Settlement Agreement Aastrom/smith

EXHIBIT 10.52


SUPPLEMENTAL AGREEMENT TO EMPLOYMENT AGREEMENT


This Supplemental Agreement is made by and between Aastrom Biosciences, Inc., a Michigan Corporation ("Employer") and Alan K. Smith ("Employee"), with respect to the existing Employment Agreement pursuant to which Employer has employed Employee.


RECITALS


A. Employer currently employs Employee as a corporate officer.


B. Employer has previously agreed to provide severance compensation to Employee under certain circumstances; and a purpose of this Agreement is to clarify and memorialize the parties' rights and obligations with respect to severance compensation.


C. This Agreement is also being entered into to provide Employee with enhanced financial security and to provide sufficient incentives and encouragement to Employee to remain with Employer, notwithstanding the possibility of the occurrence in the future of a Change in Control (as defined below) event for Employer.


D. As used in this Agreement, the following terms shall have the following meanings:


"Cause" means the occurrence of any of the following events, as determined by the Board of Directors of Employer, in good faith:


(i) Employee's theft, material act of dishonesty or fraud, or intentional falsification of any records of Employer;


(ii) Employee's improper use or disclosure of confidential or proprietary information of Employer;


(iii) Employee's gross negligence or willful misconduct in the performance of Employee's assigned duties;


(iv) Employee's conviction (including any plea of guilty or nolo contendre) of a crime of moral turpitude causing material harm to the reputation or standing of Employer or which materially impairs Employee's ability to perform his duties for Employer.


"Change in Control" shall mean the occurrence of any of the following events:


(i) All or substantially all of the assets of Employer are sold (and the pending proposed transactions involving Zellera AG shall not be deemed to constitute such an event);


(ii) ...