Document:

ex101.htm

Exhibit 10.1

 

	Oncothyreon Inc.  	 MAIN  206.801.2100
	www.oncothyreon.com    	 FAX  206.801.2101

 

2601 Fourth Ave., Suite 500

Seattle, WA 98121

August 17, 2010

Ms. Julia Marie Eastland

Seattle, WA  98109

Dear Julie,

 

I am delighted to offer you the position of Chief Financial Officer (CFO) and Vice President Corporate Development at Oncothyreon Inc.  This position reports to Robert Kirkman, President and CEO.  Your official start date will be September 7, 2010.  This offer includes the following:

 

	
  

	
1.

	
A base salary for a regular, full-time position of $10,416.67 per semi-monthly pay period (equivalent to $250,000 on an annual basis).  Salaries are paid twice a month, by direct deposit, on the 15th and the second last banking day of each month.

	
  

	
2.

	
You are eligible to participate in the Company’s non-qualified Stock Option Plan.  The plan is governed by the Company’s “Amended and Restated Share Option Plan” (the “Option Plan”) and the terms of this document will govern.

Following your acceptance of this offer, we will recommend to the Compensation          Committee of our Board of Directors after commencement of your employment that you receive a grant of options to purchase 40,000 shares of Oncothyreon’s Common Stock, and your grant will be subject to the approval of the Compensation Committee or its delegate.  Your grant will be priced in accordance with our equity incentive plan and our policies governing stock option grants.  Stock options are vested over a four year period with no more than 25% of the shares subject to the award vesting in any one year period.

	
  

	
3.

	
You will be eligible for our performance bonus plan at the 30% target level.  The performance bonus plan is governed by the Company’s “Employee Incentive Program” document and the terms of this document will govern.  Goals for the plan are established at the beginning of the year, and payment is made following the close of the year.

	
  

	
4.

	
Oncothyreon Inc. offers an “Employee Stock Purchase Plan (ESPP)” which provides eligible employees with an opportunity to purchase shares of our common stock (“Shares”) through accumulated payroll deductions. The Purchase Plan allows you to contribute up to fifteen percent (15%) of your eligible compensation through payroll deductions to purchase Shares during each offering period.  You will be eligible the next offering period on December 15, 2010.

 

	
  

	
5.

	
Medical, dental, vision and life insurance, short term and long term disability, four weeks (20 days) of accrued vacation, 10 paid holidays and paid parking.

 

  

  

  

Ms. Julia Marie Eastland

August 17, 2010

Page 2

	
6.  

	
You will become eligible for Oncothyreon matching contributions into the Company’s 401(k) plan upon date of hire.  Oncothyreon will match your contributions into the plan, up to a maximum of 3% of your monthly gross salary (subject to maximums as deemed by law).  Contributions to this plan are made through payroll deductions.  This plan is governed by plan documents provided by our carrier for this benefit.

	
7.  

	
Severance: In the event your employment is terminated for reasons other than “Cause” (as defined below) you will be entitled to the following:

 

i)   Lump sum payment of nine month’s base salary, less required withholding

 

	
  

	
ii)   Lump sum payment of nine month’s equivalent of performance review bonus at target, less required withholding

 

“Cause” for the purpose of this agreement shall include but not be limited to (i) willful engaging in illegal conduct or gross misconduct which is injurious to the Company or an affiliated company, (ii) being convicted of, or entering a plea of nolo contendere or guilty to, a felony or a crime of moral turpitude; (iii) engaging in fraud, misappropriation, embezzlement or any other act or acts of dishonesty resulting or intended to result directly or indirectly in a gain or personal enrichment to you at the expense of the Company or an affiliated company, (iv) material breach of any written policies of the Company or an affiliated company, or (v) willful and continual failure substantially to perform your duties with the Company, which failure has continued for a period of at least 30 days after written notice by the Company.

	
  

	
 

Section 409A

 

i) Notwithstanding anything to the contrary in this letter agreement, no severance payable to you, if any, pursuant to this letter agreement that, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Section 409A (together, the “ Deferred Payments ”) will be payable until you have a “separation from service” within the meaning of Section 409A. Similarly, no severance payable to you, if any, pursuant to this letter agreement that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be payable until you have a “separation from service” within the meaning of Section 409A.

 

ii) Notwithstanding anything to the contrary in this letter agreement, if you are a “specified employee” within the meaning of Section 409A at the time of your separation from service, then, if required, the Deferred Payments, which are otherwise due to you on or within the six (6) month period following your separation from service will accrue, to the extent required, during such six (6) month period and will become payable in a lump sum payment on the date six (6) months and one (1) day following the date of your separation from service or the date of your death, if earlier. All subsequent Deferred Payments, if any, will be

  

  

  

Ms. Julia Marie Eastland

August 17, 2010

Page 3

payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under this letter agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).

iii) Any amount paid under the letter agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Payments for purposes of clause (i) above.

	
  

	
 

iv) Any amount paid under this letter agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit will not constitute Deferred Payments for purposes of clause (i) above. “Section 409A Limit” will mean the lesser of two (2) times: (i) your annualized compensation based upon the annual rate of pay paid to you during your taxable year preceding your taxable year of your termination of employment as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Internal Revenue Code for the year in which your employment is terminated.

	
  

	
 

v) The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. You and the Company agree to work together in good faith to consider amendments to this letter agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to you under Section 409A.”

 

	
8.  

	
Change in Control: In the event there is a “Change in Control” as defined herein and you remain employed through the date of the Change in Control, you will be entitled to the following:

 

i)  Lump sum payment of one year’s base salary, less required withholding, and

 

ii)  Lump sum payment of one year’s equivalent of performance review bonus at target, less required withholding.

 

Such payments will be made within sixty (60) days following the consummation of the Change in Control, provided that, within forty-five (45) days of the Change in Control, you have signed a separation agreement in a form reasonably satisfactory to the Company, which shall include a general release of all claims against the Company and its affiliated entities.

  

  

  

Ms. Julia Marie Eastland

August 17, 2010

Page 4

“Change in Control” for the purpose of this agreement shall be deemed to have occurred if, on or after the date hereof (i) the board of directors of the Company passes a resolution to the effect that, for purposes of the Company’s Amended and Restated Share Option Plan, a Change in Control has occurred or (ii) any person or any group of two or more persons acting jointly or in concert becomes the beneficial owner, directly or indirectly, or acquires the right to control or direct, twenty-five (25%) percent or more of the outstanding voting securities of the Company or any successor to the Company in any manner, including without limitation as a result of a takeover bid or an amalgamation of the Company with any other corporation or any other business combination or reorganization, and for purposes hereof “voting security” means any security other than a debt security carrying a voting right either under all circumstances or under some circumstances that have occurred and are continuing.”

To protect the Company’s proprietary interests, all of Oncothyreon’s employees are required to sign a Confidentiality Agreement as a condition of employment.

The Company reserves the right to conduct reference checks, academic checks and background checks on all its potential finance employees.  Your job offer is therefore contingent upon a clearance of such investigations.  You also must be able to prove your eligibility to work within the United States.

Please note that acceptance of this offer does not create a contract of continuing employment with Oncothyreon Inc.  Employment with the company is on an at-will basis, meaning that the employee or the company may terminate the employment relationship at any time and for any reason not expressly prohibited by law.

If you are in agreement with these terms please sign and return one copy of this letter, the other copy is for your files, to acknowledge your acceptance by Tuesday August 24, 2010.  This may be faxed to 206-801-2125.

Julie, we all look forward to you joining our team at Oncothyreon and I am confident that you will be able to significantly contribute to the success of our company.  Please feel free to contact me at 206-801-2124 if you have any questions.

Sincerely,

/s/ Kathryn Knowles

Kathryn Knowles

Director, Human Resources

/s/ Julia M. Eastland                                                                         8/17/10                                         

Julia Marie Eastland                                                                                       DateEX-10.1

AASTROM BIOSCIENCES, INC.

This Indemnification Agreement (“Agreement”) is made as of        by and
between Aastrom Biosciences, Inc., a Michigan corporation (the “Company”), and      
(“Indemnitee”).

RECITALS

WHEREAS, the Company desires to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve the Company;

WHEREAS, in order to induce Indemnitee to continue to provide services to the Company, the
Company wishes to provide for the indemnification of, and advancement of expenses to, Indemnitee to
the maximum extent permitted by law;

WHEREAS, the Bylaws of the Company (the “Bylaws”) require indemnification of the
officers and directors of the Company, and Indemnitee may also be entitled to indemnification
pursuant to the Michigan Business Corporation Act, as amended (the “MBCA”);

WHEREAS, the Bylaws and the MBCA expressly provide that the indemnification provisions set
forth therein are not exclusive, and thereby contemplate that contracts may be entered into between
the Company and its Representatives with respect to indemnification;

WHEREAS, the Company and Indemnitee recognize the continued difficulty in obtaining liability
insurance for the Company’s Representatives, the significant and continual increases in the cost of
such insurance and the general trend of insurance companies to reduce the scope of coverage of such
insurance;

WHEREAS, the Company and Indemnitee further recognize the substantial increase in corporate
litigation in general, subjecting its Representatives to expensive litigation risks at the same
time as the availability and scope of coverage of liability insurance provide increasing challenges
for the Company;

WHEREAS, Indemnitee does not regard the protection currently provided by applicable law, the
Company’s governing documents and available insurance as adequate under the present circumstances,
and Indemnitee may not be willing to continue to serve in such capacity without additional
protection;

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the
increased difficulty in attracting and retaining highly qualified persons such as Indemnitee is
detrimental to the best interests of the Company’s shareholders and that the Company should act to
assure Indemnitee that there will be increased certainty of such protection in the future;

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent
permitted by applicable law, regardless of any amendment or revocation of the Company’s Restated
Articles of Incorporation (the “Charter”) or Bylaws, so that they will serve or continue to
serve the Company free from undue concern that they will not be so indemnified; and

WHEREAS, this Agreement is a supplement to and in furtherance of the indemnification provided
in the Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:

Section 1. Services to the Company. Indemnitee agrees to serve as a director of the
Company. Indemnitee may at any time and for any reason resign from such position (subject to any
other contractual obligation or any obligation imposed by law), in which event the Company shall
have no obligation under this Agreement to continue Indemnitee in such position. This Agreement
shall not be deemed an employment contract between the Company (or any of its subsidiaries or any
Enterprise) and Indemnitee. The foregoing notwithstanding, this Agreement shall continue in force
after Indemnitee has ceased to serve as a director of the Company.

Section 2. Definitions. As used in this Agreement:

(a) “Change in Control” shall be deemed to have occurred if (i) any “person” (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other
than a trustee or other fiduciary holding securities under an employee benefit plan of the Company
or a corporation owned directly or indirectly by the shareholders of the Company in substantially
the same proportions as their ownership of stock of the Company, is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the
Company representing twenty-five percent (25%) or more of the total voting power represented by the
Company’s then outstanding Voting Securities, or (ii) during any period of two (2) consecutive
years, individuals who at the beginning of such period constitute the Board of Directors of the
Company and any new director whose election by the Board of Directors or nomination for election by
the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to constitute a majority
thereof, or (iii) the shareholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would result in the Voting
Securities of the Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the surviving entity) at
least fifty percent (50%) of the total voting power represented by the Voting Securities of the
Company or such surviving entity outstanding immediately after such merger or consolidation, or the
shareholders of the Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of (in one transaction or a series of transactions) all
or substantially all the Company’s assets.

(b) “Corporate Status” describes the status of a person as a current or former
Representative of the Company or of any other Enterprise which such person is or was serving at the
request of the Company.

(c) “Enforcement Expenses” shall include all reasonable attorneys’ fees, retainers,
court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees, and all other
disbursements or expenses of the types customarily incurred in connection with an action to enforce
indemnification or advancement rights, or an appeal from such action, including without limitation
the premium, security for, and other costs relating to any cost bond, supersedes bond, or other
appeal bond or its equivalent.

(d) “Enterprise” shall mean any domestic or foreign, for-profit or not-for-profit,
corporation (other than the Company), partnership, joint venture, trust, employee benefit plan or
other legal entity of which Indemnitee is or was serving as a Representative at the request of the
Company.

(e) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding or an appeal resulting from a Proceeding, including without
limitation the premium, security for, and other costs relating to any cost bond, supersedes bond,
or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in
settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

(f) “Independent Counsel” shall mean a law firm, or a partner (or, if applicable,
member) of such a law firm, that is experienced in matters of Michigan corporation law and neither
presently is, nor in the past five (5) years has been, retained to represent: (i) the Company, any
Enterprise or Indemnitee in any matter material to any such party (other than with respect to
matters concerning Indemnitee under this Agreement, or of other indemnitees under similar
indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not
include any person who, under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or Indemnitee in an action to
determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees
and expenses of the Independent Counsel referred to above and to fully indemnify such counsel
against any and all expenses, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.

(g) “Proceeding” shall include any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing
or any other actual, threatened or completed proceeding, whether brought in the right of the
Company or otherwise and whether of a civil, criminal, administrative or investigative nature, in
which Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that
Indemnitee is or was a director of the Company or is or was serving at the request of the Company
as Representative of any Enterprise or by reason of any action taken by him or her or of any action
taken on his or her part while acting as director of the Company or while serving at the request of
the Company as a Representative of any Enterprise, in each case whether or not serving in such
capacity at the time any liability or expense is incurred for which indemnification, reimbursement
or advancement of expenses can be provided under this Agreement; provided, however,
that the term “Proceeding” shall not include any action, suit or arbitration, or part thereof,
initiated by Indemnitee to enforce Indemnitee’s rights under this Agreement as provided for in
Section 13(e) of this Agreement.

(h) “Representative” shall mean a person occupying the position or discharging the
functions of a director, officer, employee, fiduciary, trustee or agent thereof, regardless of the
name or title by which the person may be designated. The term does not imply that a director, as
such, is an agent of a corporation.

(i) “Voting Securities” shall mean any securities of the Company which vote generally
in the election of directors.

Section 3. Indemnity in Third-Party Proceedings. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened
to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the
right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee
shall be indemnified against all Expenses, judgments, fines and amounts paid in settlement actually
and reasonably incurred by Indemnitee or on his or her behalf in connection with such Proceeding or
any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the Company and, in the case
of a criminal proceeding, had no reasonable cause to believe that his or her conduct was unlawful;
provided, however, that the Company has no obligation to indemnify the Indemnitee
for amounts paid in settlement without the Company’s prior written consent.

Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company
shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or
is threatened to be made, a party to or a participant in any Proceeding by or in the right of the
Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by him or her or on his or her
behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee
acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the Company. No indemnification for Expenses shall be made under this Section 4
in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by
a court to be liable to the Company, unless and only to the extent that the court of common pleas
of the judicial district embracing the county in which the registered office of the Company is
located or any court in which the Proceeding was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee
is fairly and reasonably entitled to indemnification for such expenses as the court of common pleas
or other court deems proper.

Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provisions of this Agreement and except as provided in Section 8, to the
extent that Indemnitee is a party to or a participant in and is successful, on the merits or
otherwise, in any Proceeding or in defense of any claim, issue or matter therein, the Company shall
indemnify Indemnitee against all Expenses actually and reasonably incurred by him or her in
connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful,
on the merits or otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by him or her or on his or her behalf in connection with each successfully resolved claim,
issue or matter. For purposes of this Section and without limitation, the termination of any
claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or matter.

Section 6. Indemnification For Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his or her Corporate
Status, a witness in any Proceeding to which Indemnitee is not a party and is not threatened to be
made a party, he or she shall be indemnified against all Expenses actually and reasonably incurred
by him or her or on his or her behalf in connection therewith.

Section 7. Additional Indemnification.

(a) Except as provided in Section 8, notwithstanding any limitation in Section 3, Section 4 or
Section 5, the Company shall indemnify Indemnitee to the fullest extent permitted by law if
Indemnitee is a party to or is threatened to be made a party to any Proceeding (including a
Proceeding by or in the right of the Company to procure a judgment in its favor) against all
Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by
Indemnitee in connection with the Proceeding.

(b) For purposes of Section 7(a), the meaning of the phrase “to the fullest extent permitted
by law” shall include, but not be limited to:

(i) to the fullest extent permitted by the provision of the MBCA that
authorizes or contemplates additional indemnification by agreement, or the
corresponding provision of any amendment to or replacement of the MBCA or such
provision thereof; and

(ii) to the fullest extent authorized or permitted by any amendments to or
replacements of the MBCA adopted after the date of this Agreement that increase the
extent to which a corporation may indemnify its Representatives.

Section 8. Exclusions. Notwithstanding any provision in this Agreement to the
contrary, the Company shall not be obligated under this Agreement:

(a) to make any indemnity for amounts otherwise indemnifiable hereunder (or for which
advancement is provided hereunder) if and to the extent that Indemnitee has otherwise actually
received such amounts under any insurance policy, contract, agreement or otherwise;

(b) to make any indemnity for an accounting of profits made from the purchase and sale (or
sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b)
of the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or
common law;

(c) to make any indemnity or advancement that is prohibited by applicable law; or

(d) to make any indemnity or advancement in connection with any Proceeding (or any part of any
Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding)
initiated by Indemnitee against the Company or its directors, officers, employees or other
indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior
to its initiation, (ii) the Company provides the indemnification, in its sole discretion, pursuant
to the powers vested in the Company under applicable law or (iii) such Proceeding (or any part of
any Proceeding) is initiated after a Change in Control has occurred after the date of this
Agreement.

Section 9. Advances of Expenses. The Company shall advance, to the extent not
prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding, and such
advancement shall be made within twenty (20) days after the receipt by the Company of a statement
or statements requesting such advances (which shall include invoices received by Indemnitee in
connection with such Expenses but, in the case of invoices in connection with legal services, any
references to legal work performed or to expenditures made that would cause Indemnitee to waive any
privilege accorded by applicable law shall not be included with the invoice) from time to time,
whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and
interest free. Advances shall be made without regard to Indemnitee’s ability to repay the expenses
and without regard to Indemnitee’s ultimate entitlement to indemnification under the other
provisions of this Agreement. Indemnitee shall qualify for advances upon the execution and
delivery to the Company of this Agreement which shall constitute an undertaking providing that
Indemnitee undertakes to the fullest extent required by law to repay the advance if and to the
extent that it is ultimately determined by a court of competent jurisdiction in a final judgment,
not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company. The right
to advances under this paragraph shall in all events continue until final disposition of any
Proceeding, including any appeal therein. Nothing in this Section 9 shall limit Indemnitee’s right
to advancement pursuant to Section 13(e) of this Agreement.

Section 10. Procedure for Notification and Defense of Claim.

(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a
written request therefor and, if Indemnitee so chooses pursuant to Section 11 of this Agreement,
such written request shall also include a request for Indemnitee to have the right to
indemnification determined by Independent Counsel.

(b) The Company will be entitled to participate in the Proceeding at its own expense.

Section 11. Procedure Upon Application for Indemnification.

(a) Upon written request by Indemnitee for indemnification pursuant to Section 10(a), a
determination, if such determination is required by applicable law, with respect to
Indemnitee’s entitlement thereto shall be made in the specific case: (i) by Independent Counsel in
a written opinion to the Board if Indemnitee so requests in such written request for
indemnification pursuant to Section 10(a), or (ii) by the Company in accordance with applicable law
if Indemnitee does not so request such determination be made by Independent Counsel. In the case
that such determination is made by Independent Counsel, a copy of Independent Counsel’s written
opinion shall be delivered to Indemnitee and, if it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten (10) days after such determination.
Indemnitee shall cooperate with the Independent Counsel or the Company, as applicable, making such
determination with respect to Indemnitee’s entitlement to indemnification, including providing to
such counsel or the Company, upon reasonable advance request, any documentation or information
which is not privileged or otherwise protected from disclosure and which is reasonably available to
Indemnitee and reasonably necessary to such determination. Any costs or expenses (including
attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the Independent
Counsel or the Company shall be borne by the Company (irrespective of the determination as to
Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.

(b) In the event that Indemnitee exercises his or her right to have his or her entitlement to
indemnification determined by Independent Counsel pursuant to clause (i) of Section 11(a), the
Independent Counsel shall be selected by Indemnitee. The Company may, within ten (10) days after
written notice of such selection, deliver to Indemnitee a written objection to such selection;
provided, however, that such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined
in Section 2 of this Agreement, and the objection shall set forth with particularity the factual
basis of such assertion. Absent a proper and timely objection, the person so selected shall act as
Independent Counsel. If such written objection is so made and substantiated, the Independent
Counsel so selected may not serve as Independent Counsel unless and until such objection is
withdrawn or a court has determined that such objection is without merit. If, within twenty (20)
days after the later of (i) submission by Indemnitee of a written request for indemnification and
Independent Counsel pursuant to Section 10(a) and Section 11(a)(i) hereof, respectively, and (ii)
the final disposition of the Proceeding, including any appeal therein, no Independent Counsel shall
have been selected without objection, Indemnitee may petition a court of competent jurisdiction for
resolution of any objection which shall have been made by the Company to the selection of
Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the
court or by such other person as the court shall designate. The person with respect to whom all
objections are so resolved or the person so appointed shall act as Independent Counsel under
Section 11(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant
to Section 13(a) of this Agreement, Independent Counsel shall be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of professional
conduct then prevailing).

Section 12. Presumptions and Effect of Certain Proceedings.

(a) In making a determination with respect to entitlement to indemnification hereunder, it
shall be presumed that Indemnitee is entitled to indemnification under this Agreement if
Indemnitee has submitted a request for indemnification in accordance with Section 10(a) of this
Agreement, and the Company shall have the burden of proof to overcome that presumption in
connection with the making of any determination contrary to that presumption. Neither (i) the
failure of the Company or of Independent Counsel to have made a determination prior to the
commencement of any action pursuant to this Agreement that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of conduct, nor (ii) an actual
determination by the Company or by Independent Counsel that Indemnitee has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has
not met the applicable standard of conduct.

(b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of guilty, nolo contendere or its
equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee
did not act in good faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the Company or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

(c) The knowledge and/or actions, or failure to act, of any Representative of the Company or
any Enterprise shall not be imputed to Indemnitee for purposes of determining the right to
indemnification under this Agreement.

Section 13. Remedies of Indemnitee.

(a) Subject to Section 13(f), in the event that (i) a determination is made pursuant to
Section 11 of this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 9 of this Agreement,
(iii) no determination of entitlement to indemnification shall have been made pursuant to Section
11(a) of this Agreement within sixty (60) days after receipt by the Company of the request for
indemnification that does not include a request for Independent Counsel, (iv) payment of
indemnification is not made pursuant to Section 5 or Section 6 or the last sentence of Section
11(a) of this Agreement within ten (10) days after receipt by the Company of a written request
therefor or (v) payment of indemnification pursuant to Section 3, Section 4 or Section 7 of this
Agreement is not made within ten (10) days after a determination has been made that Indemnitee is
entitled to indemnification, Indemnitee shall be entitled to an adjudication by a court of his or
her entitlement to such indemnification or advancement. Alternatively, Indemnitee, at his or her
option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence
such proceeding seeking an adjudication or an award in arbitration within one hundred and eighty
(180) days following the date on which Indemnitee first has the right to commence such proceeding
pursuant to this Section 13(a); provided, however, that the foregoing time
limitation shall not apply in respect of a proceeding brought by Indemnitee to enforce his or her
rights under Section 5 of this Agreement. The Company shall not oppose Indemnitee’s right to seek
any such adjudication or award in arbitration.

(b) In the event that a determination shall have been made pursuant to Section 11(a) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 13 shall be conducted in all respects as a de novo
trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that
adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section
13, the Company shall have the burden of proving Indemnitee is not entitled to indemnification or
advancement, as the case may be.

(c) If a determination shall have been made pursuant to Section 11(a) of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 13, absent (i) a misstatement
by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.

(d) The Company shall be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 13 that the procedures and presumptions of this Agreement are
not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement.

(e) The Company shall indemnify Indemnitee against any and all Enforcement Expenses and, if
requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written
request therefor) advance, to the extent not prohibited by law, such Enforcement Expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee
for indemnification or advancement from the Company under this Agreement or under any liability
insurance policies maintained by the Company for coverage of its Representatives, regardless of
whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement or
insurance recovery, as the case may be, in the suit for which indemnification or advancement is
being sought.

(f) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement to indemnification under this Agreement shall be required to be made prior to the final
disposition of the Proceeding, including any appeal therein.

Section 14. Non-exclusivity; Survival of Rights; Insurance; Subrogation.

(a) The rights of indemnification and to receive advancement as provided by this Agreement
shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled
under applicable law, the Charter, the Bylaws, any agreement, a vote of shareholders or a
resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of
any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in
respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to
such amendment, alteration or repeal. To the extent that a change in Michigan law, whether by
statute or judicial decision, permits greater indemnification or advancement than would be afforded
currently under the Charter, Bylaws and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right
or remedy herein conferred is intended to be exclusive of any other right or remedy, and every
other right and remedy shall be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other right or remedy.

(b) To the extent that the Company maintains an insurance policy or policies providing
liability insurance for Representatives of the Company or of any other Enterprise, Indemnitee shall
be covered by such policy or policies in accordance with its or their terms to the maximum extent
of the coverage available for any such Representative under such policy or policies. If, at the
time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has liability
insurance in effect covering its Representatives, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the procedures set forth in the
respective policies. The Company shall thereafter take all necessary or desirable action to cause
such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding
in accordance with the terms of such policies.

(c) In the event of any payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.

(d) The Company’s obligation to provide indemnification or advancement hereunder to Indemnitee
who is or was serving at the request of the Company as a Representative of any other Enterprise
shall be reduced by any amount Indemnitee has actually received as indemnification or advancement
from such other Enterprise.

Section 15. Duration of Agreement. This Agreement shall continue until and terminate
upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as
a Representative of the Company or (b) one (1) year after the final termination of any Proceeding,
including any appeal, then pending in respect of which Indemnitee is granted rights of
indemnification or advancement hereunder and of any proceeding commenced by Indemnitee pursuant to
Section 13 of this Agreement relating thereto. This Agreement shall be binding upon the Company and
its successors and assigns and shall inure to the benefit of Indemnitee and his or her heirs,
executors and administrators. The Company shall require and cause any successor (whether direct or
indirect by purchase, merger, consolidation, division or otherwise) to all, substantially all or a
substantial part, of the business and/or assets of the Company, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to perform if no such
succession had taken place.

Section 16. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including without limitation,
each portion of any section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any
way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by
law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform
to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to
the fullest extent possible, the provisions of this Agreement (including, without limitation, each
portion of any section of this Agreement containing any such provision held to be invalid, illegal
or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby.

Section 17. Enforcement.

(a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director
of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in
serving as a director of the Company.

(b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof; provided,
however, that this Agreement is a supplement to and in furtherance of the Charter, the
Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or
abrogate any rights of Indemnitee thereunder.

Section 18. Modification and Waiver. No supplement, modification or amendment, or
waiver of any provision, of this Agreement shall be binding unless executed in writing by the
parties thereto. No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a
continuing waiver.

Section 19. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in
writing upon being served with any summons, citation, subpoena, complaint, indictment, information
or other document relating to any Proceeding or matter which may be subject to indemnification or
advancement as provided hereunder. The failure of Indemnitee to so notify the Company shall not
relieve the Company of any obligation which it may have to Indemnitee under this Agreement or
otherwise.

Section 20. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by
hand and receipted for by the party to whom said notice or other communication shall have been
directed, (b) mailed by certified or registered mail with postage prepaid, on the third business
day after the date on which it is so mailed, (c) mailed by reputable overnight courier and
receipted for by the party to whom said notice or other communication shall have been directed or
(d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has
been received:

(a) If to Indemnitee, at such address as Indemnitee shall provide to the Company.

(b) If to the Company to:

Aastrom Biosciences, Inc.

Domino’s Farms, Lobby K

24 Frank Lloyd Wright Drive

Ann Arbor, MI 48105

Attn: Scott Durbin

Fax: (734) [665-0485]

or to any other address as may have been furnished to Indemnitee by the Company.

Section 21. Contribution. To the fullest extent permissible under applicable law, if
the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to
be paid in settlement and/or for Expenses, in connection with any Proceeding in such proportion as
is deemed fair and reasonable in light of all of the circumstances in order to reflect (i) the
relative benefits received by the Company and Indemnitee in connection with the event(s) and/or
transaction(s) giving rise to such Proceeding; and/or (ii) the relative fault of the Company (and
its Representatives) and Indemnitee in connection with such event(s) and/or transactions.

Section 22. Applicable Law and Consent to Jurisdiction. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in accordance with,
the laws of the State of Michigan, without regard to its conflict of laws rules. Except with
respect to any arbitration commenced by Indemnitee pursuant to Section 13(a) of this Agreement, the
Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought only in a court of
competent jurisdiction in the State of Michigan (a “Michigan Court”), and not in any other
state or federal court in the United States of America or any court in any other country, (ii)
consent to submit to the exclusive jurisdiction of the Michigan Court for purposes of any action or
proceeding arising out of or in connection with this Agreement, (iii) consent to service of process
at the address set forth in Section 20 of this Agreement with the same legal force and validity as
if served upon such party personally within the State of Michigan, (iv) waive any objection to the
laying of venue of any such action or proceeding in the Michigan Court, and (v) waive, and agree
not to plead or to make, any claim that any such action or proceeding brought in the Michigan Court
has been brought in an improper or inconvenient forum.

Section 23. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. Only one such counterpart signed by the party
against whom enforceability is sought needs to be produced to evidence the existence of this
Agreement.

Section 24. Miscellaneous. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this Agreement or to
affect the construction thereof.

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year
first above written.

AASTROM BIOSCIENCES, INC.

  

By:

    Name:     Office:

    Indemnitee

      

Name (please print)

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