Talor, PhD
  963 
    
  62.50 
04/23/19
 
  8,000 
  4,000 
  95.00 
07/06/19
 
  600 
    
  95.00 
07/20/19
 
  600 
    
  120.00 
07/20/20
 
  600 
    
  172.50 
04/14/21
 
  1,200 
    
  97.50 
05/17/22
 
  6,000 
    
  70.00 
12/17/22
 
  1,200 
    
  52.50 
06/30/23
 
  2,400 
    
  27.25 
02/25/24
 
  40,000 
  80,000 
  2.18 
07/27/27
 
    
  193,934 
  2.45 
04/30/28
 
    
  100,000 
  3.55 
09/20/28
 
 
14
 
 
 
 
Shares underlying unexercised
 
 
 
 
 
 
 
Option which are:
 
 
Exercise
 
Expiration
Name
 
Exercisable
 
 
Unexercisable
 
 
Price
 
 
Date
 
Daniel Zimmerman, PhD
  600 
 
 
 
  120.00 
07/20/20
 
  600 
 
 
 
  172.50 
04/14/21
 
  900 
 
 
 
  97.50 
05/17/22
 
  900 
 
 
 
  52.50 
06/30/23
 
  1,800 
 
 
 
  27.25 
02/25/24
 
  8,000 
 
 
 
  27.50 
08/05/24
 
  4,000 
 
 
 
  15.50 
06/25/25
 
  2,667 
  1,333 
  11.75 
07/21/26
 
  2,000 
  4,000 
  1.87 
06/28/27
 
  6,667 
  13,333 
  1.59 
09/17/27
 
    
  126,194 
  2.45 
04/30/28
 
    
    
    
 
John Cipriano
  600 
    
  120.00 
07/20/20
 
  600 
    
  172.50 
04/14/21
 
  400 
    
  62.50 
09/30/19
 
  900 
    
  97.50 
05/17/22
 
  900 
    
  57.50 
06/30/23
 
  1,800 
    
  27.25 
02/25/24
 
  30,000 
  60,000 
  2.18 
07/27/27
 
    
  148,347 
  2.45 
04/30/28
 
Summary. The following shows certain information as of September 30, 2018 concerning the stock options and stock bonuses granted by CEL-SCI. Each option represents the right to purchase one share of CEL-SCI's common stock.
 
Name of Plan
 
Total Shares Reserved Under Plans
 
 
Shares Reserved for Outstanding Options
 
 
Shares Issued
 
 
Remaining Options/Shares Under Plans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Incentive Stock Option Plans
  138,400 
  123,558 
  N/A 
  385 
Non-Qualified Stock Option Plans
  3,387,200 
  3,036,569 
  N/A 
  309,526 
Stock Bonus Plans
  783,760 
  N/A 
  300,230 
  483,497 
Stock Compensation Plan
  134,000 
  N/A 
  115,590 
  0 
Incentive Stock Bonus Plan
  640,000 
  N/A 
  624,000 
  16,000 
 
Of the shares issued pursuant to CEL-SCI's Stock Bonus Plans, 217,908 shares were issued as part of CEL-SCI's contribution to its 401(k) plan.
 
The following table shows the weighted average exercise price of the outstanding options granted pursuant to CEL-SCI’s Incentive and Non-Qualified Stock Option Plans as of September 30, 2018, CEL-SCI’s most recent fiscal year end. CEL-SCI’s Incentive and Non-Qualified Stock Option Plans have been approved by CEL-SCI's shareholders.
 
 
15
 
 
Plan category
 
Number of Securities to be Issued Upon Exercise of Outstanding Options (a)
 
 
Weighted-Average Exercise Price of Outstanding Options
 
 
Number of Securities
Remaining Available For
Future Issuance
Under Equity Compensation
Plans, Excluding Securities
Reflected in Column (a)
 
 
 
 
 
 
 
 
 
 
 
Incentive Stock Option Plans
  123,558 
 $37,69 
  385 
Non-Qualified Stock Option Plans
  3,036,569 
 $6.06 
  309,526 
 
Compensation Committee
 
During the year ending September 30, 2018, CEL-SCI had a Compensation Committee which was comprised of Peter Young, Bruno Baillavoine and Robert Watson. During the year ended September 30, 2018, the Compensation Committee formerly met on one occasion.
 
The following is the report of the Compensation Committee:
 
The key components of CEL-SCI’s executive compensation program include annual base salaries and long-term incentive compensation consisting of stock options. It is CEL-SCI’s policy to target compensation (i.e., base salary, stock option grants and other benefits) at approximately the median of comparable companies in the biotechnology field. Accordingly, data on compensation practices followed by other companies in the biotechnology industry is considered.
 
CEL-SCI’s long-term incentive program formerly consisted of periodic grants of stock options with an exercise price equal to the fair market value of CEL-SCI’s common stock at the close of the previous trading day. To encourage retention, the ability to exercise options granted under the program was subject to vesting restrictions. Decisions made regarding the timing and size of option grants took into account the performance of both CEL-SCI and the employee, “competitive market” practices, and the size of the option grants made in prior years. The weighting of these factors varied and was subjective.
 
On August 31, 2016, CEL-SCI entered into a three-year employment agreement with Geert Kersten, CEL-SCI’s Chief Executive Officer. The employment agreement with Mr. Kersten, which is essentially the same as Mr. Kersten’s prior employment agreement, as amended on August 30, 2013, provided that, during the term of the agreement, CEL-SCI would pay Mr. Kersten an annual salary of $559,052, plus any increases in proportion to salary increases granted to other senior executive officers of CEL-SCI, as well any increases approved by the Board of Directors during the period of the employment agreement.
 
On August 31, 2016, CEL-SCI entered into a three-year employment agreement with Patricia B. Prichep, CEL-SCI’s Senior Vice President of Operations. The employment agreement with Ms. Prichep, which is essentially the same as Ms. Prichep’s prior employment agreement entered into on August 30, 2013 provided that, during the term of the agreement, CEL-SCI would pay Ms. Prichep an annual salary of $245,804 plus any increases approved by the Board of Directors during the period of the employment agreement.
 
On August 31, 2016, CEL-SCI entered into a three-year employment agreement with Eyal Talor, Ph.D., CEL-SCI’s Chief Scientific Officer. The employment agreement with Dr. Talor, which is essentially the same as Dr. Talor’s prior employment agreement entered into on August 30, 2013, provided that, during the term of the agreement, CEL-SCI would pay Dr. Talor an annual salary of $303,453 plus any increases approved by the Board of Directors during the period of the employment agreement.
 
 
16
 
 
During the year ending September 30, 2018, the compensation paid to CEL-SCI’s other executive officers was based on a variety of factors, including the performance in the executive's area of responsibility, the executive's individual performance, the executive's experience in his or her role, the executive's length of service with CEL-SCI, the achievement of specific goals established for CEL-SCI and its business, and, in certain instances, to the achievement of individual goals.
 
Financial or stockholder value performance comparisons were not used to determine the compensation of CEL-SCI’s other executive officers since CEL-SCI’s financial performance and stockholder value are influenced to a substantial degree by external factors and as a result comparing the compensation payable to the other executive officers to CEL-SCI’s financial or stock price performance can be misleading.
 
During the year ended September 30, 2018, CEL-SCI granted options for the purchase of 1,321,203 shares of CEL-SCI’s common stock to CEL-SCI’s executive officers. In granting the options to CEL-SCI’s executive officers, the Board of Directors considered the same factors which were used to determine the cash compensation paid to such officers.
 
Except as otherwise disclosed in this proxy statement, during the year ended September 30, 2018, CEL-SCI did not issue any shares of its common stock to its officers or directors in return for services provided to CEL-SCI.
 
The foregoing report has been approved by the members of the Compensation Committee:
 
Peter Young
Bruno Baillavoine
Robert Watson
 
CEL-SCI’s Compensation Committee Charter can be reviewed at CEL-SCI’s website: https://cel-sci.com/new-investor-information/#corporategovernance.
 
Audit Committee
 
During the year ended September 30, 2018, CEL-SCI had an Audit Committee comprised of Peter Young, Bruno Baillavoine and Robert Watson. All members of the Audit Committee were independent as defined by Section 803 of the NYSE American Listing Standards. Dr. Young serves as the audit committee’s financial expert. The purpose of the Audit Committee is to review and approve the selection of CEL-SCI’s independent registered public accounting firm and review CEL-SCI’s financial statements with CEL-SCI’s independent registered public accounting firm.
 
During the fiscal year ended September 30, 2018, the Audit Committee met eight times. All the members of the Audit Committee attended these meetings.
 
The following is the report of the Audit Committee:
 
(1) 
The Audit Committee reviewed and discussed CEL-SCI’s audited financial statements for the year ended September 30, 2018 with CEL-SCI’s management.
 
(2) 
The Audit Committee discussed with CEL-SCI’s independent registered public accounting firm the matters required to be discussed by PCAOB (Public Company Accounting Oversight Board) Standard No. 16 “Communication with Audit Committees”.
 
(3) 
The Audit Committee has received the written disclosures and the letter from CEL-SCI’s independent registered public accounting firm required by PCAOB independence standards, and had discussed with CEL-SCI’s independent registered public accounting firm the independent registered public accounting firm’s independence; and
 
 
17
 
 
(4) 
Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in CEL-SCI’s Annual Report on Form 10-K for the year ended September 30, 2018 for filing with the Securities and Exchange Commission.
 
(5) 
During the year ended September 30, 2018, CEL-SCI paid BDO USA, LLP, CEL-SCI’s independent registered public accounting firm, fees for professional services rendered for the audit of CEL-SCI’s annual financial statements and the reviews of the financial statements included in CEL-SCI’s 10-Q reports for the fiscal year and all regulatory filings. The Audit Committee is of the opinion that these fees are consistent with BDO USA, LLP maintaining its independence from CEL-SCI.
 
The foregoing report has been approved by the members of the Audit Committee:
 
Peter Young
Bruno Baillavoine
Robert Watson
 
CEL-SCI’s Board of Directors has adopted a written charter for the Audit Committee. CEL-SCI’s Audit Committee Charter can be reviewed at CEL-SCI’s website: https://cel-sci.com/new-investor-information/#corporategovernance.
 
PROPOSAL TO APPROVE THE ADOPTION OF THE
2019 NON-QUALIFIED STOCK OPTION PLAN
 
Shareholders are being requested to approve the adoption of CEL-SCI’s 2019 Non-Qualified Stock Option Plan. CEL-SCI’s employees, directors, officers, consultants, and advisors are eligible to be granted options pursuant to the 2019 Non-Qualified Plan as may be determined by CEL-SCI’s Board of Directors or the Compensation Committee, provided however that bona fide services must be rendered by consultants or advisors and such services must not be in connection with the offer or sale of securities in a capital-raising transaction or promoting CEL-SCI’s common stock.
 
The 2019 Non-Qualified Plan authorizes the issuance of up to 3,000,000 shares of CEL-SCI’s common stock to persons that exercise options granted pursuant to the Plan. As of March 26, 2019, CEL-SCI had not granted any options to purchase shares of common stock under the 2019 Non-Qualified Stock Option Plan.
 
The 2019 Non-Qualified Plan will function and be administered in the same manner as CEL-SCI’s 2018 Non-Qualified Plan, including provisions providing that any options granted pursuant to the 2019 Plan must have a minimum vesting period of one year and the exercise price of any options granted pursuant to 2019 Plan may not be changed, except in the case of stock splits, reorganizations or recapitalizations. There are no provisions requiring CEL-SCI to pay cash for an option under any circumstances. The Board of Directors recommends that the shareholders of CEL-SCI approve the adoption of the 2019 Non-Qualified Stock Option Plan.
 
PROPOSAL TO APPROVE THE ADOPTION OF THE
2019 STOCK COMPENSATION PLAN
 
During the two years ended September 30, 2018, CEL-SCI issued 0 and 13,000 shares of its common stock, respectively, to its officers, directors and employees. During the two years ended September 30, 2018, CEL-SCI issued 0 and 219,984 shares, respectively, to consultants for payment of services of $0 and $60,264. To conserve cash, CEL-SCI expects that it may continue to offer its officers, directors, employees and consultants the opportunity to receive shares of CEL-SCI’s common stock in payment of amounts owed by CEL-SCI for services rendered.
 
So that CEL-SCI may continue to offer shares of its common stock in payment of compensation owed, CEL-SCI’s Board of Directors, subject to shareholder approval, has adopted the 2019 Stock Compensation Plan. The 2019 Stock Compensation Plan is virtually identical to CEL-SCI’s 2015 Stock Compensation Plan which expired on December 31, 2017. Up to 500,000 shares of common stock would be available for issuance under the Plan. The Board of Directors recommends that the shareholders of CEL-SCI approve the adoption of the 2019 Stock Compensation Plan.
 
 
18
 
 
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
The Board of Directors has selected BDO USA, LLP, an independent registered public accounting firm, to audit the books and records of CEL-SCI for the fiscal year ending September 30, 2019. A representative of BDO USA, LLP is expected to be present at the shareholders’ meeting.
 
BDO USA, LLP served as CEL-SCI’s auditors for the years ended September 30, 2018 and 2017. The following table shows the aggregate fees billed to CEL-SCI during these years by BDO USA, LLP:
 
 
 
Year Ended September 30,
 
 
 
2018
 
 
2017
 
Audit Fees
 $445,000 
 $375,000 
Audit-Related Fees
  -- 
  -- 
Tax Fees
  -- 
  -- 
All Other Fees
  -- 
  -- 
 
Audit fees represent amounts billed for professional services rendered for the audit of CEL-SCI’s annual financial statements and the reviews of the financial statements included in CEL-SCI’s 10-Q reports for the fiscal year and all regulatory filings. Before BDO USA, LLP was engaged by CEL-SCI to render audit or non-audit services, the engagement was approved by CEL-SCI’s audit committee. CEL-SCI’s Board of Directors is of the opinion that the Audit Fees charged by BDO USA, LLP are consistent with BDO USA, LLP maintaining its independence from CEL-SCI.
 
The Board of Directors recommends that the shareholders of CEL-SCI approve its selection of BDO USA, LLP as CEL-SCI’s independent public accounting firm to audit the books and records of CEL-SCI for the year ending September 30, 2019.
 
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
 
CEL-SCI’s Annual Report on Form 10-K for the year ending September 30, 2018 is available at https://cel-sci.com/sec-filings/.
 
SHAREHOLDER PROPOSALS
 
Any shareholder proposal which may properly be included in the proxy solicitation material for the annual meeting of shareholders following CEL-SCI’s fiscal year ending September 30, 2019 must be received by the Secretary of CEL-SCI no later than January 2, 2020.
 
GENERAL
 
The cost of preparing, printing and mailing the enclosed proxy, accompanying notice and proxy statement, and all other costs in connection with solicitation of proxies will be paid by CEL-SCI including any additional solicitation made by letter or telephone. Failure of a quorum to be present at the meeting will necessitate adjournment and will subject CEL-SCI to additional expense.
 
CEL-SCI’s Board of Directors does not intend to present and does not have reason to believe that others will present any other items of business at the annual meeting. However, if other matters are properly presented to the meeting for a vote, the proxies will be voted upon such matters in accordance with the judgment of the persons acting under the proxies.
 
 
Please complete, sign and return the attached proxy promptly
 

 
19
 
 
CEL-SCI CORPORATION PROXY
This Proxy is solicited by CEL-SCI’s Board of Directors
 
The undersigned stockholder of CEL-SCI acknowledges receipt of the Notice of the Annual Meeting of Stockholders to be held May 20, 2019, 10:30 a.m. local time, at 4820-C Seton Drive, Baltimore, MD 21215, and hereby appoints Geert R. Kersten with the power of substitution, as Attorney and Proxy to vote all the shares of the undersigned at said annual meeting of stockholders and at all adjournments thereof, hereby ratifying and confirming all that said Attorney and Proxy may do or cause to be done by virtue hereof. The above named Attorney and Proxy is instructed to vote all of the undersigned's shares as follows:
 
The Board of Directors recommends a vote FOR all the nominees listed below:
 
(1)
To elect the persons who shall constitute CEL-SCI's Board of Directors for the ensuing year.
 
☐  FOR all nominees listed below (except as marked to the contrary below)
☐  WITHHOLD AUTHORITY to vote for all nominees listed below 
 
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW)
 
Nominees:
Geert R. Kersten
Peter R. Young
Bruno Baillavoine
Robert Watson
 
The Board of Directors recommends you vote FOR the following proposals;
 
(2)
To approve the adoption of CEL-SCI’s 2019 Non-Qualified Stock Option Plan which provides that up to 3,000,000 shares of common stock may be issued upon the exercise of options granted pursuant to the Non-Qualified Stock Option Plan.
  ☐ FOR
 ☐ AGAINST
 ☐ ABSTAIN
 
 
 
 
 
(3)
To approve the adoption of CEL-SCI’s 2019 Stock Compensation Plan which provides that up to 500,000 shares of common stock may be issued shares pursuant to the plan.
  ☐ FOR
  ☐ AGAINST
  ☐ ABSTAIN
 
 
 
 
 
(4)
To ratify the appointment of BDO USA, LLP as CEL-SCI’s independent registered public accounting firm for the fiscal year ending September 30, 2019.
  ☐ FOR
  ☐ AGAINST
  ☐ ABSTAIN
 
To transact such other business as may properly come before the meeting or any adjournments or postponements thereof.
 
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DISCRETION IS INDICATED, THIS PROXY WILL BE VOTED IN FAVOR OF ALL NOMINEES TO THE BOARD OF DIRECTORS AND ITEMS 2 THROUGH 4.
 
Directions to the Annual Meeting can be found at https://cel-sci.com/new-investor-information/.
 
 
  Dated this __ day of ____________ 2019.
 
 
 
 
 
 
 
 
(Signature)
 
 
 
 
 
 
 
 
(Signature)
 
 
Please sign your name exactly as it appears on your stock certificate. If shares are held jointly, each holder should sign. Executors, trustees, and other fiduciaries should so indicate when signing.
Please Sign, Date and Return this Proxy so that your shares may be voted at the meeting.
 
Send the proxy by regular mail, email, or fax to:
 
CEL-SCI Corporation
Attn: Gavin de Windt
8229 Boone Blvd., #802
Vienna, VA 22182
Phone: 703-506-9460
Fax: 703-506-9471
Email: gdewindt@cel-sci.com

 
 
 
           
 
.
 
IMPORTANT ANNUAL STOCKHOLDERS’
MEETING INFORMATION — YOUR VOTE COUNTS!
 
Stockholder Meeting Notice
 
Important Notice Regarding the Availability of Proxy Materials for the
 
 

 CEL-SCI Corporation Stockholder Meeting to be Held on May 20, 2019.

 
Under Securities and Exchange Commission rules, you are receiving this notice that the proxy materials for the annual stockholders’ meeting are available on the Internet. Follow the instructions below to view the materials and vote online or request a copy. The items to be voted on and location of the annual meeting are on the reverse side. Your vote is important!
 
This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting. The proxy statement, annual report and letter to shareholders are available at:
 
www.envisionreports.com/CVM
 
 
Easy Online Access — A Convenient Way to View Proxy Materials and Vote
When you go online to view materials, you can also vote your shares. Step 1: Go to www.envisionreports.com/CVM to view the materials.
Step 2: Click on Cast Your Vote or Request Materials.
Step 3: Follow the instructions on the screen to log in.
Step 4: Make your selection as instructed on each screen to select delivery preferences and vote.
 
When you go online, you can also help the environment by consenting to receive electronic delivery of future materials.
 
Obtaining a Copy of the Proxy Materials - If you want to receive a paper or e-mail copy of these documents, you must request one. There is no charge to you for requesting a copy. Please make your request for a copy as instructed on the reverse side on or before April 27, 2019 to facilitate timely delivery.
 
 
 
 
Stockholder Meeting Notice
 
CEL-SCI Corporation’s Annual Meeting of Stockholders will be held at 4820-C Seton Drive, Baltimore, MD 21215, on May 20, 2019, at 10:30 a.m. local time.
 
Proposals to be voted on at the meeting are listed below, along with the Board of Directors’ recommendations.
 
The Board of Directors recommends that you vote FOR the following:
 
(1) To elect the persons who shall constitute CEL-SCI's Board of Directors for the ensuing year.
 
The Board of Directors recommends you vote FOR the following proposals:
 
(2) To approve the adoption of CEL-SCI’s 2019 Non-Qualified Stock Option Plan which provides that up to 3,000,000 shares of common stock may be issued upon the exercise of options granted pursuant to the Plan.
 
(3) To approve the adoption of CEL-SCI’s 2019 Stock Compensation Plan which provides that up to 500,000 shares of common stock may be issued pursuant to the Plan.
 
(4) To ratify the appointment of BDO USA, LLP as CEL-SCI’s independent registered public accounting firm for the fiscal year ending September 30, 2019.
 
To transact such other business as may properly come before the meeting or any adjournments or postponements thereof.
 
PLEASE NOTE - YOU CANNOT VOTE BY RETURNING THIS NOTICE. To vote your shares you must vote online or request a paper copy of the proxy materials to receive a proxy card. If you wish to attend and vote at the meeting, please bring this notice with you.
 
Directions to attend the meeting can be found on our website at https://cel-sci.com/new-investor-information/.
 

Here’s how to order a copy of the proxy materials and select a future delivery preference:
 
Paper copies: Current and future paper delivery requests can be submitted via the telephone, Internet or email options below. Email copies: Current and future email delivery requests must be submitted via the Internet by following the instructions below.
 
If you request an email copy of current materials you will receive an email with a link to the materials.
 
PLEASE NOTE: You must use the number in the shaded bar on the reverse side when requesting a set of proxy materials.
 
●   
Internet - Go to www.envisionreports.com/CVM. Click Cast Your Vote or Request Materials. Follow the instructions to log in and order a  paper or email copy of the current meeting materials and submit your preference for email or paper delivery of future meeting materials.
 
●   
Telephone - Call us free of charge at 1-866-641-4276 using a touch-tone phone and follow the instructions to log in and order a paper copy of the materials by mail for the current meeting. You can also submit a preference to receive a paper copy for future meetings.
 
●   
Email - Send email to investorvote@computershare.com with “Proxy Materials CEL-SCI Corporation” in the subject line. Include in the message your full name and address, plus the number located in the shaded bar on the reverse, and state in the email that you want a paper copy of current meeting materials. You can also state your preference to receive a paper copy for future meetings.