SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
CEL-SCI CORPORATION
---------------- ---------------------
(Name of Registrant as Specified In Its Charter)
William T. Hart - Attorney for Registrant
--------- -------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
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4) Proposed maximum aggregate value of transaction:
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[ ] 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:
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2) Form, Schedule or Registration No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
CEL-SCI CORPORATION
8229 Boone Blvd.
Suite 802
Vienna, Virginia 22l82
(703) 506-9460
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD MARCH 22, 2001
To the Shareholders:
Notice is hereby given that the annual meeting of the shareholders of
CEL-SCI Corporation (the "Company") will be held at the Company's laboratory
which is located at 4820-C Seton Drive, Baltimore, MD 21215 on March 22, 2001,
at 11:00 A.M., for the following purposes:
(1) to elect the directors who shall constitute the Company's Board of
Directors for the ensuing year;
(2) to approve the adoption of the Company's year 2000 Incentive Stock
Option Plan which provides that up to 500,000 shares of common stock may be
issued upon the exercise of options granted pursuant to the Incentive Stock
Option Plan.
(3) to approve the adoption of the Company's year 2000 Non-Qualified Stock
Option Plan which provides that up to 500,000 shares of common stock may be
issued upon the exercise of options granted pursuant to the Non-Qualified Stock
Option Plan.
(4) to approve the adoption of the Company's year 2000 Stock Bonus Plan
which provides that up to 200,000 shares of common stock may be issued to
persons granted stock bonuses pursuant to the Stock Bonus Plan.
(5) to approve the issuance of such number of common share as may be
required by the terms of certain outstanding warrants.
(6) to ratify the appointment of Deloitte & Touche as the Company's
independent accountants for the fiscal year ending September 30, 2001;
to transact such other business as may properly come before the meeting.
February 1, 2001 is the record date for the determination of shareholders
entitled to notice of and to vote at such meeting. Shareholders are entitled to
one vote for each share held. As of February 1, 2001, there were _________
shares of the Company's Common Stock issued and outstanding.
CEL-SCI CORPORATION
February 5, 2001 By Geert R. Kersten
-------------------------------------
Chief Executive Officer
<PAGE>
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, AND SIGN,
DATE AND RETURN THE PROXY CARD. TO SAVE THE COST OF FURTHER SOLICITATION PLEASE
MAIL YOUR PROXY CARD PROMPTLY.
<PAGE>
CEL-SCI CORPORATION
8229 Boone Blvd.
Suite 802
Vienna, Virginia 22l82
(703) 506-9460
PROXY STATEMENT
The accompanying proxy is solicited by the Company's directors for voting at
the annual meeting of shareholders to be held on March 22, 2001, 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 the Company at the address set forth 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 mailed to shareholders of
record on or about February --, 2001.
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 and to approve
the other proposals to come before the meeting. Cumulative voting in the
election of directors is not permitted. The adoption of any other proposals to
come before the meeting will require the approval of a majority of votes cast at
the meeting.
Shares of the Company'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 special
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 have the same effect as votes against the
proposals to be considered at the meeting.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of February 1, 2001, information with
respect to the shareholdings of (i) each person owning beneficially 5% or more
of the Company's Common Stock (ii) each officer who received compensation in
excess of $100,000 during the Company's most recent fiscal year and (iii) all
officers and directors as a group. Unless otherwise indicated, each owner has
sole voting and investment powers over his shares of Common Stock.
<PAGE>
Number of Percent of
Name and Address Shares (1) Class (4)
---------------- ----------- -------------
Maximilian de Clara 348,333 *
Bergstrasse 79
6078 Lungern,
Obwalden, Switzerland
Geert R. Kersten 1,210,422 (2) 5.4%
8229 Boone Blvd., Suite 802
Vienna, VA 22182
Patricia B. Prichep 216,292 *
8229 Boone Blvd., Suite 802
Vienna, VA 22182
M. Douglas Winship 103,283 *
8229 Boone Blvd., Suite 802
Vienna, VA 22182
Eyal Talor, Ph.D. 81,015 *
8229 Boone Blvd., Suite 802
Vienna, VA 22182
Daniel H. Zimmerman, Ph.D. 134,874 *
8229 Boone Blvd., Suite 802
Vienna, VA 22182
Michael Luecke 58,209 *
8229 Boone Blvd., Suite 802
Vienna, VA 22182
Alexander G. Esterhazy 25,000 *
20 Chemin du Pre-Poiset
CH- 1253 Vandoeuvres
Geneve, Switzerland
John M. Jacquemin 562,436 (3) 2.6%
8614 Westwood Center Drive
Vienna, VA 22182
F. Donald Hudson 127,200 *
40 Moorings Road
Marion, MA 02738
<PAGE>
All Officers and Directors 2,867,064 12.6%
as a Group (10 persons)
*Less than 1%
(1) Includes shares issuable prior to May 16, 2001 upon the exercise of options
or warrants granted to the following persons:
Options or Warrants Exercisable
Name Prior to May 16, 2001
---- ------------------------------------
Maximilian de Clara 348,333
Geert R. Kersten 1,073,334
Patricia B. Prichep 203,501
M. Douglas Winship 94,167
Eyal Talor, Ph.D. 70,833
Daniel H. Zimmerman, Ph.D. 107,667
Michael Luecke 50,000
Alexander G. Esterhazy 25,000
John M. Jacquemin 278,152
F. Donald Hudson 127,000
(2) Amount includes shares held in trust for the benefit of Mr. Kersten's minor
children. Geert R. Kersten is the stepson of Maximilian de Clara.
(3) Includes shares registered in the name of Mooring Capital Fund and shares
issuable upon the exercise of warrants held by Mooring Capital Fund. Mr.
Jacquemin may be deemed the beneficial owner of the shares held by Mooring
Capital Fund.
(4) Amount excludes shares which may be issued upon the exercise or conversion
of other options, warrants and other convertible securities previously
issued by the Company.
ELECTION OF DIRECTORS
Unless the proxy contains contrary instructions, it is intended that the
proxies will be voted for the election of the current directors listed below to
serve as members of the board of directors until the next annual meeting of
shareholders and until their successors shall be elected and shall qualify.
All current directors have consented to stand for re-election. 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.
Certain information concerning the Company's officers and the Board of
Directors follows:
<PAGE>
Name Age Position
Maximilian de Clara 70 President and a Director
Geert R. Kersten, Esq. 42 Chief Executive Officer, Secretary, Treasurer
and a Director
Patricia B. Prichep 49 Senior Vice President of Operations
M. Douglas Winship 51 Senior Vice President of Regulatory
Affairs and Quality Assurance
Eyal Talor, Ph.D. 44 Senior Vice President of Research and
Manufacturing
Daniel H. Zimmerman
Ph.D. 59 Senior Vice President of Research, Cellular
Immunology
Michael Luecke 58 Senior Vice President of Business Development
Alexander G. Esterhazy 56 Director
John M. Jacquemin 53 Director
F. Donald Hudson 67 Director
Mr. Maximilian de Clara, by virtue of his position as an officer and
director of the Company, may be deemed to be the "parent" and "founder" of the
Company as those terms are defined under applicable rules and regulations of the
Securities and Exchange Commission.
Maximilian de Clara. Mr. de Clara has been a director of the Company since
its inception in March, l983, and has been president of the Company since July,
l983. Prior to his affiliation with the Company, and since at least l978, Mr. de
Clara was involved in the management of his personal investments and personally
funding research in the fields of biotechnology and biomedicine. Mr. de Clara
attended the medical school of the University of Munich from l949 to l955, but
left before he received a medical degree. During the summers of l954 and l955,
he worked as a research assistant at the University of Istanbul in the field of
cancer research. For his efforts and dedication to research and development in
the fight against cancer and AIDS, Mr. de Clara was awarded the "Pour le Merit"
honorary medal of the Austrian Military Order "Merito Navale" as well as the
honor cross of the Austrian Albert Schweitzer Society.
Geert R. Kersten, Esq. Mr. Kersten was Director of Corporate and Investment
Relations for the Company between February, 1987 and October, 1987. In October
of 1987, he was appointed Vice President of Operations. In December 1988, Mr.
Kersten was appointed a director of the Company. Mr. Kersten also became the
Company's secretary and treasurer in 1989. In May 1992, Mr. Kersten was
appointed Chief Operating Officer and in February 1995, Mr. Kersten became the
Company's Chief Executive Officer. In previous years, Mr. Kersten worked as a
financial analyst with Source Capital, Ltd., an investment advising firm in
McLean, Virginia. Mr. Kersten is a stepson of Maximilian de Clara, who is the
President and a Director of the Company. Mr. Kersten attended George Washington
University in Washington, D.C. where he earned a B.A. in Accounting and a M.B.A.
with emphasis on International Finance. He also attended law school at American
University in Washington, D.C. where he received a Juris Doctor degree.
<PAGE>
Patricia B. Prichep has been the Company's Senior Vice President of
Operations since March 1994. Between December, 1992 and March 1994, Ms. Prichep
was the Company's Director of Operations. From June 1990 to December 1992, Ms.
Prichep was the Manager of Quality and Productivity for the NASD's Management,
Systems and Support Department. Between 1982 and 1990, Ms. Prichep was Vice
President and Operations Manager for Source Capital, Ltd.
M. Douglas Winship has been the Company's Senior Vice President of
Regulatory Affairs and Quality Assurance since April 1994. Between 1988 and
April 1994, Mr. Winship held various positions with Curative Technologies, Inc.,
including Vice President of Regulatory Affairs and Quality Assurance
(1991-1994).
Eyal Talor, Ph.D. has been the Company's Senior Vice President of Research
and Manufacturing since March 1994. From October 1993 until March 1994, Dr.
Talor was Director of Research, Manufacturing and Quality Control, as well as
the Director of the Clinical Laboratory, for Chesapeake Biological Laboratories,
Inc. From 1991 to 1993, Dr. Talor was a principal scientist with SRA
Technologies, Inc., as well as the director of SRA's Flow Cytometry Laboratory
(1991-1993) and Clinical Laboratory (1992-1993). During 1992 and 1993, Dr. Talor
was also the Regulatory Affairs and Safety Officer for SRA. Since 1987, Dr.
Talor has held various positions with The John Hopkins University, including
course coordinator for the School of Continuing Studies (1989-Present), research
associate and lecturer in the Department of Immunology and Infectious Diseases
(1987-1991), and adjunct associate professor (1991-present).
Daniel H. Zimmerman, Ph.D. has been the Company's Vice President of
Research, Cellular Immunology since January 1996. Dr. Zimmerman founded CELL
MED, Inc. and was its president from 1987 to 1995. From 1973 to 1987 Dr.
Zimmerman served in various positions at Electronucleonics, Inc. including
Scientist, Senior Scientist, Technical Director and Program Manager. From 1969
to 1973 Dr. Zimmerman was a Senior Staff Fellow at NIH.
Michael Luecke joined the Company as Senior Vice President of Business
Development in June 1998. Mr. Luecke has over 20 years of business experience in
pharmaceutical and biotechnology companies. He has held senior-level business
development/licensing positions with Bristol-Myers, SmithKline and Ciba-Geigy,
as well as several small biopharmaceutical companies.
Alexander G. Esterhazy has been an independent financial advisor since
November 1997. Between July 1991 and October 1997 Mr. Esterhazy was a senior
partner of Corpofina S.A. Geneva, a firm engaged in mergers, acquisitions and
portfolio management. Between January 1998 and July 1991 Mr. Esterhazy was a
managing director of DG Bank in Switzerland. During this period Mr. Esterhazy
was in charge of the Geneva, Switzerland branch of the DG Bank, founded and
served as vice president of DG Finance (Paris) and was the President and Chief
Executive officer of DG-Bourse, a securities brokerage firm.
John M. Jacquemin has, since 1982, been the President of Mooring Financial
Corporation, a company specializing in the origination, purchase and
administration of
<PAGE>
commercial loan portfolios, equipment leases and real estate mortgages. Between
1977 and 1982 Mr. Jacquemin was Vice President of CFC Corporation, a company
involved in title insurance, fire and casualty insurance, equipment leasing and
real estate development.
F. Donald Hudson has been a director of the Company since May 19, 2000. Mr.
Hudson was previously a director of the Company between May 1992 and March 1999.
Since October 1995 Mr. Hudson has been a consultant in the biotechnology field.
From December 1994 to October 1995 Mr. Hudson was President and Chief Executive
Officer of VIMRx Pharmaceuticals, Inc. (now Nexell Corp.) Mr. Hudson was
reappointed as a director on May 19, 2000 in connection with the settlement of
litigation brought by Mr. Hudson and a former director of the Company.
All of the Company's officers devote substantially all of their time on the
Company's business.
The Company's Board of Directors met eleven times during the year ending
September 30, 2000. All of the Directors attended each of these meetings either
in person or by telephone conference call.
Executive Compensation
The following table sets forth in summary form the compensation received by
(i) the Chief Executive Officer of the Company and (ii) by each other executive
officer of the Company who received in excess of $100,000 during the fiscal year
ended September 30, 2000.
All
Other Other
Annual Restric- Com-
Compen- ted Stock Options pensa-
Name and Princi- Fiscal Salary Bonus sation Awards Granted tion
pal Position Year (1) (2) (3) (4) (5) (6)
---------------- ------ ------ ----- ------ --------- ------- -----
Maximilian
de Clara, 2000 $345,583 -- $72,945 $550,000 60,000 $ 64
President 1999 $335,292 -- $72,945 $435,625 145,000 $ 63
1998 $315,021 -- $81,709 -- 164,000 $ 73
Geert R.
Kersten, 2000 $303,049 -- $15,349 $10,375 60,000 $4,114
Chief Executive 1999 $268,480 $15,154 $10,000 145,000 $4,113
Officer,
Secretary 1998 $229,533 -- $15,180 $ 7,500 164,000 $5,310
and Treasurer
Patricia B.
Prichep 2000 $114,430 -- $3,000 $6,998 23,000 $ 63
Senior Vice 1999 $107,936 -- $3,000 $6,476 79,500 $ 63
President of
Operations
<PAGE>
M. Douglas
Winship, 2000 $154,658 -- $2,400 $9,280 20,000 $ 64
Senior Vice
President 1999 $146,609 -- $2,400 $8,797 27,500 $ 63
of Regulatory
Affairs 1998 $136,918 -- $2,400 $6,240 -- $1,060
and Quality
Assurance
Eyal Talor, Ph.D. 2000 $150,334 -- $3,000 $9,020 50,000 $ 63
Senior Vice 1999 $139,085 -- $3,000 $8,345 30,000 $ 63
President of
of Research and 1998 $130,845 -- $3,000 $5,769 27,000 $ 958
Manufacturing
Daniel Zimmerman, 2000 $124,165 -- $3,000 $7,450 20,000 $ 64
Ph.D., 1999 $114,806 -- $3,000 $6,888 45,000 $ 63
Senior Vice 1998 $106,360 -- $3,000 $4,882 39,000 $ 822
President of
Cellular Immunology
Michael Luecke, 2000 $150,000 -- -- $9,000 -- $ 64
Senior Vice 1999 $150,000 -- -- $8,875 -- $ 63
President of
Business Development
(1) The dollar value of base salary (cash and non-cash) received.
(2) The dollar value of bonus (cash and non-cash) received.
(3) Any other annual compensation not properly categorized as salary or bonus,
including perquisites and other personal benefits, securities or property.
Amounts in the table represent automobile, parking and other
transportation expenses, plus, in the case of Maximilian de Clara and
Geert Kersten, director's fees of $8,000.
(4) During the periods covered by the table, the value of the shares of
restricted stock issued as compensation for services to the persons listed
in the table. In the case of Mr. de Clara, the shares (200,000 in 2000 and
1999) were issued in consideration for past services rendered to the
Company. In the case of all other persons listed in the table, the shares
were issued as the Company's contribution on behalf of the named officer
to the Company's 401(k) retirement plan.
As of September 30, 2000, the number of shares of the Company's common
stock, owned by the officers included in the table above, and the value of such
shares at such date, based upon the market price of the Company's common stock
were:
Name Shares Value
Maximilian de Clara -- --
Geert R. Kersten 137,088 $300,223
Patricia B. Prichep 12,791 $ 28,012
M. Douglas Winship 9,116 $ 19,964
Eyal Talor, Ph.D. 10,182 $ 22,299
Daniel Zimmerman, Ph.D. 27,207 $ 59,583
Michael Luecke 8,209 $ 17,978
<PAGE>
Dividends may be paid on shares of restricted stock owned by the Company's
officers and directors, although the Company has no plans to pay dividends.
(5) The shares of Common Stock to be received upon the exercise of all stock
options granted during the periods covered by the Table. Includes certain
options issued in connection with the Company's Salary Reduction Plans as
well as certain options purchased from the Company. See "Options Granted
During Fiscal Year Ending September 30, 2000" below.
(6) All other compensation received that the Company could not properly report
in any other column of the Table including annual Company contributions or
other allocations to vested and unvested defined contribution plans, and the
dollar value of any insurance premiums paid by, or on behalf of, the Company
with respect to term life insurance for the benefit of the named executive
officer, and the full dollar value of the remainder of the premiums paid by,
or on behalf of, the Company. Amounts in the table represent life insurance
premiums.
Long Term Incentive Plans - Awards in Last Fiscal Year
None.
Employee Pension, Profit Sharing or Other Retirement Plans
During 1993 the Company implemented a defined contribution retirement
plan, qualifying under Section 401(k) of the Internal Revenue Code and covering
substantially all the Company's employees. Prior to January 1, 1998 the
Company's contribution was equal to the lesser of 3% of each employee's salary,
or 50% of the employee's contribution. Effective January 1, 1998 the plan was
amended such that the Company's contribution is now made in shares of the
Company's common stock as opposed to cash. Each participant's contribution is
matched by the Company 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. The Company's contribution of common
stock is valued each quarter based upon the closing price of the Company's
common stock. The fiscal 2000 expenses for this plan were $102,559. Other than
the 401(k) Plan, the Company does not have a defined benefit, pension, profit
sharing or other retirement plan.
Compensation of Directors
Standard Arrangements. The Company currently pays its directors $2,000
per quarter, plus expenses. The Company has no standard arrangement pursuant to
which directors of the Company are compensated for any services provided as a
director or for committee participation or special assignments.
Other Arrangements. The Company has from time to time granted options
to its outside directors. See Stock Options below for additional information
concerning options granted to the Company's directors.
<PAGE>
Employment Contracts
Effective April 12, 1999, the Company entered into a three-year employment
agreement with Mr. de Clara. The employment agreement provides that the Company
will pay Mr. de Clara an annual salary of $363,000 during the term of the
agreement. In the event that there is a material reduction in Mr. de Clara's
authority, duties or activities, or in the event there is a change in the
control of the Company, then the agreement allows Mr. de Clara to resign from
his position at the Company and receive a lump-sum payment from the Company
equal to 18 months salary. For purposes of the employment agreement, a change in
the control of the Company means the sale of more than 50% of the outstanding
shares of the Company's Common Stock, or a change in a majority of the Company's
directors.
Effective August 1, 2000, the Company entered into a three-year employment
agreement with Mr. Kersten. The employment agreement provides that during the
term of the employment agreement the Company will pay Mr. Kersten an annual
salary of $336,132, subject to the minimum annual increases of 5% per year. In
the event there is a change in the control of the Company, the agreement allows
Mr. Kersten to resign from his position at the Company and receive a lump-sum
payment from the Company equal to 24 months salary. For purposes of the
employment agreement a change in the control of the Company means: (1) the
merger of the Company with another entity if after such merger the shareholders
of the Company do not own at least 50% of voting capital stock of the surviving
corporation; (2) the sale of substantially all of the assets of the Company; (3)
the acquisition by any person of more than 50% of the Company's common stock; or
(4) a change in a majority of the Company's directors which has not been
approved by the incumbent directors.
Stock Options
The following tables set forth information concerning the options
granted during the fiscal year ended September 30, 2000, to the persons named
below, and the fiscal year-end value of all unexercised options (regardless of
when granted) held by these persons.
<PAGE>
Options Granted During Fiscal Year Ending September 30, 2000
------------------------------------------------------------
Individual Grants
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<TABLE>
<S> <C> <C> <C> <C> <C>
Potential Realizable
% of Total Value at Assumed
Options Annual Rates of Stock
Granted to Exercise Price Appreciation
Options Employees in Price Per Expiration for Option Term (1)
Name Granted (#) Fiscal Year Share Date 5% 10%
------ ----------- ----------- --------- ----------- ---- -----
Maximilian de Clara 60,000 15% $3.06 4/19/10 $115,200 $292,611
Geert R. Kersten 60,000 15% $3.06 4/19/10 $115,200 $292,611
Patricia B. Prichep 23,000 5.8% $4.00 2/02/10 $ 57,858 $146,510
Eyal Talor, Ph.D. 50,000 12.6% $2.56 11/27/09 $ 80,000 $204,000
M. Douglas Winship 20,000 5% $5.37 4/03/10 $ 67,543 $171,160
Daniel Zimmerman, Ph.D. 20,000 5% $4.00 2/02/10 $ 50,300 $127,400
</TABLE>
(1) The potential realizable value of the options shown in the table assuming
the market price of the Company's Common Stock appreciates in value from the
date of the grant to the end of the option term at 5% or 10%.
Option Exercises and Year-End Option Values
Value (in $) of
Unexercised
Number of In-the-Money
Unexercised Options at Fiscal
Options (3) Year-End (4)
Shares ------------ ---------------
Acquired On Value Exercisable/ Exercisable/
Name Exercise (1) Realized (2) Unexercisable Unexercisable
---- ------------ ------------ ------------- ----------------
Maximilian de Clara 373,667 $1,436,548 295,000/109,999 25,916/4,333
Geert R. Kersten 50,750 $137,310 1,020,001/109,999 25,916/4,333
Patricia Prichep 23,000 $89,900 190,834/38,666 12,525/1,300
M. Douglas Winship 2,000 $4,510 82,500/30,000 3,775/1,300
Eyal Talor 91,334 $274,626 70,833/18,333 3,366/1,733
Daniel Zimmerman 24,000 $141,120 91,000/35,000 8,150/1,300
Michael Luecke 10,000 $44,425 40,000/50,000 --/--
(1) The number of shares received upon exercise of options during the fiscal
year ended September 30, 2000.
(2) With respect to options exercised during the Company's fiscal year ended
September 30, 2000, the dollar value of the difference between the option
exercise price and the market value of the option shares purchased on the
date of the exercise of the options.
(3) The total number of unexercised options held as of September 30, 2000,
separated between those options that were exercisable and those options that
were not exercisable.
(4) For all unexercised options held as of September 30, 2000, the market value
of the stock underlying those options as of September 30, 2000.
<PAGE>
Stock Option and Bonus Plans
The Company has Incentive Stock Option Plans, Non-Qualified Stock
Option Plans and Stock Bonus Plans. 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 the Company's Common Stock to persons that exercise
options granted pursuant to the Plan. Only Company employees may be granted
options pursuant to the Incentive Stock Option Plan.
To be classified as incentive stock options under the Internal Revenue
Code, options granted pursuant to the Plans must be exercised prior to the
following dates:
(a) The expiration of three months after the date on which an option
holder's employment by the Company is terminated (except if such termination is
due to death or permanent and total disability);
(b) The expiration of 12 months after the date on which an option
holder's employment by the Company is terminated, if such termination is due to
the Employee's permanent and total disability;
(c) In the event of an option holder's death while in the employ of the
Company, his executors or administrators may exercise, within three months
following the date of his death, the option as to any of the shares not
previously exercised;
The total fair market value of the shares of Common Stock (determined
at the time of the grant of the option) for which any employee may be granted
options which are first exercisable in any calendar year may not exceed
$100,000.
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 the Company may not be exercisable by its terms after five years from
the date of grant. Any other option granted pursuant to the Plan may not be
exercisable by its terms after ten years from the date of grant.
<PAGE>
The purchase price per share of Common Stock purchasable under an
option is determined by the 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 the Company's
outstanding shares).
Non-Qualified Stock Option Plan. The Non-Qualified Stock Option Plans
authorize the issuance of shares of the Company's Common Stock to persons that
exercise options granted pursuant to the Plans. The Company'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
the offer or sale of securities in a capital-raising transaction. The option
exercise price is determined by the Committee but cannot be less than the market
price of the Company's Common Stock on the date the option is granted.
Stock Bonus Plan. Under the Stock Bonus Plan, the Company's employees,
directors, officers, consultants and advisors are eligible to receive a grant of
the Company's shares, 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.
Other Information Regarding the Plans. The Plans are administered by
the Company's Board of Directors. The Directors serve for a one-year tenure and
until their successors are elected. A Director may be removed at any time by the
vote of a majority of the Company's shareholders. Any vacancies which may occur
on the Board of Directors may be filled by the Board of Directors. The Board of
Directors is vested with the authority to interpret the provisions of the Plans
and supervise the administration of the Plans. In addition, the Board of
Directors 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 Board of Directors, 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 Board
of Directors 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
Plan and any options granted pursuant to the Incentive Stock Option Plan or the
Non-Qualified Stock Option Plan will be forfeited if the "vesting" schedule
established by the Board of Directors 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 the Company or the period of time a non-employee must provide
services to the Company. At the time an employee ceases working for the Company
(or at the time a non-employee ceases to perform services for the Company), any
shares or options not fully vested will be forfeited and cancelled. At the
discretion of the Board of Directors payment for the shares of common stock
underlying options may be paid through the delivery of shares of the Company'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 Board of Directors.
Options are generally non-transferable except upon death of the option
holder. Shares issued pursuant to the Stock Bonus Plan will generally not be
transferable until the person receiving the shares satisfies the vesting
requirements imposed by the Board of Directors when the shares were issued.
<PAGE>
The Board of Directors of the Company may at any time, and from time to
time, amend, terminate, or suspend one or more of the Plans in any manner they
deem appropriate, provided that such amendment, termination or suspension will
not adversely affect rights or obligations with respect to shares or options
previously granted. The Board of Directors may not without shareholder approval
make any amendment which would materially modify the eligibility requirements
for the Plans or materially increase in any other way the benefits accruing to
employees who are eligible to participate in the Plans.
Summary. The following sets forth certain information, as of February
1, 2000, concerning the stock options and stock bonuses granted by the Company.
Each option represents the right to purchase one share of the Company's Common
Stock.
The total shares reserved under each Plan includes shares authorized by the
year 2000 Plans which are being submitted to the Company's shareholders for
their approval at the March 16, 2001 meeting.
Total Shares
Shares Reserved for Shares Remaining
Reserved Outstanding Issued as Options/Shares
Name of Plan Under Plans Options Stock Bonus Under Plans
----------- ----------- ---------- ----------- ----------
Incentive Stock Option Plans 1,600,000 1,046,766 N/A 466,649
Non-Qualified Stock Option
Plans 3,260,000 1,839,806 N/A 272,733
Stock Bonus Plans 840,000 N/A 496,293 343,707
Of the shares issued pursuant to the Company's Stock Bonus Plans 70,303
shares have been issued as part of the Company's contribution to its 401(k) plan
and 400,000 shares have been issued to Maximilian de Clara, the Company's
President, for services rendered to the Company.
Transactions with Related Parties
During the year ended September 30, 1999 the Company issued 200,000 shares
of its common stock to Mr. de Clara for past services provided to the Company.
In January 1999 the Company issued Mr. de Clara an additional 200,000 shares of
common stock for past services provided to the Company.
<PAGE>
Compensation Committee
During the year ending September 30, 2000 the Company had a Compensation
Committee which, was comprised of Maximilian de Clara, Alexander Esterhazy and
John Jacquemin. During the year ended September 30, 2000 the Compensation
Committee did not formerly meet as a separate committee, but rather held its
meetings in conjunction with the Company's Board of Director's meetings.
During the year ended September 30, 2000, Mr. de Clara was the only officer
participating in deliberations of the Company's compensation committee
concerning executive officer compensation. During the year ended September 30,
2000, no director of the Company was also an executive officer of another
entity, which had an executive officer of the Company serving as a director of
such entity or as a member of the compensation committee of such entity.
The following is the report of the Compensation Committee:
The key components of the Company's executive compensation program include
annual base salaries and long-term incentive compensation consisting of stock
options. It is the Company'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.
The Company's long term incentive program consists exclusively of periodic
grants of stock options with an exercise price equal to the fair market value of
the Company's Common Stock on the date of grant. To encourage retention, the
ability to exercise options granted under the program is subject to vesting
restrictions. Decisions made regarding the timing and size of option grants take
into account Company and individual performance, "competitive market" practices,
and the size of the option grants made in prior years. The weighting of these
factors varies and is subjective. Current option holdings are not considered
when granting options.
In April 1999 the Company entered into a three-year employment agreement
with Maximilian de Clara, the Company's President, which provides that during
the employment term the Company will pay Mr. de Clara a salary of $363,000.
Between August 1, 1997 and August 1, 2000 the Company had an employment
agreement with Mr. Kersten which provided that during the year ending July 31,
2000, the Company would pay Mr. Kersten a salary of $320,466. Effective August
1, 2000, the Company entered into a new three-year employment agreement with
<PAGE>
Geert R. Kersten. The employment agreement provides that during the term of the
employment agreement the Company will pay Mr. Kersten an annual salary of
$336,132, subject to the minimum annual increases of 5% per year. In renewing
Mr. Kersten's employment contract the Compensation Committee considered various
factors, including Mr. Kersten's performance in his area of responsibility, Mr.
Kersten's experience in his position, and Mr. Kersten's length of service with
the Company. During the fiscal year ending September 30, 2000 the cash
compensation paid to Mr. de Clara and Mr. Kersten was based on these employment
contracts. Since the terms of the employment contracts established the
compensation paid to Mr. de Clara and Mr. Kersten, and except with respect to
the renewal of Mr. Kersten's employment contract, there was no relationship
between the Company's performance and Mr. de Clara's or Mr. Kersten's
compensation for the last completed fiscal year. During the year ended September
30, 1999 Mr. de Clara and Mr. Kersten, in accordance with the Company's salary
reduction program, agreed to reduce a portion of the compensation payable in
fiscal 1999 and 2000 pursuant to their employment contracts in exchange for
stock options.
During the year ending September 30, 2000, the compensation paid to the
Company'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 the Company, the achievement of specific
goals established for the Company 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 the Company's other executive officers since the
Company'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 the Company's financial
or stock price performance can be misleading.
During the year ended September 30, 2000 the Company granted options for the
purchase of 233,000 shares of the Company's common stock to the Company's
executive officers. In granting the options to the Company's executive officers,
the Board of Directors considered the same factors which were used to determine
the cash compensation paid to such officers.
During the year ended September 30, 2000 the Company issued 200,000 shares
of its common stock to the Company's President, Maximilian de Clara, in return
for past services provided to the Company.
The foregoing report has been approved by the members of the Compensation
Committee:
Maximilian de Clara
Alexander Esterhazy
John Jacquemin
<PAGE>
Stockholder Return Performance Graph
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total stockholder return on the Company's common stock with the
cumulative total return of the Amex Market Value Index and an old and new
Biotechnology peer group for the five fiscal years ending September 30, 2000.
Comparison of Five Year Cumulative Total Return Among Cel-Sci
Corporation, the Amex Market Value, a New Peer Group and the Old Peer Group
------------------------------------------------------------------------------
The members of the New Peer Group used for purposes of the following
comparison, and their respective trading symbols, are: Antex Biologics, Inc.
(ANX), Epimmune, Inc. (EPMN) and Neoprobe Corp. (NEOP).
The members of the Old Peer Group, and their respective trading symbols,
are: Pharmos Corp. (PARS), Alpha 1 Biomedicals, Inc. (ALBM), Interferon
Sciences, Inc. (IFSC), and Avant Immunotherapeutics, Inc. (AVAN). The Old Peer
Group was replaced with the New Peer Group since the large market capitalization
of Avant Immnotherapeutics, Inc. (AVAN), relative to the other members of the
Old Peer Group, resulted in a distorted weighted average of the Old Peer Group's
cumulative total return.
Cumulative Total Return
9/95 9/96 9/97 9/98 9/99 9/00
---- ---- ---- ---- ---- ----
New Peer Group
Cel-Sci Corporation 100.00 124.32 156.76 56.76 58.11 48.65
Amex Market Value Index 100.00 101.91 127.81 119.69 153.76 191.35
Peer Group 100.00 98.54 78.97 9.95 8.04 9.27
Old Peer Group
Cel-Sci Corporation 100.00 124.32 156.76 56.76 58.11 48.65
Amex Market Value Index 100.00 101.91 127.81 119.69 153.76 191.35
Peer Group 100.00 56.98 76.38 34.46 31.99 133.22
$100 invested on 09/30/95 in stock or index, including reinvestment of
dividends. The Company's fiscal year ends on September 30.
Audit Committee
During the year ending September 30, 2000 the Company had an Audit Committee
comprised of Geert Kersten, Alexander Esterhazy and John Jacquemin. The purpose
of the Audit Committee is to review and approve the selection of the Company's
auditors, review the Company's financial statements with the Company's
independent auditors, and review and discuss the independent auditor's
management letter relating to the Company's internal accounting controls. During
the fiscal year ending September 30, 2000, the Audit Committee met once. All
members of the Audit Committee attended this meeting.
<PAGE>
The following is the report of the Audit Committee.
(1) The Audit Committee reviewed and discussed the Company's audited financial
statements for the year ended September 30, 2000 with the Company's
management.
(2) The Audit Committee discussed with the Company's independent auditors the
matters required to be discussed by Statement of Accounting Standards 61.
(3) The Audit Committee has received the written disclosures and the letter
from the Company's independent accountants required by Independence
Standards Board Standard No. 1 (Independence Standards Board Standard No.
1, Independence Discussions with Audit Committees), and had discussed with
the Company's independent accountants the independent accountants
independence; and
(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 the Company's Annual Report on Form 10-K for the year ended
September 30, 2000 for filing with the Securities and Exchange Commission.
The foregoing report has been approved by the members of the Audit
Committee:
Geert R. Kersten
Alexander G. Esterhazy
John M. Jacquemin
PROPOSAL TO ADOPT YEAR 2000 INCENTIVE STOCK OPTION PLAN
Shareholders are being requested to vote on the adoption of the Company's
year 2000 Incentive Stock Option Plan. The purpose of the year 2000 Incentive
Stock Option Plan is to furnish additional compensation and incentives to the
Company's officers and employees.
The year 2000 Incentive Stock Option Plan, if adopted, will authorize the
issuance of up to 500,000 shares of the Company's common stock to persons that
exercise options granted pursuant to the plan. As of the date of this Proxy
Statement the Company had not granted any options pursuant to this plan.
<PAGE>
The year 2000 Incentive Stock Option Plan was adopted by the Board of
Directors on February 15, 2000. Any options granted under the year 2000
Incentive Stock Option Plan must be granted before February 15, 2010. If
adopted, the year 2000 Incentive Stock Option Plan will function and be
administered in the same manner as the Company's other Incentive Stock Option
Plans. The Board of Directors recommends that the shareholders of the Company
approve the adoption of the year 2000 Incentive Stock Option Plan.
PROPOSAL TO ADOPT YEAR 2000 NON-QUALIFIED STOCK OPTION PLAN
Shareholders are being requested to vote on the adoption of the Company's
year 2000 Non-Qualified Stock Option Plan. The Company's employees, directors
and officers, and consultants or advisors to the Company are eligible to be
granted options pursuant to the year 2000 Non-Qualified Plan as may be
determined by the Company's Compensation Committee which administers the Plan,
provided however that bona fide services must be rendered by such consultants or
advisors and such services must not be in connection with the offer or sale of
securities in a capital-raising transaction.
The year 2000 Non-Qualified Plan, if adopted, will authorize the issuance of
up to 500,000 shares of the Company's common stock to persons that exercise
options granted pursuant to the Plan. As of the date of this Proxy Statement, no
options have been granted pursuant to the year 2000 Non-Qualified Plan.
The year 2000 Non-Qualified Plan was adopted by the Board of Directors on
February 15, 2000. If adopted, the year 2000 Non-Qualified Plan will function
and be administered in the same manner as the Company's other Non-Qualified
Plans. The Board of Directors recommends that the shareholders of the Company
approve the adoption of the year 2000 Non-Qualified Plan.
PROPOSAL TO ADOPT YEAR 2000 STOCK BONUS PLAN
Shareholders are being requested to vote on the adoption of the Company's
year 2000 Stock Bonus Plan. The purpose of the year 2000 Stock Bonus Plan is to
furnish additional compensation and incentives to the Company's officers and
employees and by allowing the Company to continue to make contributions to its
401(k) plan with shares of its common stock instead of cash.
Since 1993 the Company has maintained a defined contribution retirement plan
(also known as a 40l(k) Plan) covering substantially all the Company's
employees. Prior to January 1, 1998 the Company's contribution to the 401(k)
Plan was made in cash. Effective January 1, 1998 the Company's employees
approved a change in the plan such that the Company's contribution is now made
in shares of the Company's common stock as opposed to cash. The Company's
contribution of common stock is made quarterly and is valued based upon the
price of the Company's common stock on the American Stock Exchange. The Board of
Directors is of the opinion that contributions to the 401(k) plan with shares of
the Company's common stock serves to further align the shareholder's interest
with that of the Company's employees.
<PAGE>
The year 2000 Stock Bonus Plan, if adopted, will authorize the issuance of
up to 200,000 shares of the Company's common stock to persons granted stock
bonuses pursuant to the plan. As of the date of this Proxy Statement the Company
had not granted any stock bonuses pursuant to the year 2000 Stock Bonus Plan.
The year 2000 Stock Bonus Plan was adopted by the Board of Directors on
February 15, 2000. If adopted, this Plan will function and be administered in
the same manner as the Company's existing Stock Bonus Plans. The Board of
Directors recommends that the shareholders of the Company approve the adoption
of the year 2000 Stock Bonus Plan.
PROPOSAL TO APPROVE ISSUANCE OF COMMON STOCK AS REQUIRED BY TERMS OF SERIES B
AND SERIES D WARRANTS
In December 1999 and January 2000, the Company sold 1,148,592 shares of its
common stock, plus Series A and Series B warrants, to a group of private
investors for $2,800,000. The Series A warrants allow the holders to purchase up
to 402,007 shares of the Company's common stock at a price of $2.925 per share
at any time prior to December 8, 2002. The Series B warrants allow the holders,
under certain circumstances, to acquire additional shares of the Company's
common stock at a nominal price in the event:
o the price of the Company's common stock falls below $2.4375 per share prior
to the first fixed vesting date,
o the price of the Company's common stock, on any subsequent fixed vesting
date, falls below (i) $2.4375 per share or (ii) the price of the Company's
common stock on the immediately preceding vesting date, whichever is less,
or
o the Company raises in excess of $1,000,000 at a price which is below
$2.4375 per share.
The fixed vesting dates for the purposes of the Series B warrants are:
December 8, 2000 (1)
June 8, 2001
December 8, 2001
June 8, 2002
December 8, 2002
(1) In the case of 122,951 shares sold in January 2001, the first vesting date
is December 30, 2000. The subsequent vesting dates are unchanged.
Other vesting dates will occur when an extraordinary event occurs, such as a
change in the control of the Company, the bankruptcy or liquidation of the
Company, or the failure of the Company's common stock to be listed on the
American Stock Exchange, the NASDAQ Stock Market or the NASDAQ SmallCap market.
<PAGE>
In December 2000, and at the time of the first fixed vesting date, the
investors in this offering still owned 364,814 shares which they purchased in
the private offering. Since the price of the Company's common stock was below
$2.4375 per share on the vesting date, the terms of the Series B warrants, as
outlined below, entitled the investors to acquire 273,834 shares of the
Company's common stock at a nominal price.
Upon the occurrence of any future vesting date, the additional shares which
the Company will be required to issue to the holders of the Series B warrants
will be determined in accordance with the following formula:
[(C x PA) / A] - C
C = The number of shares purchased by the Series B warrant
holder and not yet sold
PA = The Adjustment Price from the immediately preceding
vesting date, which was $1.54 as of December 8, 2000.
A = Adjustment price, which is equal to the lesser of
$1.54, or the average of the 10 lowest closing bid
prices of CEL-SCI's common stock during the 30 trading
days immediately preceding the vesting date.
In the case of 122,951 shares sold in January 2000, the Adjustment Price is
$1.17.
In addition to the foregoing, if the Company raises in excess of $1,000,000
through the sale of common stock, or securities convertible into common stock,
at a price which is below $2.4375 per share, then the holders of the Series B
warrants will be entitled to receive additional shares of the Company's common
stock in accordance with the following formula:
[(C x $2.4375) / D] - C
C = The number of shares purchased by the Series B warrant
holder and not yet sold on the date of the financing.
D = An amount equal to the lesser of the average of the
closing bid prices of CEL-SCI's common stock for the 10
trading days immediately preceding the date of the
financing, or the price per share of the common stock,
or common stock equivalent (as the case may be), sold in
the financing.
In March 2000, the Company sold 1,026,666 shares of its common stock, plus
Series C and Series D warrants, to the same private investors referred to above
for $7,700,000. The Series C warrants allow the holders to purchase up to
413,344 shares of the Company's common stock at a price of $8.50 per share at
any time prior to March 21, 2003. The Series D warrants allow the holders, under
certain circumstances, to acquire additional shares of the Company's common
stock at a nominal price in the event:
<PAGE>
o the price of the Company's common stock falls below $7.50 per share prior
to the first fixed vesting date,
o the price of the Company's common stock, on any subsequent foxed vesting
date, falls below (i) $7.50 per share or (ii) the price of the Company's
common stock on the immediately preceding vesting date, whichever is less,
or
o the Company raises in excess of $1,000,000 at a price which is below $7.50
per share.
The fixed vesting dates for the purposes of the Series D warrants are:
March 21, 2001
September 21, 2001
March 21, 2002
September 21, 2002
March 21, 2003
Other vesting dates will occur when an extraordinary event occurs, such as a
change in the control of the Company, the bankruptcy or liquidation of the
Company, or the failure of the Company's common stock to be listed on the
American Stock Exchange, the NASDAQ Stock Market or the NASDAQ SmallCap market.
Upon the occurrence of a vesting date, the additional shares which the
Company will be required to issue to the holders of the Series D warrants will
be determined in accordance with the following formula:
[(C x PA) / A] - C
C = The number of shares purchased by the Series D warrant
holder and not yet sold
PA = The Adjustment Price from the immediately preceding
vesting date or, with respect to the first vesting date,
$7.50.
A = Adjustment price, which is equal to the lesser of
$7.50, or the average of the 10 lowest closing bid
prices of CEL-SCI's common stock during the 30 trading
days immediately preceding the vesting date.
In addition to the foregoing, if the Company raises in excess of $1,000,000
through the sale of common stock, or securities convertible into common stock,
at a price which is below $7.50 per share, then the holders of the Series D
warrants will be entitled to receive additional shares of the Company's common
stock in accordance with the following formula:
<PAGE>
[(C x $7.50) / D] - C
C = The number of shares purchased by the Series D warrant
holder and not yet sold on the date of the financing.
D = An amount equal to the lesser of the average of the
closing bid prices of the Company's common stock for the
10 trading days immediately preceding the date of the
financing, or the price per share of the common stock,
or common stock equivalent (as the case may be), sold in
the financing.
The Company's common stock and warrants trade on the American Stock Exchange
("AMEX"). The rules of AMEX require a corporation, the securities of which are
listed on the AMEX, to obtain shareholder approval if more than 20% of a
corporations's common stock will be sold in a private offering and below the
greater of the book value or market price of the corporation's common stock.
For purposes of applying this particular rule to shares issuable upon the
exercise of the Series B and Series D warrants, the AMEX considers (i) the
issuance of common stock upon the exercise of the warrants to be a sale of the
Company's common stock, (ii) the price at which the warrants are exercised to be
the price at which the shares of common stock are sold, and (iii) since the
warrants are exercisable at a nominal price, any shares issued upon the exercise
of the Series B and Series D warrants will consider to be issued at less than
market price.
Based upon the number of the Company's common shares which were outstanding
prior to the sale of the Series B and Series D warrants, the AMEX rule would
prohibit the Company from issuing more than 4,081,100 shares upon the exercise
of the Series B and Series D warrants unless shareholder approval is obtained
for the issuance of these additional shares.
In order to avoid any violation of the AMEX rules relating to the issuance
of shares below the market price of the Company's common stock, the terms of the
Series B and D warrants provide that no more than 4,081,100 shares may be issued
upon the exercise of these warrants, unless the Company obtains shareholder
approval for the issuance of more than 4,081,100 shares.
The actual number of shares issuable upon the exercise of the Series B and
D warrants will vary depending upon a number of factors, including the price of
the Company's common stock at certain dates. Accordingly, the number of shares
which may be issued upon the exercise of the Series B and D warrants cannot be
determined at this time. However, based upon the market price of the Company's
common stock on January 18, 2001, the Company would be required to issue
4,052,632 shares of its common stock if the Series B and D warrants were
exercised as of that date.
If a majority of the shareholders present in person or by proxy at the
annual meeting do not approve the additional issuance of shares, the Company
will be required to pay to the Series B or Series D warrant holders an amount
equal to the market price of the Company's common stock, multiplied by the
number of shares which could have been issued upon the exercise of the Series B
or Series D warrants had the proposal been adopted.
<PAGE>
The Company is requesting the Company's shareholders, if it should be
necessary, to approve the issuance of such number of common shares as may be
required upon the exercise of the Series B and Series D warrants. The Company's
Board of Directors believes that approval of this proposal is in the best
interests of both the Company and its shareholders and unanimously recommends
that shareholders vote "FOR" this Proposal.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche, independent certified
public accountants, to audit the books and records of the Company for the fiscal
year ended September 30, 2001. Deloitte & Touche served as the Company's
independent public accountants for the fiscal year ended September 30, 2000. A
representative of Deloitte & Touche is not expected to be present at the
shareholders' meeting.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
The Company's Annual Report on Form 10-K for the year ending September 30,
2000 will be sent to any shareholder of the Company upon request. Requests for a
copy of this report should be addressed to the Secretary of the Company at the
address provided on the first page of this proxy statement.
SHAREHOLDER PROPOSALS
Any shareholder proposal which may properly be included in the proxy
solicitation material for the annual meeting of shareholders following the
Company's year ending September 30, 2001 must be received by the Secretary of
the Company no later than December 31, 2001.
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 the Company including any additional solicitation
made by letter, telephone or telegraph. Failure of a quorum to be present at the
meeting will necessitate adjournment and will subject the Company to additional
expense. The Company's annual report, including financial statements for the
1998 fiscal year, is included in this mailing.
The Company's Board of Directors do 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 enclosed proxy promptly. No postage is
required if mailed in the United States.
<PAGE>
CEL-SCI CORPORATION
This Proxy is solicited by the Company's Board of Directors
The undersigned stockholder of the Company, acknowledges receipt of the
Notice of the Annual Meeting of Stockholders, to be held March 22, 2001, 11:00
A.M. local time, at the Company's laboratory, which is located at 4820-C Seton
Drive, Baltimore, MD 21215, and hereby appoints Maximilian de Clara or Geert R.
Kersten with the power of substitution, as Attorneys and Proxies 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 Attorneys
and Proxies may do or cause to be done by virtue hereof. The above named
Attorneys and Proxies are instructed to vote all of the undersigned's shares as
follows:
(1) To elect the directors who shall constitute the Company's Board of
Directors for the ensuing year.
__
/__/ FOR all nominees listed below (except as marked to the contrary below)
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW)
__
/__/ WITHHOLD AUTHORITY to vote for all nominees listed below
Nominees:
Maximilian de Clara
Geert R. Kersten
Alexander G. Esterhazy
John M. Jacquemin
F. Donald Hudson
(2) To approve the adoption of the Company's year 2000 Incentive Stock
Option Plan. __ __ __
/_/ FOR /_/ AGAINST /_/ ABSTAIN
(3) To approve the adoption of the Company's year 2000 Non-Qualified Stock
Option Plan.
__ __ __
/_/ FOR /_/ AGAINST /_/ ABSTAIN
(4) To approve the adoption of the Company's year 2000 Stock Bonus Plan
__ __ __
/_/ FOR /_/ AGAINST /_/ ABSTAIN
(5) To approve the issuance of such number common shares as may be required
by the terms of the Company's Series B and Series D warrants.
__ __ __
/_/ FOR /_/ AGAINST /_/ ABSTAIN
<PAGE>
(6) To ratify the appointment of Deloitte & Touche as the Company's
independent accountants for the fiscal year ending September 30, 2001.
__ __ __
/_/ FOR /_/ AGAINST /_/ ABSTAIN
To transact such other business as may properly come before the
meeting.
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 ITEMS 1 THROUGH 6.
Dated this day of , 2001.
----- ----------
_______________________________________
(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.
