e8vk
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 21, 2011
Aastrom Biosciences, Inc.
(Exact name of registrant as specified in its charter)
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Michigan
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000-22025
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94-3096597 |
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.) |
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24 Frank Lloyd Wright Drive, P.O.
Box 376, Ann Arbor, Michigan
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48106 |
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(Address of principal executive offices)
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(Zip Code) |
Registrants telephone number, including area code: (734) 930-5555
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
Dr. Bartels Employment Agreement
On March 22, 2011, Ronnda L. Bartel, PhD and Aastrom Biosciences, Inc. (the Company) entered
into an Employment Agreement (the Bartel Employment Agreement). The Bartel Employment Agreement
provides that Dr. Bartel will receive an initial annual base salary of $243,389 and her base salary
shall be redetermined annually by the Companys Chief Executive Officer (the CEO) in consultation
with the Compensation Committee of the Board of Directors (the Compensation Committee). Under
the Bartel Employment Agreement, Dr. Bartel will also be eligible to receive cash incentive
compensation as determined by the CEO in consultation with the Committee from time to time. Dr.
Bartels target annual incentive compensation shall be 30% of her then-current base salary.
In the event of her termination by the Company without Cause or by Dr. Bartel for Good Reason
(as such terms are defined in the Bartel Employment Agreement), and subject to Dr. Bartels signing
a general release of claims, the Company shall pay Dr. Bartel an amount equal to nine months of her
then-current base salary in nine substantially equal monthly installments. Additionally, all stock
options and other stock-based awards which would have vested had Dr. Bartel remained employed for
an additional nine months following the date of termination shall become exercisable as of the date
of termination. Dr. Bartel would also be entitled to continued participation in the Companys
group health, dental and vision programs for nine months following the date of termination.
In the event of her termination by the Company without Cause or by Dr. Bartel for Good Reason
within twelve months following a Change in Control (as such term is defined in the Bartel
Employment Agreement), and subject to Dr. Bartels signing a general release of claims, the Company
shall pay to Dr. Bartel a lump-sum cash payment in an amount equal to twelve months of her
then-current base salary (or her base salary in effect immediately prior to the Change in Control,
if higher). Additionally and notwithstanding anything to the contrary in any applicable option
agreement or stock-based award agreement, all stock options and other stock-based awards held by
Dr. Bartel shall immediately accelerate and become exercisable as of the termination date. Dr.
Bartel would also be entitled to continued participation in the Companys group health, dental and
vision programs for twelve months following the date of termination.
If any payments to Dr. Bartel, calculated in a manner consistent with Section 280G of the
Internal Revenue Code of 1986, as amended (the Code), would be subject to the excise tax imposed
by Section 4999 of the Code, she will receive either the entire benefit or reduced payments, which
alternative will be determined by a nationally recognized accounting firm selected by the Company.
In addition, during her employment and after termination of the Bartel Employment Agreement,
Dr. Bartel has agreed to keep the Companys confidential information in confidence and trust and
has agreed not to use or disclose such confidential information without the Companys written
consent except as necessary in the ordinary course of performing her duties to the Company. During
the term of the Bartel Employment Agreement and for a period of twelve months thereafter Dr. Bartel
also agrees not to compete with the Company and not to solicit employees, customers or suppliers of
the Company.
The Bartel Employment Agreement contains other customary terms and conditions. The foregoing
description of the Bartel Employment Agreement does not purport to be complete and is qualified in
its entirety by reference to the actual Bartel Employment Agreement which is attached as Exhibit
10.1 to this Current Report on Form 8-K, and is incorporated herein by reference.
Dr. Watlings Employment Agreement
On March 22, 2011, Sharon Watling, PharmD and the Company entered into an Employment Agreement
(the Watling Employment Agreement). The Watling Employment Agreement provides that Dr. Watling
will receive an initial annual base salary of $190,000 and her base salary shall be redetermined
annually by the Companys CEO in consultation with the Compensation Committee. Under the Watling
Employment Agreement, Dr. Watling will also be eligible to receive cash incentive compensation as
determined by the CEO in consultation with the Committee from time to time. Dr. Watlings target annual incentive compensation
shall be 30% of her then-current base salary.
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In the event of her termination by the Company without Cause or by Dr. Watling for Good Reason
(as such terms are defined in the Watling Employment Agreement), and subject to Dr. Watlings
signing a general release of claims, the Company shall pay Dr. Watling an amount equal to nine
months of her then-current base salary in nine substantially equal monthly installments.
Additionally, all stock options and other stock-based awards which would have vested had Dr.
Watling remained employed for an additional nine months following the date of termination shall
become exercisable as of the date of termination. Dr. Watling would also be entitled to continued
participation in the Companys group health, dental and vision programs for nine months following
the date of termination.
In the event of her termination by the Company without Cause or by Dr. Watling for Good Reason
within twelve months following a Change in Control (as such term is defined in the Watling
Employment Agreement), and subject to Dr. Watlings signing a general release of claims, the
Company shall pay to Dr. Watling a lump-sum cash payment in an amount equal to twelve months of her
then-current base salary (or her base salary in effect immediately prior to the Change in Control,
if higher). Additionally and notwithstanding anything to the contrary in any applicable option
agreement or stock-based award agreement, all stock options and other stock-based awards held by
Dr. Watling shall immediately accelerate and become exercisable as of the termination date. Dr.
Watling would also be entitled to continued participation in the Companys group health, dental and
vision programs for twelve months following the date of termination.
If any payments to Dr. Watling, calculated in a manner consistent with Section 280G of the
Code, would be subject to the excise tax imposed by Section 4999 of the Code, she will receive
either the entire benefit or reduced payments, which alternative will be determined by a nationally
recognized accounting firm selected by the Company.
In addition, during her employment and after termination of the Watling Employment Agreement,
Dr. Watling has agreed to keep the Companys confidential information in confidence and trust and
has agreed not to use or disclose such confidential information without the Companys written
consent except as necessary in the ordinary course of performing her duties to the Company. During
the term of the Watling Employment Agreement and for a period of twelve months thereafter Dr.
Watling also agrees not to compete with the Company and not to solicit employees, customers or
suppliers of the Company.
The Watling Employment Agreement contains other customary terms and conditions. The foregoing
description of the Watling Employment Agreement does not purport to be complete and is qualified in
its entirety by reference to the actual Watling Employment Agreement which is attached as Exhibit
10.2 to this Current Report on Form 8-K, and is incorporated herein by reference.
Approval of Senior Executive Incentive Bonus Plan
On March 21, 2011, the Board of Directors approved the Companys Senior Executive Incentive
Bonus Plan (the Bonus Plan). The Bonus Plan provides that the Compensation Committee may select
certain key executives to be eligible to receive bonuses under the Bonus Plan, which would be based
upon the attainment of performance targets which are established by the Compensation Committee.
The Company may terminate the Bonus Plan at any time in its sole discretion. The foregoing
description of the Bonus Plan does not purport to be complete and is qualified in its entirety by
reference to the actual Bonus Plan which is attached as Exhibit 10.3 to this Current Report on Form
8-K, and is incorporated herein by reference.
Termination of Employee Compensation Guidelines
In connection with their approval of the Bonus Plan, on March 21, 2011, the Board of Directors
terminated the Companys Employee Compensation Guidelines, as amended.
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Item 5.03. Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year.
At its Special Meeting of Stockholders held on March 21, 2011, the stockholders of the Company
voted to approve an amendment to the Companys Restated Articles of Incorporation, as amended (the
Articles), to increase the number of shares of the Companys common stock authorized for issuance
thereunder from 62,500,000 shares to 150,000,000 shares. The amendment to the Articles is filed as
Exhibit 3.1 hereto and is incorporated by reference herein.
Item 5.07. Submission of Matters to a Vote of Security Holders.
At its Special Meeting of Stockholders held on March 21, 2011, the stockholders of the Company
voted on the following matters, which are described in detail in the Companys Proxy Statement
filed with the Securities and Exchange Commission (the SEC) on February 15, 2011: (i) to approve
an amendment to the Articles to increase the number of shares of the Companys common stock
authorized for issuance thereunder from 62,500,000 shares to 150,000,000 shares (Proposal 1); and
to approve an amendment to the Companys 2009 Omnibus Incentive Plan (the Incentive Plan) to
increase the aggregate number of shares of the Companys common stock authorized for issuance under
the Incentive Plan by 3,900,000 shares from 3,250,000 shares to 7,150,000 shares (Proposal 2).
The foregoing descriptions of the amendment to the Articles and the amendment to the Incentive Plan
do not purport to be complete and each is qualified in its entirety by reference to the actual
amendment to the Articles and the actual amendment to the Incentive Plan, which are attached as
Exhibit 3.1 and Exhibit 10.3 to this Current Report on Form 8-K, respectively, and are incorporated
herein by reference.
The Companys stockholders approved the amendment to the Articles, as recommended by the
Companys Board of Directors in Proposal 1. The Companys stockholders voted for Proposal 1 as
follows: 19,447,770 shares were voted for the approval of the amendment to the Companys Articles,
9,059,417 shares voted against and 213,359 shares abstained from voting.
The Companys stockholders approved the amendment to the Companys Incentive Plan, as
recommended by the Companys Board of Directors in Proposal 2. The Companys stockholders voted
for Proposal 2 as follows: 3,504,628 shares were voted for the approval of the amendment to the
Companys Incentive Plan, 2,820,840 shares voted against and 111,797 shares abstained from voting.
There were 22,283,281 broker non-votes.
On March 21, 2011, the Company issued a press release announcing the approval of Proposal 1
and Proposal 2 at the Special Meeting. A copy of the press release, dated March 21, 2011, is filed
herewith as Exhibit 99.1.
Item 8.01. Other Events.
2011 Annual Meeting Date
On March 25, 2011, the Company issued a press release announcing that it currently plans to
hold its 2011 Annual Meeting of Stockholders (the 2011 Annual Meeting) at 8:30 a.m., local time,
on Tuesday, June 7, 2011, at 24 Frank Lloyd Wright Drive, Lobby K, Ann Arbor, Michigan, 48105.
Stockholders of record as of the close of business on April 11, 2011, will be entitled to notice of
and to vote at the 2011 Annual Meeting. A copy of the press release, dated March 25, 2011, is
filed herewith as Exhibit 99.2.
Stockholder Proposal and Nomination Deadline
The 2011 Annual Meeting date represents a change of more than 30 days from the anniversary of
the Companys 2010 Annual Meeting of Stockholders. As a result, pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934, as amended, the Company has set a new deadline for the receipt of
any stockholder proposals submitted pursuant to Rule 14a-8 for inclusion in the Companys proxy
materials for the 2011 Annual Meeting. The new deadline for the submission of such stockholder
proposals is the close of business on Friday, April 8, 2011. Such proposals should be delivered to:
Aastrom Biosciences, Inc., 24 Frank Lloyd Wright Drive, P.O. Box 376, Ann Arbor, Michigan, 48106,
Attention: Secretary. The Company recommends that such proposals be sent by certified mail, return
receipt requested. Such proposals will also need to comply with the
rules of the SEC regarding the inclusion of stockholder proposals in the Companys proxy materials, and may be
omitted if not in compliance with applicable requirements.
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Under the Companys current by-laws, proposals of business and nominations for directors other
than those to be included in the Companys proxy materials following the procedures described in
Rule 14a-8 may be made by stockholders if notice is timely given and if the notice contains the
information required by the Companys by-laws. To be timely, a notice with respect to the 2011
Annual Meeting must be delivered to the Secretary of the Company no later than the close of
business on Friday, April 8, 2011. Such proposals or nominations should be delivered to: Aastrom
Biosciences, Inc., 24 Frank Lloyd Wright Drive, P.O. Box 376, Ann Arbor, Michigan, 48106,
Attention: Secretary.
The description of the press release set forth herein does not purport to be complete and is
qualified in its entirety by reference to the full text of the press release attached hereto as
Exhibit 99.2 and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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3.1 |
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Certificate of Amendment to the Restated Articles of Incorporation. |
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10.1 |
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Employment Agreement with Ronnda L. Bartel, PhD, dated March 22, 2011. |
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10.2 |
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Employment Agreement with Sharon Watling, PharmD, dated March 22, 2011. |
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10.3 |
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Senior Executive Incentive Bonus Plan. |
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10.4 |
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Amendment to the 2009 Omnibus Incentive Plan, dated March 21, 2011. |
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99.1 |
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Press Release, dated March 21, 2011. |
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99.2 |
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Press Release, dated March 25, 2011. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Aastrom Biosciences, Inc.
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Date: March 25, 2011 |
By: |
/s/ TIMOTHY M. MAYLEBEN
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Name: |
Timothy Mayleben |
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Title: |
Chief Executive Officer and President |
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exv3w1
Exhibit 3.1
BCS/CD-515(Rev. 08/10)
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MICHIGAN DEPARTMENT OF ENERGY, LABOR & ECONOMIC GROWTH
BUREAU OF COMMERCIAL SERVICES |
Date Received
MAR 23 2011 |
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FILED
MAR 23 2011 |
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This document is effective on the date filed, unless a
subsequent effective date within 90 days after received
date is stated in the document.
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Name
Aastrom Biosciences, Inc.
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Administrator |
Address
Dominos Farms, Lobby K, 24 Frank Lloyd Wright Drive
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BUREAU OF COMMERCIAL SERVICES |
City Ann Arbor
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State Michigan
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ZIP Code
48105 |
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EFFECTIVE DATE: |
Document will be returned to the name and address you enter above.
If left blank, document will be returned to the registered office. |
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CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION
For use by Domestic Profit and Nonprofit Corporations
(Please read information and instructions on the last page)
Pursuant to the provisions of Act 284, Public Acts of 1972, (profit corporations), or Act 162,
Public Acts of 1982 (nonprofit corporations), the undersigned corporation executes the following
Certificate:
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The present name of the corporation is: |
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Aastrom Biosciences, Inc. |
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The identification number assigned
by the Bureau is:
529-456 |
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Article III of the Articles of Incorporation is hereby amended to read as follows: |
The total authorized shares:
Common Shares 150,000,000
Preferred Shares 5,000,000
A statement of all or any of the relative rights, preferences and limitations of the shares of each
class is as follows:
See Rider attached hereto and made a part
hereof.
Effective at 9:00 a.m. EST, on February 18, 2010, every eight 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.
COMPLETE ONLY ONE OF THE FOLLOWING:
4. Profit or Nonprofit Corporations: For amendments adopted by unanimous consent of incorporators
before the first meeting of the board of directors or trustees.
The foregoing amendment to the Articles of Incorporation was duly adopted on the ______________ day of
______________ , __________ , in accordance with the provisions of the Act by the unanimous consent of the
incorporator(s) before the first meeting of the Board of Directors or Trustees.
Signed this __________ day of ______________ , __________
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(Signature)
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(Signature) |
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(Type or Print Name)
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(Type or Print Name) |
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(Signature)
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(Signature) |
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(Type or Print Name)
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(Type or Print Name) |
5. Profit Corporation Only: Shareholder or Board Approval
The foregoing amendment to the Articles of Incorporation proposed by the board was duly adopted on the
21st day of March
, 2011 , by the: (check one of the following)
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shareholders at a meeting in accordance with Section 611(3) of the Act. |
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written consent of the shareholders having not less than the minimum number of
votes required by statute in accordance with Section 407(1) of the Act. Written notice to
shareholders who have not consented in writing has been given. (Note: Written consent by less than
all of the shareholders is permitted only if such provision appears in the Articles of
Incorporation.) |
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written consent of all the shareholders entitled to vote in accordance with Section 407(2)
of the Act. |
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board of a profit corporation pursuant to section 611(2) of the Act. |
Profit Corporations and Professional Service Corporations
Signed this 22 day of March , 2011
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By
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/s/ Timothy Mayleben |
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(Signature of an authorized officer or agent) |
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Timothy Mayleben,
President & CEO
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(Type or Print Name)
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RIDER TO ARTICLE III
PART A: COMMON STOCK
Section 1.
Voting Rights. One Vote Per Share. The holders of shares of Common Stock shall
be entitled to one vote for each share so held with respect to all matters voted on by the holders
of shares of Common Stock of the Corporation.
Section 2. Liquidation Rights. Subject to preferences applicable to any outstanding
shares of Preferred Stock, all distributions made or funds paid to the holders of Common Stock upon
the occurrence of any voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation shall be made on the basis of the number of shares of Common Stock held
by each of them. A consolidation or merger of the Corporation with or into another
corporation or entity shall be regarded as a liquidation, dissolution or winding up of the
Corporation within the meaning of this Section 2 unless such consolidation or merger is not
intended to effect a change in the ownership or control of the Corporation or of its assets and is
not intended to alter materially the business or assets of the Corporation, including, by way of
example and without limiting the generally of the foregoing: (i) a consolidation or merger which
merely changes the identity, form or place of organization of the Corporation, or which is between
or among the Corporation and any of its direct or indirect subsidiaries, or (ii) following such
merger or consolidation, shareholders of the Corporation immediately prior to such event own not
less than 51% of the voting power of such corporation immediately after such merger or
consolidation on a pro rata basis.
Section 3. Dividends. Dividends may be paid on the Common Stock as and when declared by the
Board of Directors, subject to preferences applicable to any outstanding shares of Preferred Stock.
PART B. PREFERRED STOCK
The Preferred Stock may be issued from time to time in one or more series. The Board of Directors
of the Corporation is hereby authorized, within the limitations and restrictions stated in these
Restated Articles of Incorporation, to fix or alter the dividend rights, dividend rate, conversion
rights, voting rights, rights and terms of redemption (including sinking fund provisions), the
redemption price or prices, and the liquidation preferences of any wholly unissued series of
Preferred Stock, and the number of shares constituting any such series and the
designation thereof, or any of them, and to increase or decrease the number of shares of any series
subsequent to the issue of shares of that series but not below the number of shares of such series
then outstanding. In case the number of shares of any series shall be so decreased, the shares
constituting such decrease shall resume the status which they had prior to the adoption of the
resolution originally fixing the number of shares of such series.
exv10w1
Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (Agreement) is made as of the 22nd day of March, 2011,
between Aastrom Biosciences, Inc., a Michigan corporation (the Company), and Ronnda L. Bartel
(the Executive).
WHEREAS, the Company desires to employ the Executive and the Executive desires to be employed
by the Company on the terms contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
1. Position and Duties. The Executive shall serve as the Chief Scientific Officer of
the Company and shall have such powers and duties as may from time to time be prescribed by the
Chief Executive Officer of the Company (the CEO) or other authorized executive, provided that
such duties are consistent with the Executives position or other positions that she may hold from
time to time. The Executive shall devote her full working time and efforts to the business and
affairs of the Company. Notwithstanding the foregoing, the Executive may engage in religious,
charitable or other community activities as long as such services and activities are disclosed to
the Board and do not materially interfere with the Executives performance of her duties to the
Company as provided in this Agreement.
2. Compensation and Related Matters.
(a) Base Salary. The Executives initial annual base salary shall be $243,389. The
Executives base salary shall be redetermined annually by the CEO in consultation with the
Companys Compensation Committee. The base salary in effect at any given time is referred to
herein as Base Salary. The Base Salary shall be payable in a manner that is consistent with the
Companys usual payroll practices for senior executives.
(b) Incentive Compensation. The Executive shall be eligible to receive cash incentive
compensation as determined by the CEO in consultation with the Companys Compensation Committee
from time to time. The Executives target annual incentive compensation shall be thirty percent
(30%) of her Base Salary. To be eligible for an incentive compensation payment, the Executive must
be employed by the Company on the day such incentive compensation is paid.
(c) Options. From time to time and at the discretion of management and the Board of
Directors, the Company will grant to the Executive options to purchase shares of the Companys
common stock at an exercise price equal to the fair market value of the Companys common stock on
the effective date of grant. Such options will be subject to the terms and conditions of the
Companys 2009 Stock Option Plan, as may be amended and/or restated from time to time, or such
other similar equity plan and form of stock option agreement, in each case duly adopted by the
Company, and such options will be subject to approval by the Board of Directors.
(d) Expenses. The Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by him in performing services hereunder, in accordance with the
policies and procedures then in effect and established by the Company for its senior executive
officers.
(e) Other Benefits. The Executive shall be entitled to continue to participate in or
receive benefits under all of the Companys Employee Benefit Plans in effect on the date hereof, or
under plans or arrangements that provide the Executive with benefits at least substantially
equivalent to those provided under such Employee Benefit Plans. As used herein, the term Employee
Benefit Plans includes, without limitation, each pension and retirement plan; supplemental
pension, retirement and deferred compensation plan; savings and profit-sharing plan; stock
ownership plan; stock purchase plan; stock option plan; life insurance plan; medical insurance
plan; disability plan; and health and accident plan or arrangement established and maintained by
the Company on the date hereof for employees of the same status within the hierarchy of the
Company. The Executive shall be entitled to participate in or receive benefits under any employee
benefit plan or arrangement which may, in the future, be made available by the Company to its
executives and key management employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plan or arrangement. Any payments or benefits
payable to the Executive under a plan or arrangement referred to in this Section 2(d) in respect of
any calendar year during which the Executive is employed by the Company for less than the whole of
such year shall, unless otherwise provided in the applicable plan or arrangement, be prorated in
accordance with the number of days in such calendar year during which she is so employed. Should
any such payments or benefits accrue on a fiscal (rather than calendar) year, then the proration in
the preceding sentence shall be on the basis of a fiscal year rather than calendar year.
(f) Vacations. The Executive shall be entitled to accrue up to four (4) weeks paid
vacation days in each year, which shall be accrued ratably. The Executive shall also be entitled
to all paid holidays given by the Company to its executives.
3. Termination. The Executives employment hereunder may be terminated without any
breach of this Agreement under the following circumstances:
(a) Death. The Executives employment hereunder shall terminate upon her death.
(b) Disability. The Company may terminate the Executives employment if she is
disabled and unable to perform the essential functions of the Executives then existing position or
positions under this Agreement with or without reasonable accommodation for a period of 180 days
(which need not be consecutive) in any 12-month period. If any question shall arise as to whether
during any period the Executive is disabled so as to be unable to perform the essential functions
of the Executives then existing position or positions with or without reasonable accommodation,
the Executive may, and at the request of the Company shall, submit to the Company a certification
in reasonable detail by a physician selected by the Company to whom the Executive or the
Executives guardian has no reasonable objection as to whether the Executive is so disabled or how
long such disability is expected to continue, and such certification shall for the purposes of this
Agreement be conclusive of the issue. The
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Executive shall cooperate with any reasonable request of the physician in connection with such
certification. If such question shall arise and the Executive shall fail to submit such
certification, the Companys determination of such issue shall be binding on the Executive.
Nothing in this Section 3(b) shall be construed to waive the Executives rights, if any, under
existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C.
§2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.
(c) Termination by Company for Cause. The Company may terminate the Executives
employment hereunder for Cause by a vote of the Board at a meeting of the Board called and held for
such purpose. For purposes of this Agreement, Cause shall mean: (i) conduct by the Executive
constituting a material act of misconduct in connection with the performance of her duties,
including, without limitation, misappropriation of funds or property of the Company or any of its
subsidiaries or affiliates other than the occasional, customary and de minimis use of Company
property for personal purposes; (ii) the commission by the Executive of any felony or a misdemeanor
involving moral turpitude, deceit, dishonesty or fraud, or any conduct by the Executive that would
reasonably be expected to result in material injury or reputational harm to the Company or any of
its subsidiaries and affiliates if she were retained in her position; (iii) continued
non-performance by the Executive of her duties hereunder (other than by reason of the Executives
physical or mental illness, incapacity or disability) which has continued for more than 15 days
following written notice of such non-performance from the CEO; (iv) a breach by the Executive of
any of the provisions contained in Section 7 of this Agreement; (v) a material violation by the
Executive of the Companys written employment policies, or (vi) failure to cooperate with a bona
fide internal investigation or an investigation by regulatory or law enforcement authorities, after
being instructed by the Company to cooperate, or the willful destruction or failure to preserve
documents or other materials known to be relevant to such investigation or the inducement of others
to fail to cooperate or to produce documents or other materials in connection with such
investigation.
(d) Termination Without Cause. The Company may terminate the Executives employment
hereunder at any time without Cause. Any termination by the Company of the Executives employment
under this Agreement which does not constitute a termination for Cause under Section 3(c) and does
not result from the death or disability of the Executive under Section 3(a) or (b) shall be deemed
a termination without Cause.
(e) Termination by the Executive. The Executive may terminate her employment
hereunder at any time for any reason, including but not limited to Good Reason. For purposes of
this Agreement, Good Reason shall mean that the Executive has complied with the Good Reason
Process (hereinafter defined) following the occurrence of any of the following events: (i) a
material diminution in the Executives responsibilities, authority or duties; (ii) a material
diminution in the Executives Base Salary except for across-the-board salary reductions based on
the Companys financial performance similarly affecting all or substantially all senior management
employees of the Company; (iii) a material change in the geographic location of the Companys
offices from its present location; or (iv) the material breach of this Agreement by the Company.
Good Reason Process shall mean that (i) the Executive reasonably determines in good faith that a
Good Reason condition has occurred; (ii) the Executive notifies the Company in writing of the
first occurrence of the Good Reason condition within 15 days of the first occurrence of such
condition; (iii) the Executive cooperates
3
in good faith with the Companys efforts, for a period not less than 15 days following such
notice (the Cure Period), to remedy the condition; (iv) notwithstanding such efforts, the Good
Reason condition continues to exist; and (v) the Executive terminates her employment within 15 days
after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure
Period, Good Reason shall be deemed not to have occurred.
(f) Notice of Termination. Except for termination as specified in Section 3(a), any
termination of the Executives employment by the Company or any such termination by the Executive
shall be communicated by written Notice of Termination to the other party hereto. For purposes of
this Agreement, a Notice of Termination shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon.
(g) Date of Termination. Date of Termination shall mean: (i) if the Executives
employment is terminated by her death, the date of her death; (ii) if the Executives employment is
terminated on account of disability under Section 3(b) or by the Company for Cause under Section
3(c), the date on which Notice of Termination is given; (iii) if the Executives employment is
terminated by the Company under Section 3(d), 30 days after the date on which a Notice of
Termination is given; (iv) if the Executives employment is terminated by the Executive under
Section 3(e) without Good Reason, 30 days after the date on which a Notice of Termination is given,
and (v) if the Executives employment is terminated by the Executive under Section 3(e) with Good
Reason, the date on which a Notice of Termination is given after the end of the Cure Period.
Notwithstanding the foregoing, in the event that the Executive gives a Notice of Termination to the
Company, the Company may unilaterally accelerate the Date of Termination and such acceleration
shall not result in a termination by the Company for purposes of this Agreement.
4. Compensation Upon Termination.
(a) Termination Generally. If the Executives employment with the Company is
terminated for any reason, the Company shall pay or provide to the Executive (or to her authorized
representative or estate) any earned but unpaid base salary, incentive compensation earned but not
yet paid, unpaid expense reimbursements, accrued but unused vacation and any vested benefits the
Executive may have under any employee benefit plan of the Company (the Accrued Benefit) on or
before the time required by law but in no event more than 30 days after the Executives Date of
Termination.
(b) Termination by the Company Without Cause or by the Executive with Good Reason. If
the Executives employment is terminated by the Company without Cause as provided in Section 3(d),
or the Executive terminates her employment for Good Reason as provided in Section 3(e), then the
Company shall, through the Date of Termination, pay the Executive her Accrued Benefit. In
addition:
(i) subject to the Executive signing a general release of claims in favor of the
Company and related persons and entities in a form and manner satisfactory to the Company
(the Release) within the 21-day period following the Date of Termination and the
expiration of the seven-day revocation period for the Release, the Company shall pay the
Executive an amount equal to nine (9) months of the Executives
4
Base Salary (the Severance Amount). The Severance Amount shall be paid out in
substantially equal installments in accordance with the Companys payroll practice over
[nine (9) months], beginning on the first payroll date that occurs 30 days after the Date of
Termination. Solely for purposes of Section 409A of the Internal Revenue Code of 1986, as
amended (the Code), each installment payment is considered a separate payment.
Notwithstanding the foregoing, if the Executive breaches any of the provisions contained in
Section 7 of this Agreement, all payments of the Severance Amount shall immediately cease;
and
(ii) upon the Date of Termination, all stock options and other stock-based awards held
by the Executive in which the Executive would have vested if she had remained employed for
an additional nine (9) months following the Date of Termination shall vest and become
exercisable or nonforfeitable as of the Date of Termination; and
(iii) subject to the Executives copayment of premium amounts at the active employees
rate, the Executive may continue to participate in the Companys group health, dental and
vision program for nine (9) months; provided, however, that the continuation of health
benefits under this Section shall reduce and count against the Executives rights under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA).
5. Change in Control Payment. The provisions of this Section 5 set forth certain
terms of an agreement reached between the Executive and the Company regarding the Executives
rights and obligations upon the occurrence of a Change in Control of the Company. These provisions
are intended to assure and encourage in advance the Executives continued attention and dedication
to her assigned duties and her objectivity during the pendency and after the occurrence of any such
event. These provisions shall apply in lieu of, and expressly supersede, the provisions of Section
4(b) regarding severance pay and benefits upon a termination of employment, if such termination of
employment occurs within twelve (12) months after the occurrence of the first event constituting a
Change in Control. These provisions shall terminate and be of no further force or effect beginning
twelve (12) months after the occurrence of a Change in Control.
(a) Change in Control. If within twelve (12) months after a Change in Control, the
Executives employment is terminated by the Company without Cause as provided in Section 3(d) or
the Executive terminates her employment for Good Reason as provided in Section 3(e), then,
(i) subject to the signing of the Release by the Executive within 30 days after the
Date of Termination and the expiration of the seven-day revocation period for the Release,
the Company shall pay the Executive a lump sum in cash in an amount equal to twelve (12)
months of the Executives current Base Salary (or the Executives Base Salary in effect
immediately prior to the Change in Control, if higher). Such payment shall be paid on the
first payroll date that occurs 30 days after the Date of Termination; and
5
(ii) notwithstanding anything to the contrary in any applicable option agreement or
stock-based award agreement, all stock options and other stock-based awards held by the
Executive shall immediately accelerate and become fully exercisable or nonforfeitable as of
the Date of Termination; and
(iii) subject to the Executives copayment of premium amounts at the active employees
rate, the Executive may continue to participate in the Companys group health, dental and
vision program for twelve (12) months; provided, however, that the continuation of health
benefits under this Section shall reduce and count against the Executives rights under
COBRA.
(b) Additional Limitation.
(i) Anything in this Agreement to the contrary notwithstanding, in the event that the
amount of any compensation, payment or distribution by the Company to or for the benefit of
the Executive, whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the
Code and the applicable regulations thereunder (the Severance Payments), would be subject
to the excise tax imposed by Section 4999 of the Code, the following provisions shall apply:
(A) If the Severance Payments, reduced by the sum of (1) the Excise Tax and (2)
the total of the Federal, state, and local income and employment taxes payable by
the Executive on the amount of the Severance Payments which are in excess of the
Threshold Amount, are greater than or equal to the Threshold Amount, the Executive
shall be entitled to the full benefits payable under this Agreement.
(B) If the Threshold Amount is less than (x) the Severance Payments, but
greater than (y) the Severance Payments reduced by the sum of (1) the Excise Tax and
(2) the total of the Federal, state, and local income and employment taxes on the
amount of the Severance Payments which are in excess of the Threshold Amount, then
the Severance Payments shall be reduced (but not below zero) to the extent necessary
so that the sum of all Severance Payments shall not exceed the Threshold Amount. In
such event, the Severance Payments shall be reduced in the following order: (1) cash
payments not subject to Section 409A of the Code; (2) cash payments subject to
Section 409A of the Code; (3) equity-based payments and acceleration; and (4)
non-cash forms of benefits. To the extent any payment is to be made over time
(e.g., in installments, etc.), then the payments shall be reduced in reverse
chronological order.
(ii) For the purposes of this Section 5(b), Threshold Amount shall mean three times
the Executives base amount within the meaning of Section 280G(b)(3) of the Code and the
regulations promulgated thereunder less one dollar ($1.00); and Excise Tax shall mean the
excise tax imposed by Section 4999 of the Code, and any interest or penalties incurred by
the Executive with respect to such excise tax.
6
(iii) The determination as to which of the alternative provisions of Section 5(b)(i)
shall apply to the Executive shall be made by a nationally recognized accounting firm
selected by the Company (the Accounting Firm), which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of the Date of
Termination, if applicable, or at such earlier time as is reasonably requested by the
Company or the Executive. For purposes of determining which of the alternative provisions
of Section 5(b)(i) shall apply, the Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation applicable to individuals for the
calendar year in which the determination is to be made, and state and local income taxes at
the highest marginal rates of individual taxation in the state and locality of the
Executives residence on the Date of Termination, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local taxes. Any
determination by the Accounting Firm shall be binding upon the Company and the Executive.
(b) Definitions. For purposes of this Section 5, the following terms shall have the
following meanings:
Change in Control shall mean any of the following:
(i) any person, as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the Act) (other than the Company, any of its
subsidiaries, or any trustee, fiduciary or other person or entity holding securities under
any employee benefit plan or trust of the Company or any of its subsidiaries), together with
all affiliates and associates (as such terms are defined in Rule 12b-2 under the Act) of
such person, shall become the beneficial owner (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company representing 50 percent
or more of the combined voting power of the Companys then outstanding securities having the
right to vote in an election of the Board (Voting Securities) (in such case other than as
a result of an acquisition of securities directly from the Company); or
(ii) the consummation of (A) any consolidation or merger of the Company where the
stockholders of the Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such term is defined in
Rule 13d-3 under the Act), directly or indirectly, shares representing in the aggregate more
than 50 percent of the voting shares of the Company issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any), or (B) any sale or
other transfer (in one transaction or a series of transactions contemplated or arranged by
any party as a single plan) of all or substantially all of the assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred for
purposes of the foregoing clause (i) solely as the result of an acquisition of securities by the
Company which, by reducing the number of shares of Voting Securities outstanding, increases the
proportionate number of Voting Securities beneficially owned by any person to 50 percent or more of
the combined voting power of all of the then outstanding Voting
7
Securities; provided, however, that if any person referred to in this sentence shall
thereafter become the beneficial owner of any additional shares of Voting Securities (other than
pursuant to a stock split, stock dividend, or similar transaction or as a result of an acquisition
of securities directly from the Company) and immediately thereafter beneficially owns 50 percent or
more of the combined voting power of all of the then outstanding Voting Securities, then a Change
in Control shall be deemed to have occurred for purposes of the foregoing clause (i).
6. Section 409A.
(a) Anything in this Agreement to the contrary notwithstanding, if at the time of the
Executives separation from service within the meaning of Section 409A of the Code, the Company
determines that the Executive is a specified employee within the meaning of Section
409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes
entitled to under this Agreement on account of the Executives separation from service would be
considered deferred compensation subject to the 20 percent additional tax imposed pursuant to
Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code,
such payment shall not be payable and such benefit shall not be provided until the date that is the
earlier of (A) six months and one day after the Executives separation from service, or (B) the
Executives death. If any such delayed cash payment is otherwise payable on an installment basis,
the first payment shall include a catch-up payment covering amounts that would otherwise have been
paid during the six-month period but for the application of this provision, and the balance of the
installments shall be payable in accordance with their original schedule.
(b) All in-kind benefits provided and expenses eligible for reimbursement under this Agreement
shall be provided by the Company or incurred by the Executive during the time periods set forth in
this Agreement. All reimbursements shall be paid as soon as administratively practicable, but in
no event shall any reimbursement be paid after the last day of the taxable year following the
taxable year in which the expense was incurred. The amount of in-kind benefits provided or
reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be
provided or the expenses eligible for reimbursement in any other taxable year. Such right to
reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.
(c) To the extent that any payment or benefit described in this Agreement constitutes
non-qualified deferred compensation under Section 409A of the Code, and to the extent that such
payment or benefit is payable upon the Executives termination of employment, then such payments or
benefits shall be payable only upon the Executives separation from service. The determination
of whether and when a separation from service has occurred shall be made in accordance with the
presumptions set forth in Treasury Regulation Section 1.409A-1(h).
(d) The parties intend that this Agreement will be administered in accordance with Section
409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its
compliance with Section 409A of the Code, the provision shall be read in such a manner so that all
payments hereunder comply with Section 409A of the Code. The parties agree that this Agreement may
be amended, as reasonably requested by either party, and as may be
8
necessary to fully comply with Section 409A of the Code and all related rules and regulations
in order to preserve the payments and benefits provided hereunder without additional cost to either
party.
(e) The Company makes no representation or warranty and shall have no liability to the
Executive or any other person if any provisions of this Agreement are determined to constitute
deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or
the conditions of, such Section.
7. Confidential Information, Noncompetition and Cooperation.
(a) Confidential Information. As used in this Agreement, Confidential Information
means information belonging to the Company which is of value to the Company in the course of
conducting its business and the disclosure of which could result in a competitive or other
disadvantage to the Company. Confidential Information includes, without limitation, financial
information, reports, and forecasts; inventions, improvements and other intellectual property;
trade secrets; know-how; designs, processes or formulae; software; market or sales information or
plans; customer lists; and business plans, prospects and opportunities (such as possible
acquisitions or dispositions of businesses or facilities) which have been discussed or considered
by the management of the Company. Confidential Information includes information developed by the
Executive in the course of the Executives employment by the Company, as well as other information
to which the Executive may have access in connection with the Executives employment. Confidential
Information also includes the confidential information of others with which the Company has a
business relationship. Notwithstanding the foregoing, Confidential Information does not include
information in the public domain, unless due to breach of the Executives duties under Section
7(b).
(b) Confidentiality. The Executive understands and agrees that the Executives
employment creates a relationship of confidence and trust between the Executive and the Company
with respect to all Confidential Information. At all times, both during the Executives employment
with the Company and after its termination, the Executive will keep in confidence and trust all
such Confidential Information, and will not use or disclose any such Confidential Information
without the written consent of the Company, except as may be necessary in the ordinary course of
performing the Executives duties to the Company.
(c) Documents, Records, etc. All documents, records, data, apparatus, equipment and
other physical property, whether or not pertaining to Confidential Information, which are furnished
to the Executive by the Company or are produced by the Executive in connection with the Executives
employment will be and remain the sole property of the Company. The Executive will return to the
Company all such materials and property as and when requested by the Company. In any event, the
Executive will return all such materials and property immediately upon termination of the
Executives employment for any reason. The Executive will not retain with the Executive any such
material or property or any copies thereof after such termination.
(d) Noncompetition and Nonsolicitation. During the Executives employment with the
Company and for twelve (12) months thereafter, regardless of the reason for the
9
termination, the Executive (i) will not, directly or indirectly, whether as owner, partner,
shareholder, consultant, agent, employee, co-venturer or otherwise, engage, participate, assist or
invest in any Competing Business (as hereinafter defined); (ii) will refrain from directly or
indirectly employing, attempting to employ, recruiting or otherwise soliciting, inducing or
influencing any person to leave employment with the Company (other than terminations of employment
of subordinate employees undertaken in the course of the Executives employment with the Company);
and (iii) will refrain from soliciting or encouraging any customer or supplier to terminate or
otherwise modify adversely its business relationship with the Company. The Executive understands
that the restrictions set forth in this Section 7(d) are intended to protect the Companys interest
in its Confidential Information and established employee, customer and supplier relationships and
goodwill, and agrees that such restrictions are reasonable and appropriate for this purpose. For
purposes of this Agreement, the term Competing Business shall mean an autologous or allogeneic
cell therapy technology business focused on the development of therapies for the treatment of
severe, chronic cardiovascular diseases conducted anywhere in the world which is competitive with
the business which the Company or any of its affiliates at any time during the employment of the
Executive. Notwithstanding the foregoing, the Executive may own up to one percent (1%) of the
outstanding stock of a publicly held corporation which constitutes or is affiliated with a
Competing Business.
(e) Third-Party Agreements and Rights. The Executive hereby confirms that the
Executive is not bound by the terms of any agreement with any previous employer or other party
which restricts in any way the Executives use or disclosure of information or the Executives
engagement in any business. The Executive represents to the Company that the Executives execution
of this Agreement, the Executives employment with the Company and the performance of the
Executives proposed duties for the Company will not violate any obligations the Executive may have
to any such previous employer or other party. In the Executives work for the Company, the
Executive will not disclose or make use of any information in violation of any agreements with or
rights of any such previous employer or other party, and the Executive will not bring to the
premises of the Company any copies or other tangible embodiments of non-public information
belonging to or obtained from any such previous employment or other party.
(f) Litigation and Regulatory Cooperation. During and after the Executives
employment, the Executive shall cooperate fully with the Company in the defense or prosecution of
any claims or actions now in existence or which may be brought in the future against or on behalf
of the Company which relate to events or occurrences that transpired while the Executive was
employed by the Company. The Executives full cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with counsel to prepare for
discovery or trial and to act as a witness on behalf of the Company at mutually convenient times.
During and after the Executives employment, the Executive also shall cooperate fully with the
Company in connection with any investigation or review of any federal, state or local regulatory
authority as any such investigation or review relates to events or occurrences that transpired
while the Executive was employed by the Company. The Company shall reimburse the Executive for any
reasonable out-of-pocket expenses incurred in connection with the Executives performance of
obligations pursuant to this Section 7(f).
10
(g) Injunction. The Executive agrees that it would be difficult to measure any
damages caused to the Company which might result from any breach by the Executive of the promises
set forth in this Section 7, and that in any event money damages would be an inadequate remedy for
any such breach. Accordingly, subject to Section 8 of this Agreement, the Executive agrees that if
the Executive breaches, or proposes to breach, any portion of this Agreement, the Company shall be
entitled, in addition to all other remedies that it may have, to an injunction or other appropriate
equitable relief to restrain any such breach without showing or proving any actual damage to the
Company.
8. Arbitration of Disputes. Any controversy or claim arising out of or relating to
this Agreement or the breach thereof or otherwise arising out of the Executives employment or the
termination of that employment (including, without limitation, any claims of unlawful employment
discrimination whether based on age or otherwise) shall, to the fullest extent permitted by law, be
settled by arbitration in any forum and form agreed upon by the parties or, in the absence of such
an agreement, under the auspices of the American Arbitration Association (AAA) in Detroit,
Michigan in accordance with the Employment Dispute Resolution Rules of the AAA, including, but not
limited to, the rules and procedures applicable to the selection of arbitrators. In the event that
any person or entity other than the Executive or the Company may be a party with regard to any such
controversy or claim, such controversy or claim shall be submitted to arbitration subject to such
other person or entitys agreement. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. This Section 8 shall be specifically
enforceable. Notwithstanding the foregoing, this Section 8 shall not preclude either party from
pursuing a court action for the sole purpose of obtaining a temporary restraining order or a
preliminary injunction in circumstances in which such relief is appropriate; provided that any
other relief shall be pursued through an arbitration proceeding pursuant to this Section 8.
9. Consent to Jurisdiction. To the extent that any court action is permitted
consistent with or to enforce Section 8 of this Agreement, the parties hereby consent to the
jurisdiction of the Superior Court of the State of Michigan and the United States District Court
for the District of Michigan. Accordingly, with respect to any such court action, the Executive
(a) submits to the personal jurisdiction of such courts; (b) consents to service of process; and
(c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with
respect to personal jurisdiction or service of process.
10. Integration. This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements between the parties
concerning such subject matter, including without limitation, the Amended and Restated Employment
Agreement by and between the Company and the Executive dated as of December 14, 2009.
11. Withholding. All payments made by the Company to the Executive under this
Agreement shall be net of any tax or other amounts required to be withheld by the Company under
applicable law.
12. Successor to the Executive. This Agreement shall inure to the benefit of and be
enforceable by the Executives personal representatives, executors, administrators, heirs,
11
distributees, devisees and legatees. In the event of the Executives death after her
termination of employment but prior to the completion by the Company of all payments due him under
this Agreement, the Company shall continue such payments to the Executives beneficiary designated
in writing to the Company prior to her death (or to her estate, if the Executive fails to make such
designation).
13. Enforceability. If any portion or provision of this Agreement (including, without
limitation, any portion or provision of any section of this Agreement) shall to any extent be
declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this
Agreement, or the application of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion
and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by
law.
14. Survival. The provisions of this Agreement shall survive the termination of this
Agreement and/or the termination of the Executives employment to the extent necessary to
effectuate the terms contained herein.
15. Waiver. No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of any party to require the performance of
any term or obligation of this Agreement, or the waiver by any party of any breach of this
Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a
waiver of any subsequent breach.
16. Notices. Any notices, requests, demands and other communications provided for by
this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally
recognized overnight courier service or by registered or certified mail, postage prepaid, return
receipt requested, to the Executive at the last address the Executive has filed in writing with the
Company or, in the case of the Company, at its main offices, attention of the Board.
17. Amendment. This Agreement may be amended or modified only by a written instrument
signed by the Executive and by a duly authorized representative of the Company.
18. Governing Law. This is a Michigan contract and shall be construed under and be
governed in all respects by the laws of the State of Michigan, without giving effect to the
conflict of laws principles of such State. With respect to any disputes concerning federal law,
such disputes shall be determined in accordance with the law as it would be interpreted and applied
by the United States Court of Appeals for the Sixth Circuit.
19. Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be taken to be an original; but such counterparts
shall together constitute one and the same document.
20. Successor to Company. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company expressly to assume and agree to perform this Agreement to the
same extent that the Company would be required to perform it if no succession had taken
12
place. Failure of the Company to obtain an assumption of this Agreement at or prior to the
effectiveness of any succession shall be a material breach of this Agreement.
21. Gender Neutral. Wherever used herein, a pronoun in the masculine gender shall be
considered as including the feminine gender unless the context clearly indicates otherwise.
IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year
first above written.
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AASTROM BIOSCIENCES, INC.
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/s/ TIMOTHY M. MAYLEBEN
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By: Tim M. Mayleben |
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Its: CEO and President |
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EXECUTIVE
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/s/ RONNDA L. BARTEL
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Ronnda L. Bartel |
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exv10w2
Exhibit 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement (Agreement) is made as of the 22nd day of March, 2011,
between Aastrom Biosciences, Inc., a Michigan corporation (the Company), and Sharon Watling (the
Executive).
WHEREAS, the Company desires to employ the Executive and the Executive desires to be employed
by the Company on the terms contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
1. Position and Duties. The Executive shall serve as the Vice President, Clinical and
Regulatory of the Company, and shall have such other powers and duties as may from time to time be
prescribed by the Chief Executive Officer of the Company (the CEO) or other authorized executive,
provided that such duties are consistent with the Executives position or other positions that she
may hold from time to time. The Executive shall devote her full working time and efforts to the
business and affairs of the Company. Notwithstanding the foregoing, the Executive may engage in
religious, charitable or other community activities as long as such services and activities are
disclosed to the Board and do not materially interfere with the Executives performance of her
duties to the Company as provided in this Agreement.
2. Compensation and Related Matters.
(a) Base Salary. The Executives initial annual base salary shall be $190,000. The
Executives base salary shall be redetermined annually by the CEO in consultation with the
Companys Compensation Committee. The base salary in effect at any given time is referred to
herein as Base Salary. The Base Salary shall be payable in a manner that is consistent with the
Companys usual payroll practices for senior executives.
(b) Incentive Compensation. The Executive shall be eligible to receive cash incentive
compensation as determined by the CEO in consultation with the Companys Compensation Committee
from time to time. The Executives target annual incentive compensation shall be thirty percent
(30%) of her Base Salary. To be eligible for an incentive compensation payment, the Executive must
be employed by the Company on the day such incentive compensation is paid.
(c) Options. From time to time and at the discretion of management and the Board of
Directors, the Company will grant to the Executive options to purchase shares of the Companys
common stock at an exercise price equal to the fair market value of the Companys common stock on
the effective date of grant. Such options will be subject to the terms and conditions of the
Companys 2009 Stock Option Plan, as may be amended and/or restated from time to time, or such
other similar equity plan and form of stock option agreement, in each case duly adopted by the
Company, and such options will be subject to approval by the Board of Directors.
(d) Expenses. The Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by him in performing services hereunder, in accordance with the
policies and procedures then in effect and established by the Company for its senior executive
officers.
(e) Other Benefits. The Executive shall be entitled to continue to participate in or
receive benefits under all of the Companys Employee Benefit Plans in effect on the date hereof, or
under plans or arrangements that provide the Executive with benefits at least substantially
equivalent to those provided under such Employee Benefit Plans. As used herein, the term Employee
Benefit Plans includes, without limitation, each pension and retirement plan; supplemental
pension, retirement and deferred compensation plan; savings and profit-sharing plan; stock
ownership plan; stock purchase plan; stock option plan; life insurance plan; medical insurance
plan; disability plan; and health and accident plan or arrangement established and maintained by
the Company on the date hereof for employees of the same status within the hierarchy of the
Company. The Executive shall be entitled to participate in or receive benefits under any employee
benefit plan or arrangement which may, in the future, be made available by the Company to its
executives and key management employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plan or arrangement. Any payments or benefits
payable to the Executive under a plan or arrangement referred to in this Section 2(d) in respect of
any calendar year during which the Executive is employed by the Company for less than the whole of
such year shall, unless otherwise provided in the applicable plan or arrangement, be prorated in
accordance with the number of days in such calendar year during which she is so employed. Should
any such payments or benefits accrue on a fiscal (rather than calendar) year, then the proration in
the preceding sentence shall be on the basis of a fiscal year rather than calendar year.
(f) Vacations. The Executive shall be entitled to accrue up to three (3) weeks paid
vacation days in each year, which shall be accrued ratably. The Executive shall also be entitled
to all paid holidays given by the Company to its executives.
3. Termination. The Executives employment hereunder may be terminated without any
breach of this Agreement under the following circumstances:
(a) Death. The Executives employment hereunder shall terminate upon her death.
(b) Disability. The Company may terminate the Executives employment if she is
disabled and unable to perform the essential functions of the Executives then existing position or
positions under this Agreement with or without reasonable accommodation for a period of 180 days
(which need not be consecutive) in any 12-month period. If any question shall arise as to whether
during any period the Executive is disabled so as to be unable to perform the essential functions
of the Executives then existing position or positions with or without reasonable accommodation,
the Executive may, and at the request of the Company shall, submit to the Company a certification
in reasonable detail by a physician selected by the Company to whom the Executive or the
Executives guardian has no reasonable objection as to whether the Executive is so disabled or how
long such disability is expected to continue, and such certification shall for the purposes of this
Agreement be conclusive of the issue. The
2
Executive shall cooperate with any reasonable request of the physician in connection with such
certification. If such question shall arise and the Executive shall fail to submit such
certification, the Companys determination of such issue shall be binding on the Executive.
Nothing in this Section 3(b) shall be construed to waive the Executives rights, if any, under
existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C.
§2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.
(c) Termination by Company for Cause. The Company may terminate the Executives
employment hereunder for Cause by a vote of the Board at a meeting of the Board called and held for
such purpose. For purposes of this Agreement, Cause shall mean: (i) conduct by the Executive
constituting a material act of misconduct in connection with the performance of her duties,
including, without limitation, misappropriation of funds or property of the Company or any of its
subsidiaries or affiliates other than the occasional, customary and de minimis use of Company
property for personal purposes; (ii) the commission by the Executive of any felony or a misdemeanor
involving moral turpitude, deceit, dishonesty or fraud, or any conduct by the Executive that would
reasonably be expected to result in material injury or reputational harm to the Company or any of
its subsidiaries and affiliates if she were retained in her position; (iii) continued
non-performance by the Executive of her duties hereunder (other than by reason of the Executives
physical or mental illness, incapacity or disability) which has continued for more than 15 days
following written notice of such non-performance from the CEO; (iv) a breach by the Executive of
any of the provisions contained in Section 7 of this Agreement; (v) a material violation by the
Executive of the Companys written employment policies, or (vi) failure to cooperate with a bona
fide internal investigation or an investigation by regulatory or law enforcement authorities, after
being instructed by the Company to cooperate, or the willful destruction or failure to preserve
documents or other materials known to be relevant to such investigation or the inducement of others
to fail to cooperate or to produce documents or other materials in connection with such
investigation.
(d) Termination Without Cause. The Company may terminate the Executives employment
hereunder at any time without Cause. Any termination by the Company of the Executives employment
under this Agreement which does not constitute a termination for Cause under Section 3(c) and does
not result from the death or disability of the Executive under Section 3(a) or (b) shall be deemed
a termination without Cause.
(e) Termination by the Executive. The Executive may terminate her employment
hereunder at any time for any reason, including but not limited to Good Reason. For purposes of
this Agreement, Good Reason shall mean that the Executive has complied with the Good Reason
Process (hereinafter defined) following the occurrence of any of the following events: (i) a
material diminution in the Executives responsibilities, authority or duties; (ii) a material
diminution in the Executives Base Salary except for across-the-board salary reductions based on
the Companys financial performance similarly affecting all or substantially all senior management
employees of the Company; (iii) a material change in the geographic location of the Companys
offices from its present location; or (iv) the material breach of this Agreement by the Company.
Good Reason Process shall mean that (i) the Executive reasonably determines in good faith that a
Good Reason condition has occurred; (ii) the Executive notifies the Company in writing of the
first occurrence of the Good Reason condition within 15 days of the first occurrence of such
condition; (iii) the Executive cooperates
3
in good faith with the Companys efforts, for a period not less than 15 days following such
notice (the Cure Period), to remedy the condition; (iv) notwithstanding such efforts, the Good
Reason condition continues to exist; and (v) the Executive terminates her employment within 15 days
after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure
Period, Good Reason shall be deemed not to have occurred.
(f) Notice of Termination. Except for termination as specified in Section 3(a), any
termination of the Executives employment by the Company or any such termination by the Executive
shall be communicated by written Notice of Termination to the other party hereto. For purposes of
this Agreement, a Notice of Termination shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon.
(g) Date of Termination. Date of Termination shall mean: (i) if the Executives
employment is terminated by her death, the date of her death; (ii) if the Executives employment is
terminated on account of disability under Section 3(b) or by the Company for Cause under Section
3(c), the date on which Notice of Termination is given; (iii) if the Executives employment is
terminated by the Company under Section 3(d), 30 days after the date on which a Notice of
Termination is given; (iv) if the Executives employment is terminated by the Executive under
Section 3(e) without Good Reason, 30 days after the date on which a Notice of Termination is given,
and (v) if the Executives employment is terminated by the Executive under Section 3(e) with Good
Reason, the date on which a Notice of Termination is given after the end of the Cure Period.
Notwithstanding the foregoing, in the event that the Executive gives a Notice of Termination to the
Company, the Company may unilaterally accelerate the Date of Termination and such acceleration
shall not result in a termination by the Company for purposes of this Agreement.
4. Compensation Upon Termination.
(a) Termination Generally. If the Executives employment with the Company is
terminated for any reason, the Company shall pay or provide to the Executive (or to her authorized
representative or estate) any earned but unpaid base salary, incentive compensation earned but not
yet paid, unpaid expense reimbursements, accrued but unused vacation and any vested benefits the
Executive may have under any employee benefit plan of the Company (the Accrued Benefit) on or
before the time required by law but in no event more than 30 days after the Executives Date of
Termination.
(b) Termination by the Company Without Cause or by the Executive with Good Reason. If
the Executives employment is terminated by the Company without Cause as provided in Section 3(d),
or the Executive terminates her employment for Good Reason as provided in Section 3(e), then the
Company shall, through the Date of Termination, pay the Executive her Accrued Benefit. In
addition:
(i) subject to the Executive signing a general release of claims in favor of the
Company and related persons and entities in a form and manner satisfactory to the Company
(the Release) within the 21-day period following the Date of Termination and the
expiration of the seven-day revocation period for the Release, the Company shall pay the
Executive an amount equal to nine (9) months of the Executives
4
Base Salary (the Severance Amount). The Severance Amount shall be paid out in
substantially equal installments in accordance with the Companys payroll practice over nine
(9) months, beginning on the first payroll date that occurs 30 days after the Date of
Termination. Solely for purposes of Section 409A of the Internal Revenue Code of 1986, as
amended (the Code), each installment payment is considered a separate payment.
Notwithstanding the foregoing, if the Executive breaches any of the provisions contained in
Section 7 of this Agreement, all payments of the Severance Amount shall immediately cease;
and
(ii) upon the Date of Termination, all stock options and other stock-based awards held
by the Executive in which the Executive would have vested if she had remained employed for
an additional nine (9) months following the Date of Termination shall vest and become
exercisable or nonforfeitable as of the Date of Termination; and
(iii) subject to the Executives copayment of premium amounts at the active employees
rate, the Executive may continue to participate in the Companys group health, dental and
vision program for nine (9) months; provided, however, that the continuation of health
benefits under this Section shall reduce and count against the Executives rights under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA).
5. Change in Control Payment. The provisions of this Section 5 set forth certain
terms of an agreement reached between the Executive and the Company regarding the Executives
rights and obligations upon the occurrence of a Change in Control of the Company. These provisions
are intended to assure and encourage in advance the Executives continued attention and dedication
to her assigned duties and her objectivity during the pendency and after the occurrence of any such
event. These provisions shall apply in lieu of, and expressly supersede, the provisions of Section
4(b) regarding severance pay and benefits upon a termination of employment, if such termination of
employment occurs within twelve (12) months after the occurrence of the first event constituting a
Change in Control. These provisions shall terminate and be of no further force or effect beginning
twelve (12) months after the occurrence of a Change in Control.
(a) Change in Control. If within twelve (12) months after a Change in Control, the
Executives employment is terminated by the Company without Cause as provided in Section 3(d) or
the Executive terminates her employment for Good Reason as provided in Section 3(e), then,
(i) subject to the signing of the Release by the Executive within 30 days after the
Date of Termination and the expiration of the seven-day revocation period for the Release,
the Company shall pay the Executive a lump sum in cash in an amount equal to twelve (12)
months of the Executives current Base Salary (or the Executives Base Salary in effect
immediately prior to the Change in Control, if higher). Such payment shall be paid on the
first payroll date that occurs 30 days after the Date of Termination; and
5
(ii) notwithstanding anything to the contrary in any applicable option agreement or
stock-based award agreement, all stock options and other stock-based awards held by the
Executive shall immediately accelerate and become fully exercisable or nonforfeitable as of
the Date of Termination; and
(iii) subject to the Executives copayment of premium amounts at the active employees
rate, the Executive may continue to participate in the Companys group health, dental and
vision program for twelve (12) months; provided, however, that the continuation of health
benefits under this Section shall reduce and count against the Executives rights under
COBRA.
(b) Additional Limitation.
(i) Anything in this Agreement to the contrary notwithstanding, in the event that the
amount of any compensation, payment or distribution by the Company to or for the benefit of
the Executive, whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the
Code and the applicable regulations thereunder (the Severance Payments), would be subject
to the excise tax imposed by Section 4999 of the Code, the following provisions shall apply:
(A) If the Severance Payments, reduced by the sum of (1) the Excise Tax and (2)
the total of the Federal, state, and local income and employment taxes payable by
the Executive on the amount of the Severance Payments which are in excess of the
Threshold Amount, are greater than or equal to the Threshold Amount, the Executive
shall be entitled to the full benefits payable under this Agreement.
(B) If the Threshold Amount is less than (x) the Severance Payments, but
greater than (y) the Severance Payments reduced by the sum of (1) the Excise Tax and
(2) the total of the Federal, state, and local income and employment taxes on the
amount of the Severance Payments which are in excess of the Threshold Amount, then
the Severance Payments shall be reduced (but not below zero) to the extent necessary
so that the sum of all Severance Payments shall not exceed the Threshold Amount. In
such event, the Severance Payments shall be reduced in the following order: (1) cash
payments not subject to Section 409A of the Code; (2) cash payments subject to
Section 409A of the Code; (3) equity-based payments and acceleration; and (4)
non-cash forms of benefits. To the extent any payment is to be made over time
(e.g., in installments, etc.), then the payments shall be reduced in reverse
chronological order.
(ii) For the purposes of this Section 5(b), Threshold Amount shall mean three times
the Executives base amount within the meaning of Section 280G(b)(3) of the Code and the
regulations promulgated thereunder less one dollar ($1.00); and Excise Tax shall mean the
excise tax imposed by Section 4999 of the Code, and any interest or penalties incurred by
the Executive with respect to such excise tax.
6
(iii) The determination as to which of the alternative provisions of Section 5(b)(i)
shall apply to the Executive shall be made by a nationally recognized accounting firm
selected by the Company (the Accounting Firm), which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of the Date of
Termination, if applicable, or at such earlier time as is reasonably requested by the
Company or the Executive. For purposes of determining which of the alternative provisions
of Section 5(b)(i) shall apply, the Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation applicable to individuals for the
calendar year in which the determination is to be made, and state and local income taxes at
the highest marginal rates of individual taxation in the state and locality of the
Executives residence on the Date of Termination, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local taxes. Any
determination by the Accounting Firm shall be binding upon the Company and the Executive.
(b) Definitions. For purposes of this Section 5, the following terms shall have the
following meanings:
Change in Control shall mean any of the following:
(i) any person, as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the Act) (other than the Company, any of its
subsidiaries, or any trustee, fiduciary or other person or entity holding securities under
any employee benefit plan or trust of the Company or any of its subsidiaries), together with
all affiliates and associates (as such terms are defined in Rule 12b-2 under the Act) of
such person, shall become the beneficial owner (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company representing 50 percent
or more of the combined voting power of the Companys then outstanding securities having the
right to vote in an election of the Board (Voting Securities) (in such case other than as
a result of an acquisition of securities directly from the Company); or
(ii) the consummation of (A) any consolidation or merger of the Company where the
stockholders of the Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such term is defined in
Rule 13d-3 under the Act), directly or indirectly, shares representing in the aggregate more
than 50 percent of the voting shares of the Company issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any), or (B) any sale or
other transfer (in one transaction or a series of transactions contemplated or arranged by
any party as a single plan) of all or substantially all of the assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred for
purposes of the foregoing clause (i) solely as the result of an acquisition of securities by the
Company which, by reducing the number of shares of Voting Securities outstanding, increases the
proportionate number of Voting Securities beneficially owned by any person to 50 percent or more of
the combined voting power of all of the then outstanding Voting
7
Securities; provided, however, that if any person referred to in this sentence shall
thereafter become the beneficial owner of any additional shares of Voting Securities (other than
pursuant to a stock split, stock dividend, or similar transaction or as a result of an acquisition
of securities directly from the Company) and immediately thereafter beneficially owns 50 percent or
more of the combined voting power of all of the then outstanding Voting Securities, then a Change
in Control shall be deemed to have occurred for purposes of the foregoing clause (i).
6. Section 409A.
(a) Anything in this Agreement to the contrary notwithstanding, if at the time of the
Executives separation from service within the meaning of Section 409A of the Code, the Company
determines that the Executive is a specified employee within the meaning of Section
409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes
entitled to under this Agreement on account of the Executives separation from service would be
considered deferred compensation subject to the 20 percent additional tax imposed pursuant to
Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code,
such payment shall not be payable and such benefit shall not be provided until the date that is the
earlier of (A) six months and one day after the Executives separation from service, or (B) the
Executives death. If any such delayed cash payment is otherwise payable on an installment basis,
the first payment shall include a catch-up payment covering amounts that would otherwise have been
paid during the six-month period but for the application of this provision, and the balance of the
installments shall be payable in accordance with their original schedule.
(b) All in-kind benefits provided and expenses eligible for reimbursement under this Agreement
shall be provided by the Company or incurred by the Executive during the time periods set forth in
this Agreement. All reimbursements shall be paid as soon as administratively practicable, but in
no event shall any reimbursement be paid after the last day of the taxable year following the
taxable year in which the expense was incurred. The amount of in-kind benefits provided or
reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be
provided or the expenses eligible for reimbursement in any other taxable year. Such right to
reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.
(c) To the extent that any payment or benefit described in this Agreement constitutes
non-qualified deferred compensation under Section 409A of the Code, and to the extent that such
payment or benefit is payable upon the Executives termination of employment, then such payments or
benefits shall be payable only upon the Executives separation from service. The determination
of whether and when a separation from service has occurred shall be made in accordance with the
presumptions set forth in Treasury Regulation Section 1.409A-1(h).
(d) The parties intend that this Agreement will be administered in accordance with Section
409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its
compliance with Section 409A of the Code, the provision shall be read in such a manner so that all
payments hereunder comply with Section 409A of the Code. The parties agree that this Agreement may
be amended, as reasonably requested by either party, and as may be
8
necessary to fully comply with Section 409A of the Code and all related rules and regulations
in order to preserve the payments and benefits provided hereunder without additional cost to either
party.
(e) The Company makes no representation or warranty and shall have no liability to the
Executive or any other person if any provisions of this Agreement are determined to constitute
deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or
the conditions of, such Section.
7. Confidential Information, Noncompetition and Cooperation.
(a) Confidential Information. As used in this Agreement, Confidential Information
means information belonging to the Company which is of value to the Company in the course of
conducting its business and the disclosure of which could result in a competitive or other
disadvantage to the Company. Confidential Information includes, without limitation, financial
information, reports, and forecasts; inventions, improvements and other intellectual property;
trade secrets; know-how; designs, processes or formulae; software; market or sales information or
plans; customer lists; and business plans, prospects and opportunities (such as possible
acquisitions or dispositions of businesses or facilities) which have been discussed or considered
by the management of the Company. Confidential Information includes information developed by the
Executive in the course of the Executives employment by the Company, as well as other information
to which the Executive may have access in connection with the Executives employment. Confidential
Information also includes the confidential information of others with which the Company has a
business relationship. Notwithstanding the foregoing, Confidential Information does not include
information in the public domain, unless due to breach of the Executives duties under Section
7(b).
(b) Confidentiality. The Executive understands and agrees that the Executives
employment creates a relationship of confidence and trust between the Executive and the Company
with respect to all Confidential Information. At all times, both during the Executives employment
with the Company and after its termination, the Executive will keep in confidence and trust all
such Confidential Information, and will not use or disclose any such Confidential Information
without the written consent of the Company, except as may be necessary in the ordinary course of
performing the Executives duties to the Company.
(c) Documents, Records, etc. All documents, records, data, apparatus, equipment and
other physical property, whether or not pertaining to Confidential Information, which are furnished
to the Executive by the Company or are produced by the Executive in connection with the Executives
employment will be and remain the sole property of the Company. The Executive will return to the
Company all such materials and property as and when requested by the Company. In any event, the
Executive will return all such materials and property immediately upon termination of the
Executives employment for any reason. The Executive will not retain with the Executive any such
material or property or any copies thereof after such termination.
(d) Noncompetition and Nonsolicitation. During the Executives employment with the
Company and for twelve (12) months thereafter, regardless of the reason for the
9
termination, the Executive (i) will not, directly or indirectly, whether as owner, partner,
shareholder, consultant, agent, employee, co-venturer or otherwise, engage, participate, assist or
invest in any Competing Business (as hereinafter defined); (ii) will refrain from directly or
indirectly employing, attempting to employ, recruiting or otherwise soliciting, inducing or
influencing any person to leave employment with the Company (other than terminations of employment
of subordinate employees undertaken in the course of the Executives employment with the Company);
and (iii) will refrain from soliciting or encouraging any customer or supplier to terminate or
otherwise modify adversely its business relationship with the Company. The Executive understands
that the restrictions set forth in this Section 7(d) are intended to protect the Companys interest
in its Confidential Information and established employee, customer and supplier relationships and
goodwill, and agrees that such restrictions are reasonable and appropriate for this purpose. For
purposes of this Agreement, the term Competing Business shall mean an autologous or allogeneic
cell therapy technology business focused on the development of therapies for the treatment of
severe, chronic cardiovascular diseases conducted anywhere in the world which is competitive with
the business which the Company or any of its affiliates at any time during the employment of the
Executive. Notwithstanding the foregoing, the Executive may own up to one percent (1%) of the
outstanding stock of a publicly held corporation which constitutes or is affiliated with a
Competing Business.
(e) Third-Party Agreements and Rights. The Executive hereby confirms that the
Executive is not bound by the terms of any agreement with any previous employer or other party
which restricts in any way the Executives use or disclosure of information or the Executives
engagement in any business. The Executive represents to the Company that the Executives execution
of this Agreement, the Executives employment with the Company and the performance of the
Executives proposed duties for the Company will not violate any obligations the Executive may have
to any such previous employer or other party. In the Executives work for the Company, the
Executive will not disclose or make use of any information in violation of any agreements with or
rights of any such previous employer or other party, and the Executive will not bring to the
premises of the Company any copies or other tangible embodiments of non-public information
belonging to or obtained from any such previous employment or other party.
(f) Litigation and Regulatory Cooperation. During and after the Executives
employment, the Executive shall cooperate fully with the Company in the defense or prosecution of
any claims or actions now in existence or which may be brought in the future against or on behalf
of the Company which relate to events or occurrences that transpired while the Executive was
employed by the Company. The Executives full cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with counsel to prepare for
discovery or trial and to act as a witness on behalf of the Company at mutually convenient times.
During and after the Executives employment, the Executive also shall cooperate fully with the
Company in connection with any investigation or review of any federal, state or local regulatory
authority as any such investigation or review relates to events or occurrences that transpired
while the Executive was employed by the Company. The Company shall reimburse the Executive for any
reasonable out-of-pocket expenses incurred in connection with the Executives performance of
obligations pursuant to this Section 7(f).
10
(g) Injunction. The Executive agrees that it would be difficult to measure any
damages caused to the Company which might result from any breach by the Executive of the promises
set forth in this Section 7, and that in any event money damages would be an inadequate remedy for
any such breach. Accordingly, subject to Section 8 of this Agreement, the Executive agrees that if
the Executive breaches, or proposes to breach, any portion of this Agreement, the Company shall be
entitled, in addition to all other remedies that it may have, to an injunction or other appropriate
equitable relief to restrain any such breach without showing or proving any actual damage to the
Company.
8. Arbitration of Disputes. Any controversy or claim arising out of or relating to
this Agreement or the breach thereof or otherwise arising out of the Executives employment or the
termination of that employment (including, without limitation, any claims of unlawful employment
discrimination whether based on age or otherwise) shall, to the fullest extent permitted by law, be
settled by arbitration in any forum and form agreed upon by the parties or, in the absence of such
an agreement, under the auspices of the American Arbitration Association (AAA) in Detroit,
Michigan in accordance with the Employment Dispute Resolution Rules of the AAA, including, but not
limited to, the rules and procedures applicable to the selection of arbitrators. In the event that
any person or entity other than the Executive or the Company may be a party with regard to any such
controversy or claim, such controversy or claim shall be submitted to arbitration subject to such
other person or entitys agreement. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. This Section 8 shall be specifically
enforceable. Notwithstanding the foregoing, this Section 8 shall not preclude either party from
pursuing a court action for the sole purpose of obtaining a temporary restraining order or a
preliminary injunction in circumstances in which such relief is appropriate; provided that any
other relief shall be pursued through an arbitration proceeding pursuant to this Section 8.
9. Consent to Jurisdiction. To the extent that any court action is permitted
consistent with or to enforce Section 8 of this Agreement, the parties hereby consent to the
jurisdiction of the Superior Court of the State of Michigan and the United States District Court
for the District of Michigan. Accordingly, with respect to any such court action, the Executive
(a) submits to the personal jurisdiction of such courts; (b) consents to service of process; and
(c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with
respect to personal jurisdiction or service of process.
10. Integration. This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements between the parties
concerning such subject matter, including without limitation the Employment Agreement by and
between the Company and the Executive dated as of January 14, 2010.
11. Withholding. All payments made by the Company to the Executive under this
Agreement shall be net of any tax or other amounts required to be withheld by the Company under
applicable law.
12. Successor to the Executive. This Agreement shall inure to the benefit of and be
enforceable by the Executives personal representatives, executors, administrators, heirs,
distributees, devisees and legatees. In the event of the Executives death after her termination
of
11
employment but prior to the completion by the Company of all payments due him under this
Agreement, the Company shall continue such payments to the Executives beneficiary designated in
writing to the Company prior to her death (or to her estate, if the Executive fails to make such
designation).
13. Enforceability. If any portion or provision of this Agreement (including, without
limitation, any portion or provision of any section of this Agreement) shall to any extent be
declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this
Agreement, or the application of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion
and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by
law.
14. Survival. The provisions of this Agreement shall survive the termination of this
Agreement and/or the termination of the Executives employment to the extent necessary to
effectuate the terms contained herein.
15. Waiver. No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of any party to require the performance of
any term or obligation of this Agreement, or the waiver by any party of any breach of this
Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a
waiver of any subsequent breach.
16. Notices. Any notices, requests, demands and other communications provided for by
this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally
recognized overnight courier service or by registered or certified mail, postage prepaid, return
receipt requested, to the Executive at the last address the Executive has filed in writing with the
Company or, in the case of the Company, at its main offices, attention of the Board.
17. Amendment. This Agreement may be amended or modified only by a written instrument
signed by the Executive and by a duly authorized representative of the Company.
18. Governing Law. This is a Michigan contract and shall be construed under and be
governed in all respects by the laws of the State of Michigan, without giving effect to the
conflict of laws principles of such State. With respect to any disputes concerning federal law,
such disputes shall be determined in accordance with the law as it would be interpreted and applied
by the United States Court of Appeals for the Sixth Circuit.
19. Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be taken to be an original; but such counterparts
shall together constitute one and the same document.
20. Successor to Company. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company expressly to assume and agree to perform this Agreement to the
same extent that the Company would be required to perform it if no succession had taken place.
Failure of the Company to obtain an assumption of this Agreement at or prior to the effectiveness
of any succession shall be a material breach of this Agreement.
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21. Gender Neutral. Wherever used herein, a pronoun in the masculine gender shall be
considered as including the feminine gender unless the context clearly indicates otherwise.
IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year
first above written.
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AASTROM BIOSCIENCES, INC. |
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/s/ TIMOTHY M. MAYLEBEN |
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By:
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Tim M. Mayleben |
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Its:
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CEO and President |
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EXECUTIVE |
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/s/ SHARON WATLING |
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Sharon Watling |
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exv10w3
Exhibit 10.3
AASTROM BIOSCIENCES, INC.
SENIOR EXECUTIVE INCENTIVE BONUS PLAN
1. Purpose
This Senior Executive Incentive Bonus Plan (the Incentive Plan) is intended to provide an
incentive for superior work and to motivate eligible executives of Aastrom Biosciences, Inc. (the
Company) toward even higher achievement and business results, to tie their goals and interests to
those of the Company and its shareholders and to enable the Company to attract and retain highly
qualified executives. The Incentive Plan is for the benefit of Covered Executives (as defined
below).
2. Covered Executives
From time to time, the Compensation Committee of the Board of Directors of the Company (the
Compensation Committee) may select certain key executives (the Covered Executives) to be
eligible to receive bonuses hereunder.
3. Administration
The Compensation Committee shall have the sole discretion and authority to administer and
interpret the Incentive Plan.
4. Bonus Determinations
(a) A Covered Executive may receive a bonus payment under the Incentive Plan based upon the
attainment of performance targets which are established by the Compensation Committee and relate to
financial, operational, clinical or regulatory metrics with respect to the Company or any of its
subsidiaries (the Corporate Performance Goals), including the following: cash flow, revenue,
earnings before interest, taxes, depreciation and amortization, net income (loss) (either before or
after interest, taxes, depreciation and/or amortization), changes in the market price of the
Companys common stock, acquisitions or strategic transactions, clinical or regulatory milestones,
operating income (loss), return on capital, assets, equity or investment, shareholder returns,
gross or net profit levels, expense, margins, operating efficiency, working capital and earnings
(loss) per share of the Companys common stock, any of which may be measured either in absolute
terms or as compared to any incremental increase or as compared to results of a peer group. Each
Corporate Performance Goal may have a minimum hurdle, a target (100 percent attainment of the
Corporate Performance Goal) and a maximum.
(b) Except as otherwise set forth in this Section 4(b): (i) any bonuses paid to Covered
Executives under the Incentive Plan shall be based upon objectively determinable bonus formulas
that tie such bonuses to one or more performance targets relating to the Corporate Performance
Goals, (ii) bonus formulas for Covered Executives shall be adopted in each performance period by
the Compensation Committee and communicated to each Covered Executive at the beginning of each
performance period and (iii) no bonuses shall be paid to Covered Executives unless and until the
Compensation Committee makes a determination with
respect to the attainment of the performance objectives. Notwithstanding the foregoing, the
Company may adjust bonuses payable under the Incentive Plan based on achievement of individual
performance goals or pay bonuses (including, without limitation, discretionary bonuses) to Covered
Executives under the Incentive Plan based upon such other terms and conditions as the Compensation
Committee may in its discretion determine.
(c) Each Covered Executive shall have a targeted bonus opportunity for each performance
period. For each Covered Executive, the Compensation Committee shall have the authority to
apportion the annual target award so that a portion of the annual target award shall be tied to
attainment of corporate performance targets and a portion of the target award shall be tied to
attainment of individual performance targets.
(d) The payment of a bonus to a Covered Executive with respect to a performance period shall
be conditioned upon the Covered Executives employment by the Company on the last day of the
performance period.
5. Timing of Payment
The Corporate Performance Goals will be measured at the end of each fiscal year after the
Companys financial reports have been published. If the Corporate Performance Goals and or
individual goals for any fiscal year are met, payments will be made as soon as practicable, but not
later than March 15 of the subsequent fiscal year. For the avoidance of doubt, bonuses for year 1
must be paid by March 15 of year 2.
6. Amendment and Termination
The Company reserves the right to amend or terminate the Incentive Plan at any time in its
sole discretion.
2
exv10w4
Exhibit 10.4
FIRST AMENDMENT TO
AASTROM BIOSCIENCES, INC.
2009 OMNIBUS INCENTIVE PLAN
WHEREAS, Aastrom Biosciences, Inc. (the Company) desires to amend the Aastrom
Biosciences, Inc. 2009 Omnibus Incentive Plan (as amended and in effect, the Plan) to increase
the aggregate number of shares authorized for issuance under the Plan by 3,900,000 shares of common
stock, no par value (the Common Stock), of the Company (the Plan Amendment); and
WHEREAS, on January 18, 2011, subject to shareholder approval, the Board of Directors of
the Company approved the Plan Amendment.
NOW THEREFORE, in accordance with Section 12.1 of the Plan, the Plan is hereby amended as
follows:
1. Section 3.1(a) of the Plan is hereby amended and restated in its entirety to read as
follows:
Subject to adjustment as provided in Section 12.2, effective as of March 21, 2011 the
Shares authorized for grant under the Plan shall be increased from 3,250,000 Shares to 7,150,000
Shares, as increased if applicable under this Section, less one (1) share of Stock for every one
(1) share of Stock that was subject to an option or stock appreciation right granted after June 30,
2009 under the Prior Plans and 1.25 Shares for every one (1) Share that was subject to an award
other than an option or stock appreciation right granted after June 30, 2009 under the Prior Plans.
Any Shares that are subject to Options or Stock Appreciation Rights shall be counted against this
limit as one (1) Share for every one (1) Share granted, and any Shares that are subject to Awards
other than Options or Stock Appreciation Rights shall be counted against this limit as 1.25 Shares
for every one (1) Share granted. After the effective date of the Plan (as provided in Section
13.13), no awards may be granted under any Prior Plan.
2. The last sentence of Section 5.7 of the Plan is hereby amended and restated in its
entirety to read as follows:
Notwithstanding anything in Section 3.1 to the contrary and solely for the purposes of
determining whether Shares are available for the grant of Incentive Stock Options under the Plan,
the maximum aggregate number of Shares that may be issued pursuant to Incentive Stock Options
granted under the Plan shall be 7,150,000 Shares, subject to adjustment as provided in Section
12.2.
3. The first clause of Section 11.3 of the Plan is hereby amended and restated in its
entirety to read as follows:
11.3. Change in Control. For purposes of the Plan, Change in Control means the
occurrence of any one of the following events:
4. The Plan Amendment shall be effective upon approval of the shareholders of the Company
at the March 21, 2011 Special Meeting of Shareholders. If the Plan Amendment is not so approved at
such meeting, then the amendment to the Plan set forth herein shall be void ab initio.
5. Except herein above provided, the Plan is hereby ratified, confirmed and approved in
all respects.
exv99w1
Exhibit 99.1
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Aastrom Biosciences
Dominos Farms, Lobby K
24 Frank Lloyd Wright Drive
Ann Arbor, MI 48105
T 734 930-5555 F 734 665-0485
www.aastrom.com |
Aastrom Announces Outcome of Special Meeting of Shareholders
ANN ARBOR, Mich., March 21, 2011 Aastrom Biosciences, Inc. (Nasdaq:ASTM), a leading developer
of expanded autologous cellular therapies for the treatment of severe, chronic cardiovascular diseases, today announced that
company shareholders approved amendments to the companys Restated Articles of Incorporation to increase the number of
authorized shares of Aastrom common stock from 62,500,000 to 150,000,000 and to increase the number of shares available under
the Aastrom 2009 Omnibus Equity Incentive Plan. The amendments were approved at a special meeting of Aastrom shareholders held on
Monday, March 21, 2011.
About Aastrom Biosciences
Aastrom Biosciences is developing expanded autologous cellular therapies for use in the treatment of severe,
chronic cardiovascular diseases. The companys proprietary cell-processing technology enables the manufacture
of mixed-cell therapies expanded from a patients own bone marrow and delivered directly to damaged tissues.
Aastrom has advanced its cell therapies into late-stage clinical development, including a planned Phase 3 clinical program for the
treatment of patients with critical limb ischemia and two ongoing Phase 2 clinical trials in patients with dilated cardiomyopathy.
For more information, please visit Aastroms website at www.aastrom.com.
The Aastrom Biosciences, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3663
Media and investor contact
Bill Berry
Berry & Company
212 253-8881
ir@aastrom.com
bberry@berrypr.com
more
This document contains forward-looking statements, including, without limitation, statements concerning clinical trial plans and
progress, objectives and expectations, clinical activity timing, intended product development, the performance and contribution of certain individuals and
expected timing of collecting and analyzing treatment data, all of which involve certain risks and uncertainties. These statements are often, but are not always, made through the
use of words or phrases such as anticipates, intends, estimates, plans, expects, we believe, we intend, and similar words or phrases, or future or conditional verbs
such as will, would, should, potential, could, may, or similar expressions. Actual results may differ significantly from the expectations contained in the forward-looking
statements. Among the factors that may result in differences are the inherent uncertainties associated with clinical trial and product development activities, regulatory approval requirements,
competitive developments, and the availability of resources and the allocation of resources among different potential uses. These and other significant factors are discussed in greater
detail in Aastroms Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. These forward looking statements
reflect managements current views and Aastrom does not undertake to update any of these forward-looking statements to reflect a change in its views or events or circumstances
that occur after the date of this release except as required by law.
exv99w2
Exhibit 99.2
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Aastrom Biosciences
Dominos Farms, Lobby K
24 Frank Lloyd Wright Drive
Ann Arbor, MI 48105
T 734 930-5555 F 734 665-0485
www.aastrom.com |
Aastrom
Announces Date of 2011 Annual Meeting
of Shareholders
ANN ARBOR, Mich., March 25, 2011 Aastrom Biosciences, Inc. (Nasdaq:ASTM), a leading
developer of expanded, patient specific cellular therapies for the treatment of severe, chronic
cardiovascular diseases, today announced that the company will hold its 2011 Annual Meeting of
Shareholders on June 7, 2011, at 8:30 A.M. (EDT) at the companys headquarters in Ann Arbor,
Michigan. Shareholders of record as of April 11, 2011, are entitled to notice of and to vote at the
meeting. Aastrom plans to file the definitive proxy statement for the Annual Meeting on April 12,
2011.
The meeting will be webcast live and will also be accessible in archive until 11:59 P.M. (EDT) on
June 21, 2011, beginning two hours after the meeting. The URL for live and archived access to the
meeting is http://www.aastrom.com/investor.cfm. Participants should allow approximately five to ten
minutes prior to the meeting start time to visit the site and download any streaming media software
needed to listen to the webcast. To participate in the live meeting by telephone, please call (877)
312-5881 and reference Aastroms Annual Meeting of Shareholders. If calling from outside the U.S.,
please use the international phone number (253) 237-1173. A replay of the call will be available
11:30 A.M. (EDT) on June 7, 2011, until 11:59 P.M. (EDT) on June 21, 2011, by calling (800)
642-1687, or from outside the U.S. at (706) 645-9291. A podcast will be available after the live
event at http://www.aastrom.com/events.cfm until 11:59 P.M. (EDT) on June 21, 2011. The conference
ID is 55149669.
About Aastrom Biosciences
Aastrom Biosciences is developing expanded, patient specific cellular therapies for use in the
treatment of severe, chronic cardiovascular diseases. The companys proprietary cell-processing
technology enables the manufacture of mixed-cell therapies expanded from a patients own bone
marrow and delivered directly to damaged tissues. Aastrom has advanced its cell therapies into
late-stage clinical development, including a planned Phase 3 clinical program for the treatment of
more
patients with critical limb ischemia and two ongoing Phase 2 clinical trials in patients with
dilated cardiomyopathy. For more information, please visit Aastroms website at
www.aastrom.com.
The Aastrom Biosciences, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=3663
Media and investor contact
Bill Berry
Berry & Company
212 253-8881
ir@aastrom.com
bberry@berrypr.com
This document contains forward-looking statements, including, without limitation, statements
concerning clinical trial plans and progress, objectives and expectations, clinical activity
timing, intended product development, the performance and contribution of certain individuals and
expected timing of collecting and analyzing treatment data, all of which involve certain risks and
uncertainties. These statements are often, but are not always, made through the use of words or
phrases such as anticipates, intends, estimates, plans, expects, we believe, we
intend, and similar words or phrases, or future or conditional verbs such as will, would,
should, potential, could, may, or similar expressions. Actual results may differ
significantly from the expectations contained in the forward-looking statements. Among the factors
that may result in differences are the inherent uncertainties associated with clinical trial and
product development activities, regulatory approval requirements, competitive developments, and the
availability of resources and the allocation of resources among different potential uses. These and
other significant factors are discussed in greater detail in Aastroms Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. These
forward looking statements reflect managements current views and Aastrom does not undertake to
update any of these forward-looking statements to reflect a change in its views or events or
circumstances that occur after the date of this release except as required by law.