Aradigm Corporation (NASDAQ:ARDM) Files An 8-K Material Modification to Rights of Security Holders

Aradigm Corporation (NASDAQ:ARDM) Files An 8-K Material Modification to Rights of Security Holders
Item 3.03 Material Modification to Rights of Security Holders.

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On June29, 2018, the Company convened its Annual Meeting of Shareholders (the “Meeting”). Four proposals were presented and voted on and the results for the four proposals were reported at the Meeting. Set forth below are the results reported at the Meeting for proposals 1, 2, 3 and 4.

Proposal 1 – Election of Edwin Gordon, Frederick Hudson, John M. Siebert and Virgil D. Thompson as directors to serve until the next annual meeting of shareholders and until their successors are duly elected and qualified.

All of the following four nominees for director were elected to hold office until the next annual meeting of shareholders and until their successors are elected:

Nominee

For Withheld Non-votes

Edwin Gordon

9,834,465 93,249 3,650,737

Frederick Hudson

9,471,527 456,187 3,650,737

John M. Siebert

9,460,554 467,160 3,650,737

Virgil D. Thompson

9,439,807 487,907 3,650,737

The four nominees received the highest number of “For” votes from the holders of votes of shares present in person or represented by proxy and entitled to vote at the Meeting on the election of directors. Withheld votes and broker non-votes have no effect on the outcome of the election of directors.

Proposal 2 – To approve an Amendment to Aradigm’s Amended and Restated Articles of Incorporation to increase the authorized number of shares of Common Stock by 15million shares.

For:

12,296,516

Against:

1,269,650

Abstain:

12,285

Non-votes:

Proposal 2 received “For” votes from the holders of at least a majority of the outstanding shares of Common Stock. Proposal 2 therefore passed.

Proposal 3 – To approve an amendment to Aradigm’s Employee Stock Purchase Plan to increase the aggregate number of shares of Aradigm’s Common Stock authorized for issuance under such plan by 200,000 shares.

For:

9,756,761

Against:

168,094

Abstain:

2,859

Non-votes:

3,650,737

Proposal 3 received “For” votes from the holders of at least a majority of the outstanding shares of common stock present either in person or by proxy and entitled to vote at the Meeting. Proposal 3 therefore passed.

Proposal 4 – To ratify the selection of OUM& Co. LLP as Aradigm’s independent registered public accounting firm for the fiscal year ending December31, 2018.

For:

13,360,776

Against:

171,668

Abstain:

46,007

Non-votes:

Proposal 4 received “For” votes from the holders of at least a majority of the outstanding shares of common stock present either in person or by proxy and entitled to vote at the Meeting. Proposal 4 therefore passed.

Non-Employee Director Compensation

On February12, 2018, the Company previously reported in its Current Report on Form 8-K the Board’s adoption of specified cash preservation measures, including the reduction of cash compensation paid to members of the Board for service on the Board or committees of the Board to 50% of the then current cash compensation. Effective June29, 2018, the Board has determined the compensation for the Company’s non-employee directors for fiscal year 2018.

In comparison to the Company’s non-employee director compensation for fiscal year 2017, the Board has implemented the following changes, among others, to the Company’s non-employee director compensation: (1) cash retainers for attendance at meetings of the Board or each Board committee will be paid on a per-meeting basis only for each additional meeting of the Board or of each committee, as the case may be, held in excess of four meetings of the Board or of the relevant committee per year, (2)the amount of cash retainer payable on a per-meeting basis for attendance at telephonic meetings of the Board or each Board committee has been decreased from $1,000 to $500 for each such meeting and (3)the annual cash retainer payable to the Chairman of the Nominating and Governance Committee has been decreased from $10,000 to $5,000 and the annual cash retainer payable to each other member of that committee has been decreased from $5,000 to $3,000.

The Company’s full non-employee director compensation program for fiscal year 2018 is described below.

Cash Compensation

The Executive Chairman of the Board is an employee of the Company and is not eligible for any compensation in his capacity as a Board member. Each non-employee member of the Board will receive an annual retainer with a value of $35,000, which includes a total of four meetings of the Board and of each Board committee in each year.

Board members will also receive additional annual retainers for serving on Board committees. The additional annual retainer for the Chairman of the Audit Committee will be $20,000 and the additional annual retainer for all other members of the Audit Committee will be $7,500. The additional annual retainer for the Chairman of the Compensation Committee will be $10,000 and the additional annual retainer for all other members of the Compensation Committee will be $5,000. The additional annual retainer for the Chairman of the Nominating and Corporate Governance Committee will be $5,000 and the additional annual retainer for all other members of the Nominating and Corporate Governance Committee will be $3,000.

In addition, for attendance at Board meetings in excess of a total of four Board meetings in a year, each non-employee member of the Board will receive $1,000 for each in-person meeting of the Board and $500 for each telephonic meeting of the Board. For attendance at meetings of each Board committee in excess of a total of four meetings of the relevant committee in a year, each director serving as Chairman of the committee and each other member of the committee will receive $1,000 for each in-person meeting of the relevant committee and $500 for each telephonic meeting of the relevant committee.

Non-employee directors are also entitled to receive reimbursement of reasonable out-of-pocket expenses incurred by them to attend Board meetings.

Equity-Based Compensation

Each non-employee director will be granted an annual stock option grant exercisable for shares of Common Stock under the Aradigm Corporation 2015 Equity Incentive Plan. On June29, 2018, the Compensation Committee and the Board approved an annual stock option grant with a grant date fair value of $99,980 to Messrs. Gordon, Hudson and Thompson, each of which is exercisable for 97,323 shares of Common Stock. Each option will vest and become exercisable in four equal quarterly installments over a one-year period beginning on June29, 2018. As reported in Item 3.03 of this current report, the Committee and the Board approved the grant to Dr.Matkovits, in connection with her appointment to the Board, of an option exercisable for 50,000 shares of the Company’s common stock with a grant date fair value of $51,365.

Press Release

On July6, 2018, the Company announced via press release the appointment of Dr.Matkovits to the Board, as reported under Item 3.03 of this current report. A copy of the Company’s press release is attached hereto as Exhibit 99.1 and incorporated in this Item 3.03 by reference.

Item 3.03 Financial Statements and Exhibits.

(d) Exhibits.


ARADIGM CORP Exhibit
EX-3.1 2 d691807dex31.htm EX-3.1 EX-3.1 Exhibit 3.1 Certificate of Amendment of Amended and Restated Articles of Incorporation of Aradigm Corporation The undersigned hereby certifies that: 1. He is the Executive Chairman of the Board and Secretary of Aradigm Corporation,…
To view the full exhibit click here

About Aradigm Corporation (NASDAQ:ARDM)

Aradigm Corporation is a pharmaceutical company focused on the development and commercialization of products for the treatment and prevention of severe respiratory diseases. The Company’s lead product candidate is Pulmaquin inhaled ciprofloxacin, which is in Phase III clinical trials. It offers AERx pulmonary drug delivery platform and other technologies. Its partnered programs under development include Inhaled Ciprofloxacin. It is also engaged in developing Smoking Cessation Therapy (ARD-1600 Inhaled Nicotine). Its lead development candidates are its formulations of the potent antibiotic ciprofloxacin (Pulmaquin (ARD-3150) and Lipoquin (ARD-3100)) that are delivered by inhalation for the management of infections associated with the severe respiratory diseases, such as cystic fibrosis (CF) and non-cystic fibrosis bronchiectasis (BE). Pulmaquin uses slow release liposomal formulation (Lipoquin) mixed with a small amount of ciprofloxacin dissolved in an aqueous medium.

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