On September 1, 2015, the Board of Aradigm Corp. accepted the resignation of Lafmin Morgan, who offered his resignation as a director of the company due to increased professional responsibilities required at his current position at Grifols. The Board, Grifols and Mr. Morgan agreed to enter into a Board Observer Agreement to allow Mr. Morgan to continue as a representative of Grifols as a non-voting observer in future meetings of the Board. The Board Observer Agreement provides that Grifols may designate a Board observer in lieu of designating a nominee to the Board as provided under the Governance Agreement. Following the acceptance of Mr. Morgan's resignation, the Board reduced the size of the Board from six directors to five directors. The Board also appointed director
Fred Hudson to fill the vacancy on the Compensation Committee that was created by Mr. Morgan's resignation from the Board.