EXHIBIT 10(K)
EMPLOYMENT AGREEMENT
This Employment Agreement ("AGREEMENT") is made by and between Eyal Talor,
Ph.D. ("EMPLOYEE") and CEL-SCI Corporation ("CEL-SCI" or "the Company") as of
August 30, 2010 (the "Effective Date").
RECITALS
EMPLOYEE has been an Employee of CEL-SCI since March 16, 1994. 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 Scientific Officer of CEL-SCI
for a three (3) year period commencing on the Effective Date of this AGREEMENT
and ending on the third anniversary of the Effective Date, 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, subject to the severance payment provisions set forth in this
AGREEMENT. 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 Chief Executive Officer, the President or
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. The
employment relationship between CEL-SCI and EMPLOYEE may be terminated by
CEL-SCI or by EMPLOYEE after the expiration of the 3-year period, with or
without cause, subject to the terms and conditions of this AGREEMENT.
2. Wage Compensation
2.1 EMPLOYEE shall be compensated on the basis of an annualized
salary of Two hundred thirty nine thousand, eight hundred sixty eight and 30/100
Dollars ($239,868.30), less applicable withholding taxes. Increases in salary,
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.
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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.
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. CEL-SCI 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.
5.1.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
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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
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 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.
a. Involuntary Termination For Other Than Cause ("Constructive
Termination").
"Constructive Termination" shall occur if EMPLOYEE resigns his
employment within ninety (90) days of the occurrence of any of the following
events: (i) any reduction in the salary of the EMPLOYEE, (ii) a relocation (or
demand for relocation) of EMPLOYEE's place of employment to a location more than
thirty-five (35) miles from EMPLOYEE's current place of employment, (iii) a
significant and material reduction in EMPLOYEE's authority, job duties or level
of responsibility or the imposition of significant and material limitations on
EMPLOYEE's autonomy in his position, or (iv) if a Change of Control event has
occurred.
"Change of Control" shall mean a change in ownership or control of
the Company affected through any of the following transactions:
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b. a merger, consolidation or reorganization approved by the Company's
stockholders, unless securities representing more that 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
c. any stockholder-approved transfer or other disposition of all or
substantially all of the Company's assets, or
d. the acquisition, directly or indirectly by any person or related
group of persons (other than the Company or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Company), of
beneficial ownership (within the meaning of Rule 13d3 of the 1934 Act) of
securities possessing more than fifty percent (50%) of the total voting power of
the Company's outstanding securities pursuant to a tender or exchange offer made
directly to the Company's shareholders, or
e. 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, or have been nominated for election as Members of
the Board of Directors during such period by the President of the Company.
In the event a Constructive Termination has occurred, other than Change of
Control, 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 relieved of further responsibility or liability to the
other under this Agreement. In the case of Change of Control, EMPLOYEE does not
have to submit his notice of resignation, as a simple notification will do. Upon
receipt of such notice of resignation or notification, 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 18 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.
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In the event of a Constructive Termination, whether or not followed by
termination of EMPLOYEE's employment, all stock options under any Company Stock
Option Plan which EMPLOYEE holds at the time of such Change of Control, shall
become fully vested. The company 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.
In the event of a Constructive Termination, CEL-SCI shall also provide the
following benefits to EMPLOYEE:
a. An eligible 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.
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.
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6. Confidentiality
6.1 In view of the fact that the EMPLOYEE's work for the Company
will bring him 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 him 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
an adequate remedy to the Company;
6.2.2 The right and remedy to require the EMPLOYEE to
reimburse the Company for all money damages, direct, consequential, or
incidental, suffered by the Company as a result of any transactions
constituting a breach of any of the provisions of the preceding paragraph.
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
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
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person, or otherwise, if: (1) such other business, partnership, firm,
corporation, entity or person is engaged in for-profit activity in the
pharmaceutical industry within the United States and competes with CEL-SCI in
the field of natural cytokine mixtures for the treatment of any cancer
indication CEL-SCI 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 CEL-SCI 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., 18 months in the case of termination
under paragraph 5.3) or in the case of the EMPLOYEE's resignation or under
Section 5.2 for 2 years.
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.
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), as follows (or to such other address as either party shall designate
by notice in writing to the other in accordance herewith).
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 CEL-SCI 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 CEL-SCI
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. Binding
arbitration will be conducted in the Washington, D.C. metropolitan area, in
accordance with the rules and regulations of the American Arbitration
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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
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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CEL-SCI CORPORATION
By: /s/ Geert Kersten
---------------------------
Geert Kersten,
Chief Executive Officer
EMPLOYEE
/s/ Eyal Talor
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Eyal Talor, Ph.D.