EX-10.1






AMENDMENT TO

EMPLOYMENT AGREEMENT




This Amendment to Employment Agreement (this “Amendment”) dated March 10, 2008 is made
by and between Aastrom Biosciences, Inc., a Michigan corporation (“Employer”) and Gerald D.
Brennan, Jr. (“Employee”).



RECITALS:




WHEREAS, Employer and Employee entered into that certain Employment Agreement dated as of June
10, 2005 (the “Employment Agreement”);



WHEREAS, on February 11, 2008, Employee resigned from his positions as Employer’s Vice
President, Administrative & Financial Operations and Chief Financial Officer, principal financial
and accounting officer, Secretary, Treasurer and from all other offices with Employer, effective as
of such date, and will resign and retire as an employee of Employer on or about July 15, 2008;



WHEREAS, on February 11, 2008, Employer accepted Employee’s resignation effective as set forth
above;



WHEREAS, until Employee’s retirement from Employer as an employee, Employer and Employee
mutually intend that Employee shall provide certain transition services to and on behalf of
Employer;



WHEREAS, Employer desires for Employee to continue as a consultant to the Employer during the
two and one-half month period commencing with the date Employee retires from the Employer, in order
to further ensure an orderly transition and be available to respond to any issues that may arise
out of Employee’s activities prior to his retirement; and



WHEREAS, Employee is desirous of and agrees to provide such transition and consulting services
to the Employer.



AGREEMENT:




NOW THEREFORE, the parties agree as follows:



1. Section 3 of the Employment Agreement is hereby amended and restated in its entirety as
follows:



3. DUTIES. Effective February 11, 2008, Employee shall be deemed to have
resigned as Employer’s Vice President, Administrative & Financial Operations and
Chief Financial Officer, principal financial and accounting officer, Secretary,
Treasurer and from all other offices with Employer. Beginning February 11, 2008,
and for the remainder of the Employment Term (as defined in Section 5.1 below),
Employee shall continue to perform faithfully and diligently all duties as may be
reasonably requested by Employer’s Chief Executive Officer, including but not
limited to the transitioning of activities previously performed by Employee in
Employee’s former capacity as an officer of Employer. Employee shall not provide
consulting services or other business or scientific services to any other party,
without the prior written consent of Employer.



2. Section 5.1 of the Employment Agreement is hereby amended and restated in its entirety as
follows:



5.1 TERM The term of Employee’s employment hereunder (the “Employment
Term”) shall continue until July 15, 2008 (the “Termination Date”). The
Termination Date may be amended by mutual agreement in writing. For the two and
one-half month period commencing on the Termination Date (the “Consulting
Term”), Employee shall be engaged by Employer as a consultant pursuant to the
terms and provisions of Section 8 below.



3. Sections 6.2.1 and 6.2.3 of the Employment Agreement are hereby amended and restated in
their entirety as follows:



6.2.1 Severance. If the Employee’s employment is terminated on the Termination
Date, then he shall be engaged as a consultant, for the Consulting Term, in
accordance with the terms and conditions of Section 8 hereof. In the event
Employee’s employment is terminated prior to the Termination Date by Employer
without Cause, then the Consulting Term shall commence on the date of such earlier
termination. In the event that (i) Employee’s employment is terminated by Employer
for Cause, (ii) Employee resigns his employment prior to the Termination Date, or
(iii) Employee dies or become disabled prior to the Termination Date, Employee shall
only be entitled to be paid salary as provided in Section 4.1 through the effective
date of such termination, as full compensation for any and all claims of Employee
under this Agreement or otherwise. Other than the consulting payments specified in
Section 8 hereof, the Employer shall not be obligated to pay any other consulting or
severance payments to Employee under any circumstances. For the avoidance of doubt,
the prior sentence shall not limit the Employee’s normal rights as a retiring
employee to, by way of example, but not limitation, payment for unused vacation pay,
rights under COBRA, rights to exercise vested but unexercised options or similar
rights, as set forth in the applicable plans or agreements or by applicable law



6.2.3 Right to Terminate. Employer retains and reserves the right to terminate
the employment of Employee at any time, with or without Cause. For avoidance of
doubt, no consulting or other severance payments of whatever nature shall be owed if
(i) Employee’s termination is for Cause, (ii) Employee resigns on a date prior to
the Termination Date, or (iii) Employee’s employment terminates as a result of
Employee’s death or disability. For the avoidance of doubt, the prior sentence
shall not limit the Employee’s normal rights as a retiring employee to, by way of
example, but not limitation, payment for unused vacation pay, rights under COBRA,
rights to exercise vested but unexercised options or similar rights, as set forth in
the applicable plans or agreements or by applicable law



4. The Employment Agreement is hereby amended by adding the following new Section 8 and by
renumbering the existing Section 8 as Section 9:



8. CONSULTING AGREEMENT.



8.1 TERM AND DUTIES. Employee’s engagement as a consultant hereunder and
entitlement to any compensation or benefits under this Section 8 is conditioned upon
Employee’s remaining employed until the end of the Employment Term and upon
resignation from all capacities in which Employee is then rendering services to
Employer on the Termination Date; provided, however, that if Employer terminates
Employee’s employment without Cause prior to the Termination Date, Employee shall be
engaged as a consultant as if such date of termination were the Termination Date.
If these conditions are satisfied, then Employee shall be engaged as a consultant,
to provide such services as may be mutually agreed upon including, but not limited
to, assisting Employer in responding to issues that arise in connection with matters
with respect to which Employee was involved during the Employment Term, for the two
and one-half month period commencing on the Termination Date.



8.2 COMPENSATION FOR CONSULTING SERVICES. As compensation for his consulting
services, Employer shall pay Employee a monthly amount based on the annual salary
rate that Employee was earning at the Termination Date during each month that
Employee is engaged as a consultant, such amounts to be paid at the same time as
Employer’s normal payroll periods. At all times during the Consulting Term,
Employee shall be an independent contractor and shall not be considered an employee
of Employer for any purpose. During the Consulting Term, Employee shall be
responsible for the collection and payment of any and all income or employment taxes
(whether federal, state or local) arising out of its association with Employer, and
Employee agrees to indemnify, save and hold Employer harmless from and against any
liabilities and expenses with respect to the payment of such taxes based upon or
arising out of its association with Employer during the Consulting Term. For the
avoidance of doubt, during the Consulting Term, Employee shall not be entitled to
the compensation or fringe benefits set forth in Section 4 hereof, except to the
extent that such rights accrued during the employment period and payment thereof
survives the termination of employment by virtue of plan provisions, written
agreement, or applicable law.



8.3 CONSULTING AGREEMENT CONDITIONED UPON EXECUTION OF WAIVER.
Notwithstanding anything contained herein to the contrary, Employee’s engagement as
a consultant is hereby expressly conditioned upon Employee having executed as of his
Termination Date a customary and reasonable form of waiver and release, as provided
for in Section 6.4 above.



5. Employer Property. Except as specifically set forth in this Section 4, Employee
agrees to return, no later than his Termination Date, all Employer credit cards and other Employer
property, including, but not limited to, keys, computers, cellular phones and other equipment, and
all memoranda, notes, lists, plans, records, reports, correspondence, computer disks and memory,
and other documentation (including copies thereof) relating the Employer or the business of the
Employer or any of its affiliates, or which contain confidential information, however stored or
recorded, issued or loaned to him or which he ever possessed or had under his control.
Notwithstanding the immediately foregoing, the parties agree that at the end of the Employment
Term, title to that certain personal computer owned by Employer and used by Employee in the
performance of his duties shall be transferred from Employer to Employee. Ownership of all other
property of Employer shall remain with Employer upon termination of Employee’s employment with
Employer. Employee reaffirms his obligations pursuant to certain confidentiality agreements and
other arrangements previously entered into between Employer and Employee or as to which Employee is
otherwise subject.



6. Defined Terms. All capitalized terms used in this Amendment and not defined herein
shall have the meanings provided in the Employment Agreement.



7. Effective Date. This Amendment is effective as of February 11, 2008.



8. Full Force and Effect. Except as above amended, the Employment Agreement shall
remain in full force and effect. To the extent any provision in this Amendment conflicts with any
provision in the Employment Agreement, the provisions of this Amendment shall govern. Any matter
not specifically addressed in this Amendment but addressed in the Employment Agreement shall be
determined in accordance with the provisions of the Employment Agreement.



9. Amendments. No amendment or modification of the terms or conditions of this
Amendment shall be valid unless in writing and signed by both parties.



10. Governing Law. This Amendment shall be interpreted, construed, governed and
enforced according to the laws of the State of Michigan.



11. Counterparts. This Amendment may be executed in multiple counterparts, all of
which together shall constitute one and the same instrument.



12. Incorporation of Recitals. All of the recitals contained herein are hereby
incorporated into and made a part of this Amendment.



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IN WITNESS WHEREOF, the parties have executed this Amendment to Employment Agreement as of the
day and year first above written.



EMPLOYER:



Aastrom Biosciences, Inc.



	 	 	 
	By:

	 	/s/ George W. Dunbar, Jr.
	
 
	 	 
	Name:

	 	George W. Dunbar, Jr.
	
 
	 	 
	Its:

	 	Chief Executive Officer and President
	
 
	 	 






EMPLOYEE:



 /s/ Gerald D. Brennan, Jr.



Gerald D. Brennan, Jr.




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