EXHIBIT 10(mmm)
EMPLOYMENT AGREEMENT
This Employment Agreement ("AGREEMENT") is made by and between Geert X.
Xxxxxxx ("EMPLOYEE") and CEL-SCI Corporation ("CEL-SCI" or "the Company") as of
August 31, 2016 (the "Effective Date").
RECITALS
EMPLOYEE has been an EMPLOYEE of CEL-SCI since February 1987. CEL-SCI and
EMPLOYEE wish to set forth in this AGREEMENT the terms and conditions under
which EMPLOYEE is to be employed by CEL-SCI from the date of execution forward.
In consideration of EMPLOYEE's agreement to continue providing services to
CEL-SCI, CEL-SCI's agreement to employ EMPLOYEE on the terms and conditions set
forth herein and the mutual agreements set forth herein, the parties hereto
agree as follows:
1. Term And Nature Of Employment
CEL-SCI hereby employs EMPLOYEE as Chief Executive Officer of CEL-SCI
commencing on the Effective Date of this AGREEMENT and ending on August 31,
2019, unless said period of employment (the "Employment Period") is terminated
earlier in accordance with the terms of this AGREEMENT. Thereafter, EMPLOYEE
shall be employed on an at-will basis and may terminate and may be terminated
from his employment with or without cause. EMPLOYEE hereby accepts such
employment and agrees to devote his full business time and attention, best
efforts, energy and skills to the business and affairs of CEL-SCI. EMPLOYEE
agrees to perform such other duties as may from time to time be assigned to him
by the Board of Directors of CEL-SCI and shall act at all times in accordance
with the best interests of CEL-SCI. EMPLOYEE agrees that he shall comply with
all applicable governmental laws, rules and regulations and with all of
CEL-SCI's policies, rules and/or regulations applicable to the employees of
CEL-SCI.
2. Wage Compensation
2.1 EMPLOYEE shall be compensated on the basis of an annual salary of
$559,052, less applicable withholding taxes. Employee will receive at least the
same salary increases per year as do other senior executives of CEL-SCI.
Increases beyond those, if any, shall be made at the sole discretion of the
Board of Directors of CEL-SCI. Nothing in this paragraph 2.1 shall be construed
to limit CEL-SCI's right to terminate this AGREEMENT in accordance with the
terms hereof.
2.2 Payment.
Salary payments will normally be made to EMPLOYEE semi-monthly or otherwise
in accordance with CEL-SCI's pay period practices applicable to executive
officers.
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3. Other Benefits.
3.1 During the Employment Period, EMPLOYEE shall 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 EMPLOYEE's satisfaction of any applicable condition of eligibility.
3.2 Reimbursement of Expenses. CEL-SCI shall reimburse EMPLOYEE for all
reasonable business expenses incurred by EMPLOYEE on behalf of CEL-SCI provided
that: (i) such reasonable expenses are ordinary and necessary business expenses
incurred on behalf of CEL-SCI, and (ii) EMPLOYEE provides CEL-SCI with itemized
accounts, receipts and other documentation for such reasonable expenses as are
reasonably required by CEL-SCI. Any expenses found not to be reasonable business
expenses by the auditors or the IRS will be reimbursed to the Company by the
EMPLOYEE.
4. Former Employment
No Conflict. EMPLOYEE represents and warrants that the execution and
delivery by him of this AGREEMENT, his employment by CEL-SCI and his performance
of duties under this AGREEMENT will not conflict with and will not be
constrained by any prior employment or consulting agreement or relationship, or
any other contractual obligations.
5. Termination
5.1.a Termination of AGREEMENT Due to Death or Disability. EMPLOYEE's
employment and this AGREEMENT shall terminate upon EMPLOYEE's death. In the
event that EMPLOYEE's employment ends due to his death, CEL-SCI's obligations
under this AGREEMENT shall immediately cease, except that the EMPLOYEE's legal
representatives shall be entitled to receive all compensation otherwise payable
to EMPLOYEE through the last day of the month in which the EMPLOYEE's death
occurred. If EMPLOYEE dies while employed by CEL-SCI, any options or stock of
the Company then owned by EMPLOYEE shall automatically accelerate and become
fully vested. This provision shall not otherwise limit any benefits available
under CEL-SCI's benefit plans. The exercise period of any stock options held by
EMPLOYEE at his death will be extended pursuant to the provisions of any stock
option plan or agreement pursuant to which the options were granted.
5.1.b. If EMPLOYEE becomes mentally or physically incapacitated or disabled
so as to be unable to perform EMPLOYEE's duties under this agreement, the
AGREEMENT shall terminate as well. Employee's inability to adequately perform
services under this AGREEMENT for a period of ninety (90) consecutive days will
be conclusive evidence of such mental or physical incapacity or disability,
unless such inability to adequately perform such services under this AGREEMENT
is pursuant to a mental or physical incapacity or disability covered by the
Family Medical Leave Act ("FMLA"). If EMPLOYEE becomes disabled while employed
by CEL-SCI, any options or stock of the Company then owned by EMPLOYEE shall
automatically accelerate and become fully vested. This provision shall not
otherwise limit any benefits available under CEL-SCI's benefit plans. CEL-SCI
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shall also extend the period of exercisability of those stock options to four
years, or the natural expiration of the stock options, whichever is later.
5.2 "Termination for Cause". Notwithstanding anything to the contrary
herein, EMPLOYEE's employment and this AGREEMENT may be terminated by CEL-SCI
upon written notification upon the occurrence of any of the following:
a. Willful misconduct that has a material adverse effect on
CEL-SCI's operations, prospects, and business.
b. Acts of fraud against CEL-SCI.
c. EMPLOYEE breaches any of the terms or conditions set forth in
this AGREEMENT and EMPLOYEE fails to cure such breach within 30 days after
EMPLOYEE's receipt from CEL-SCI of written notice of such breach, which notice
shall describe in reasonable detail CEL-SCI's belief that EMPLOYEE is in breach
hereof (notwithstanding the following, no cure period shall be applicable to
breaches by EMPLOYEE of paragraphs 6 and 7 or to the extent CEL-SCI has provided
EMPLOYEE more than 2 notices of substantially the same breach within any 12
month period).
In the event that EMPLOYEE's employment is terminated with cause by CEL-SCI
pursuant to this paragraph 5.2 of this AGREEMENT, CEL-SCI obligations under this
AGREEMENT shall immediately cease.
Termination of EMPLOYEE pursuant to this section 5.2 shall be in addition
to and without prejudice to any other right or remedy to which CEL-SCI may be
entitled at law, in equity, or under this AGREEMENT.
5.3 Constructive Termination.
If during the period commencing on the date that is 12 months prior to the
occurrence of a Change in Control and ending on the date that is 48 months
following a Change in Control, (i) the Company terminates Employee's employment,
or other than for cause, the Employee terminates his employment with the
Company, or (ii) the Employee terminates his employment for Good Reason (both a
"Constructive Termination"), then;
o all stock options under any Company Stock Option Plan which Employee
holds at the time of such Constructive Termination shall become fully
vested;
o the Company will extend the expiration date of the stock options
referred to above to a date which is four years after the effective
date of the Employee's resignation, unless the expiration date is
after such four-year period, in which case the original expiration
date will control;
o all outstanding restricted stock, which is the subject of an Award
Agreement pursuant to the Company's 2014 Incentive Stock Bonus Plan;
shall vest; and
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o all restrictions pertaining to any award made pursuant to the
Company's 2014 Incentive Stock Bonus Plan shall lapse and have no
further force and effect, including the failure to meet the
Performance Criteria set forth in the Award Agreement pursuant to the
Company's 2014 Incentive Stock Bonus Plan.
For purposes of the above:
"Change of Control" shall mean a change in ownership or control of
the Company affected through any of the following transactions:
a. a merger, consolidation or reorganization approved by the Company's
stockholders, unless securities representing more than 50% of the total combined
voting power of the voting securities of the successor corporation are
immediately thereafter beneficially owned, directly or indirectly, and in
substantially the same proportion, by the persons who beneficially owned the
company's outstanding voting securities immediately prior to such transaction,
or
b. any stockholder-approved transfer or other disposition of all or
substantially all of the Company's assets, or
c. The acquisition by any individual, entity or group of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended) of 20% or more of the Company's either (1) the
then outstanding shares of common stock of the Company or (2) the combined
voting power of the then outstanding voting securities of the Company entitled
to vote in the election of directors, or
d. a change in the composition of the Board over a period of thirty-six
(36) months or less such that a majority of the Board members ceases, by reason
of one or more contested elections for Board membership, to be comprised of
individuals who either (A) have been Board members continuously since the
beginning of such period or (B) have been elected or nominated for election as
Board members during such period by at least a majority of Board members
described in clause (A) who were still in office at the time the Board approved
such election or nomination.
Good Reason means: (a) a reduction in the Employee's compensation
(including benefits); or (b) the Employee being assigned any duties which are
materially inconsistent with the duties of the Employee immediately prior to the
occurrence of the Constructive Termination; or (c) the office at which the
Employee performs his duties is more than 10 miles from the office at which the
Employee performed his duties immediately prior to the occurrence of the
Constructive Termination.
In the event a Constructive Termination has occurred EMPLOYEE shall,
in his sole discretion, provide Company with his written notice of resignation
to be effective not less than 30 days after receipt by Company, whereupon
EMPLOYEE shall cease to be employed by the Company and both parties shall be
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relieved of further responsibility or liability to the other under this
Agreement, other than as provided in this AGREEMENT. Upon receipt of such notice
of resignation, Company shall promptly pay to EMPLOYEE by certified check, wire
transfer funds, or other form of payment reasonably acceptable to EMPLOYEE, a
lump sum amount equal to 24 months salary of the EMPLOYEE at such compensation
rate as is then in effect under the terms of this Agreement and any extension or
renewal thereof (the "Payment"), or the value of the remaining employment
contract, whichever is greater. The Payment shall not have deducted from it any
charges, expenses, debts, set-offs or other deductions of any kind whatsoever
except for required taxes.
5.4 In the event of a Constructive Termination, the Company shall also
provide the following benefits to EMPLOYEE:
a. The EMPLOYEE's existing coverage under the Company's group health
plan (and, if applicable, the existing group health coverage for eligible
dependents) will end on the last day of the month in which the eligible
EMPLOYEE's employment terminates. The eligible EMPLOYEE and his eligible
dependents may then be eligible to elect temporary continuation coverage under
the Company's group health plan in accordance with the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended ("COBRA"). The eligible EMPLOYEE
(and, if applicable, his eligible dependents) will be provided with a COBRA
election form and notice which describe his rights to continuation coverage
under COBRA. If an eligible EMPLOYEE elects COBRA continuation coverage, then
the Company will pay for COBRA coverage (such payments shall not include COBRA
coverage with respect to the Company's Section 125 health care reimbursement
plan) for (i) eighteen (18) months, or (ii) the maximum period permitted under
COBRA. If EMPLOYEE does exhaust the applicable COBRA period, the Company will
reimburse EMPLOYEE for the cost of an individual health insurance policy in an
amount not to exceed the amount of the monthly COBRA premium previously paid by
the Company pursuant to this paragraph for the remainder of the two year period
following EMPLOYEE's termination of employment. After such period of
Company-paid coverage, the eligible EMPLOYEE (and, if applicable, his eligible
dependents) may continue coverage at his own expense in accordance with COBRA or
other applicable laws. No provision of this agreement will affect the
continuation coverage rules under COBRA. Therefore, the period during which the
eligible EMPLOYEE must elect to continue the Company's health plan coverage
under COBRA, the length of time during which COBRA coverage will be made
available to the eligible EMPLOYEE, and all the eligible EMPLOYEE's other rights
and obligation under COBRA will be applied in the same manner that such rules
would apply in the absence of the Plan. In the event, however, an EMPLOYEE
becomes eligible for benefits under another plan prior to the expiration of the
period in which the Company is paying benefit premiums, the Company shall no
longer be obligated to pay such benefit premiums. The EMPLOYEE is required to
notify the Company of eligibility for benefits under another plan and is
expected to enroll in the new group plan at the first eligible opportunity
unless EMPLOYEE chooses, at EMPLOYEE's sole expense, to continue COBRA benefits
through the Company. If EMPLOYEE fails to notify the Company of EMPLOYEE's
eligibility for alterative benefits, the Company shall have the right to
discontinue payment of COBRA premiums upon thirty (30) days' notice to EMPLOYEE.
In no event shall a cash payment be made to EMPLOYEE in lieu of the payment of
COBRA premiums. The payment of COBRA premiums by the Company shall not extend
the maximum eligible COBRA coverage period.
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b. Outplacement Services. The Company will make available to
EMPLOYEE, upon his request, outplacement services provided by a reputable
outplacement counselor selected by the Company for a period of nine months
following termination. The Company will assume the cost of all such outplacement
services. In no event will a cash payment be made in lieu of outplacement
benefits.
6. Confidentiality
6.1 In view of the fact that the EMPLOYEE's work for the Company will bring
his into close contact with many confidential affairs of the Company not readily
available to the public, the EMPLOYEE agrees:
6.1.1 To keep secret and retain in the strictest confidence, all
confidential matters of the Company, including, without limitation, inventions
and related proprietary information, trade secrets, patents, customer lists,
methods, scientific results and related documentation in connection with any
research and development undertaken by, or at the direction of, the Company,
confidential pricing policies, confidential utilization review protocols and
screens, confidential and proprietary operational methods and other confidential
and proprietary business affairs and plans of the Company and its affiliates,
learned by his heretofore or hereafter; and not to disclose them to anyone
outside the Company, except in the course of performing his duties hereunder or
with the Company's express written consent; and
6.1.2 To promptly deliver to the Company upon the termination of his
employment with the Company, or at any time the Company may so request, all
memoranda, notes, records, reports, manuals, and other documents (and all copies
thereof) relating to the Company's business and all property associated
therewith, which he may then possess or have under his control.
6.2 If the EMPLOYEE commits a breach, or threatens to commit a breach, of
any of the provisions of Section 6.1 hereof, the Company shall have the
following rights and remedies:
6.2.1 The rights and remedy to have the provisions of this Agreement
specifically enforced by any court of competent jurisdiction, it being
acknowledged that any such breach or threatened breach shall cause irreparable
injury to the Company, and that money damages shall not provide a complete and
adequate remedy to the Company;
Each of the rights and remedies enumerated above shall be independent
of the other and shall be severally enforceable, and all of such rights and
remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to the Company under law or in equity.
7. Non-Competition and Non-Solicitation of Employees/Inventions, Patents and
Copyrights
7.1 EMPLOYEE agrees and promises that if his employment is terminated,
then, for the period of time described below, he will not be engaged in any
other business or as a consultant to or general partner, employee, officer or
director of any partnership, firm, corporation, or other entity, or as an agent
for any person, or otherwise, if: (1) such other business, partnership, firm,
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corporation, entity or person is engaged in for-profit activity in the
pharmaceutical industry within the United States and competes with the Company
in the field of natural cytokine mixtures for the treatment of any cancer
indication the Company is pursuing in clinical trials; and (2) EMPLOYEE either
(a) is a senior officer of such other business, partnership, firm, corporation,
entity or person; or (b) participates in or directs the development of drugs for
the treatment of cancer for such other business, partnership, firm, corporation,
entity or person. This agreement to refrain from engaging in competitive
activities shall continue for the period during which the Company is required by
the terms of paragraphs 5.2 or 5.3 of this Agreement to make salary payments to
EMPLOYEE following his termination (i.e., twenty four (24) months in the case of
Constructive Termination under paragraph 5.3), or for 2 years in the case of the
EMPLOYEE's resignation or termination pursuant to Section 5.2.
7.2 The EMPLOYEE further agrees and represents that during the EMPLOYEE's
employment by the Company and during the period in which EMPLOYEE is subject to
the Non-Competition provisions of this AGREEMENT, the EMPLOYEE will not,
directly or indirectly, on the EMPLOYEE's own behalf or in the service of, or on
behalf of any other individual or entity, divert, or attempt to divert, solicit
or hire away, to or for any individual or entity which is engaged in providing
business services, any person employed by the Company, whether or not such
EMPLOYEE is employed pursuant to a written agreement and whether or not such
EMPLOYEE is employed for a determined period or at-will.
7.3 All inventions made by the EMPLOYEE during the employment term, which
inventions apply to the Company's business, including any improvements to any
invention in existence as of the date of this Agreement, will be assigned to the
Company. In the event any of such inventions are of a patentable nature,
EMPLOYEE agrees to apply for a patent on the invention and assign any patent
rights relating to the invention to the Company. The Company will bear the costs
of any such patent applications.
7.4 EMPLOYEE understands that the Company's duties may involve writing or
drafting various documents, for the Company. EMPLOYEE hereby assigns any and all
rights to such documents to the Company, together with the right to secure
copyright therefor and all extensions and renewals of copyright throughout the
entire world. The Company shall have the right to make any and all versions,
omissions, additions, changes, specifications and adaptions, in whole or in
part, with respect to such documents, brochures or publications.
8. Notices.
All notices, requests, consents and other communications, required or
permitted to be given hereunder, shall be in writing and shall be deemed to have
been duly given if delivered personally or sent by prepaid electronic
transmission or mailed first-class, postage prepaid, by registered or certified
mail or delivered by an overnight courier service (notices sent by electronic
transmission, mail or courier service shall be deemed to have been given on the
date sent, or to such other address as either party shall designate by notice in
writing to the other in accordance herewith).
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9. Arbitration
The parties agree that any and all disputes that they have with one another
which arise out of EMPLOYEE's employment or under the terms of this AGREEMENT
shall be resolved through final and binding arbitration, as specified herein.
This shall include, without limitation, disputes relating to this AGREEMENT,
EMPLOYEE's employment by the Company or the termination thereof, claims for
breach of contract or breach of the covenant of good faith and fair dealing, and
any claims of discrimination or other claims under any federal, state or local
law or regulation now in existence or hereinafter enacted and as amended from
time to time concerning in any way the subject of EMPLOYEE's employment with the
Company or its termination. The only claims not covered by this paragraph 9 are
claims for benefits under the workers' compensation laws or claims for
unemployment insurance benefits, which will be resolved pursuant to those laws,
or the Company's rights pursuant to Section 6.2.1, which may be enforced by any
court of competent jurisdiction. Binding arbitration will be conducted in the
Washington, D.C. metropolitan area, in accordance with the rules and regulations
of the American Arbitration Association. Each party will bear one half of the
cost of the arbitration filing and hearing fees, and the cost of the arbitrator.
Each party will bear its own attorneys' fees, unless otherwise decided by the
arbitrator. EMPLOYEE understands and agrees that the arbitration shall be
instead of any civil litigation and that the arbitrator's decision shall be
final and binding to the fullest extent permitted by law and enforceable by any
court having jurisdiction thereof.
10. General.
10.1 This Agreement shall be governed by, and enforced in accordance with,
the laws of the Commonwealth of Virginia.
10.2 The article and section headings in this Agreement are for reference
only and shall not in any way affect the interpretation of this Employment
Agreement.
10.3 This Agreement sets forth the entire agreement and understanding of
the parties relating to the subject matter hereof and supersedes all prior
agreements, arrangements and understandings, written or oral, relating to the
subject matter hereof.
10.4 This Agreement, and the EMPLOYEE'S rights and obligations hereunder,
may not be assigned by the EMPLOYEE. The Company may assign this Agreement and
its rights, together with its obligations, hereunder in connection with any
sale, transfer or other disposition of all or substantially all of its business
or assets subject to Section 5.3 hereof; in any event, the obligations of the
Company hereunder shall be binding on its successors or assigns, whether by
merger, consolidation of acquisition of all or substantially all of its business
or assets.
10.5 This Agreement may be amended, modified, superseded, cancelled,
renewed or extended, and the terms hereof may be waived, only by a written
instrument executed by both of the parties hereto or, in the case of a waiver,
by the party waiving compliance. The failure of either party at any time or
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times to require performance of any provision hereof shall in no manner affect
the right at a later time to enforce the same. No waiver by either party of the
breach of any term or covenant contained in this Agreement, whether by conduct
or otherwise, in any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any such breach, or a waiver of the breach
of any other term or covenant in this Agreement.
11. Subsidiaries and Affiliates.
As used herein, the term "subsidiary" shall mean any corporation or other
business entity controlled by the corporation in question; and the term
"affiliate" shall mean and include any corporation or other business entity
controlling, controlled by, or under common control with the corporation in
question.
12. Survival.
Sections 6 and 7 of this Agreement shall survive termination of this
Agreement for any reason.
IN WITNESS WHEREOF, the parties have executed this Agreement as of August
31, 2016.
CEL-SCI CORPORATION
/s/ Xxxxxxxx X. Xxxxxxx
-----------------------------------------
By: Xxxxxxxx X. Xxxxxxx
Senior Vice President of Operations
EMPLOYEE
/s/ Geert X. Xxxxxxx
------------------------------------
Geert X. Xxxxxxx
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