def14a
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement. |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)). |
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Definitive Proxy Statement. |
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Definitive Additional Materials. |
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Soliciting Material under §240.14a-12. |
Aastrom Biosciences, Inc.
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Per unit price or other underlying value of transaction computed pursuant
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Check box if any part of the fee is offset as provided by Exchange Act Rule
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previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing. |
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Date Filed: |
April 14,
2011
Dear Shareholder:
Please join us for our Annual Meeting of Shareholders on
Tuesday, June 7, 2011 at 8:30 a.m., local time, at
Aastrom Biosciences, Inc.s headquarters located at 24
Frank Lloyd Wright Drive, Lobby K, Ann Arbor, Michigan, 48105.
You are cordially invited to attend.
At this Annual Meeting, the agenda includes the election of six
(6) directors and the ratification of the appointment of
PricewaterhouseCoopers LLP as our independent registered public
accounting firm for the fiscal year ending December 31,
2011. The Board of Directors unanimously recommends that you
vote FOR the election of each director nominee and
FOR the ratification of the appointment of
PricewaterhouseCoopers LLP.
All shareholders are cordially invited to attend the Annual
Meeting in person. We are providing proxy material access to our
shareholders via the Internet. Accordingly, you can access proxy
materials and vote at www.proxyvote.com. Details
regarding the matters to be acted upon at this Annual Meeting
are described in the Notice of Internet Availability of Proxy
Materials (the Notice) you received in the mail or
via E-mail.
Please give the proxy materials your careful attention.
You may vote via the Internet or by telephone by following the
instructions on your Notice and on that website. In order to
vote via the Internet or by telephone, you must have the
shareholder identification number which is provided in your
Notice. If you have requested a proxy card by mail, you may vote
by signing, voting and returning that proxy card in the envelope
provided. If you attend the Annual Meeting, you may vote in
person even if you have previously returned your proxy card or
have voted via the Internet or by telephone. Please review the
instructions for each voting option described in the Notice and
in this Proxy Statement. Your prompt cooperation will be greatly
appreciated.
A copy of Aastroms 2011 Annual Report and Proxy Statement
are also available at www.aastrom.com/annuals.cfm. The
Board of Directors and management team look forward to seeing
you at the Annual Meeting.
Sincerely,
Timothy M. Mayleben
President and Chief Executive Officer
TABLE
OF CONTENTS
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AASTROM
BIOSCIENCES, INC.
24 Frank Lloyd Wright Drive, Lobby
K
Ann Arbor, MI 48105
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TIME |
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8:30 a.m., local time, on Tuesday, June 7, 2011 |
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PLACE |
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Aastrom Biosciences, Inc. 24 Frank Lloyd Wright Drive Lobby K
Ann Arbor, Michigan, 48105 |
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ITEMS OF BUSINESS |
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1. To elect six directors to each serve a term of one year
expiring at the 2012 Annual Meeting of Shareholders. |
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2. To ratify the appointment of PricewaterhouseCoopers LLP as
Aastroms independent registered public accounting firm; and |
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3. To consider such other business as may properly come before
the Annual Meeting of Shareholders and any adjournment thereof. |
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RECORD DATE |
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You may vote at the Annual Meeting of Shareholders if you were a
shareholder of record at the close of business on April 11,
2011. |
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VOTING BY PROXY |
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If you cannot attend the Annual Meeting of Shareholders, you may
vote your shares over the Internet or by telephone by following
the instructions on the Notice of Internet Availability of Proxy
Materials (the Notice) you received in the mail or
via E-mail,
and which instructions are also provided on that website, or, if
you have requested a proxy card by mail, by signing, voting and
returning your proxy card to Broadridge Financial Solutions, 51
Mercedes Way, Edgewood, New York 11717. For specific
instructions on how to vote your shares, please review the
instructions for each of these voting options as detailed in
your Notice and in this Proxy Statement. If you attend the
Annual Meeting, you may vote in person even if you have
previously returned your proxy card or have voted via the
Internet or by telephone. |
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AVAILABILITY OF MATERIALS |
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In addition to their availability at www.proxyvote.com,
this Proxy Statement and the Companys Annual Report to
Shareholders are available for viewing, printing and downloading
at www.aastrom.com/annuals.cfm. |
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE
PROMPTLY COMPLETE YOUR PROXY AS INDICATED ABOVE IN ORDER TO
ENSURE REPRESENTATION OF YOUR SHARES. PLEASE REVIEW THE
INSTRUCTIONS FOR EACH OF YOUR VOTING OPTIONS DESCRIBED IN
THIS PROXY STATEMENT AND THE NOTICE YOU RECEIVED IN THE MAIL.
By order of the Board of Directors,
Scott C. Durbin
Corporate Secretary
Ann Arbor, Michigan
April 14, 2011
1
AASTROM
BIOSCIENCES, INC.
24 Frank Lloyd Wright Drive, Lobby
K
Ann Arbor, Michigan 48105
PROXY
STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors (the
Board) of Aastrom Biosciences, Inc., a Michigan
corporation (the Company), for use at the Annual
Meeting of Shareholders to be held on Tuesday, June 7, 2011
at 8:30 a.m., local time, at the Companys
headquarters located at 24 Frank Lloyd Wright Drive, Lobby K,
Ann Arbor, Michigan, 48105, or at any adjournments or
postponements thereof (the Annual Meeting). An
Annual Report to Shareholders, containing financial statements
for the year ended December 31, 2011, and this Proxy
Statement are being made available to all shareholders entitled
to vote at the Annual Meeting. This Proxy Statement and the form
of proxy were first made available to shareholders on or about
April 14, 2011. Unless the context requires otherwise,
references to we, us, our,
the Company and Aastrom refer to Aastrom
Biosciences, Inc.
GENERAL
INFORMATION ABOUT THE MEETING, SOLICITATION AND VOTING
What am I
voting on?
There are two proposals scheduled to be voted on at the Annual
Meeting of Shareholders:
1. Election of directors; and
2. Ratification of the appointment of
PricewaterhouseCoopers LLP as Aastroms independent
registered public accounting firm for the 2011 fiscal year.
Who is
entitled to vote?
Shareholders as of the close of business on April 11, 2011
(the Record Date) may vote at the Annual Meeting of
Shareholders. You have one vote for each share of common stock
you held on the Record Date, including shares:
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Held directly in your name as shareholder of record
(also referred to as registered
shareholder); and
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Held for you in an account with a broker, bank or other nominee
(shares held in street name). Street name holders
generally cannot vote their shares directly and must instead
instruct the brokerage firm, bank or nominee how to vote their
shares.
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What
constitutes a quorum?
A majority of the outstanding shares entitled to vote, present
or represented by proxy, constitutes a quorum for the Annual
Meeting of Shareholders. Abstentions are counted as present and
entitled to vote for purposes of determining a quorum.
Broker non-votes (described below) are also counted
as present and entitled to vote for purposes of determining a
quorum. As of April 11, 2011, 38,618,037 shares of
Aastrom common stock were outstanding and entitled to vote.
How many
votes are required to approve each proposal?
The following explains how many votes are required to approve
each proposal, provided that a majority of our shares is present
at the Annual Meeting of Shareholders (in person or by proxy).
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The six candidates for election who receive a plurality vote in
the affirmative will be elected; and
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Ratifying PricewaterhouseCoopers LLP as Aastroms
independent registered public accounting firm for fiscal year
ending December 31, 2011 requires the affirmative vote of a
majority of the votes cast on the proposal.
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How are
votes counted and who are the proxies?
You may either vote FOR or WITHHOLD
authority to vote for each nominee for the Board of Directors.
Shares present or represented and not so marked as to withhold
authority to vote for a particular nominee will be voted in
favor of a particular nominee and will be counted toward such
nominees achievement of a plurality. Shares present at the
meeting or represented by proxy where the shareholder properly
withholds authority to vote for such nominee in accordance with
the proxy instructions and broker non-votes will not
be counted toward such nominees achievement of plurality.
You may vote FOR, AGAINST or
ABSTAIN on the ratification of
PricewaterhouseCoopers LLP. If you abstain from voting on the
proposal to ratify PricewaterhouseCoopers LLP, it will have no
effect on the voting of the proposal. Brokers, bankers and other
nominees have discretionary voting power on this routine matter
and, accordingly, broker non-votes will have no
effect on the ratification.
The persons named as attorneys-in-fact in the proxies, Timothy
M. Mayleben and Scott C. Durbin, were selected by the Board of
Directors and are officers of the Company. All properly executed
proxies submitted in time to be counted at the Annual Meeting
will be voted by such persons at the Annual Meeting. Where a
choice has been specified on the proxy with respect to the
foregoing matters, the shares represented by the proxy will be
voted in accordance with the specifications. If no such
specifications are indicated, such proxies will be voted FOR the
election of the director nominees and FOR ratification of the
appointment of PricewaterhouseCoopers LLP as the Companys
independent registered public accounting firm for the fiscal
year ending December 31, 2011.
What is a
broker non-vote?
If you hold your shares in street name and do not provide voting
instructions to your broker, your shares will not be voted on
any proposal on which your broker does not have discretionary
authority to vote (a broker non-vote). Shares held
by brokers who do not have discretionary authority to vote on a
particular matter and who have not received voting instructions
from their customers are counted as present for the purpose of
determining whether there is a quorum at the Annual Meeting of
Shareholders, but are not counted or deemed to be present or
represented for the purpose of determining whether shareholders
have approved that matter. Pursuant to applicable rules, brokers
will have discretionary authority to vote on the proposal to
ratify the appointment of PricewaterhouseCoopers LLP.
How does
the Board recommend that I vote?
Aastroms Board recommends that you vote your shares:
FOR each of the nominees to the
Board; and
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FOR the ratification of the appointment of
PricewaterhouseCoopers LLP as Aastroms independent
registered public accounting firm for fiscal year ending
December 31, 2011.
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How do I
vote my shares without attending the meeting?
If you are a shareholder of record, you may vote by granting a
proxy. For shares held in street name, you may vote by
submitting voting instructions to your broker or nominee. In any
circumstance, you may vote:
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By Internet or Telephone You may vote by
Internet or telephone by following the instructions on your
Notice and on www.proxyvote.com or as directed by
your broker or other nominee. In order to vote via the Internet
or by telephone, you must have the shareholder identification
number which is provided in your Notice.
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By Mail If you have requested a proxy card by
mail, you may vote by signing, voting and returning that proxy
card in the envelope provided. You should sign your name exactly
as it appears on the proxy card. If you are signing in a
representative capacity (for example, as guardian, executor,
trustee, custodian, attorney or officer of a corporation), you
should indicate your name and title or capacity.
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Internet and telephone voting facilities will close at
11:59 p.m., Eastern Standard Time, on June 6, 2011.
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How do I
vote my shares in person at the meeting?
If you are a shareholder of record (also referred to as
registered shareholder) and prefer to vote your
shares in person at the meeting, bring proof of identification
and request a ballot to vote at the meeting. You may vote shares
held in street name only if you obtain a signed proxy from the
record holder (broker or other nominee) giving you the right to
vote the shares.
Even if you plan to attend the meeting, we encourage you to vote
in advance by Internet, telephone or mail so that your vote will
be counted even if you are unable to attend the meeting.
What does
it mean if I receive more than one Notice?
It generally means you hold shares registered in more than one
account. To ensure that all your shares are voted, vote
according to the instructions for each Notice you receive.
May I
change my vote?
Yes. Whether you have voted by mail, Internet or telephone, you
may change your vote and revoke your proxy by:
Sending a written statement to that effect to the
Corporate Secretary of Aastrom;
Voting by Internet or telephone at a later time;
Submitting a properly signed proxy card with a later
date; or
Voting in person at the Annual Meeting of Shareholders.
What are
the costs associated with the solicitation of proxies?
The cost of soliciting proxies will be borne by Aastrom. Aastrom
has retained Broadridge Financial Solutions
(Broadridge) to solicit registered shareholders and
to request banks and brokers, and other custodians, nominees and
fiduciaries, to solicit their customers who have stock of
Aastrom registered in the names of such persons, at a cost of
approximately $70,000, which includes mailing costs and
reimbursement of reasonable
out-of-pocket
expenses. Aastrom may supplement the original solicitation of
proxies by mail, telephone, electronic mail or personal
solicitation by our officers, directors, and other regular
employees, without additional compensation. Voting results will
be tabulated and certified by Broadridge. Aastrom may solicit
shareholders by mail through its regular employees, and will
request banks and brokers, and other custodians, nominees and
fiduciaries, to solicit their customers who have stock of
Aastrom registered in the names of such persons and will
reimburse them for their reasonable,
out-of-pocket
costs. Aastrom may use the services of its officers, directors,
and others to solicit proxies, personally or by telephone,
without additional compensation.
4
PROPOSAL 1
ELECTION
OF DIRECTORS
Our Bylaws provide that the Board will consist of not less than
five nor more than nine members, as fixed from time to time by a
resolution of the Board and that all directors will be elected
annually. The Board currently consists of six directors. The
persons named below as nominees for director will, if elected,
each serve a term of one year expiring at the 2012 Annual
Meeting of Shareholders and until their successors are elected
and qualified.
The table below sets forth Aastroms directors and nominees
and their respective ages as of April 14, 2011.
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Director
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Name
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Position
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Age
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Since
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Ronald M. Cresswell*
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Director
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76
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2010
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Timothy M. Mayleben*
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President, Chief Executive Officer and Director
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50
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2005
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Alan L. Rubino*
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Director
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56
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2005
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Nelson M. Sims*
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Lead Director
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63
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2006
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Harold C. Urschel, Jr.*
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Director
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2009
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Robert L. Zerbe*
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Director
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60
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2006
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Director
Nominees for Election at the 2011 Annual Meeting of
Shareholders
The biographical description below for each director nominee
includes the specific experience, qualifications, attributes and
skills that led to the conclusion by the Board that such person
should serve as a director of Aastrom.
Ronald M. Cresswell, a Director since October 2010,
retired in 1999 from Warner-Lambert Company, a developer and
manufacturer of health care and consumer products, where he had
been Senior Vice President and Chief Scientific Officer since
October 1998. He was formerly Vice President and Chairman,
Parke-Davis Pharmaceutical Research, a Warner-Lambert Company,
since 1989. Prior thereto, he served as Chief Operating Officer
of Laporte Industries, an internationally oriented chemical
company, since 1987. Dr. Cresswell served 25 years at
Burroughs Wellcome, a London-based international pharmaceutical
firm, where he held a broad range of research and development
positions, culminating in being the main board member for global
research and development. He earned B.Sc. and Ph.D. degrees in
applied chemistry at the University of Glasgow. He completed
post-doctoral work in the field of nucleoprotein chemistry at
Sloan Kettering Hospital in New York and is a graduate of the
Harvard Advanced Management Program. Dr. Cresswell is
actively involved with the University of Michigan as a member of
the Pharmacy Advancement Steering Committee for the College of
Pharmacy. Dr. Cresswell has also served on the Board of
Directors of Albachem Ltd., Allergan, Inc., CuraGen Corporation,
Esperion Therapeutics, Inc. and Vasogen Inc. The Board of
Directors believes Dr. Cresswells qualifications to
sit on the Companys Board of Directors include his
significant contributions at global pharmaceutical companies.
Timothy M. Mayleben, a Director since June 2005, has
served as Aastroms President and Chief Executive Officer
(the CEO) since December 2009. Mr. Mayleben
served as an advisor to life science and healthcare companies
through his advisory and investment firm, ElMa Advisors since
2004. Previously, he served as the President and Chief Operating
Officer and a Director of NightHawk Radiology Holdings, Inc.
from March 2005 to March 2008. Mr. Mayleben was formerly
the Chief Operating Officer of Esperion Therapeutics, which
later became a division of Pfizer Global Research &
Development. He joined Esperion in late 1998 as Chief Financial
Officer. While at Esperion, Mr. Mayleben led the raising of
more than $200 million in venture capital and institutional
equity funding and later negotiated the acquisition of Esperion
by Pfizer in December 2003. Mr. Mayleben holds a Masters of
Business Administration, with distinction, from the J.L. Kellogg
Graduate School of Management at Northwestern University, and a
Bachelor of Business Administration degree from the University
of Michigan Ross School of Business. He is on the Advisory Board
for the Wolverine Venture Fund and serves as a director for
several private life science companies. The Board of Directors
believes Mr. Maylebens qualifications to sit on the
Companys Board of Directors include his years of
experience in the life sciences industry, including over a
decade
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of experience as an executive officer, and his deep
understanding of the Companys historical and current
business strategies, objectives and product candidates.
Alan L. Rubino, a Director since September 2005, has
served as Chief Executive Officer and President of New American
Therapeutics, Inc., a specialty pharmaceutical company, since
October 2010. Previously, Mr. Rubino served as the Chief
Executive Officer and President of Akrimax Pharmaceuticals, LLC,
an integrated specialty pharmaceutical company, since February
2008. Prior to this he served as President and Chief Operating
Officer of Pharmos Corporation, a biopharmaceutical company,
from November 2005 to December 2007. Mr. Rubino has
continued to expand upon a highly successful and distinguished
career that included Hoffmann-LaRoche, Inc., a research-focused
healthcare company, from 1977 to 2001, where he was a member of
the U.S. Executive and Operating Committees and a
Securities and Exchange Commission, or SEC, corporate officer.
During his Roche tenure, he held a series of key executive
positions in marketing, sales, business operations, supply chain
and human resource management. In addition, he was assigned to
various executive committee roles in the areas of marketing,
project management, and globalization of Roche Holdings.
Mr. Rubino also held senior executive positions at PDI,
Inc., a sales and marketing support company, and Cardinal
Health, a company focused on improving the cost-effectiveness of
health care, from 2001 to 2005. He received Bachelor of Arts
degree in economics from Rutgers University with a minor in
biology/chemistry and also completed post-graduate educational
programs at the University of Lausanne and Harvard Business
School. Additionally, he serves on the Board of Rutgers
University School of Business and the Lerner Center for
Pharmaceutical Studies. The Board of Directors believes
Mr. Rubinos qualifications to sit on the
Companys Board of Directors include his leadership roles
in the life sciences industry in a wide range of positions,
including positions focused on sales and marketing and SEC
matters.
Nelson M. Sims, Lead Director since December 2009, has
been a Director since February 2006 and was Chairman of the
Board from 2007 through 2009. He most recently served as the
President and Chief Executive Officer (from 2003 through
2005) of Novavax, Inc., an international health and life
science company. From 1973 through 2001, Mr. Sims served in
various executive positions in sales, marketing, business
development, and general management of Eli Lilly and Company, a
pharmaceutical company, including Executive Director of Alliance
Management, Vice President, Sales and Marketing of Hybritech,
Inc. (which was acquired by Eli Lilly) and President of Eli
Lilly Canada. Mr. Sims received a Bachelor of Science
degree in Pharmacy from Southwestern Oklahoma State University,
and completed the Tuck Executive Program at the Amos Tuck School
of Business at Dartmouth College. In addition to serving as a
board member of companies where he also led the executive
management team, Mr. Sims has other significant board
experience serving both public and private companies, including
MDS, Inc., ATS Automation Tooling Systems, Inc. and Novavax,
Inc. The Board of Directors believes Mr. Simss
qualifications to sit on the Companys Board of Directors
include his significant contributions at global life sciences
companies.
Harold C. Urschel, Jr., M.D., a Director since
October 2009, has served as the Chair of
Cardiovascular & Thoracic Surgical Research,
Education & Clinical Excellence at Baylor University
Medical Center since 2002. He has taught extensively since 1985
as Professor of Cardiovascular and Thoracic Surgery at the
University of Texas Southwestern Medical School.
Dr. Urschel has been a Visiting Professor at a number of
medical centers in the U.S. and abroad, and is an honorary
member of the Thoracic Surgery faculty of the University of
Toronto and the Harvard Medical School. He has been President of
five major medical and surgical societies: the Society of
Thoracic Surgeons, American College of Chest Physicians,
International Academy of Chest Physicians, Southern Thoracic
Surgical Association and Texas Surgical Society. He received a
Bachelor of Arts degree from Princeton University (cum laude)
and an M.D. from Harvard Medical School (cum laude).
Dr. Urschel trained in cardiac surgery at Massachusetts
General Hospital, and has served as Chief of Experimental
Surgery for the U.S. Navy, Consultant to the Atomic Energy
Commission, NASA, and the Surgeon General of the U.S. Air
Force. He served on the Board of Directors of Electronic Data
Systems from its inception until 1986, when it was acquired by
General Motors. As Chairman of the Residency Review Committee
for Cardio-Thoracic Surgery he established standards for
training heart surgeons in the United States and on the American
Board of Cardiovascular and Thoracic Surgery, which examines
trainees before they enter practice. As a Founding Member of the
U.S. Heart Surgeons he has been recognized as one of the
100 best cardiac surgeons in the U.S. Honorary Degrees have
been awarded to Dr. Urschel as a Doctor of Law (Pikeville
College) and a Doctor of Science (Ohio State University). The
Board of Directors
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believes Dr. Urschels qualifications to sit on the
Companys Board of Directors include his significant
contributions to the medical field and academia.
Robert L. Zerbe, M.D., a Director since January
2006, is the Chief Executive Officer of QUATRx Pharmaceuticals
Company, a venture-backed drug development company which he
co-founded in 2000. Prior to his role at QUATRx, Dr. Zerbe
held several senior executive management positions with major
pharmaceutical companies including Eli Lilly (from 1982 to
1993) and Pfizer (formerly Parke-Davis) (from 1993 to
2000). During his tenure at Eli Lilly, Dr. Zerbes
clinical research and development positions included Managing
Director, Lilly Research Center U.K., and Vice President of
Clinical Investigation and Regulatory Affairs. He joined Parke
Davis in 1993, becoming Senior Vice President of Worldwide
Clinical Research and Development. In this capacity he led the
clinical development programs for a number of key products,
including
Lipitor®
and
Neurontin®.
Dr. Zerbe received his M.D. from the Indiana University
School of Medicine, and has completed post-doctoral work in
internal medicine, endocrinology and neuroendocrinology at
Indiana University and the National Institutes of Health.
Dr. Zerbe currently serves on the boards of directors of
two public companies, A.P. Pharma, Inc. (since 2002), a
specialty pharmaceutical company, and Optimer Pharmaceuticals,
Inc. (since 2009), a biopharmaceutical company. He also serves
on the board of directors of, Metabolex, Inc. a privately held
company that discovers and develops novel therapeutics to treat
diabetes. The Board of Directors believes Dr. Zerbes
qualifications to sit on the Companys Board of Directors
include his management positions at major pharmaceutical
companies, including the experience he gleaned in his clinic
development roles.
Vote
Required and Board of Directors Recommendation
The affirmative vote of a plurality of the total shares of
common stock represented in person or by proxy and entitled to
vote is required for the election of each of the nominees. It is
the intention of the persons named as proxies to vote such proxy
FOR the election of all nominees, unless otherwise directed by
the shareholder. The Board is currently evaluating candidates to
fill the vacancy that will be created at the 2010 Annual Meeting
and proxies cannot be voted for a greater number of persons than
the number of nominees named in this Proxy Statement. The Board
of Directors knows of no reason why any of the nominees would be
unable or unwilling to serve, but if any nominee should for any
reason be unable or unwilling to serve, the proxies will be
voted for the election of such other person for the office of
director as the Board of Directors may recommend in the place of
such nominee.
The Board of Directors recommends that shareholders vote
FOR the election of each nominee named in the above
table.
Board
Meetings and Committees
During the fiscal year ended June 30, 2010, the Board of
Directors held 10 meetings, and during the six-month period
ended December 31, 2010, the Board of Directors held 6
meetings. Each director serving on the Board of Directors in
such fiscal year attended at least 75% of such meetings of the
Board of Directors and the Committees on which he served.
Audit
Committee
Under the terms of its current Charter, the Audit
Committees responsibilities include reviewing with
Aastroms independent accountants and management the annual
financial statements and independent accountants opinion,
reviewing the scope and results of the examination of
Aastroms financial statements by the independent
accountants, reviewing all professional services performed and
related fees by the independent accountants, approving the
retention of the independent accountants and periodically
reviewing Aastroms accounting policies and internal
accounting and financial controls. The Audit Committee may
delegate duties or responsibilities to subcommittees or to one
member of the Audit Committee. Messrs. Sims (Chair) and
Rubino were members of the Audit Committee during the six-month
period ended December 31, 2010. Dr. Zerbe served on
the Audit Committee from September 2009 until October 2010, when
he was replaced by Dr. Cresswell. During the fiscal year
ended June 30, 2010, the Audit Committee held 4 meetings,
and during the six-month period ending December 31, 2010,
the Audit Committee held 4 meetings. All members of the
Companys Audit Committee are independent (as independence
is defined in Rule 5605(a)(2) and as required under
Rule 5605(c)(2) of the NASDAQ listing
7
standards). Since September 2009, Mr. Sims has been
designated as an audit committee financial expert as defined in
the rules of the SEC. The Audit Committee acts pursuant to a
written charter, a current copy of which is available on the
Investor Relations page at the Companys website,
www.aastrom.com, and by following the Corporate
Governance link. For additional information concerning the Audit
Committee, see Report of the Audit Committee of the Board
of Directors.
Compensation
Committee
Under the terms of its current Charter, the Compensation
Committees responsibilities include determining and
approving salary and bonus levels and stock option or restricted
stock grants with respect to executive officers, and determining
and approving stock option or restricted stock grants with
respect to all employees. In carrying out these
responsibilities, the Compensation Committee reviews all
components of executive officer compensation for consistency
with the Compensation Committees compensation philosophy
and strategy. The Compensation Committee may delegate duties or
responsibilities to subcommittees or to one member of the
Compensation Committee. Mr. Rubino (Chair), Dr. Zerbe
and Mr. Urschel were members of the Compensation Committee
during the six-month period ended December 31, 2010. During
the fiscal year ended June 30, 2010, the Compensation
Committee held 6 meetings, and during the six-month period ended
December 31, 2010, the Compensation Committee held 2
meetings. All members of the Companys Compensation
Committee are independent (as independence is defined in
Rule 5605(a)(2) of the NASDAQ listing standards). The
Compensation Committee acts pursuant to a written charter, a
current copy of which is available on the Investor Relations
page at the Companys website, www.aastrom.com, and
by following the Corporate Governance link.
Corporate
Governance and Nominating Committee
Under the terms of its current Charter, the Corporate Governance
and Nominating Committee (the Governance Committee)
responsibilities include assisting Aastroms Board of
Directors in fulfilling its responsibilities by reviewing and
reporting to the Board of Directors on (i) corporate
governance compliance mechanisms, (ii) corporate governance
roles amongst management and directors, and (iii) Board of
Directors process enhancement. The Governance Committee may
delegate duties or responsibilities to subcommittees or to one
member of the Governance Committee. The Governance Committee
also considers qualified candidates for appointment and
nomination for election to the Board of Directors and makes
recommendations concerning such candidates. Consistent with this
function, the Governance Committee encourages continuous
improvement of, and fosters adherence to, the Companys
corporate governance policies, procedures and practices at all
levels. Dr. Zerbe (Chair) and Messrs. Sims and Urschel
were members of the Governance Committee during the six-month
period ended December 31, 2010, and Dr. Cresswell was
elected to the Governance Committee in October 2010. During the
fiscal year ended June 30, 2010, the Governance Committee
held 3 meetings, and during the six-month period ended
December 31, 2010, the Board of Directors held 2 meetings.
All the members of the Governance Committee are independent (as
independence is defined in Rule 5605(a)(2) of the NASDAQ
listing standards). The Governance Committee acts pursuant to a
written charter, a current copy of which is available on the
Investor Relations page at the Companys website,
www.aastrom.com, and by following the Corporate
Governance link.
Director
Nominations
The Governance Committee evaluates and recommends to the Board
of Directors the nominees for each election of directors. In
fulfilling its responsibilities, the Governance Committee
considers the following factors, among others:
the appropriate size of the Companys Board and its
committees;
the needs of the Company with respect to the particular
talents and experience of its directors;
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the nominees interest in becoming an effective,
collaborative Board member, and the nominees ability to
work in a collegial style with other Board members;
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the knowledge, skills and experience of nominees, including
experience in the life sciences industry, medical products,
medical research, medicine, business, finance, administration or
public service;
|
8
experience with accounting rules and practices;
experience with regulatory and SEC requirements
applicable to public companies;
experience with regulatory requirements applicable to the
Companys industry;
appreciation of the relationship of the Companys
business to the changing needs of society; and
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balance between the benefit of continuity and the desire for a
fresh perspective provided by new members.
|
The Governance Committees goal is to assemble a Board that
brings to the Company a variety of perspectives and skills
derived from high quality business and professional experience.
In doing so, the Governance Committee also considers candidates
with appropriate non-business backgrounds.
Neither the Governance Committee nor the Board of Directors has
a specific policy with regard to the consideration of diversity
in identifying director nominees. However, both may consider the
diversity of background and experience of a director nominee in
the context of the overall composition of the Board of Directors
at that time, such as diversity of knowledge, skills,
experience, geographic location, age, gender, and ethnicity. In
general, the Governance Committee seeks director nominees with
the talents and backgrounds that provide the Board of Directors
with an appropriate mix of knowledge, skills and experience for
the needs of Aastroms business. The Governance Committee
and the Board of Directors discuss the composition of directors
on the Board, including diversity of background and experience,
as part of the annual Board evaluation process.
Other than the criteria listed above, there are no stated
minimum criteria for director nominees. The Governance Committee
does, however, recognize that under applicable regulatory
requirements at least one member of the Board must meet the
criteria for an audit committee financial expert as
defined by SEC rules, and that at least a majority of the
members of the Board must meet the definition of
independent director under the NASDAQ listing
standards or the listing standards of any other applicable self
regulatory organization. The Governance Committee also believes
it appropriate for at least one member of the Companys
management to participate as a member of the Board.
The Governance Committee identifies nominees by first evaluating
the current members of the Board willing to continue in service.
Current members of the Board with skills and experience that are
relevant to the Companys business and who are willing to
continue in service are considered for re-nomination, balancing
the value of continuity of service by existing members of the
Board with that of obtaining a new perspective. If any member of
the Board up for re-election at an upcoming annual meeting of
shareholders does not wish to continue in service, the
Governance Committee identifies the desired skills and
experience of a new nominee in light of the criteria above.
Current members of the Governance Committee and Board will be
polled for suggestions as to individuals meeting the criteria of
the Governance Committee. Research may also be performed to
identify qualified individuals. If the Governance Committee
believes that the Board requires additional candidates for
nomination, the Governance Committee may explore alternative
sources for identifying additional candidates. This may include
engaging, as appropriate, a third party search firm to assist in
identifying qualified candidates.
The Governance Committee will evaluate any recommendation for
director nominee proposed by a shareholder who (i) has
continuously held at least 1% of the outstanding shares of the
Companys common stock entitled to vote at the annual
meeting of shareholders for at least one year by the date the
shareholder makes the recommendation and (ii) undertakes to
continue to hold the common stock through the date of the
meeting. In order to be evaluated in connection with the
Companys established procedures for evaluating potential
director nominees, any recommendation for director nominee
submitted by a qualifying shareholder must be received by the
Company no later than 120 days prior to the anniversary of
the date proxy statements were made available to shareholders in
connection with the prior years Annual Meeting of
Shareholders. Any shareholder recommendation for director
nominee must be submitted to the Corporate Secretary, in writing
at 24 Frank Lloyd Wright Drive, Lobby K, Ann Arbor, Michigan
48105 and must contain the following information:
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a statement by the shareholder that
he/she is
the holder of at least 1% of the Companys common stock and
that the stock has been held for at least a year prior to the
date of the submission and that the shareholder will continue to
hold the shares through the date of the Annual Meeting of
Shareholders;
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9
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the candidates name, age, contact information and current
principal occupation or employment;
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a description of the candidates qualifications and
business experience during, at a minimum, the last five years,
including the candidates principal occupation and
employment and the name and principal business of any
corporation or other organization in which the candidate was
employed; and
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the candidates resume.
|
The Governance Committee will evaluate recommendations for
director nominees submitted by directors, management or
qualifying shareholders in the same manner, using the criteria
stated above.
All directors and director nominees will submit a completed form
of directors and officers questionnaire as part of
the nominating process. The process may also include interviews
and additional background and reference checks for non-incumbent
nominees, at the discretion of the Governance Committee.
Board
Leadership Structure
The Board of Directors general policy is that the position
of Chairman of the Board may be held by the CEO, but that if
those positions are held by the same individual or if the
Chairman is otherwise not independent, the Board shall appoint
an independent Lead Director. The CEO shall preside at all
meetings of the shareholders and, unless a Chairman has been
elected, at all meetings of the Board at which he is present. If
a Chairman has been elected, he shall preside at all Board
meetings at which he is present and, if independent, at all
executive sessions of the independent directors, and shall
perform such other powers and duties as may be assigned to him
by the Board. If the Chairman is not independent and a Lead
Director is appointed, he shall preside at executive sessions of
the independent directors and will bear such further
responsibilities as the full Board of Directors may designate
from time to time. Currently, the position of Chairman of the
Board of Directors is vacant and the Board has designated a Lead
Director who is an independent director.
The independent members of the Board have periodically reviewed
this leadership structure and believe it is appropriate for the
Company at the current time as it provides an appropriate
balance between the two roles of CEO and Lead Director. The CEO
is responsible for setting the strategic direction for the
Company and the
day-to-day
leadership and performance of the Company, while the Lead
Director provides guidance to the CEO and sets the agenda for
Board meetings and presides over meetings of the full Board. The
CEO and Lead Director provide leadership to the Board and work
with the Board to define its structure and activities in the
fulfillment of its responsibilities. The Lead Director presides
over executive sessions and ensures that no conflict of interest
arise between management and the functions of the Board and
facilitates communication among the directors. The Lead Director
and the CEO work together to provide an appropriate information
flow to the Board and the Lead Director works with other Board
members to provide strong, independent oversight of the
Companys management and affairs. Thus, the Board believes
that the current structure balances the needs for the CEO to run
the Company on a
day-to-day
basis with the benefit provided to the Company by significant
involvement and leadership of an independent Lead Director.
Shareholder
Communications with Directors
The Board has adopted a Shareholder Communications with
Directors Policy. The Shareholder Communications with Directors
Policy is available on the Investor Relations page at the
Companys website, www.aastrom.com, and by following
the Corporate Governance link.
Director
Attendance at Annual Meetings
The Board has adopted a Director Attendance at Annual Meetings
Policy. This policy is available on the Investor Relations page
at the Companys website, www.aastrom.com, and by
following the Corporate Governance link. All of the directors
then in office attended the Annual Meeting of Shareholders held
in October 2010.
10
Code of
Ethics
The Board has adopted a Code of Business Conduct and Ethics that
applies to all of our employees, officers and directors as well
as a separate Code of Ethics for Senior Financial Officers.
These Codes of Ethics are available on the Investor Relations
page at the Companys website, www.aastrom.com, and
by following the Corporate Governance link. We will also make
information related to any amendments to, or waivers from these
Codes of Ethics available on the website.
Board
Member Independence
The Board has determined that all of the Board members, except
for Mr. Mayleben, are independent within the meaning of the
director independence standards of NASDAQ and the SEC.
Mr. Mayleben is not considered independent because of his
current employment by the Company.
Risk
Oversight
Assessing and managing risk is the responsibility of
Aastroms management. The Board oversees and reviews
certain aspects of the Companys risk management efforts.
The Board is involved in risk oversight through direct
decision-making authority with respect to significant matters
and the oversight of management by the Board and its committees.
Among other areas, the Board is directly involved in overseeing
risks related to the Companys overall strategy, including
clinical and product development strategies, financing
strategies, business continuity, crisis preparedness and
corporate reputational risks.
The committees of the Board execute their oversight
responsibility for risk management as follows:
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The Audit Committee has responsibility for overseeing the
Companys internal financial and accounting controls, work
performed by the Companys independent registered public
accounting firm and the Companys internal audit function.
As part of its oversight function, the Audit Committee regularly
discusses with management and the Companys independent
registered public accounting firm the Companys major
financial and controls-related risk exposures and steps that
management has taken to monitor and control such exposures. In
addition, the Company, under the supervision of the Audit
Committee, has established procedures available to all employees
for the anonymous and confidential submission of complaints
relating to any matter to encourage employees to report
questionable activities directly to the Companys senior
management and the Audit Committee. The Audit Committee also
reviews transactions between the Company and its officers,
directors, affiliates of officers and directors or other related
parties for conflicts of interest.
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The Compensation Committee is responsible for overseeing risks
related to the Companys cash and equity-based compensation
programs and practices and ensuring that executive and employee
compensation plans are appropriately structured so as not to
incent excessive risk taking and are not reasonably likely to
have a material adverse effect on the Company.
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The Governance Committee is responsible for overseeing risks
related to the composition and structure of the Board of
Directors and its committees and the Companys corporate
governance and works to ensure that the Companys corporate
governance does not encourage or promote excessive risk taking
on the part of the Board or by employees of the Company.
|
11
PROPOSAL 2
RATIFICATION
OF APPOINTMENT OF INDEPENDENT
REGISTERED
PUBLIC ACCOUNTING FIRM
Overview
The Audit Committee has selected PricewaterhouseCoopers LLP as
the Companys independent registered public accounting firm
to audit the consolidated financial statements of Aastrom for
the fiscal year ending December 31, 2011.
PricewaterhouseCoopers LLP has acted in such capacity since its
appointment in fiscal year 1997.
Shareholder ratification of the selection of
PricewaterhouseCoopers LLP as the Companys independent
registered public accounting firm is not required by the
Companys Bylaws or otherwise. However, the Board is
submitting the selection of PricewaterhouseCoopers LLP to the
shareholders for ratification as a matter of good corporate
practice. If the shareholders fail to ratify the selection, the
Audit Committee will reconsider whether or not to retain that
firm. Even if the selection is ratified, the Audit Committee in
its discretion may direct the appointment of different
independent auditors at any time during the year if they
determine that such a change would be in the best interests of
the Company and its shareholders.
As part of its duties, the Audit Committee considers whether the
provision of services, other than audit services, during the
fiscal year ended December 31, 2011 by
PricewaterhouseCoopers LLP, the Companys independent
auditor for that period, is compatible with maintaining the
auditors independence. The following table sets forth the
aggregate fees accrued to the Company for the fiscal years ended
June 30, 2010 and June 30, 2009 and the six-month
period ended December 31, 2010 by PricewaterhouseCoopers
LLP:
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Fiscal Year
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Fiscal Year
|
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|
Six-Month Period
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Ended
|
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|
Ended
|
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Ended
|
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|
June 30,
|
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|
June 30,
|
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December 31,
|
|
|
|
2009
|
|
|
2010
|
|
|
2010
|
|
|
Audit Fees
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|
$
|
338,480
|
(1)
|
|
$
|
320,900
|
(2)
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|
$
|
220,000
|
(2)
|
Audit Related Fees
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Tax Fees
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All Other Fees
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25,000
|
(3)
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1,800
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Total
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$
|
338,480
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$
|
345,900
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$
|
221,800
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(1) |
|
The Audit Fees for the year ended June 30, 2009 were for
professional services rendered for the audits and reviews of the
consolidated financial statements of the Company, professional
services rendered for a federal compliance audit, issuance of
consents, comfort letters and assistance with review of
documents filed with the SEC. |
|
(2) |
|
The Audit Fees for the year ended June 30, 2010 and the six
month period ended December 31, 2010 were for professional
services rendered for the audits and reviews of the consolidated
financial statements of the Company, professional services
rendered for issuance of consents, comfort letters and
assistance with review of documents filed with the SEC. |
|
(3) |
|
The All Other Fees for the year ended June 30, 2010 were
for professional services rendered in connection with the
application for the Qualifying Therapeutic Discovery Project. |
The Audit Committee approves in advance the engagement and fees
of the independent registered public accounting firm for all
audit services and non-audit services, based upon independence,
qualifications and, if applicable, performance. The Audit
Committee may form and delegate to subcommittees of one or more
members
12
of the Audit Committee the authority to grant pre-approvals for
audit and permitted non-audit services, up to specific amounts.
All audit services provided by PricewaterhouseCoopers LLP for
the fiscal year ended June 30, 2010 and the six-month
period ended December 31, 2010 were pre-approved by the
Audit Committee.
Representatives of PricewaterhouseCoopers LLP attended all of
the meetings of the Audit Committee during each of the fiscal
year ended June 30, 2010 and the six-month period ended
December 31, 2010. We expect that a representative of
PricewaterhouseCoopers LLP will attend the Annual Meeting, and
the representative will have an opportunity to make a statement
if he or she so desires. The representative will also be
available to respond to appropriate questions from shareholders.
Vote
Required and Board of Directors Recommendation
The affirmative vote of a majority of the votes cast on the
proposal on the ratification of this appointment, at the Annual
Meeting of Shareholders at which a quorum representing a
majority of all outstanding shares of common stock of Aastrom is
present, either in person or by proxy, is required for
ratification of this proposal. If you abstain from voting on
this Proposal, it has no effect on the voting of the proposal.
If you submit your proxy without indicating your voting
instructions, your shares will be voted FOR this
proposal.
The Board of Directors unanimously recommends a vote
FOR the ratification of the appointment of
PricewaterhouseCoopers LLP as Aastroms Independent
Registered Public Accounting Firm for the fiscal year ending
December 31, 2011.
13
STOCK
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of
March 31, 2011, or as otherwise set forth below, with
respect to the beneficial ownership of Aastroms common
stock by (i) all persons known by Aastrom to be the
beneficial owners of more than 5% of the outstanding common
stock of Aastrom; (ii) each director and director nominee
of Aastrom, (iii) each executive officer of Aastrom named
in the Summary Compensation Table, and (iv) all executive
officers and directors of Aastrom as a group.
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Shares Owned(1)
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Percentage of
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Name and Address of Beneficial Owner(2)
|
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Number of Shares
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Class(3)
|
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Ronald M. Cresswell
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20,000
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|
*
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Timothy M. Mayleben(4)
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372,812
|
|
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|
*
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Alan L. Rubino(5)
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48,780
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|
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|
*
|
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Nelson M. Sims(6)
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72,979
|
|
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*
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Harold C. Urschel, Jr.(7)
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23,192
|
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*
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Robert L. Zerbe(8)
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45,867
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*
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Scott C. Durbin(9)
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42,500
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*
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Ronnda L. Bartel(10)
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119,349
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*
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All officers and directors as a group (9 persons)(11)
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778,229
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2.0
|
%
|
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|
* |
|
Represents less than 1% of the outstanding shares of
Aastroms common stock. |
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(1) |
|
Beneficial ownership is determined in accordance with the rules
of the SEC and includes voting and investment power with respect
to shares. Except as indicated in the footnotes to this table,
to the knowledge of the Company, the persons named in the table
have sole voting and investment power with respect to all shares
of common stock shown as beneficially owned by them, subject to
community property laws, where applicable. The number of shares
owned and percentage ownership amounts include shares of
restricted stock granted under Aastroms Amended and
Restated 2004 Equity Incentive Plan (the 2004 Plan)
and Aastroms 2009 Omnibus Incentive Plan (the 2009
Plan). Pursuant to the rules of the SEC, the number of
shares of Aastroms common stock deemed outstanding
includes shares issuable pursuant to options held by the
respective person or group that are currently exercisable or may
be exercised within 60 days of March 31, 2011. |
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(2) |
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The address for each beneficial owner is 24 Frank Lloyd Wright
Drive, Lobby K, Ann Arbor, MI 48105. |
|
(3) |
|
Calculated on the basis of 38,618,037 shares of common
stock outstanding as of March 31, 2011. |
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(4) |
|
Includes 269,812 shares issuable upon exercise of options
held by Mr. Mayleben that are exercisable within the
60-day
period following March 31, 2011. |
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(5) |
|
Includes 47,917 shares issuable upon exercise of options
held by Mr. Rubino that are exercisable within the
60-day
period following March 31, 2011. |
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(6) |
|
Includes 43,604 shares issuable upon exercise of options
held by Mr. Sims that are exercisable within the
60-day
period following March 31, 2011. |
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(7) |
|
Includes 23,192 shares issuable upon exercise of options
held by Dr. Urschel that are exercisable within the
60-day
period following March 31, 2011. |
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(8) |
|
Includes 44,967 shares issuable upon execution of options
held by Dr. Zerbe that are exercisable within the
60-day
period following March 31, 2011. |
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(9) |
|
Includes 12,500 shares issuable upon exercise of options
held by Mr. Durbin that are exercisable within the
60-day
period following March 31, 2011. |
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(10) |
|
Includes 119,349 shares issuable upon execution of options
held by Dr. Bartel are exercisable within the
60-day
period following March 31, 2011. |
|
(11) |
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Includes 594,091 shares issuable upon exercise of options
that are exercisable within the
60-day
period following March 31, 2011. |
14
EXECUTIVE
COMPENSATION AND RELATED INFORMATION
Summary
Compensation Table
On November 11, 2010, our Board of Directors approved a
change in our fiscal year end from June 30 to December 31.
As such, the following table summarizes all compensation awarded
to, earned by or paid to Timothy M. Mayleben, the Companys
chief executive officer, Scott C. Durbin, the Companys
chief financial officer, and Ronnda L. Bartel, the
Companys chief scientific officer (the named
executive officers) during the
12-month
period ended June 30, 2010 and also during the six-month
period ended December 31, 2010.
2010
SUMMARY COMPENSATION TABLE
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Option
|
|
Nonequity Incentive
|
|
All Other
|
|
|
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Plan
|
|
Compensation
|
|
Total
|
Name and Principal Position
|
|
Year*
|
|
($)
|
|
($)
|
|
($)(1)
|
|
Compensation(2)
|
|
($)(3)
|
|
($)
|
|
Timothy M. Mayleben,
|
|
|
Dec. 2010
|
|
|
$
|
212,500
|
|
|
$
|
4,375
|
|
|
$
|
374,537
|
|
|
$
|
95,625
|
|
|
$
|
11,979
|
(4)
|
|
$
|
699,016
|
|
President and CEO
|
|
|
June 2010
|
|
|
$
|
233,428
|
(5)
|
|
$
|
8,437
|
|
|
$
|
822,015
|
|
|
$
|
111,563
|
|
|
$
|
76,926
|
(4)
|
|
$
|
1,252,369
|
|
Scott C. Durbin,
|
|
|
Dec. 2010
|
|
|
$
|
137,500
|
|
|
$
|
1,875
|
|
|
$
|
94,819
|
|
|
$
|
48,125
|
|
|
$
|
7,253
|
(6)
|
|
$
|
289,572
|
|
Chief Financial Officer
|
|
|
June 2010
|
|
|
$
|
18,750
|
(7)
|
|
$
|
|
|
|
$
|
258,771
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
277,521
|
|
Ronnda L. Bartel,
|
|
|
Dec. 2010
|
|
|
$
|
121,695
|
|
|
$
|
40,000
|
(8)
|
|
$
|
122,317
|
|
|
$
|
|
|
|
$
|
4,186
|
|
|
$
|
288,198
|
|
Chief Scientific Officer
|
|
|
June 2010
|
|
|
$
|
243,389
|
(9)
|
|
$
|
40,000
|
|
|
$
|
169,059
|
|
|
$
|
|
|
|
$
|
8,096
|
|
|
$
|
460,544
|
|
|
|
|
* |
|
December 2010 information is for the six-month period ended
December 31, 2010. June 2010 information is for the fiscal
year ended June 30, 2010. |
|
(1) |
|
Amount reflects the grant date fair value of the named executive
officers stock options, calculated in accordance with FASB
ASC Topic 718. For purposes of this calculation, we have
disregarded forfeiture assumptions. For a discussion of the
assumptions used in calculating these values, see Note 3 to
our consolidated financial statements in our annual report on
Form 10-K
for the fiscal year ended June 30, 2010 filed with the SEC
on September 7, 2010. |
|
(2) |
|
Amounts reflected in this column were awarded pursuant to
Mr. Maylebens and Mr. Durbins employment
agreements, as applicable, as described in more detail below
(see Employment Contracts and Termination of Employment
and Change of Control Arrangements). Due to the change in
fiscal year end from June 30 to December 31,
Mr. Mayleben and Mr. Durbin were each awarded a
pro-rated bonus for the period from July 1, 2010 through
December 31, 2010. The incentive amounts awarded to
Mr. Mayleben and Mr. Durbin for the six-months ended
December 31, 2010 were calculated on a six-month pro-rated
basis and, because of the date Mr. Maylebens
employment commenced, the incentive amount awarded to
Mr. Mayleben for the fiscal year ended June 30, 2010
was calculated on a seven-month pro-rated basis. |
|
(3) |
|
The all other compensation column includes Aastrom contributions
to 401(k) Supplemental Retirement Plans (401(k) Plan) as
detailed in footnotes 4 and 6. None of the named executive
officers received perquisites having an aggregate value of
$10,000 or more in the six-month period ended December 31,
2010 or in the fiscal year ended June 30, 2010, as
applicable. All other compensation also includes the portion of
medical, dental, vision and long term disability premiums paid
by Aastrom on behalf of the named executive officers. These
benefits are offered to all full-time Aastrom employees. |
|
(4) |
|
These amounts include Aastrom contributions made to
Mr. Maylebens 401(k) Plan of $10,625 and $5,313 in
the six-month period ended December 31, 2010 and in the
fiscal year ended June 30, 2010, respectively. The amount
for the fiscal year ended June 30, 2010 also includes a
$50,000 lump-sum paid to Mr. Mayleben pursuant to a
consulting agreement prior to commencement of his employment
(see Employment Contracts and Termination of Employment
and Change of Control Arrangements below for a more
detailed discussion) and $20,625 in fees paid to
Mr. Mayleben for his service as a non-employee director
through December 14, 2009. |
|
(5) |
|
Effective December 14, 2009, Mr. Mayleben was
appointed the Companys President, Chief Executive Officer
and Chief Financial Officer. On June 7, 2010,
Mr. Mayleben resigned as Chief Financial Officer. |
This amount represents the salary earned by Mr. Mayleben
during the twelve months ended June 30, 2010, after his
employment commenced.
15
|
|
|
(6) |
|
This amount includes Aastrom contributions made to
Mr. Durbins 401(k) Plan of $3,438. |
|
(7) |
|
Effective June 7, 2010, Mr. Durbin was appointed the
Companys Chief Financial Officer. This amount represents
the salary earned by Mr. Durbin during the fiscal year
ended June 30, 2010 after his employment commenced. |
|
(8) |
|
Represents the cash performance bonus awarded to Dr. Bartel
on January 18, 2011 based on the achievement of goals for
the Company and Dr. Bartel set by the Compensation
Committee of the Board. |
|
(9) |
|
Effective May 2010, Dr. Bartel was promoted from Vice
President of Technical Operations to Chief Scientific Officer,
and in August of 2010, as a result of increased responsibility
and new policy-making functions, our Board of Directors
determined that Dr. Bartel was an executive officer of the
Company. This amount represents the salary earned by
Dr. Bartel during the six-month period ended
December 31, 2010. |
Outstanding
Equity Awards at Fiscal Year End
The table below reflects all outstanding equity awards made to
each of the named executive officers that were outstanding at
December 31, 2010. We currently grant stock-based awards
pursuant to our 2009 Plan and have outstanding awards under our
2004 Plan.
OUTSTANDING
EQUITY AWARDS AT DECEMBER 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Unearned
|
|
|
Exercise
|
|
|
Expiration
|
|
Name
|
|
Grant Date(1)
|
|
|
Exercisable(1)*
|
|
|
Unexercisable(1)*
|
|
|
Options (#)*
|
|
|
Price ($)*
|
|
|
Date
|
|
|
Timothy M. Mayleben
|
|
|
9/22/2010
|
(2)
|
|
|
24,688
|
|
|
|
370,312
|
|
|
|
|
|
|
$
|
1.49
|
|
|
|
9/22/2020
|
|
|
|
|
3/11/2010
|
(2)
|
|
|
43,968
|
|
|
|
190,532
|
|
|
|
|
|
|
$
|
1.52
|
|
|
|
3/11/2020
|
|
|
|
|
12/14/2009
|
(3)
|
|
|
93,750
|
|
|
|
281,250
|
|
|
|
|
|
|
$
|
2.40
|
|
|
|
12/14/2019
|
|
|
|
|
12/8/2008
|
|
|
|
18,750
|
|
|
|
|
|
|
|
|
|
|
$
|
2.96
|
|
|
|
12/8/2018
|
|
|
|
|
10/17/2008
|
|
|
|
6,875
|
|
|
|
|
|
|
|
|
|
|
$
|
2.32
|
|
|
|
10/17/2018
|
|
|
|
|
11/7/2007
|
|
|
|
6,875
|
|
|
|
|
|
|
|
|
|
|
$
|
7.60
|
|
|
|
11/7/2017
|
|
|
|
|
11/2/2006
|
|
|
|
6,875
|
|
|
|
|
|
|
|
|
|
|
$
|
12.24
|
|
|
|
11/2/2016
|
|
|
|
|
11/1/2005
|
|
|
|
3,750
|
|
|
|
|
|
|
|
|
|
|
$
|
17.84
|
|
|
|
11/1/2015
|
|
|
|
|
6/20/2005
|
|
|
|
1,500
|
|
|
|
|
|
|
|
|
|
|
$
|
23.60
|
|
|
|
6/20/2015
|
|
Scott C. Durbin
|
|
|
9/22/2010
|
(2)
|
|
|
6,250
|
|
|
|
93,750
|
|
|
|
|
|
|
$
|
1.49
|
|
|
|
9/22/2020
|
|
|
|
|
6/7/2010
|
(4)
|
|
|
|
|
|
|
275,000
|
|
|
|
|
|
|
$
|
1.44
|
|
|
|
6/7/2020
|
|
Ronnda L. Bartel
|
|
|
9/22/2010
|
(2)
|
|
|
8,063
|
|
|
|
120,937
|
|
|
|
|
|
|
$
|
1.49
|
|
|
|
9/22/2020
|
|
|
|
|
4/23/2010
|
(2)
|
|
|
11,250
|
|
|
|
78,750
|
|
|
|
|
|
|
$
|
1.80
|
|
|
|
4/23/2020
|
|
|
|
|
7/31/2009
|
|
|
|
9,766
|
|
|
|
21,484
|
|
|
|
|
|
|
$
|
3.20
|
|
|
|
7/31/2019
|
|
|
|
|
10/31/2008
|
(5)
|
|
|
19,531
|
|
|
|
11,719
|
|
|
|
|
|
|
$
|
3.20
|
|
|
|
10/31/2018
|
|
|
|
|
11/30/2007
|
|
|
|
2,513
|
|
|
|
837
|
|
|
|
|
|
|
$
|
7.36
|
|
|
|
11/30/2017
|
|
|
|
|
9/6/2007
|
|
|
|
7,139
|
|
|
|
1,648
|
|
|
|
|
|
|
$
|
8.96
|
|
|
|
9/6/2017
|
|
|
|
|
10/16/2006
|
|
|
|
31,250
|
|
|
|
|
|
|
|
|
|
|
$
|
10.88
|
|
|
|
10/16/2016
|
|
16
|
|
|
* |
|
Amounts include the impact of a
one-for-eight
reverse stock split effected on February 18, 2010 (the
Reverse Stock Split) |
|
(1) |
|
Unless otherwise noted, options vest over a period of four
years, with 25% vesting on the first anniversary of the date of
grant and 6.25% vesting each quarter thereafter. |
|
(2) |
|
These options vest in equal quarterly installments over a
four-year period beginning on the grant date. |
|
(3) |
|
These options vest in 48 equal monthly installments commencing
on the grant date. |
|
(4) |
|
25% of these options vest on the first anniversary of the grant
date. Thereafter, the remaining options vest in 36 equal monthly
installments. |
|
(5) |
|
One third of these options vest on the first anniversary of the
grant date. Thereafter, the remaining options vest in 8 equal
quarterly installments. |
Employment
Contracts, including Termination of Employment and Change of
Control Arrangements
The following are summaries of the agreements with our named
executive officers.
Mr. Maylebens
Agreements
The following is a summary of Mr. Maylebens
employment agreement as entered into on October 23, 2009,
which became effective upon his assuming the roles of Chief
Executive Officer and President immediately following the 2009
Annual Meeting of Shareholders. Also described below are the
terms of a Consulting Agreement dated October 23, 2009,
entered into by the Company and Mr. Mayleben that covered
the management transition period from September 3, 2009
until the date Mr. Mayleben assumed his new roles.
Under an employment agreement with Mr. Mayleben for his
services as Chief Executive Officer and President,
Mr. Mayleben received an initial annual base salary of
$425,000 and was eligible to receive a cash bonus (as a
participant in Aastroms existing cash performance bonus
program) based upon his performance, as determined by the Board
of Directors, for up to 45% of his base salary.
Mr. Mayleben was granted an initial stock option to
purchase 375,000 shares of Company common stock (with an
exercise price of $2.40, the fair market value on
December 14, 2009, which is the date of grant, adjusted for
the Reverse Stock Split). All 375,000 shares are subject to
time vesting and vest in 48 equal monthly installments
commencing on the first day of the calendar month first
following the date of grant. In the event of his termination by
the Company without Cause or by Mr. Mayleben for Good
Reason within one year following a Change of Control (in each
case, as those terms are defined in Mr. Maylebens
employment agreement), the vesting of all his stock options will
accelerate, with all options becoming fully exercisable. In
addition, if Mr. Maylebens employment is terminated
without Cause or for Good Reason within one year following a
Change in Control, he will be entitled to a severance payment
equal to his one and one-half times his annual base salary at
termination. If Mr. Maylebens employment is
terminated without Cause or if he terminates his employment for
Good Reason (in each case, other than in conjunction with a
Change of Control), he will be entitled to a severance payment
equal to one year of his annual base salary at termination. In
addition, in the event of Mr. Maylebens termination
without Cause or for Good Reason, the Company will pay the costs
of his first 12 months of continued medical coverage under
COBRA. All severance payments under the Agreement, including any
accelerated vesting of options and the Companys payment of
Mr. Maylebens COBRA premiums, is conditioned upon
Mr. Mayleben executing a release of claims against the
Company.
Mr. Mayleben agrees not to disclose confidential
information of the Company; during the term of his agreement and
for a period of one year thereafter, not to solicit employees,
customers or vendors of the Company; and during the term of his
agreement and for a period of one year thereafter, not to
compete with the Company.
In the event of a Change in Control, if the payments to
Mr. Mayleben constitute excess parachute payments, he will
receive either (i) the entire benefit and pay the excise
taxes on the excess amount or (ii) reduced payments,
whichever will provide the greater amount of benefits to
Mr. Mayleben on an after-tax basis. If he chooses the
latter, the Company will not be entitled to a deduction for the
excess amounts on which Mr. Mayleben is required to pay
excise taxes.
17
In addition to the employment agreement entered into between
Mr. Mayleben and the Company, on October 23, 2009, the
Company and Mr. Mayleben entered into a Consulting
Agreement, which covered the management transition period from
September 3, 2009 until the date of the 2009 Annual Meeting
of Shareholders when Mr. Mayleben assumed his new roles.
Under the Consulting Agreement, Mr. Mayleben was paid a
lump sum of $50,000 on the commencement of his employment as
Chief Executive Officer and President of the Company, for the
time, effort and consulting services provided by
Mr. Mayleben during the term of the Consulting Agreement in
preparing to take on and getting involved in day to day
activities of the Company prior to assuming his new roles. The
Company determined that the Consulting Agreement was desirable
in order to better assure that the management transition went as
smoothly as possible. During this period Mr. Mayleben
continued as an independent contractor to the Company and not as
an employee.
Mr. Durbins
Agreement
Mr. Durbins employment agreement provides that
Mr. Durbin will receive an initial annual base salary of
$275,000 and his base salary shall be redetermined annually by
the Companys CEO in consultation with the Compensation
Committee. Under his employment agreement, Mr. Durbin will
also be eligible to receive cash incentive compensation as
determined by the CEO in consultation with the Compensation
Committee from time to time. Mr. Durbins target
annual incentive compensation shall be 35% of his then-current
base salary.
In accordance with the employment agreement and as approved by
the Board, Mr. Durbin was granted an initial stock option
to purchase 275,000 shares of the Companys common
stock at an exercise price of $1.44 (the Initial
Option). All 275,000 shares are subject to time
vesting with 25% of the shares vesting on the first anniversary
of the date of the employment agreement and the remaining shares
vesting monthly in equal tranches over the following
36 months. Subject to approval by the Board,
Mr. Durbin will be eligible to receive an additional option
grant to purchase 80,000 shares of the Companys
common stock based on Mr. Durbins performance during
the 12 month period following the date of the employment
agreement as determined by the Board in its discretion and at an
exercise price equal to the fair market value of the
Companys common stock on the effective date of grant (the
Subsequent Option). The Initial Option and the
Subsequent Option shall be subject to the terms and conditions
of the Companys 2009 Plan and form of stock option
agreement.
In the event of his termination by the Company without Cause or
by Mr. Durbin for Good Reason (as such terms are defined in
Mr. Durbins employment agreement), and subject to
Mr. Durbins signing a general release of claims, the
Company shall pay Mr. Durbin an amount equal to nine months
of his then-current base salary in nine substantially equal
monthly installments. Additionally, all stock options and other
stock-based awards which would have vested had Mr. Durbin
remained employed for an additional nine months following the
date of termination shall become exercisable as of the date of
termination. Mr. Durbin 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 his termination by the Company without Cause or
by Mr. Durbin for Good Reason within 12 months
following a Change in Control (as such term is defined in
Mr. Durbins employment agreement), and subject to
Mr. Durbins signing a general release of claims, the
Company shall pay to Mr. Durbin a lump-sum cash payment in
an amount equal to 12 months of his then-current base
salary (or his 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 Mr. Durbin shall immediately
accelerate and become exercisable as of the termination date.
Mr. Durbin would also be entitled to continued
participation in the Companys group health, dental and
vision programs for 12 months following the date of
termination.
If any payments to Mr. Durbin, 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, he
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 his employment and after termination of the
employment agreement, Mr. Durbin 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
18
performing his duties to the Company. During the term of his
employment agreement and for a period of 12 months
thereafter Mr. Durbin also agrees not to compete with the
Company and not to solicit employees, customers or suppliers of
the Company.
Dr. Bartels
Agreement
In March 2011, Dr. Bartel entered into a new employment
agreement that replaced and superseded her December 2009
employment agreement. Dr. Bartels new employment
agreement provides that Dr. Bartel will receive an initial
annual base salary of $243,389, which is the same annual base
salary provided under her old agreement. Under her new
employment agreement, Dr. Bartels annual base salary
will be redetermined annually by the Companys CEO in
consultation with the Compensation Committee.
Dr. Bartels new employment agreement also provides
that Dr. Bartel will be eligible to receive cash incentive
compensation, as determined by the CEO in consultation with the
Compensation Committee from time to time, with a target annual
incentive compensation of 30% of her then-current base salary.
Under the new employment agreement, in the event of
Dr. Bartels termination by the Company without Cause
or by Dr. Bartel for Good Reason (as such terms are defined
in the new employment agreement), and subject to Dr. Bartel
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, Dr. Bartels new
employment agreement provides that 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 such
termination.
Under Dr. Bartels employment agreement, in the event
of her termination by the Company without Cause or by
Dr. Bartel for Good Reason within 12 months following
a Change in Control (as such term is defined in
Dr. Bartels 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 12 months of her then-current base
salary (or her base salary in effect immediately prior to the
Change in Control, if higher). Dr. Bartels employment
agreement additionally provides that, 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.
Under the employment agreement, Dr. Bartel would also be
entitled to continued participation in the Companys group
health, dental and vision programs for 12 months following
the date of such termination.
If any payments to Dr. Bartel, 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.
Under Dr. Bartels employment agreement,
Dr. Bartel agrees to keep the Companys confidential
information in confidence and trust, during her employment and
after the termination of her employment, and agrees 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.
Dr. Bartel also agrees that, during her employment
agreement and for a period of 12 months thereafter, she
would neither compete with the Company nor solicit any
employees, customers or suppliers of the Company.
Acceleration
of Vesting Under Stock Option Plans
Generally, in the event of a Change in Control of Aastrom (as
defined in the Companys 2009 Plan) if awards under the
2009 Plan are not assumed or substituted, awards shall vest on
the day prior to the Change in Control and terminate on the day
of the Change in Control. If assumed or substituted and the
participants board membership or services to the Company
are terminated by the Company within 12 months of the
Change in Control, the awards shall become fully vested and
exercisable and may be exercised at any time prior to the
earlier of the expiration date of the award or within three
months of the date of termination. However, if the fair market
value on the date of the
19
Change in Control is less than the exercise price of the option
or stock appreciation right, such option or stock appreciation
right shall then terminate on the date of the Change in Control.
For awards issued under the 2004 Plan, in the event of a Change
in Control of Aastrom (as defined in the Companys 2004
Plan), if such awards are not assumed, cashed-out or
substituted, then the awards shall vest as of ten days prior to
the date of the Change in Control and terminate on the day of
the Change in Control. In general, options granted to executive
officers of Aastrom will become fully exercisable if such
officer is terminated following a Change in Control and options
granted to non-employee directors will become fully vested and
immediately exercisable upon a Change in Control.
Equity
Compensation Plan Information
The following table sets forth information about the securities
authorized for issuance under our equity compensation plans as
of December 31, 2010.
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|
|
|
|
|
|
|
|
|
|
|
(c)
|
|
|
|
(a)
|
|
|
|
|
|
Number of Securities
|
|
|
|
No. of Securities to be
|
|
|
(b)
|
|
|
Remaining Available for
|
|
|
|
Issued Upon Exercise
|
|
|
Weighted-Average
|
|
|
Future Issuance Under
|
|
|
|
of Outstanding
|
|
|
Exercise Price of
|
|
|
Equity Compensation Plans
|
|
|
|
Options, Warrants and
|
|
|
Outstanding Options,
|
|
|
(Excluding Securities
|
|
Plan Category
|
|
Rights
|
|
|
Warrants and Rights
|
|
|
Reflected in Column (a))
|
|
|
Equity compensation plans/arrangements approved by shareholders
|
|
|
4,333,623
|
|
|
$
|
2.52
|
|
|
|
310,673
|
|
Equity compensation plans/arrangements not approved by
shareholders
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Total
|
|
|
4,333,623
|
|
|
$
|
2.52
|
|
|
|
310,673
|
|
|
|
|
(1) |
|
The weighted-average remaining life of outstanding options,
warrants and rights is 8.9 years. |
|
(2) |
|
There are no outstanding restricted stock units or restricted
shares. |
|
(3) |
|
Maximum option and SAR life in the 2009 Plan is ten years and
full value awards count as 1.25 shares against the 2009
Plan. |
20
Compensation
of Directors
The Director Compensation table reflects all compensation
awarded to, earned by or paid to the Companys non-employee
directors during the fiscal year ended June 30, 2010 and
for the six-month period ended December 31, 2010.
2010
DIRECTOR COMPENSATION
FOR THE TWELVE AND SIX MONTHS ENDED
JUNE 30, 2010 AND DECEMBER 31, 2010
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Fees Earned
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Other
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or Paid
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Stock
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Option
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Compensation
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Name
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|
Year*
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in Cash ($)
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|
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Awards ($)
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|
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Awards ($)(1)
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|
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($)
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Total ($)
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|
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George W. Dunbar(2)
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|
|
Dec. 2010
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|
|
$
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12,500
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|
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|
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|
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|
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$
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12,500
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June 2010
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|
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$
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25,000
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|
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$
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81,641
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$
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106,641
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Ronald M. Cresswell(3)
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|
|
Dec. 2010
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|
|
$
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6,850
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|
|
|
|
|
|
$
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83,938
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|
|
|
|
|
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$
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90,788
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|
|
|
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June 2010
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|
|
|
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|
|
|
|
|
|
|
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Alan L. Rubino
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|
|
Dec. 2010
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|
|
$
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18,750
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|
|
|
|
|
|
$
|
23,156
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|
|
|
|
|
|
$
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41,906
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|
|
|
|
June 2010
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|
|
$
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37,500
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|
|
|
|
|
|
$
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55,766
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|
|
|
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|
|
$
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93,266
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|
Nelson M. Sims
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|
|
Dec. 2010
|
|
|
$
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22,500
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|
|
|
|
|
|
$
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23,156
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|
|
|
|
|
|
$
|
45,656
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|
|
|
|
June 2010
|
|
|
$
|
52,500
|
|
|
|
|
|
|
$
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55,766
|
|
|
|
|
|
|
$
|
108,266
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|
Harold C. Urschel, Jr.
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|
|
Dec. 2010
|
|
|
$
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17,500
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|
|
|
|
|
|
$
|
23,156
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|
|
|
|
|
|
$
|
40,656
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|
|
|
|
June 2010
|
|
|
$
|
17,500
|
|
|
|
|
|
|
$
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57,858
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|
|
|
|
|
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$
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75,358
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Robert L. Zerbe
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|
|
Dec. 2010
|
|
|
$
|
21,250
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|
|
|
|
|
|
$
|
23,156
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|
|
|
|
|
|
$
|
44,406
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|
|
|
|
June 2010
|
|
|
$
|
40,000
|
|
|
|
|
|
|
$
|
55,766
|
|
|
|
|
|
|
$
|
95,766
|
|
|
|
|
* |
|
December 2010 information is for the six-month period ended
December 31, 2010. June 2010 information is for the fiscal
year ended June 30, 2010. |
|
(1) |
|
The discussion below provides details as to the aggregate number
of option awards outstanding at fiscal year end. |
|
(2) |
|
Mr. Dunbar did not stand for re-election at the 2010 Annual
Meeting of Shareholders held on October 21, 2010 and thus
ceased being a director as of October 21, 2010. |
|
(3) |
|
Dr. Cresswell joined the Board on October 21, 2010. |
Fees Earned or Paid in Cash. The Chairman of
the Board of Directors, if any, receives an annual fee of
$50,000 paid in equal quarterly increments. Each non-employee
director receives an annual fee of $25,000 paid in equal
quarterly increments. The chairperson of each standing committee
receives an additional annual fee of $7,500 and each non-chair
committee member receives an additional annual fee of $5,000,
payable quarterly. Following the Annual Meeting of Shareholders,
the Company expects to continue to pay a supplemental fee of
$7,500 to the Lead Director, paid in equal quarterly increments.
Stock and Option Awards. We had in place a
non-employee director compensation policy whereby a non-employee
director who continued to serve beyond an Annual Meeting of
Shareholders would receive a stock option to purchase
55,000 shares granted on the date of each Annual Meeting of
Shareholders, with an exercise price equal to the fair market
value of the common stock on the date of grant, vesting in equal
quarterly increments over a period of one year. Newly elected
directors joining the Board during the period between Annual
Meetings of Shareholders would receive a grant for a pro rata
amount of the 55,000 shares subject to option (reflecting
the period of time until the next Annual Meeting of
Shareholders). These equity grants would be made under the terms
of the existing equity compensation plans, as previously
approved by the shareholders. We are in the process of reviewing
our current policy and, beginning with Dr. Cresswell, are
currently offering new directors, upon joining the Board, an
award of options to purchase 85,000 shares of Aastrom
common stock that vest in three equal annual installments
beginning on the first anniversary of the grant date. Amounts in
the stock and option awards columns represent the aggregate
grant date fair value computed in accordance with FASB ASC Topic
718 (disregarding forfeiture assumptions). For
21
a discussion of the assumptions used in calculating the dollar
amount recognized, see Note 3 to our consolidated financial
statements in our annual report on
Form 10-K
for fiscal year 2010 filed with the SEC on September 7,
2010.
Previously, stock options issued to directors terminated and
could no longer be exercised after the first to occur of
(a) the expiration date of the option, (b) at any time
prior to the expiration of three months after the date on which
the service to the Company was terminated or (c) a change
in control to the extent provided in the stock option agreement.
On October 5, 2009, the Board of Directors determined that
stock options already issued to directors shall terminate and no
longer be exercised after the first to occur of (a) the
expiration date of the option, (b) at any time prior to the
expiration of 24 months after the date on which the service
to the Company is terminated or (c) a change in control to
the extent provided in the stock option agreement. This revision
was made by the Board upon the recommendation of the
Compensation Committee after it had consulted with its
independent compensation consultant who recommended the change.
The independent compensation consultant advised that by
lengthening the period the directors could exercise their
options, it would neutralize market timing on their service
decisions.
Option Holdings. Non-employee directors held
the following stock options as of December 31, 2010:
|
|
|
|
|
Director
|
|
Stock Options
|
|
|
Ronald M. Cresswell
|
|
|
85,000
|
|
Alan L. Rubino
|
|
|
104,250
|
|
Nelson M. Sims
|
|
|
99,937
|
|
Harold C. Urschel, Jr.
|
|
|
79,525
|
|
Robert L. Zerbe
|
|
|
101,300
|
|
Certain
Relationships and Related Party Transactions
The Board is committed to upholding the highest legal and
ethical conduct in fulfilling its responsibilities and
recognizes that related party transactions can present a
heightened risk of potential or actual conflicts of interest.
Accordingly, as a general matter, it is Aastroms
preference to avoid related party transactions.
Aastroms Audit Committee Charter requires that members of
the Audit Committee, all of whom are independent directors,
review and approve all related party transactions for which such
approval is required under applicable law, including SEC and
NASDAQ rules. All related party transactions shall be disclosed
in Aastroms applicable filings with the Securities and
Exchange Commission as required under SEC rules.
There were no such reportable relationships or related party
transactions during fiscal year 2009 or 2010.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires Aastroms executive officers, directors
and persons who beneficially own more than 10% of Aastroms
common stock to file initial reports of ownership and reports of
changes in ownership with the SEC. Such persons are required by
the SEC regulations to furnish Aastrom with copies of all
Section 16(a) forms filed by such persons.
Based solely on Aastroms review of such forms furnished to
it and written representations from certain reporting persons,
Aastrom believes its executive officers, directors and more than
10% shareholders have complied with all filing requirements.
22
REPORT OF
THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee oversees Aastroms financial reporting
process on behalf of the Board of Directors. Management has the
primary responsibility for the financial statements and the
reporting process, including internal control systems.
PricewaterhouseCoopers LLP is responsible for expressing an
opinion as to the conformity of our audited financial statements
with generally accepted accounting principles and an opinion on
our internal control over financial reporting. The Audit
Committee acts pursuant to a written charter that has been
adopted by the Board of Directors.
The Audit Committee consists of three directors, each of whom,
in the judgment of the Board, is an independent
director as defined in Rule 5605(a)(2) of the NASDAQ
listing standards. Nelson M. Sims and Alan L. Rubino were
members of the Audit Committee during the six-month period ended
December 31, 2010. Dr. Zerbe was a member of the Audit
Committee from September 2009 through October 2010, when he was
replaced by Ronald M. Cresswell.
The Committee has discussed and reviewed with the independent
registered public accountants all matters required to be
discussed by the Statement on Auditing Standards No. 61
(Communication with Audit Committees), as amended (AICPA,
Professional Standards, Vol.1, AU section 380), as adopted
by the Public Company Accounting Oversight Board (the
PCAOB) in Rule 3200T. The Committee has
received written disclosures and a letter from
PricewaterhouseCoopers LLP confirming their independence, as
required by applicable requirements of the PCAOB regarding the
independent accountants communications with the Committee
concerning independence, and has discussed with
PricewaterhouseCoopers LLP the accountants independence.
The Committee has met with PricewaterhouseCoopers LLP, with and
without management present, to discuss the overall scope of the
PricewaterhouseCoopers LLP audit, the results of its audits, its
evaluations of Aastroms internal controls and the overall
quality of its financial reporting. The Committee reviewed the
performance and fees of PricewaterhouseCoopers LLP prior to
recommending their appointment. The Committee reviewed the
Companys financial statements and discussed them with
management and with PricewaterhouseCoopers LLP.
Based on the review and discussions referred to above, the
Committee recommended to the Board of Directors that
Aastroms audited financial statements be included in
Aastroms Transition Report on
Form 10-K
for the six-month period ended December 31, 2010.
AUDIT
COMMITTEE
Nelson M.
Sims, Chair
Alan L. Rubino
Ronald M. Cresswell
23
SHAREHOLDER
PROPOSALS TO BE PRESENTED
AT NEXT ANNUAL MEETING
Under Aastroms Bylaws, in order for business and director
nominations to be properly brought before a meeting by a
shareholder, such shareholder must have given timely notice
thereof in writing to the Corporate Secretary of Aastrom. To be
timely, such notice must be received at Aastroms principal
executive offices not less than 120 calendar days in advance of
the one year anniversary of the date Aastroms proxy
statement was released to shareholders in connection with the
previous years Annual Meeting of Shareholders, except that
(i) if no Annual Meeting was held in the previous year,
(ii) if the date of the annual meeting has been changed by
more than thirty calendar days from the date contemplated at the
time of the previous years proxy statement or
(iii) in the event of a special meeting, then notice must
be received not later than the close of business on the tenth
day following the day on which notice of the date of the meeting
was mailed or public disclosure of the meeting date was made.
If none of the events described in (i) through
(iii) above occur, then the deadline for submitting
shareholder proposals or nominations for directors for inclusion
in the Companys proxy statement and form of proxy pursuant
to
Rule 14a-8
of the SECs proxy rules for the next Annual Meeting of
shareholders will be December 14, 2011 and shareholder
proposals submitted outside the processes of
Rule 14a-8
received after December 14, 2011 will be considered
untimely under Aastroms Bylaws. In order to be brought
before the next Annual Meeting, any such proposal or nomination
must include the relevant information as required under the
Companys Bylaws and must otherwise meet applicable
requirements of the SECs proxy rules if such proposal or
nomination is to be included in the Companys proxy
statement for the next Annual Meeting.
Shareholder proposals and director nominations should be
delivered to: Aastrom Biosciences, Inc., 24 Frank Lloyd Wright
Drive, P.O. Box 376, Ann Arbor, Michigan, 48106,
Attention: Secretary. Aastrom recommends that such proposals be
sent by certified mail, return receipt requested.
DELIVERY
OF PROXY MATERIALS AND ANNUAL REPORT
Electronic
Delivery
The notice of Annual Meeting and Proxy Statement and Annual
Report is available at www.proxyvote.com. Instead of receiving
paper copies of the Annual Report and Proxy Statement in the
mail, shareholders can elect to receive these communications
electronically at www.proxyvote.com.
Many brokerage firms and banks are also offering electronic
proxy materials to their clients. If you are a beneficial owner
of the Companys stock, you may contact that broker or bank
to find out whether this service is available to you. If your
broker or bank uses Broadridge Investor Communications, you can
sign up to receive electronic proxy materials at
www.proxyvote.com.
Householding is the term used to describe the
practice of delivering one copy of a document to a household of
shareholders instead of delivering one copy of a document to
each shareholder in the household. Shareholders who share a
common address and who have not opted out of the householding
process should receive a single copy of the Notice of Internet
Availability of Proxy Materials for each account. If you
received more than one copy of the Notice of Internet
Availability of Proxy Materials, you may elect to household in
the future; if you received a single copy of the Notice of
Internet Availability of Proxy Materials, you may opt out of
householding in the future.
Shareholders may obtain a copy of this Proxy Statement by
writing to the Company at the following address: Aastrom
Biosciences, Inc., 24 Frank Lloyd Wright Drive,
P.O. Box 376, Ann Arbor, Michigan, 48106.
24
TRANSACTION
OF OTHER BUSINESS
At the date of this Proxy Statement, the only business which the
Board of Directors intends to present or knows that others will
present at the meeting is as set forth above. If any other
matter or matters are properly brought before the meeting, or
any adjournment thereof, it is the intention of the persons
named in the accompanying form of proxy to vote the proxy on
such matters in accordance with their best judgment.
By order of the Board of Directors,
Scott C. Durbin
Corporate Secretary
April 14, 2011
25
[FORM OF PROXY CARD]*
AASTROM BIOSCIENCES, INC.
ATTN: Scott C. Durbin
P.O. BOX 376
24 FRANK LLOYD WRIGHT DRIVE
ANN ARBOR, MI 48105
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to
transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
Electronic Delivery of Future PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted,
indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59
P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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For |
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Withhold |
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For All |
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All |
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All |
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Except |
The board of directors recommends a vote
For the election of each nominee. |
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1.
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Election of Directors |
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Nominees: |
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To withhold authority to vote for any
individual nominee(s), mark For All Except and write
the number(s) of the nominee(s) on the line below: |
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01. Ronald M. Cresswell
02. Timothy M. Mayleben
03. Alan L. Rubino
04. Nelson M. Sims
05. Harold C. Urschel, Jr.
06. Robert L. Zerbe
|
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSAL. |
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For |
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Against |
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Abstain |
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2.
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To ratify the appointment of PricewaterhouseCoopers LLP as the Companys Independent
Registered Public Accounting Firm for the fiscal year ending December 31, 2011.
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Please sign exactly as your name(s)
appear(s) hereon. When signing as attorney,
executor, administrator, or other fiduciary,
please give full title as such. Joint owners
should each sign personally. All holders
must sign. If a corporation or partnership,
please sign in full corporate or partnership
name, by authorized officer. |
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Signature [PLEASE SIGN WITHIN THE BOX]
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Date |
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Signature (Joint Owners)
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Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Proxy
Statement and Annual Report are available at www.proxyvote.com.
AASTROM BIOSCIENCES, INC.
Proxy for Annual Meeting of Shareholders
Solicited by the Board of Directors
The undersigned hereby appoints Timothy M. Mayleben and Scott C. Durbin, and each of them, with
full power of substitution to represent the undersigned and to vote all of the shares of stock of
Aastrom Biosciences, Inc. (the Company) which undersigned is entitled to vote at the Annual
Meeting of Shareholders of the Company to be held at the Companys headquarters located at 24 Frank
Lloyd Wright Drive, Lobby K, Ann Arbor, Michigan, 48105, on Tuesday, June 7, 2011 at 8:30 a.m.,
local time, and at any adjournment thereof (i) as hereinafter specified upon the proposals listed
below and as more particularly described in the Companys Proxy Statement, receipt of which is
hereby acknowledged, and (ii) in their discretion upon such other matters as may properly come
before the meeting.
The shares represented hereby shall be voted as specified. If no specification is made, such shares
shall be voted FOR proposal 1. If you abstain from voting on proposal 2, it will have no
effect on the voting of the proposal.
Continued and to be signed on reverse side