On March 6, 2013, Aastrom Biosciences, Inc. (the "Company") announced the appointment of Dominick C. Colangelo as the Company's President and Chief Executive Officer and as a director of the Company. Daniel Orlando will step down from his role as the interim President and Chief Executive Officer and continue in his role as Chief Commercial Officer of the Company.

On March 4, 2013, Mr. Colangelo and the Company entered into an Employment Agreement (the "Employment Agreement"). The Employment Agreement provides that Mr. Colangelo will receive an initial annual base salary of $430,000 and his base salary shall be reviewed annually by the Company. Under the Employment Agreement, Mr. Colangelo will also be eligible to receive cash incentive compensation as determined by the Company. Mr. Colangelo's target annual incentive compensation shall be 50% of his then-current base salary. Under the Employment Agreement, the Company agrees to grant to Mr. Colangelo options to purchase 1,100,000 shares of the Company's common stock; additionally from time to time and at the discretion of management and the Company's Board of Directors, the Company may grant to Mr. Colangelo options to purchase shares of the Company's common stock pursuant to the Company's then-current equity plan.

In the event of his termination prior to a Change in Control by the Company without Cause or by Mr. Colangelo for Good Reason (as such terms are defined in the Employment Agreement), the Company shall pay Mr. Colangelo an amount equal to twelve months of his then-current base salary in equal installments over the one-year period following the date of termination of his employment. In the event of his termination within twelve (12) months following a Change in Control by the Company without Cause or by Mr. Colangelo for Good Reason, the Company shall pay Mr. Colangelo an amount equal to eighteen months of his then-current base salary in one lump sum. In either event, subject to Mr. Colangelo's co-payment of premiums at the active employee's rate, Mr. Colangelo would also be entitled to continued participation in the Company-sponsored group health, dental and vision programs for twelve months following the date of termination. Mr. Colangelo's right to receive any severance payment and to continue his participation in such health programs is conditioned upon and subject to Mr. Colangelo's signing and not revoking a general release of claims.

In addition, during his employment and after termination of the Employment Agreement, Mr. Colangelo has agreed to keep the Company's confidential information in confidence and trust and has agreed not to use or disclose such confidential information without the Company's written consent except as necessary in the ordinary course of performing his duties to the Company. During the term of the Employment Agreement and for a period of twelve months thereafter Mr. Colangelo also agrees not to compete with the Company and not to solicit employees, customers or suppliers of the Company.

The Employment Agreement contains other customary terms and conditions. The foregoing description of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the actual Employment Agreement which is attached as Exhibit 10.1 to this Current Report on Form 8-K, and is incorporated herein by reference.

On March 6, 2013, we issued a press release announcing the appointment of Mr. Colangelo, as set forth in Item 5.02 of this Current Report on Form 8-K. A copy of the press release is attached hereto as Exhibit 99.1.

(d) Exhibits.

Exhibit No.                                  Description
10.1           Employment Agreement with Dominick C. Colangelo, executed March 4, 2013.
99.1           Press Release dated March 6, 2013.