prer14a
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
Aastrom Biosciences, Inc.
(Name of Registrant as Specified in Its Charter)
Payment of filing fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which filing fee is calculated and
state how it was determined): |
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Proposed maximum aggregate value of transaction: |
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Fee paid previously with preliminary materials. |
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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. |
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Amount previously paid: |
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Form, Schedule or Registration No.: |
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Date Filed: |
March ,
2008
Dear Shareholder:
We cordially invite you to a Special Meeting of Shareholders of
Aastrom Biosciences, Inc. (Aastrom). The Special
Meeting of Shareholders will be held on [Tuesday, April 8,
2008] at 9:00 a.m. (EDT), at Aastroms offices, 24
Frank Lloyd Wright Drive, Lobby K, Ann Arbor, Michigan 48105 to
consider the following matters.
1. To approve the grant of discretionary authority to
Aastroms Board of Directors to amend Aastroms
Restated Articles of Incorporation to effect a reverse stock
split of Aastroms issued and outstanding common stock at
any time within four (4) weeks after the date shareholder
approval is obtained regarding the reverse stock split, at any
whole number ratio between one for five and one for fourteen,
with the exact exchange ratio and timing of the reverse stock
split (if at all) to be determined at the discretion of the
Board of Directors (the Reverse Stock Split). The
Reverse Stock Split will not occur unless the Board of Directors
determines that it is in the best interests of Aastrom and its
shareholders to implement the Reverse Stock Split.
2. To consider such other business as may properly come
before the Special Meeting of Shareholders and any adjournment
thereof.
The proposal to effect the Reverse Stock Split is discussed in
more detail in the enclosed Notice of Special Meeting of
Shareholders and Proxy Statement.
Your vote is important. Please use this opportunity to take part
in the affairs of Aastrom by voting on the business to come
before this meeting. After reading the Proxy Statement, please
promptly mark, sign, and return the enclosed proxy. Regardless
of the number of shares you own, your careful consideration of,
and vote on, the matters before our shareholders are important.
Sincerely,
George W. Dunbar, Jr.
President and Chief Executive Officer
AASTROM
BIOSCIENCES, INC.
24 Frank Lloyd Wright Drive, Lobby
K
Ann Arbor, MI 48105
NOTICE
OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD [APRIL 8, 2008]
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TIME |
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9:00 a.m. (Eastern Daylight Time) on [Tuesday,
April 8, 2008]. |
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PLACE |
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Aastrom Biosciences Corporate Office
24 Frank Lloyd Wright Drive, Lobby K
Ann Arbor, MI 48105 |
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ITEMS OF BUSINESS |
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1. To approve the grant of discretionary authority to
Aastroms Board of Directors to amend Aastroms
Restated Articles of Incorporation to effect a reverse stock
split of Aastroms issued and outstanding common stock at
any time within four (4) weeks after the date shareholder
approval is obtained regarding the reverse stock split, at any
whole number ratio between one for five and one for fourteen,
with the exact exchange ratio and timing of the reverse stock
split (if at all) to be determined at the discretion of the
Board of Directors (the Reverse Stock Split). The
Reverse Stock Split will not occur unless the Board of Directors
determines that it is in the best interests of Aastrom and its
shareholders to implement the Reverse Stock Split. |
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2. To consider such other business as may properly come before
the Special Meeting of Shareholders and any adjournment thereof. |
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RECORD DATE |
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You may vote at the Special Meeting of Shareholders if you were
a shareholder of record at the close of business on [February
26], 2008. |
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VOTING BY PROXY |
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If you cannot attend the Special Meeting of Shareholders, you
may vote your shares over the internet or by telephone, or by
completing and promptly returning the enclosed proxy card in the
envelope provided. Internet and telephone voting procedures are
on your proxy card. |
By order of the Board of Directors,
Julie A.
Caudill
Corporate Secretary and Controller
Ann Arbor, Michigan
March , 2008
PRELIMINARY
COPIES FILED PURSUANT TO
RULE 14a-6(a)
AASTROM BIOSCIENCES, INC.
24
Frank Lloyd Wright Drive, Lobby K
Ann Arbor, Michigan 48105
PROXY STATEMENT FOR SPECIAL
MEETING OF SHAREHOLDERS
The accompanying proxy is solicited by the Board of Directors of
Aastrom Biosciences, Inc., a Michigan corporation, for use at
the Special Meeting of Shareholders to be held [April 8,
2008], or any adjournment thereof, for the purposes set forth in
the accompanying Notice of Special Meeting. The date of this
Proxy Statement is
March [ ],
2008, the approximate date on which this Proxy Statement and the
accompanying form of proxy were first sent or given to
shareholders. Unless the context requires otherwise, references
to we, us, our, the
Company, and Aastrom refer to Aastrom
Biosciences, Inc.
QUESTIONS
AND ANSWERS ABOUT THE SPECIAL MEETING, SOLICITATION AND
VOTING
What am I
voting on?
There is one proposal scheduled to be voted on at the Special
Meeting of Shareholders:
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To approve the grant of discretionary authority to
Aastroms Board of Directors to amend Aastroms
Restated Articles of Incorporation to effect a reverse stock
split of Aastroms issued and outstanding common stock at
any time within four (4) weeks after the date shareholder
approval is obtained regarding the reverse stock split, at any
whole number ratio between one for five and one for fourteen,
with the exact exchange ratio and timing of the reverse stock
split (if at all) to be determined at the discretion of the
Board of Directors (the Reverse Stock Split). The
Reverse Stock Split will not occur unless the Board of Directors
determines that it is in the best interests of Aastrom and its
shareholders to implement the Reverse Stock Split.
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If this proposal is approved by Aastroms shareholders,
Aastroms Board of Directors will be granted the
discretionary authority to select any whole number ratio between
one for five and one for fourteen for the Reverse Stock Split,
and will be authorized to effect the Reverse Stock Split at any
time within four (4) weeks after the date shareholder
approval is obtained regarding the reverse stock split, with the
exact exchange ratio and timing of the reverse stock split (if
at all) to be determined at the discretion of the Board of
Directors. The Reverse Stock Split will not change the number of
authorized shares of common stock or preferred stock.
Who is
entitled to vote?
Shareholders as of the close of business on [February 26], 2008
(the Record Date), may vote at the Special Meeting
of Shareholders. You have one vote for each share of common
stock you held on the Record Date, including shares:
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Held directly in your name as shareholder of record
(also referred to as registered shareholder);
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Held for you in an account with a broker, bank or other nominee
(shares held in street name). Street name holders
generally cannot vote their shares directly and must instead
instruct the brokerage firm, bank or nominee how to vote their
shares.
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What
constitutes a quorum?
A majority of the outstanding shares entitled to vote, present
or represented by proxy, constitutes a quorum for the Special
Meeting of Shareholders. Abstentions are counted as present and
entitled to vote for purposes of determining a quorum. Shares
represented by broker non-votes (see below) are also
counted as present and entitled to vote for purposes of
determining a quorum. On the Record Date,
132,886,835 shares of Aastrom common stock were outstanding
and entitled to vote.
How many
votes are required to approve the proposal?
Approval of the proposal to approve the Reverse Stock Split
requires the affirmative vote of at least two-thirds of all
outstanding shares of common stock (in person or by proxy).
How are
votes counted?
You may vote FOR, AGAINST or
ABSTAIN on the proposal to approve the Reverse Stock
Split. If you abstain from voting on the proposal, it will have
the same effect as a vote against the proposal. If you just sign
and submit your proxy card without voting instructions, your
shares will be voted FOR the proposal to approve the
Reverse Stock Split.
What is a
broker non-vote?
If you hold your shares in street name and do not provide voting
instructions to your broker, your shares will not be voted on
any proposal on which your broker does not have discretionary
authority to vote (a broker non-vote). Shares held by brokers
who do not have discretionary authority to vote on a particular
matter and who have not received voting instructions from their
customers are counted as present for the purpose of determining
whether there is a quorum at the Special Meeting of
Shareholders, but are not counted or deemed to be present or
represented for the purpose of determining whether shareholders
have approved that matter. Pursuant to applicable rules, brokers
will have discretionary authority to vote on the proposal to
approve the Reverse Stock Split.
How does
the Board of Directors recommend that I vote?
Aastroms Board of Directors recommends that you vote your
shares FOR approving the Reverse Stock Split.
How do I
vote my shares without attending the meeting?
If you are a shareholder of record, you may vote by granting a
proxy. For shares held in street name, you may vote by
submitting voting instructions to your broker or nominee. In any
circumstance, you may vote:
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By Internet or Telephone If you have
internet or telephone access, you may submit your proxy by
following the voting instructions on the proxy card. If you vote
by internet or telephone, you need not return your proxy card.
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By Mail You may vote by mail by signing and
dating your proxy card and mailing it in the envelope provided.
You should sign your name exactly as it appears on the proxy
card. If you are signing in a representative capacity (for
example, as guardian, executor, trustee, custodian, attorney or
officer of a corporation), you should indicate your name and
title or capacity.
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Internet and telephone voting facilities will close at
11:59 p.m., Eastern Daylight Time, on [April 7], 2008.
How do I
vote my shares in person at the meeting?
If you are a shareholder of record and prefer to vote your
shares at the meeting, bring the enclosed proxy card or proof of
identification. You may vote shares held in street name only if
you obtain a signed proxy from the record holder (broker or
other nominee) giving you the right to vote the shares.
Even if you plan to attend the meeting, we encourage you to vote
in advance by internet, telephone or mail so that your vote will
be counted even if you are unable to attend the meeting.
What does
it mean if I receive more than one proxy card?
It generally means you hold shares registered in more than one
account. To ensure that all your shares are voted, sign and
return each proxy card or, if you vote by internet or telephone,
vote once for each proxy card you receive.
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May I
change my vote?
Yes. Whether you have voted by mail, internet or telephone, you
may change your vote and revoke your proxy by:
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Sending a written statement to that effect to the Corporate
Secretary of Aastrom;
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Voting by internet or telephone at a later time;
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Submitting a properly signed proxy card with a later
date; or
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Voting in person at the Special Meeting of Shareholders.
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Can I
receive future proxy materials electronically?
Yes. If you are a shareholder of record, you may elect to
receive future proxy statements and annual reports online as
described in the next paragraph. If you elect this feature, you
will receive an email message notifying you when the materials
are available, along with a web address for viewing the
materials. If you received this proxy statement electronically,
you do not need to do anything to continue receiving proxy
materials electronically in the future.
Whether you hold shares registered directly in your name, or
through a broker or bank, you can enroll for future delivery of
proxy statements and annual reports by following these easy
steps:
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Go to our website at www.aastrom.com;
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Click on Investors;
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In the Shareholder Services section, click on
Shareholder Electronic Delivery; and
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Follow the prompts to submit your electronic consent.
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Generally, brokers and banks offering this choice require that
shareholders vote through the internet in order to enroll.
Street name shareholders whose broker or bank is not included in
this website are encouraged to contact their broker or bank and
ask about the availability of electronic delivery. As with all
internet usage, the user must pay all access fees and telephone
charges. You may view this years annual report and proxy
materials at www.aastrom.com/annuals.cfm.
What are
the costs associated with the solicitation of proxies?
The cost of soliciting proxies will be borne by Aastrom. Aastrom
has retained Broadridge Financial Solutions
(Broadridge) to solicit registered shareholders and
to request banks and brokers, and other custodians, nominees and
fiduciaries, to solicit their customers who have stock of
Aastrom registered in the names of such persons, at a cost of
approximately [$ ], plus
reimbursement of their reasonable out-of-pocket expenses.
Aastrom may supplement the original solicitation of proxies by
mail, telephone, electronic mail or personal solicitation by our
officers, directors, and other regular employees, without
additional compensation. Aastrom has retained MacKenzie Partners
to assist us in the solicitation of proxies, if required, at a
cost of approximately $3,000, plus reimbursement of their
reasonable out-of-pocket expenses. Voting results will be
tabulated and certified by Broadridge.
PROPOSAL
PROPOSAL TO
APPROVE THE GRANT OF DISCRETIONARY AUTHORITY TO AASTROMS
BOARD OF DIRECTORS TO AMEND AASTROMS RESTATED
ARTICLES OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT
OF AASTROMS ISSUED AND OUTSTANDING COMMON STOCK AT ANY
TIME WITHIN FOUR (4) WEEKS AFTER THE DATE SHAREHOLDER
APPROVAL IS OBTAINED REGARDING THE REVERSE STOCK SPLIT, AT ANY
WHOLE NUMBER RATIO BETWEEN ONE FOR FIVE AND ONE FOR FOURTEEN,
WITH THE
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EXACT EXCHANGE RATIO AND TIMING OF THE REVERSE STOCK SPLIT
(IF AT ALL) TO BE DETERMINED AT THE DISCRETION OF THE BOARD OF
DIRECTORS
General
Our Board of Directors has unanimously adopted a resolution
approving, declaring advisable and recommending to the
shareholders for their approval, a proposal to grant
discretionary authority to Aastroms Board of Directors to
amend Aastroms Restated Articles of Incorporation to
effect a Reverse Stock Split of Aastroms issued and
outstanding common stock at any time within four (4) weeks
after the date shareholder approval is obtained regarding the
reverse stock split, at any whole number ratio between one for
five and one for fourteen, with the exact exchange ratio and
timing of the reverse stock split (if at all) to be determined
at the discretion of the Board of Directors.
If this proposal is approved by Aastroms shareholders,
Aastroms Board of Directors will be granted the
discretionary authority to select any whole number ratio between
one for five and one for fourteen for the Reverse Stock Split,
and will be authorized to effect the Reverse Stock Split at any
time within four (4) weeks after the date shareholder
approval is obtained regarding the reverse stock split, with the
exact exchange ratio and timing of the reverse stock split (if
at all) to be determined at the discretion of the Board of
Directors. Our Board of Directors decision whether or not
(and when) to effect the Reverse Stock Split (and at what whole
number ratio to effect the Reverse Stock Split) will also be
based on a number of factors, including market conditons,
existing and anticipated trading prices for our common stock and
the continued listing requirements of the Nasdaq Capital Market.
Shareholder approval is being sought to effect the Reverse Stock
Split at any whole number ratio between one for five and one for
fourteen in order to provide Aastroms Board of Directors
with the flexibility to determine the ultimate exchange ratio of
the Reverse Stock Split, based upon the best interests of the
Company and its shareholders.
If the shareholders approve the Reverse Stock Split, Aastrom
reserves the right not to effect the Reverse Stock Split if our
Board of Directors does not deem it to be in the best interests
of Aastrom and its shareholders. If approved by our shareholders
and assuming our Board of Directors determines the Reverse Stock
Split to be in the best interests of Aastrom and its
shareholders, it is our intention that it would be effected
shortly after the date of Special Meeting of Shareholders, but
it may become effective on any date selected by our Board of
Directors within four (4) weeks after the date shareholder
approval is obtained.
The amendment to our Restated Articles of Incorporation relating
to this Proposal is attached to this proxy statement as
Annex A. The form of the proposed amendment to
effect the Reverse Stock Split, as more fully described below,
will effect the Reverse Stock Split but will not change the
number of authorized shares of common stock or preferred stock.
Purpose
We are asking shareholders to approve this Proposal for the
following reasons:
Maintain Nasdaq Capital Market Listing. Our
common stock trades on the Nasdaq Capital Market. On
December 20, 2007, we received a deficiency letter from the
Nasdaq Stock Market indicating that for 30 consecutive
trading days our common stock had a closing bid price below the
$1.00 minimum closing bid as required for continued listing set
forth in Nasdaq Marketplace Rule 4310(c)(4). In accordance
with Nasdaq Marketplace Rule 4310(c)(8)(D), we were
provided a compliance period of 180 calendar days, or until
June 17, 2008, to regain compliance with this requirement.
We can regain compliance with the minimum closing bid price rule
if the bid price of our common stock closes at $1.00 or higher
for a minimum of ten consecutive business days during the
initial
180-day
compliance period, although Nasdaq may, in its discretion,
require us to maintain a minimum closing bid price of at least
$1.00 per share for a period in excess of ten consecutive
business days (but generally no more than 20 consecutive
business days) before determining that we have demonstrated the
ability to maintain long-term compliance. If compliance is not
achieved by June 17, 2008, we will be eligible for an
additional
180-day
compliance period if we meet the Nasdaq
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Capital Market initial listing criteria as set forth in
Marketplace Rule 4310(c) other than the minimum closing bid
price requirement.
We believe that approval of this Proposal would provide us with
the ability to meet the continued listing requirements for the
Nasdaq Capital Market. We do not believe that having our common
stock delisted from the Nasdaq Capital Market is desirable
because, among other things, it would reduce the liquidity of
our common stock. If our common stocks closing bid price
satisfies the minimum closing bid price rule prior to approval
of this Proposal, we may still effect the Reverse Stock Split if
shareholders approve this Proposal and if our Board of Directors
determines that effecting the Reverse Stock Split would be in
the best interests of Aastrom and its shareholders.
Increase Our Common Stock Price to a Level More
Appealing for Investors. We believe that the
Reverse Stock Split could enhance the appeal of our common stock
to the financial community, including institutional investors,
and the general investing public. We believe that a number of
institutional investors and investment funds are reluctant to
invest in lower-priced securities and that brokerage firms may
be reluctant to recommend lower priced stock to their clients,
which may be due in part to a perception that lower-priced
securities are less promising as investments, are less liquid in
the event that an investor wishes to sell its shares, or are
less likely to be followed by institutional securities research
firms and therefore to have less third-party analysis of the
company available to investors. We believe that the reduction in
the number of issued and outstanding shares of our common stock
caused by the Reverse Stock Split, together with the anticipated
increased stock price immediately following and resulting from
the Reverse Stock Split, may encourage interest and trading in
our common stock and thus possibly promote greater liquidity for
our shareholders, thereby resulting in a broader market for our
common stock than that which currently exists.
Certain
Risks Associated with the Reverse Stock Split
We cannot assure you that the market price per each share of our
common stock after the Reverse Stock Split will rise or remain
constant in proportion to the reduction in the number of shares
of common stock outstanding before the Reverse Stock Split. For
example, using the closing price of our common stock on
[February 15], 2008 of [$0.66] per share as an example, if our
Board of Directors were to implement the Reverse Stock Split at
a one for [eight] ratio, we cannot assure you that the
post-split market price of our common stock would be [$5.28
($0.66 × 8)] or greater. In many cases, the market price of
a companys shares declines after a reverse stock split.
Thus, while our stock price might meet the Nasdaq Stock
Markets continued listing requirements for the Nasdaq
Capital Market initially, we cannot assure you that it would
continue to do so.
The market price of our common stock will also be based on our
performance and other factors, some of which are unrelated to
the number of shares outstanding. If the Reverse Stock Split is
effected and the market price of our common stock declines, the
percentage decline as an absolute number and as a percentage of
our overall market capitalization may be greater than would
occur in the absence of a Reverse Stock Split. Furthermore, the
liquidity of our common stock could be adversely affected by the
reduced number of shares that would be outstanding after the
Reverse Stock Split.
We also cannot assure you that the Reverse Stock Split will
result in per share stock prices that will attract additional
investors or increase analyst coverage.
Shareholders who otherwise would be entitled to receive
fractional shares will only be entitled to a cash payment in
lieu of such shares and will no longer have any rights as a
shareholder with respect to the shares of common stock that
would have been exchanged for such fractional shares.
This proxy statement includes forward-looking statements,
including statements regarding our intent to solicit approval of
the Reverse Stock Split, the timing and ratio of the Reverse
Stock Split and the potential benefits of the Reverse Stock
Split, including, but not limited to, the duration and amount of
any increase in our common stock price resulting from the
Reverse Stock Split and any related increase in investors or
analyst coverage. Any statements about our expectations,
beliefs, plans, objectives, assumptions or future events or
performance are not historical facts and may be forward-looking.
These statements are often, but are not always, made through the
use of words or phrases such as anticipates,
estimates, plans, projects,
trends, opportunity,
comfortable,
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current, intention,
position, assume, potential,
outlook, remain, continue,
maintain, sustain, seek,
achieve, continuing,
ongoing, expects, management
believes, we believe, we intend
and similar words or phrases, or future or conditional verbs
such as will, would, should,
could, may, or similar expressions.
Accordingly, these statements involve estimates, assumptions and
uncertainties which could cause actual results to differ
materially from those expressed in them. These risks include,
but are not limited to, risks relating to the volatility of our
stock price, general market and economic conditions, the future
growth of our business, the nature of our shareholders and
potential shareholders, and unexpected delays in preparing,
filing and mailing definitive proxy materials for the Reverse
Stock Split. Any forward-looking statements are qualified in
their entirety by reference to the factors discussed throughout
this proxy statement and other risk factors that could affect
our business, including the risk factors described in the
Risk Factors sections in our filings with the SEC,
including our Annual Report on
Form 10-K
for the year ended June 30, 2007.
Because the factors referred to in the preceding paragraph could
cause actual results or outcomes to differ materially from those
expressed in any forward-looking statements we make, you should
not place undue reliance on any such forward-looking statements.
Further, any forward-looking statement speaks only as of the
date on which it is made, and we undertake no obligation to
update any forward-looking statement or statements to reflect
events or circumstances after the date on which such statement
is made or to reflect the occurrence of unanticipated events.
New factors emerge from time to time, and it is not possible for
us to predict which factors will arise. In addition, we cannot
assess the impact of each factor on our business or the extent
to which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any
forward-looking statements.
Principal
Effects of the Reverse Stock Split
If the shareholders approve this Proposal to authorize our Board
of Directors to implement the Reverse Stock Split and our Board
of Directors decides to implement the Reverse Stock Split, we
will amend the existing provision of our Restated Articles of
Incorporation relating to our authorized capital to add the
following paragraph at the end thereof:
Effective at 5:00 p.m. (EDT), on the date of filing
of the Certificate of Amendment with the State of Michigan,
every [five] ... [fourteen] outstanding shares of Common Stock
will be combined into and automatically become one share of
outstanding Common Stock of the Corporation. The Corporation
will not issue fractional shares on account of the foregoing
Reverse Stock Split; all shares that are held by a shareholder
as of the effective date hereof shall be aggregated and each
fractional share resulting from the Reverse Stock Split after
giving effect to such aggregation shall be cancelled.
In lieu of any interest in a fractional share to which a
shareholder would otherwise be entitled as a result of the
Reverse Stock Split, such shareholder will be paid a cash amount
for such fractional shares equal to the product obtained by
multiplying (a) the fraction to which the shareholder would
otherwise be entitled by (b) the per share closing price of
the Corporations Common Stock on the trading day
immediately prior to the effective time of the Reverse Stock
Split, as such price is reported on the Nasdaq Capital
Market.
There shall be no change in the number of authorized shares of
common stock or preferred stock by virtue of the Certificate of
Amendment.
The Reverse Stock Split will be effected simultaneously for all
our then-existing common stock (the Old Shares) and
the exchange ratio will be the same for all of our shares of
issued and outstanding common stock. The Reverse Stock Split
will affect all of our shareholders uniformly and will not
affect any shareholders percentage ownership interests in
us, except to the extent that the Reverse Stock Split results in
any of our shareholders owning a fractional share. Shares of
common stock issued pursuant to the Reverse Stock Split (the
New Shares) will remain fully paid and
nonassessable. The Reverse Stock Split will not affect our
continuing to be subject to the periodic reporting requirements
of the Securities Exchange Act of 1934, as amended. The
information in the
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following table is based on 132,886,835 shares of common
stock issued and outstanding as of [February 26, 2008], the
Record Date.
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Post-Split
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Percentage
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Common Stock
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Reduction
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Common Stock
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Common Stock
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Authorized but
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in the
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Outstanding
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Authorized
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Unissued
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Proposed
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Outstanding
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after the
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after the
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after the
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Reverse
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Shares of
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Reverse
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Reverse
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Reverse
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Stock Split
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Common Stock
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Stock Split
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Stock Split
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Stock Split
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1 for 5
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80
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%
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26,577,367
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250,000,000
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223,422,633
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1 for 6
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83
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%
|
|
|
22,147,805
|
|
|
|
250,000,000
|
|
|
|
227,852,195
|
|
1 for 7
|
|
|
86
|
%
|
|
|
18,983,833
|
|
|
|
250,000,000
|
|
|
|
231,016,167
|
|
1 for 8
|
|
|
88
|
%
|
|
|
16,610,854
|
|
|
|
250,000,000
|
|
|
|
233,389,146
|
|
1 for 9
|
|
|
89
|
%
|
|
|
14,765,203
|
|
|
|
250,000,000
|
|
|
|
235,234,797
|
|
1 for 10
|
|
|
90
|
%
|
|
|
13,288,683
|
|
|
|
250,000,000
|
|
|
|
236,711,317
|
|
1 for 11
|
|
|
91
|
%
|
|
|
12,080,621
|
|
|
|
250,000,000
|
|
|
|
237,919,379
|
|
1 for 12
|
|
|
92
|
%
|
|
|
11,073,902
|
|
|
|
250,000,000
|
|
|
|
238,926,098
|
|
1 for 13
|
|
|
92
|
%
|
|
|
10,222,064
|
|
|
|
250,000,000
|
|
|
|
239,777,936
|
|
1 for 14
|
|
|
93
|
%
|
|
|
9,491,916
|
|
|
|
250,000,000
|
|
|
|
240,508,084
|
|
Increased
Number of Authorized But Unissued Shares
The Company has 117,113,165 authorized but unissued shares of
our common stock as of [February 26, 2008], the Record
Date. As set forth in the table above, if the Reverse Stock
Split is effected, the number of authorized but unissued shares
of our common stock would be in the range of
223,422,633 shares (in the case of a one for five exchange
ratio) to 240,508,084 shares (in the case of a one for
fourteen exchange ratio).
As we have previously disclosed, we are exploring and will
continue to explore the possibility of entering into
complementary regenerative medicine business activities, whether
through an acquisition, business combination or otherwise. In
addition, we are continuing to explore various financing
alternatives through which we may raise additional equity
capital. If we engage in an acquisition, business combination or
financing or other similar transaction, we may issue additional
shares of our common stock, and under certain circumstances we
may use the additional number of authorized but unissued shares
which would become available to us as a result of the Reverse
Stock Split. However, we currently have no commitment,
arrangement, understanding or agreement, either oral or written,
regarding the issuance of common stock subsequent to the
increase in the number of available authorized shares as a
result of the Reverse Stock Split.
Procedure
for Effecting Reverse Stock Split and Exchange of Stock
Certificates
If this Proposal is approved by our shareholders and if our
Board of Directors still believes that the Reverse Stock Split
is in the best interests of Aastrom and its shareholders within
four (4) weeks after the date shareholder approval is
obtained, our Board of Directors will cause the Reverse Stock
Split to be implemented at the whole number ratio between one
for five and one for fourteen as selected by our Board of
Directors in its sole discretion. We will file the Certificate
of Amendment with the Michigan Department of Labor and Economic
Growth, Bureau of Commercial Services at such time as our Board
of Directors has determined the appropriate effective time for
the Reverse Stock Split. Our Board of Directors may delay
effecting the Reverse Stock Split without resoliciting
shareholder approval to any time within four (4) weeks
after the date shareholder approval is obtained. The Reverse
Stock Split will become effective on the date the Certificate of
Amendment is filed with the Michigan Department of Labor and
Economic Growth, Bureau of Commercial Services (the Split
Effective Date). Beginning on the Split Effective Date,
each certificate representing Old Shares will be deemed for all
corporate purposes to evidence ownership of New Shares.
As soon as practicable after the Split Effective Date,
shareholders will be notified that the Reverse Stock Split has
been effected. We will retain an exchange agent (the
Exchange Agent) for purposes of implementing the
exchange of stock certificates. Holders of Old Shares will be
asked to surrender to the Exchange Agent certificates
7
representing Old Shares in exchange for certificates
representing New Shares in accordance with the procedures to be
set forth in a letter of transmittal to be sent by us. No new
certificates will be issued to a shareholder until such
shareholder has surrendered such shareholders outstanding
certificate(s) together with the properly completed and executed
letter of transmittal to the Exchange Agent. Any Old Shares
submitted for transfer, whether pursuant to a sale or other
disposition, or otherwise, will automatically be exchanged for
New Shares. SHAREHOLDERS SHOULD NOT DESTROY ANY STOCK
CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY CERTIFICATE(S) UNTIL
REQUESTED TO DO SO.
Fractional
Shares
No fractional shares will be issued in connection with the
Reverse Stock Split. Shareholders of record who otherwise would
be entitled to receive fractional shares, will be entitled, upon
surrender to the Exchange Agent of certificates representing
such shares, to a cash payment in lieu thereof equal to the
fraction to which the shareholder would otherwise be entitled
multiplied by the closing price of our common stock, as such
price is reported on the Nasdaq Capital Market on the last
trading day prior to the Split Effective Date. The ownership of
a fractional interest will not give the holder thereof any
voting, dividend, or other rights except to receive payment
therefor as described herein.
Shareholders should be aware that, under the escheat laws of the
various jurisdictions where shareholders reside, where Aastrom
is domiciled, and where the funds will be deposited, sums due
for fractional interests that are not timely claimed after the
Split Effective Date may be required to be paid to the
designated agent for each such jurisdiction, unless
correspondence has been received by Aastrom or the Exchange
Agent concerning ownership of such funds within the time
permitted in such jurisdiction. Thereafter, shareholders
otherwise entitled to receive such funds will have to seek to
obtain them directly from the state to which they were paid.
Effect on
Options, Warrants and Other Securities
All outstanding options, warrants and other securities entitling
their holders to purchase shares of our common stock will be
adjusted as a result of the Reverse Stock Split, as required by
the terms of these securities. In particular, the conversion
ratio for each instrument will be reduced, and the exercise
price, if applicable, will be increased, in accordance with the
terms of each instrument and based on the exchange ratio
implemented in the Reverse Stock Split.
Accounting
Matters
The Reverse Stock Split will not affect the common stock capital
account on our balance sheet. In future financial statements, we
will restate net income or loss and other per share amounts for
periods ending before the Reverse Stock Split to give
retroactive effect to the Reverse Stock Split. The net income or
loss per share will be increased because there will be fewer
shares of our common stock outstanding.
Discretionary
Authority of Board of Directors to Abandon Reverse Stock
Split
We reserve the right to abandon the Reverse Stock Split without
further action by our shareholders at any time before the
effectiveness of the filing with the Michigan Department of
Labor and Economic Growth, Bureau of Commercial Services of the
Certificate of Amendment to our Restated Articles of
Incorporation, even if the Reverse Stock Split has been
authorized by our shareholders at the Special Meeting of
Shareholders. By voting in favor of the Reverse Stock Split, you
are expressly also authorizing our Board of Directors to
determine not to proceed with, and abandon, the Reverse Stock
Split if it should so decide.
Potential
Anti-Takeover Effect
Although in theory the increased proportion of unissued
authorized shares to issued shares could, under certain
circumstances, have an anti-takeover effect (for example, by
permitting issuances that would dilute the stock ownership of a
person seeking to effect a change in the composition of our
Board of Directors or contemplating a tender offer or other
transaction for the combination of Aastrom with another
company), this Proposal is not being proposed in response to any
effort of which we are aware to accumulate shares of our common
stock or obtain
8
control of us. Other than this Proposal, our Board of Directors
does not currently contemplate recommending the adoption of any
other actions that could be construed to have a potential
anti-takeover effect on Aastrom.
No
Dissenters Rights
Under applicable Michigan law, our shareholders are not entitled
to dissenters rights with respect to the Reverse Stock
Split, and we will not independently provide shareholders with
any such right.
Federal
Income Tax Consequences of the Reverse Stock Split
The following is a summary of certain material federal income
tax consequences of the Reverse Stock Split and does not purport
to be a complete discussion of all of the possible federal
income tax consequences of the Reverse Stock Split and is
included for general information only. Further, it does not
address any state, local or foreign income or other tax
consequences. For example, the state and local tax consequences
of the Reverse Stock Split may vary significantly as to each
shareholder, depending upon the state in which such shareholder
resides. Also, it does not address the tax consequences to
holders that are subject to special tax rules, such as banks,
insurance companies, regulated investment companies, personal
holding companies, foreign entities, nonresident alien
individuals, broker-dealers and tax-exempt entities. The
discussion is based on the provisions of the U.S. federal
income tax law as of the date hereof, which is subject to change
retroactively as well as prospectively. This summary also
assumes that the Old Shares were, and the New Shares will be,
held as a capital asset, as defined in
Section 1221 of the Internal Revenue Code of 1986, as
amended (the Code) (generally, property held for
investment). The tax treatment of a shareholder may vary
depending upon the particular facts and circumstances of such
shareholder. Each shareholder is urged to consult with such
shareholders own tax advisor with respect to the tax
consequences of the Reverse Stock Split.
Other than the cash payments for fractional shares discussed
below, no gain or loss should be recognized by a shareholder
upon such shareholders exchange of Old Shares for New
Shares pursuant to the Reverse Stock Split. The aggregate tax
basis of the New Shares received in the Reverse Stock Split
(including any fraction of a New Share deemed to have been
received) will be the same as the shareholders aggregate
tax basis in the Old Shares exchanged therefor. In general,
shareholders who receive cash upon redemption of their
fractional share interests in the New Shares as a result of the
Reverse Stock Split will recognize gain or loss based on their
adjusted basis in the fractional share interests redeemed. The
federal income tax liability, if any, generated by the receipt
of cash in lieu of a fractional interest should be minimal in
view of the low value of the fractional interest. The
shareholders holding period for the New Shares will
include the period during which the shareholder held the Old
Shares surrendered in the Reverse Stock Split.
Our view regarding the tax consequence of the Reverse Stock
Split is not binding on the Internal Revenue Service or the
courts. Accordingly, each shareholder should consult with such
shareholders own tax advisor with respect to all of the
potential tax consequences to such shareholder of the Reverse
Stock Split.
Vote
Required; Recommendation of Board of Directors
The affirmative vote of the holders of at least two-thirds of
all outstanding shares of our common stock entitled to vote on
this Proposal will be required for approval of this Proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR THE PROPOSAL TO APPROVE THE GRANT OF
DISCRETIONARY AUTHORITY TO AASTROMS BOARD OF DIRECTORS TO
AMEND AASTROMS RESTATED ARTICLES OF INCORPORATION TO
EFFECT A REVERSE STOCK SPLIT OF AASTROMS ISSUED AND
OUTSTANDING COMMON STOCK AT ANY TIME WITHIN FOUR (4) WEEKS
AFTER THE DATE SHAREHOLDER APPROVAL IS OBTAINED REGARDING THE
REVERSE STOCK SPLIT, AT ANY WHOLE NUMBER RATIO BETWEEN ONE FOR
FIVE AND ONE FOR FOURTEEN, WITH THE EXACT EXCHANGE RATIO AND
TIMING OF THE REVERSE STOCK SPLIT (IF AT ALL) TO BE DETERMINED
AT THE DISCRETION OF THE BOARD OF DIRECTORS.
9
STOCK
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of
January 31, 2008 with respect to the beneficial ownership
of Aastroms common stock by (i) all persons known by
Aastrom to be the beneficial owners of more than 5% of the
outstanding common stock of Aastrom; (ii) each director of
Aastrom, (iii) each of the named executive officers of
Aastrom, and (iv) all of our current executive officers and
directors of Aastrom as a group.
|
|
|
|
|
|
|
|
|
|
|
Shares Owned(1)
|
|
|
|
|
|
|
Percentage of
|
|
Name and Address of Beneficial Owner(2)
|
|
Number of Shares
|
|
|
Class(3)
|
|
|
George W. Dunbar(4)
|
|
|
863,333
|
|
|
|
*
|
|
Gerald D. Brennan(5)
|
|
|
187,350
|
|
|
|
*
|
|
Elmar R. Burchardt(6)
|
|
|
93,750
|
|
|
|
*
|
|
Robert R. Bard(7)
|
|
|
10,050
|
|
|
|
*
|
|
R. Douglas Armstrong(8)
|
|
|
626,091
|
|
|
|
*
|
|
Timothy M. Mayleben(9)
|
|
|
112,233
|
|
|
|
*
|
|
Alan L. Rubino(10)
|
|
|
112,233
|
|
|
|
*
|
|
Nelson M. Sims(11)
|
|
|
93,833
|
|
|
|
*
|
|
Stephen G. Sudovar(12)
|
|
|
132,233
|
|
|
|
*
|
|
Susan L. Wyant(13)
|
|
|
142,233
|
|
|
|
*
|
|
Robert L. Zerbe(14)
|
|
|
92,800
|
|
|
|
*
|
|
All officers and directors as a group (7 persons)(15)
|
|
|
1,642,648
|
|
|
|
*
|
|
|
|
|
* |
|
Represents less than 1% of the outstanding shares of
Aastroms common stock. |
|
(1) |
|
Except as indicated in the footnotes to this table, the persons
named in the table have sole voting and investment power with
respect to all shares of common stock shown as beneficially
owned by them, subject to community property laws, where
applicable. The number of shares owned and percentage ownership
amounts include shares of restricted stock granted under
Aastroms 2004 Equity Incentive Plan. |
|
(2) |
|
Unless otherwise provided, the address for each beneficial owner
is 24 Frank Lloyd Wright Drive, Ann Arbor, MI 48105. |
|
(3) |
|
Calculated on the basis of 132,804,840 shares of common
stock outstanding as of January 31, 2008 except the shares
of common stock underlying options exercisable within
60 days of January 31, 2008 are deemed to be
outstanding for purposes of calculating ownership of securities
of the holders of such options. |
|
(4) |
|
Includes 833,333 shares issuable upon exercise of options
held by Mr. Dunbar that are exercisable within the
60-day
period following January 31, 2008. |
|
(5) |
|
Includes 157,350 shares issuable upon exercise of options
held by Mr. Brennan that are exercisable within the
60-day
period following January 31, 2008. Mr. Brennan
resigned from his positions as the Companys
Vice President, Administrative & Financial
Operations and Chief Financial Officer, principal financial and
accounting officer, Secretary, Treasurer and from all other
offices, effective as of February 11, 2008.
Mr. Brennan is an employee of the Company as of the date of
this proxy statement. |
|
(6) |
|
Includes 93,750 shares issuable upon exercise of options
held by Dr. Burchardt that are exercisable within the
60-day
period following January 31, 2008. The Companys Board
of Directors determined on November 2, 2006 that
Mr. Burchardt was not an executive officer.
Mr. Burchardt is included in this section because he had
been deemed to be an executive officer during a portion of the
last completed fiscal year until November 2, 2006 when the
Board of Directors determined that Mr. Burchardt was not an
executive officer. Mr. Burchardt is an employee of the
Company as of the date of this proxy statement. |
|
(7) |
|
Does not include any shares issuable upon exercise of options
held by Mr. Bard that are exercisable within the
60-day
period following January 31, 2008. The Companys Board
of Directors determined on November 2, 2006 that
Mr. Bard was not an executive officer. Mr. Bard is
included in this section because he had been deemed to be an
executive officer during a portion of the last completed fiscal
year until November 2, 2006 |
10
|
|
|
|
|
when the Board of Directors determined that Mr. Bard was
not an executive officer. Mr. Bard resigned as an employee
of the Company, effective as of September 21, 2007. |
|
(8) |
|
The number of shares held by Dr. Armstrong is set forth as
of February 2, 2008, and does not include any shares
issuable upon exercise of options held by Dr. Armstrong
that are exercisable within the
60-day
period following January 31, 2008. Includes
68,000 shares held in trusts in which Dr. Armstrong is
a co-trustee; Dr. Armstrong disclaims beneficial ownership
of all such shares except to the extent of his pecuniary
interest therein. Dr. Armstrong terminated his employment
arrangement with the Company as Chief Executive Officer,
effective as of July 17, 2006. Dr. Armstrong is
included in this section because he served as the Companys
principal executive officer during a portion of the last
completed fiscal year until July 17, 2006. |
|
(9) |
|
Includes 105,333 shares issuable upon exercise of options
held by Mr. Mayleben that are exercisable within the
60-day
period following January 31, 2008. |
|
(10) |
|
Includes 105,333 shares issuable upon exercise of options
held by Mr. Rubino that are exercisable within the
60-day
period following January 31, 2008. |
|
(11) |
|
Includes 78,333 shares issuable upon execution of options
held by Mr. Sims that are exercisable within the
60-day
period following January 31, 2008. |
|
(12) |
|
Includes 105,333 shares issuable upon exercise of options
held by Mr. Sudovar that are exercisable within the
60-day
period following January 31, 2008. |
|
(13) |
|
Includes 135,333 shares issuable upon exercise of options
held by Dr. Wyant that are exercisable within the
60-day
period following January 31, 2008. |
|
(14) |
|
Includes 85,600 shares issuable upon execution of options
held by Dr. Zerbe are exercisable within the
60-day
period following January 31, 2008. |
|
(15) |
|
Includes 1,542,348 shares issuable upon exercise of options
that are exercisable within the
60-day
period following January 31, 2008. Represents less than 1%
of the outstanding shares of Aastroms common stock. |
11
SHAREHOLDER
PROPOSALS TO BE PRESENTED
AT NEXT ANNUAL MEETING
Under Aastroms bylaws, in order for business to be
properly brought before a meeting by a shareholder, such
shareholder must have given timely notice thereof in writing to
the Corporate Secretary of Aastrom. To be timely, such notice
must be received at Aastroms principal executive offices
not less than 120 calendar days in advance of the one year
anniversary of the date Aastroms proxy statement was
released to shareholders in connection with the previous
years annual meeting of shareholders, except that
(i) if no annual meeting was held in the previous year,
(ii) if the date of the annual meeting has been changed by
more than thirty calendar days from the date contemplated at the
time of the previous years proxy statement or
(iii) in the event of a special meeting, then notice must
be received not later than the close of business on the tenth
day following the day on which notice of the date of the meeting
was mailed or public disclosure of the meeting date was made.
Proposals of shareholders intended to be presented at the next
annual meeting of the shareholders of Aastrom must be received
by Aastroms Corporate Secretary at the Companys
office at 24 Frank Lloyd Wright Drive, Lobby K, Ann Arbor,
Michigan 48105, no later than June 11, 2008. Such
shareholder proposals may also be included in Aastroms
proxy statement if they also satisfy the conditions established
by the Securities and Exchange Commission for such inclusion.
TRANSACTION
OF OTHER BUSINESS
At the date of this Proxy Statement, the only business which the
Board of Directors intends to present or knows that others will
present at the meeting is as set forth above. If any other
matter or matters are properly brought before the meeting, or
any adjournment thereof, it is the intention of the persons
named in the accompanying form of proxy to vote the proxy on
such matters in accordance with their best judgment.
By order of the Board of Directors,
Julie A. Caudill
Corporate Secretary and Controller
March , 2008
12
ANNEX A
FORM OF
CERTIFICATE OF AMENDMENT
TO THE RESTATED ARTICLES OF INCORPORATION
1. The present name of the corporation is:
Aastrom Biosciences, Inc.
2. The identification number assigned by the Bureau is:
529-456
3. The following language is hereby added to the end of
Article III of the Restated Articles of Incorporation:
Effective at 5:00 p.m. (EDT), on the date of filing of this
Certificate of Amendment with the State of Michigan, every
[five] ... [fourteen] outstanding shares of Common Stock will be
combined into and automatically become one share of outstanding
Common Stock of the Corporation. The Corporation will not issue
fractional shares on account of the foregoing reverse stock
split; all shares that are held by a shareholder as of the
effective date hereof shall be aggregated and each fractional
share resulting from the reverse stock split after giving effect
to such aggregation shall be cancelled.
In lieu of any interest in a fractional share to which a
shareholder would otherwise be entitled as a result of such
reverse stock split, such shareholder will be paid a cash amount
for such fractional shares equal to the product obtained by
multiplying (a) the fraction to which the shareholder would
otherwise be entitled by (b) the per share closing price of
the Corporations Common Stock on the trading day
immediately prior to the effective time of the reverse stock
split, as such price is reported on the Nasdaq Capital Market.
4. The foregoing amendment to the Restated Articles of
Incorporation was duly adopted on the [XX] day of [April],
2008, at a meeting of the shareholders, where the necessary
votes were cast in favor of the amendment.
Signed
this
day
of
,
2008.
A-1
PROXY
AASTROM BIOSCIENCES, INC.
Proxy for Special Meeting of Shareholders
Solicited by the Board of Directors
The undersigned hereby appoints George W. Dunbar, Jr. and Julie A. Caudill, and each of them,
with full power of substitution to represent the undersigned and to vote all of the shares of stock
of Aastrom Biosciences, Inc. (Aastrom or the Company) which undersigned is entitled to vote at the Special
Meeting of Shareholders of the Company to be held at Aastrom Biosciences, Inc. headquarters, Ann
Arbor, Michigan on [Tuesday], [April 8], 2008 at 9:00 a.m. (EDT), and at any adjournment thereof
(i) as hereinafter specified upon the proposal listed below and as more particularly described in
the Companys Proxy Statement, receipt of which is hereby acknowledged, and (ii) in their
discretion upon such other matters as may properly come before the meeting.
The shares represented hereby shall be voted as specified. If no specification is made, such
shares shall be voted FOR proposal 1.
A vote FOR the following proposal is recommended by the Board of Directors:
1. To approve the grant of discretionary authority to Aastroms Board of Directors to amend
Aastroms Restated Articles of Incorporation to effect a reverse stock split of Aastroms
issued and outstanding common stock at any time within four (4) weeks after the date
shareholder approval is obtained regarding the reverse stock split, at any whole number
ratio between one for five and one for fourteen, with the exact exchange ratio and timing of
the reverse stock split (if at all) to be determined at the discretion of the Board of
Directors (the Reverse Stock Split). The Reverse Stock Split will not occur unless the
Board of Directors determines that it is in the best interests of Aastrom and its
shareholders to implement the Reverse Stock Split.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
Side Two
(Continued from other side)
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW. o
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Even if you are planning to attend the meeting in person, you are urged to sign
and mail the Proxy in the return envelope so that your stock may be represented
at the meeting.
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Sign exactly as your name(s) appears on your stock certificate. If shares of
stock stand of record in the names of two or more persons or in the name of
husband and wife, whether as joint tenants or otherwise, both or all of such
persons should sign the above Proxy. If shares of stock are held of record by
a corporation, the Proxy should be executed by the President or Vice President
and the Secretary or Assistant Secretary, and the corporate seal should be
affixed thereto. Executors or administrators or other fiduciaries who execute
the above Proxy for a deceased shareholder should give their title. Please
date the Proxy. |
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Signature (s)
Date: