CEL-SCI CORPORATION
1996 NON-QUALIFIED STOCK OPTION PLAN
1. Purpose. This 1996 Non-Qualified Stock Option Plan (the "Plan")
is intended to advance the interests of CEL-SCI Corporation (the
"Company") and its shareholders, by encouraging and enabling
selected officers, directors, consultants and key employees
upon whose judgment, initiative and effort the Company is largely
dependent for the successful conduct of its business, to acquire
and retain a proprietary interest in the Company by ownership of
its stock. Options granted under the Plan are intended to be
Options which do not meet the requirements of Section 422 of the
Internal Revenue Code of l954, as amended (the "Code").
2. Definitions.
(a) "Board" means the Board of Directors of the Company.
(b) "Committee" means the directors duly appointed to administer
the Plan.
(c) "Common Stock" means the Company's Common Stock.
(d) "Date of Grant" means the date on which an Option is granted
under the Plan.
(e) "Option" means an Option granted under the Plan.
(f) "Optionee" means a person to whom an Option, which has not
expired, has been granted under the Plan.
(g) "Successor" means the legal representative of the estate of
a deceased optionee or the person or persons who acquire the
right to exercise an Option by bequest or inheritance or by
reason of the death of any Optionee.
3. Administration of Plan. The Plan shall be administered by the
Company's Board of Directors or in the alternative, by a
committee of two or more directors appointed by the Board (the
"Committee"). If a Committee should be appointed, the Committee
shall report all action taken by it to the Board. The Committee
shall have full and final authority in its discretion, subject to
the provisions of the Plan, to determine the individuals to whom
and the time or times at which Options shall be granted and the
number of shares and purchase price of Common Stock covered by
each Option; to construe and interpret the Plan; to determine the
terms and provisions of the respective Option agreements, which
need not be identical, including, but without limitation, terms
covering the payment of the Option Price; and to make all other
determinations and take all other actions deemed necessary or
advisable for the proper administration of the Plan. All such
actions and determinations shall be conclusively binding for all
purposes and upon all persons.
4. Common Stock Subject to Options. The aggregate number of shares
of the Company's Common Stock which may be issued upon the
exercise of Options granted under the Plan shall not exceed
400,000, subject to adjustment under the provisions of paragraph
7. The shares of Common Stock to be issued upon the exercise of
Options may be authorized but unissued shares, shares issued and
reacquired by the Company or shares bought on the market for the
purposes of the Plan. In the event any Option shall, for any
reason, terminate or expire or be surrendered without having
been exercised in full, the shares subject to such Option but
not purchased thereunder shall again be available for Options to
be granted under the Plan.
5. Participants. Options may be granted under the Plan the
Company's employees, directors and officers, and consultants or
advisors to the Company, provided however that bona fide services
shall 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.
6. Terms and Conditions of Options. Any Option granted under the
Plan shall be evidenced by an agreement executed by the Company
and the recipient and shall contain such terms and be in such
form as the Committee may from time to time approve, subject to
the following limitations and conditions:
(a) Option Price. The Option Price per share with respect
to each Option shall be determined by the Committee but shall in
no instance be less than the market value of the Common Stock.
(b) Period of Option. The period during which each option
may be exercised, and the expiration date of each Option shall be
fixed by the Committee, but, notwithstanding any provision of the
Plan to the contrary, such expiration date shall not be more than
ten years from the date of Grant.
(c) Vesting of Shareholder Rights. Neither an Optionee nor
his successor shall have any rights as a shareholder of the
Company until the certificates evidencing the shares purchased
are properly delivered to such Optionee or his successor.
(d) Exercise of Option. Each Option shall be exercisable
from time to time during a period (or periods) determined by the
Committee and ending upon the expiration or termination of the
Option; provided, however, the Committee may, by the provisions
of any Option Agreement, limit the number of shares purchaseable
thereunder in any period or periods of time during which the
Option is exercisable.
(e) Nontransferability of Option. No Option shall be
transferable or assignable by an Optionee, otherwise than by
will or the laws of descent and distribution and each Option
shall be exercisable, during the Optionee's lifetime, only by
him. No Option shall be pledged or hypothecated in any way and
no Option shall be subject to execution, attachment, or similar
process except with the express consent of the Committee.
(f) Death of Optionee. If an Optionee dies while holding
an Option granted hereunder, his Option privileges shall be
limited to the shares which were immediately purchasable by him
at the date of death and such Option
privileges shall expire unless exercised by his successor within
four months after the date of death.
7. Reclassification, Consolidation, or Merger. If
and to the extent that the number of issued shares of Common Stock of the
Corporaton shall be increased or reduced by change in par value,
split up, reclassification, distribution of a dividend payable in
stock, or the like, the number of shares subject to Option and
the Option price per share shall be proportionately adjusted by
the Committee, whose determination shall be conclusive. If the
Corporation is reorganized or consolidated or merged with another
corporation, an Optionee granted an Option hereunder shall be
entitled to receive Options covering shares of such reorganized,
consolidated, or merged company in the same proportion, at an
equivalent price, and subject to the same conditions. The new
Option or assumption of the old Option shall not give Optionee
additional benefits which he did not have under the old Option,
or deprive him of benefits which he had under the old Option.
8. Restrictions on Issuing Shares. The exercise of each Option
shall be subject to the condition that if at any time the Company
shall determine in its discretion that the satisfaction of
withholding tax or other withholding liabilities, or that the
listing, registration, or qualification of any shares otherwise
deliverable upon such exercise upon any securities exchange or
under any state or federal law, or that the consent or approval
of any regulatory body, is necessary or desirable as a condition
of, or in connection with, such exercise or the delivery or
purchase of shares purchased thereto, then in any such event,
such exercise shall not be effective unless such withholding,
listing, registration, qualification, consent, or approval shall
have been effected or obtained free of any conditions not
acceptable to the Company.
Unless the shares of stock covered by the Plan have been
registered with the Securities and Exchange Commission pursuant
to Section 5 of the Securities Act of l933, each optionee shall,
by accepting an option, represent and agree, for himself and his
transferrees by will or the laws of descent and distribution,
that all shares of stock purchased upon the exercise of the op-
tion will be acquired for investment and not for resale or
distribution. Upon such exercise of any portion of an option,
the person entitled to exercise the same shall, upon request of
the Company, furnish evidence satisfactory to the Company
(including a written and signed representation) to the effect
that the shares of stock are being acquired in good faith for
investment and not for resale or distribution. Furthermore, the
Company may, if it deems appropriate, affix a legend to
certificates representing shares of stock purchased upon exercise
of options indicating that such shares have not been registered
with the Securities and Exchange Commission and may so notify the
Company's transfer agent. Such shares may be disposed of by an
optionee in the following manner only: (l) pursuant to an
effective registration statement covering such resale or reoffer,
(2) pursuant to an applicable exemption from registration as
indicated in a written opinion of counsel acceptable to the
Company, or (3) in a transaction that meets all the requirements
of Rule l44 of the Securities and Exchange Commission. If shares
of stock covered by the Plan have been registered with the
Securities and Exchange Commission, no such restrictions on
resale shall apply, except in the case of optionees who are di-
rectors, officers, or principal shareholders of the Company.
Such persons may dispose of shares only by one of the three
aforesaid methods.
9. Use of Proceeds. The proceeds received by the Company
from the sale of Common Stock pursuant to the exercise of Options
granted under the Plan shall be added to the Company's general
funds and used for general corporate purposes.
l0. Amendment, Suspension, and Termination of Plan. The
Board of Directors may alter, suspend, or discontinue the Plan,
but may not, without the approval of a majority of those holders
of the Company's Common Stock voting in person or by proxy at
any meeting of the Company's shareholders, make any alteration or
amendment thereof which operates to (a) abolish the Committee,
change the qualification of its members, or withdraw the
administration of the Plan from its supervision, (b) make any
material change in the class of eligible employees as defined in
paragraph 5, (c) increase the total number of shares reserved for
purposes of this Plan except as provided in paragraph 7, (d)
increase the total number of shares for which an option or
options may be granted to any one employee, (e) extend the term
of the Plan or the maximum option periods provided in paragraph
6, (f) decrease the minimum option price provided in paragraph 6,
except as provided in paragraph 7, or (g) materially increase the
benefits accruing to employees participating under this Plan.
Unless the Plan shall theretofore have been terminated by
the Board, the Plan shall terminate ten years after the effective
date of the Plan. No Option may be granted during any suspension
or after the termination of the Plan. No amendment, suspension,
or termination of the Plan shall, without an Optionee's consent,
alter or impair any of the rights or obligations under any Option
theretofore granted to such Optionee under the Plan.
11. Limitations. Every right of action by or on behalf of
the Company or by any shareholder against any past, present or
future member of the Board, or any officer or employee of the
Company arising out of or in connection with this Plan shall,
irrespective of the place where such action may be brought and
irrespective of the place of residence of any such director, offi-
cer or employee cease and be barred by the expiration of one year
from whichever is the later of (a) the date of the act or
omission in respect of which such right of action arises; or (b)
the first date upon which there has been made generally available
to shareholders an annual report of the Company or any proxy
statement for the annual meeting of shareholders following the
issuance of such annual report, which annual report and proxy
statment alone or together set forth, for the related period, the
number of shares issuable upon the exercise of the options
granted pursuant to this Plan; and any and all right of action by
any employee (past, present or future) against the Company
arising out of or in connection with this Plan shall,
irrespective of the place where such action may be brought, cease
and be barred by the expiration of one year from the date of the
act or omission in respect of which
such right of action arises.
l2. Governing Law. The Plan shall be governed by the laws
of the State of Colorado.
l3. Expenses of Administration. All costs and expenses incurred in
the operation and adminstration of this Plan shall be borne by the Company.
CEL-SCI CORPORATION
By /s/ Geert Kersten