<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ______)*
AFFYMETRIX, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, NO PAR VALUE
- --------------------------------------------------------------------------------
(Title of Class of Securities)
00826T 10 8
- --------------------------------------------------------------------------------
(CUSIP Number)
GLAXO WELLCOME PLC
GLAXO WELLCOME HOUSE
BERKELEY AVENUE
GREENFORD, MIDDLESEX UB6 0NN
ENGLAND
011 44 171 493 4060
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and Communications)
Copies to:
William R. Dougherty
Simpson Thacher & Bartlett
99 Bishopsgate
London EC2M 3YH, England
011 44 171 422 4010
April 14, 1998
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
IF THE FILING PERSON HAS PREVIOUSLY FILED A STATEMENT ON SCHEDULE 13G TO
REPORT THE ACQUISITION THAT IS THE SUBJECT OF THIS SCHEDULE 13D, AND IS
FILING THIS SCHEDULE BECAUSE OF SECTION 240.13d-1(e), 240.13d-1(f), OR
240.13d-1(g), CHECK THE FOLLOWING BOX. / /
NOTE: SCHEDULES FILED IN PAPER FORMAT SHALL INCLUDE A SIGNED ORIGINAL AND
FIVE COPIES OF THE SCHEDULE, INCLUDING ALL EXHIBITS. SEE SECTION 240.13D-7(b)
FOR OTHER PARTIES TO WHOM COPIES ARE TO BE SENT.
*THE REMAINDER OF THIS COVER PAGE SHALL BE FILLED OUT FOR A REPORTING PERSON'S
INITIAL FILING ON THIS FORM WITH RESPECT TO THE SUBJECT CLASS OF SECURITIES, AND
FOR ANY SUBSEQUENT AMENDMENT CONTAINING INFORMATION WHICH WOULD ALTER
DISCLOSURES PROVIDED IN A PRIOR COVER PAGE.
THE INFORMATION REQUIRED ON THE REMAINDER OF THIS COVER PAGE SHALL NOT BE DEEMED
TO BE "FILED" FOR THE PURPOSE OF SECTION 18 OF THE SECURITIES EXCHANGE ACT OF
1934 ("ACT") OR OTHERWISE SUBJECT TO THE LIABILITIES OF THAT SECTION OF THE ACT
BUT SHALL BE SUBJECT TO ALL OTHER PROVISIONS OF THE ACT (HOWEVER, SEE THE
NOTES).
The Exhibit Index Begins on Page 25.
Page 1 of 102
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SCHEDULE 13D
CUSIP NO. 00826T 10 8 PAGE 2 OF 102 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GLAXO WELLCOME PLC
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
JOINT FILING
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
ENGLAND
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
7,785,063
---------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,257,229
OWNED BY ---------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 9,042,292
WITH ---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
NONE
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,042,292
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
36.8%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
HC
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 2 of 102
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SCHEDULE 13D
CUSIP NO. 00826T 10 8 PAGE 3 OF 102 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GLAXO GROUP LIMITED
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
JOINT FILING
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
ENGLAND
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
7,705,067
--------------------------------------------------------
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 1,257,229
EACH --------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 8,962,296
--------------------------------------------------------
10 SHARED DISPOSITIVE POWER
NONE
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,962,296
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
36.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 3 of 102
<PAGE>
SCHEDULE 13D
CUSIP NO. 00826T 10 8 PAGE 4 OF 102 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GLAXO VENTURE LIMITED
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
JOINT FILING
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
ENGLAND
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
7,705,067
--------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY NONE
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 7,705,067
WITH --------------------------------------------------------
10 SHARED DISPOSITIVE POWER
NONE
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,705,067
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
31.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON *
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 4 of 102
<PAGE>
SCHEDULE 13D
CUSIP NO. 00826T 10 8 PAGE 5 OF 102 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GLAXO WELLCOME AMERICAS INC.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
JOINT FILING
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NONE
--------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,257,229
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 1,257,229
WITH --------------------------------------------------------
10 SHARED DISPOSITIVE POWER
NONE
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,257,229
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.1%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
HC
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 5 of 102
<PAGE>
SCHEDULE 13D
CUSIP NO. 00826T 10 8 PAGE 6 OF 102 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
AFFYMAX N.V.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
JOINT FILING
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
NETHERLANDS
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
7,705,067
NUMBER OF --------------------------------------------------------
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH NONE
REPORTING --------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
7,705,067
--------------------------------------------------------
10 SHARED DISPOSITIVE POWER
NONE
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,705,067
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
31.4%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 6 of 102
<PAGE>
SCHEDULE 13D
CUSIP NO. 00826T 10 8 PAGE 7 OF 102 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
AFFYMAX TECHNOLOGIES N.V.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
JOINT FILING
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
NETHERLANDS ANTILLES
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
6,746,592
NUMBER OF --------------------------------------------------------
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH NONE
REPORTING --------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
6,746,592
--------------------------------------------------------
10 SHARED DISPOSITIVE POWER
NONE
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,746,592
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
27.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
Page 7 of 102
<PAGE>
SCHEDULE 13D
CUSIP NO. 00826T 10 8 PAGE 8 OF 102 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
DOUGLAS M. HURT
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
JOINT FILING
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
ENGLAND
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NONE
NUMBER OF --------------------------------------------------------
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH NONE
REPORTING --------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
NONE
--------------------------------------------------------
10 SHARED DISPOSITIVE POWER
NONE
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
39,998 (Not to be construed as an admission of beneficial ownership).
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.2%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 8 of 102
<PAGE>
SCHEDULE 13D
CUSIP NO. 00826T 10 8 PAGE 9 OF 102 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
BARRY C. ROSS
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
JOINT FILING
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e)
/ /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
ENGLAND
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NONE
NUMBER OF --------------------------------------------------------
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH NONE
REPORTING --------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
NONE
--------------------------------------------------------
10 SHARED DISPOSITIVE POWER
NONE
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
39,998 (Not to be construed as an admission of beneficial ownership).
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
/ /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.2%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
Page 9 of 102
<PAGE>
STATEMENT PURSUANT TO RULE 13D-1
OF THE GENERAL RULES AND REGULATIONS
UNDER THE
UNITED STATES
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
ITEM 1. Security and Issuer.
This Statement on Schedule 13D (the "Schedule 13D") relates to the
Common Stock, no par value ("Affymetrix Common Stock"), of Affymetrix, Inc., a
Delaware corporation (the "Company"). The principal executive offices of the
Company are located at 3380 Central Expressway, Santa Clara, California 95051.
ITEM 2. Identity and Background.
(a) - (c) and (f) This Schedule 13D is being filed jointly by the
following persons: (i) Glaxo Wellcome plc ("Glaxo Wellcome"), (ii) Glaxo Group
Limited ("Glaxo Group"), (iii) Glaxo Venture Limited ("Glaxo Venture"), (iv)
Glaxo Wellcome Americas Inc. ("Glaxo Americas"), (v) Affymax N.V. ("Affymax"),
(vi) Affymax Technologies N.V. ("Affymax Technologies"), (vii) Mr. Douglas M.
Hurt and (viii) Dr. Barry C. Ross. The foregoing persons shall collectively be
referred to herein as the "Glaxo Reporting Persons". The agreement among the
Glaxo Reporting Persons relating to the joint filing of this Schedule 13D is
attached as Exhibit 1 hereto.
Glaxo Wellcome and its subsidiary and associated undertakings,
constitute a major global pharmaceutical group engaged in the creation and
discovery, development, manufacture and marketing of prescription and
non-prescription medicines. Glaxo Wellcome is the ultimate parent holding
company with respect to all of the other Glaxo Reporting Persons, other than Mr.
Douglas M. Hurt and Dr. Barry C. Ross. Glaxo Wellcome owns, directly and
indirectly, 100% of Glaxo Group. Glaxo Group in turn owns 100% of (i) Glaxo
Venture which owns approximately 99% of Affymax of which Affymax Technologies is
a wholly-owned subsidiary and (ii) Glaxo Americas. None of Glaxo Wellcome, Glaxo
Group or Glaxo Venture directly holds any shares of Affymetrix Common Stock or
Series AA Preferred Stock (the "Affymetrix Preferred Stock") of the Company.
The principal executive offices of Glaxo Wellcome, Glaxo Group, Glaxo
Venture, Glaxo Americas, Affymax and Affymax Technologies are as follows:
Page 10 of 102
<PAGE>
Glaxo Wellcome plc, Glaxo Group Limited, Glaxo Venture Limited, Affymax N.V.
and Affymax Technologies N.V.:
Glaxo Wellcome House
Berkeley Avenue
Greenford, Middlesex UB6 0NN
England
Glaxo Wellcome Americas Inc.
499 Park Avenue
New York, New York 10022
The name, citizenship, residence or business address and principal
occupation or employment (and the name, principal business and address of any
corporation or other organization in which such employment is conducted) of each
director and executive officer of Glaxo Wellcome, Glaxo Group, Glaxo Venture,
Glaxo Americas, Affymax and Affymax Technologies is set forth in Schedule A
hereto.
On January 4, 1999, Mr. Douglas M. Hurt, who was designated by Glaxo
Wellcome as a director of the Company, resigned. Dr. Barry C. Ross, also
designated by Glaxo Wellcome as a director of the Company, remains as a
director. Each is a citizen of the United Kingdom. The principal business
address of Mr. Douglas M. Hurt is Glaxo Wellcome UK Ltd, Stockley Park West,
Uxbridge, Middlesex UB11 1BT, England and of Dr. Barry C. Ross is Glaxo Research
& Development, Medicines Research Centre, Gunnels Wood Road, Stevenage, Herts
SG1 2NY, England. The principal occupation or employment of Mr. Douglas M. Hurt
is Managing Director of Glaxo Wellcome UK Ltd, a subsidiary of Glaxo Wellcome,
and of Dr. Barry C. Ross is Director of Research Strategy and Alliances for
Glaxo Wellcome Research & Development.
(d) and (e) During the last five years, none of the Glaxo Reporting
Persons and, to the best knowledge of the Glaxo Reporting Persons, none of the
other persons named in this Item 2: (i) has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) has
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to Federal or state securities laws or finding
any violations of such laws.
Information with respect to each of the Glaxo Reporting Persons is
given solely by such Glaxo Reporting Person and no Glaxo Reporting Person has
responsibility for the accuracy or completeness of information supplied by
another Glaxo Reporting Person.
ITEM 3. Source and Amount of Funds or Other Consideration.
Glaxo Wellcome beneficially owns 9,042,292 shares of Affymetrix Common
Stock, of which 1,257,229 shares are issuable upon the conversion of 1,634,522
shares of Affymetrix Preferred Stock. Glaxo Group beneficially owns 8,962,296
shares of Affymetrix Common Stock, of which 1,257,229 shares are issuable upon
the conversion of 1,634,522 shares of Affymetrix Preferred Stock. Glaxo Venture
beneficially owns 7,705,067 shares of Affymetrix Common Stock. Glaxo Americas
beneficially owns 1,257,229 shares of Affymetrix Common
Page 11 of 102
<PAGE>
Stock, all of which are issuable upon the conversion of 1,634,522 shares of
Affymetrix Preferred Stock. Affymax beneficially owns 7,705,067 shares of
Affymetrix Common Stock. Affymax Technologies beneficially owns 6,746,592 shares
of Affymetrix Common Stock. Other than the shares of Affymetrix Common Stock
that are issuable upon the conversion of 1,634,522 shares of Affymetrix
Preferred Stock and the Directors' Shares (as defined below), all of the owned
shares described in the preceding four sentences were beneficially owned by
Glaxo Wellcome, Glaxo Group, Glaxo Venture, Affymax and Affymax Technologies as
of or prior to the initial public offering of the Company in June 1996. In March
1995, Glaxo Wellcome's predecessor Glaxo plc, acquired approximately 99% of the
voting securities of Affymax, of which the Company was a wholly-owned subsidiary
(the "1995 Transaction"). All funds used to purchase the voting securities of
Affymax came from working capital.
On April 14, 1998, Glaxo Americas purchased 1,634,522 shares of
Affymetrix Preferred Stock for approximately $49.9 million in a private
placement transaction pursuant to the terms of the Series AA Preferred Stock
Purchase Agreement dated March 9, 1998 (the "Preferred Stock Purchase
Agreement") between Glaxo Americas and the Company. The funds used to purchase
the shares of Affymetrix Preferred Stock came from working capital. The
Preferred Stock Purchase Agreement is attached as Exhibit 2 hereto.
Mr. Douglas M. Hurt and Dr. Barry C. Ross may each be deemed to
beneficially own 39,998 shares of Affymetrix Common Stock (the "Directors'
Shares") pursuant to certain currently exercisable stock options granted to them
by the Company. The Directors' Shares are held by Mr. Douglas M. Hurt and Dr.
Barry C. Ross for the benefit of Glaxo Wellcome which has the sole power to
direct both the voting and disposition of such shares. Mr. Douglas M. Hurt and
Dr. Barry C. Ross each disclaims beneficial ownership of the securities of the
Company reported in this Schedule 13D, and the filing of this Schedule 13D shall
not be construed as an admission that these individuals are the beneficial
owners of any securities of the Company.
Until the date hereof, the Glaxo Reporting Persons have filed their
beneficial ownership positions in the Affymetrix Common Stock on Schedule 13G
under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act").
Pursuant to Rule 13d-1(a) of the Exchange Act, the Glaxo Reporting Persons are
filing this Schedule 13D on account of the purchase of the Affymetrix Preferred
Stock.
ITEM 4. Purpose of the Transaction.
The Glaxo Reporting Persons purchased the shares of Affymetrix
Preferred Stock that are the subject of this Schedule 13D for the purpose of
investment. With respect to all other shares of the Company owned by the Glaxo
Reporting Persons (other than the Directors' Shares), such shares were obtained
in connection with the 1995 Transaction. Except Glaxo Wellcome's plan to fill
the vacancy on the board of directors of the Company after Mr. Douglas M. Hurt
resigned on January 4, 1999, none of the Glaxo Reporting Persons, to the best of
their knowledge, has any present plan or proposal which relates to, or could
result in the occurrence of, any of the events referred to in subparagraphs (a)
through (j) of Item 4 of Schedule 13D (although they reserve the right to
develop such plans).
Page 12 of 102
<PAGE>
ITEM 5. Interest in Securities of the Issuer.
As of February 5, 1999, according to the Company, there were 23,017,409
shares of Affymetrix Common Stock outstanding. In addition, for purposes of Rule
13d-3 under the Exchange Act, the shares of Affymetrix Common Stock with respect
to the options for Mr. Douglas M. Hurt and Dr. Barry C. Ross, the Affymetrix
Preferred Stock and certain warrants owned by Affymax and Affymax Technologies
increase the diluted number of shares of Affymetrix Common Stock outstanding to
24,558,245. The Affymetrix Common Stock ownership percentages set forth below
are based on this number of shares.
(a) and (b) As of the date of this Schedule 13D, Glaxo Wellcome was the
beneficial owner of 9,042,292 shares of Affymetrix Common Stock, representing
36.8% of the outstanding shares of Affymetrix Common Stock, 1,257,229 of which
or approximately 5.1% are issuable upon the conversion of the 1,634,522 shares
of Affymetrix Preferred Stock. Glaxo Wellcome, through its indirect wholly-owned
subsidiary Glaxo Americas, purchased 1,634,522 shares of Affymetrix Preferred
Stock in a private placement transaction in accordance with the terms of the
Preferred Stock Purchase Agreement. Such shares are convertible into Affymetrix
Common Stock at $39.77 per share and until such time as the shares of Affymetrix
Preferred Stock are converted, the holder of the Affymetrix Preferred Stock is
entitled to an annual 6.5% cumulative dividend.
In connection with the purchase of the Affymetrix Preferred Stock,
Glaxo Wellcome, through its subsidiary Glaxo Americas, entered into the Voting
Trust Agreement, dated as of April 14, 1998 (the "Voting Trust Agreement"), with
the Company and Wachovia Bank, N.A. (the "Trustee"). Pursuant to the Voting
Trust Agreement, the Trustee has the power to vote or direct the vote of the
shares of Affymetrix Preferred Stock with respect to certain mergers,
consolidations or reorganizations or sales, conveyances or other dispositions of
all or substantially all of the assets of the Company or any transaction or
proposal that requires the majority vote of each outstanding class of capital
stock voting as separate classes which would not have an Adverse Effect (as
defined in the Voting Trust Agreement) on the shares of Affymetrix Preferred
Stock. As this agreement provides, the Trustee shall vote the shares of
Affymetrix Preferred Stock at a regular or special meeting of shareholders
proportionately in accordance with the votes cast by all holders of the
Affymetrix Common Stock for and against such transaction or proposal. However,
if the transaction or proposal would have an Adverse Effect on the shares of
Affymetrix Preferred Stock, Glaxo Americas, as the beneficial owner of such
shares, is permitted to direct the Trustee to vote in any way it desires. Glaxo
Wellcome, through its wholly-owned subsidiary Glaxo Americas, has the sole power
to dispose or direct the disposition of all of such shares of Affymetrix
Preferred Stock or the shares of Affymetrix Common Stock into which such shares
of Affymetrix Preferred Stock can be converted. In all cases, the holder of
shares of Affymetrix Preferred Stock has the right to one vote for each share of
Affymetrix Common Stock into which shares of Affymetrix Preferred Stock can be
converted on the appropriate record date for determination of the shareholders
entitled to vote. The Voting Trust Agreement is attached as Exhibit 3 hereto.
The remaining 7,785,063 shares of Affymetrix Common Stock beneficially
owned by Glaxo Wellcome comprise the 7,705,067 shares beneficially owned by
Glaxo Venture and the
Page 13 of 102
<PAGE>
79,996 shares beneficially owned by Mr. Douglas M. Hurt and Dr. Barry C. Ross,
each discussed below.
As of the date of this Schedule 13D, Glaxo Group was the beneficial
owner of 8,962,296 shares of Affymetrix Common Stock, representing approximately
36.5% of the outstanding shares of Affymetrix Common Stock, 1,257,229 of which
or approximately 5.1% are issuable upon the conversion of the 1,634,522 shares
of Affymetrix Preferred Stock. Glaxo Group has the sole power to vote or direct
the vote and to dispose or direct the disposition of all of such shares of
Affymetrix Common Stock, except the Trustee shares the power to vote or direct
the vote of the shares of Affymetrix Preferred Stock as described in the third
paragraph of this Item 5. The remaining 7,705,067 shares of Affymetrix Common
Stock beneficially owned by Glaxo Group are those beneficially owned by its
subsidiary, Glaxo Venture.
As of the date of this Schedule 13D, Glaxo Venture was the beneficial
owner of 7,705,067 shares of Affymetrix Common Stock, representing approximately
31.4% of the outstanding shares of Affymetrix Common Stock. Glaxo Venture has
the sole power to vote or direct the vote and to dispose or direct the
disposition of all of such shares of Affymetrix Common Stock.
As of the date of this Schedule 13D, Glaxo Americas was the beneficial
owner of 1,634,522 shares of Affymetrix Preferred Stock which may be converted
into 1,257,229 shares of Affymetrix Common Stock, representing approximately
5.1% of the outstanding shares of Affymetrix Common Stock. Glaxo Americas
purchased 1,634,522 shares of Affymetrix Preferred Stock in a private placement
transaction pursuant to the Preferred Stock Purchase Agreement. Such shares are
convertible into Affymetrix Common Stock at $39.77 per share and until such time
that the shares of Affymetrix Preferred Stock are converted, the holder of the
Affymetrix Preferred Stock is entitled to an annual 6.5% cumulative dividend.
With respect to the power to vote or direct the vote and to dispose or direct
the disposition of all such shares of Affymetrix Preferred Stock, please see the
description set forth in the third paragraph of this Item 5.
As of the date of this Schedule 13D, Affymax was the beneficial owner
of 7,705,067 shares of Affymetrix Common Stock, representing approximately 31.4%
of the outstanding shares of Affymetrix Common Stock. Affymax directly owns
889,554 shares of Affymetrix Common Stock and indirectly beneficially owns,
through its wholly-owned subsidiary Affymax Technologies, 6,746,592 shares of
Affymetrix Common Stock. Affymax also owns directly a warrant dated December 29,
1994 (the "Affymax Warrant") to purchase 68,921 shares of Affymetrix Common
Stock at $8.25 per share which expires on December 29, 1999. Affymax has the
sole power to vote or direct the vote and to dispose or direct the disposition
of all of such shares of Affymetrix Common Stock.
As of the date of this Schedule 13D, Affymax Technologies was the
beneficial owner of 6,746,592 shares of Affymetrix Common Stock, representing
approximately 27.5% of the outstanding shares of Affymetrix Common Stock.
Affymax Technologies directly owns 6,611,632 shares of Affymetrix Common Stock
and a warrant dated June 20, 1995 (the "Affymax Technologies Warrant") to
purchase 134,960 shares of Affymetrix Common Stock at $8.25 per share which
expires on March 31, 2000. Affymax Technologies has the sole power to
Page 14 of 102
<PAGE>
vote or direct the vote and to dispose or direct the disposition of all of such
shares of Affymetrix Common Stock.
As of the date of this Schedule 13D, Mr. Douglas M. Hurt and Dr. Barry
C. Ross may each be deemed to beneficially own 39,998 shares of Affymetrix
Common Stock, representing in each case less than 0.2% of the outstanding shares
of Affymetrix Common Stock, pursuant to currently exercisable stock options
granted to them by the Company. The Directors' Shares are held by Mr. Douglas M.
Hurt and Dr. Barry C. Ross for the benefit of Glaxo Wellcome which has the sole
power to direct both the voting and disposition of such shares. Mr. Douglas M.
Hurt and Dr. Barry C. Ross each disclaims beneficial ownership of the securities
of the Company reported in this Schedule 13D, and the filing of this Schedule
13D shall not be construed as an admission that these individuals are the
beneficial owners of any securities of the Company.
(c) To the best knowledge of each of the Glaxo Reporting Persons, none
of the Glaxo Reporting Persons has engaged in any transaction during the past 60
days in any shares of Affymetrix Common Stock.
(d) To the best knowledge of each of the Glaxo Reporting Persons, no
person, other than the Glaxo Reporting Persons, has the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
the shares of Affymetrix Common Stock beneficially owned by the Glaxo Reporting
Persons. However, the Trustee, pursuant to the terms of the Voting Trust
Agreement, holds the shares of Affymetrix Preferred Stock for the benefit of
Glaxo Americas and will distribute all dividends and distributions to Glaxo
Americas (other than dividends or other distributions payable in shares which
will not be distributed but will remain subject to the Voting Trust Agreement).
ITEM 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
In December 1994, in connection with a lease agreement between the
Company and a third party, Affymax agreed to release the Company of certain
financial covenants to that third party. In exchange for this release, the
Company issued the Affymax Warrant to Affymax. After the Company's initial
public offering in June 1996, the Affymax Warrant was converted to a warrant to
purchase 68,921 shares of Affymetrix Common Stock at $8.25 per share. Pursuant
to the Affymax Warrant, if this third party terminates the lease because Affymax
or Affymax Technologies defaults on its obligations, Affymax shall have no
further rights under the Affymax Warrant. Also in June 1995, the Company agreed
to issue the Affymax Technologies Warrant to Affymax instead of paying interest
to Affymax under a convertible promissory note. After the Company's initial
public offering in June 1996, the Affymax Technologies Warrant was converted to
a warrant to purchase 134,960 shares of Affymetrix Common Stock at $8.25 per
share.
On July 6, 1995, the Company and Glaxo Wellcome entered into an
agreement (the "Governance Agreement") pursuant to which Glaxo Wellcome has the
right to designate for election a number of directors based on the percentage of
voting stock then held directly or indirectly by Glaxo Wellcome and is obligated
to vote its shares for the slate of directors recommended to the shareholders.
The Governance Agreement was amended on April 14, 1998
Page 15 of 102
<PAGE>
in connection with the issuance to Glaxo Americas of the Affymetrix Preferred
Stock and on September 8, 1998 in connection with the reincorporation of the
Company as a Delaware corporation. Glaxo Wellcome currently has the right to
designate for election three of the nine directors of the Company. If Glaxo
Wellcome were to transfer 40% of the outstanding voting shares of the Company to
a third party, this third party would be required to agree to vote pursuant to
the terms of the Governance Agreement. In addition, under the terms of the
Governance Agreement, the Company granted Glaxo Wellcome certain registration
rights with respect to its shares and has indemnified Glaxo Wellcome for certain
securities law violations in connection with any related offerings. The
Governance Agreement also provides that Glaxo Wellcome has the right to call a
special meeting of the stockholders, so long as Glaxo Wellcome continues to hold
at least 10% of the outstanding capital stock of the Company and Glaxo Wellcome
has the right to designate more directors on a proportionate basis in the event
that the Company increases the size of the board of directors. The Governance
Agreement and the two amendments thereto are attached as Exhibits 4, 5 and 6
hereto.
In 1993, the board of directors of the Company adopted the Affymetrix,
Inc. 1993 Stock Plan (the "Stock Plan") which was amended and restated on June
6, 1997 pursuant to which incentive stock options, nonqualified stock options
and purchase rights may be granted to directors, employees and outside
consultants. There are 5,200,000 shares of Affymetrix Common Stock reserved for
issuance under the Stock Plan. Options granted to each of Mr. Douglas M. Hurt
and Dr. Barry C. Ross in connection with the Stock Plan expire no later than ten
years from the date of grant and may be exercised no later than three months
after termination of the holder's status as an employee or consultant to the
Company or within one year in certain other instances. The option price is
required to be at least 100% of the fair value on the date of grant (110% in
certain circumstances) as determined by the board of directors of the Company.
Options granted to each of Mr. Douglas M. Hurt and Dr. Barry C. Ross vest within
five years from the date of grant. As directors of the Company, each of Mr.
Douglas M. Hurt and Dr. Barry C. Ross may be deemed to beneficially own 39,998
shares of Affymetrix Common Stock pursuant to stock options which have vested.
However, as of January 4, 1999, Mr. Douglas M. Hurt resigned as a director of
the Company and will no longer be entitled as a director to options under the
Stock Plan. Mr. Douglas M. Hurt accordingly has three months following such
resignation to exercise the options for the benefit of Glaxo Wellcome. Mr.
Douglas M. Hurt and Dr. Barry C. Ross each disclaims beneficial ownership of the
securities of the Company reported in this Schedule 13D, and the filing of this
Schedule 13D shall not be construed as an admission that these individuals are
the beneficial owners of any securities of the Company. The Stock Plan is
attached as Exhibit 7 hereto.
On April 14, 1998, Glaxo Americas purchased 1,634,522 shares of
Affymetrix Preferred Stock in a private placement transaction from the Company
at a price of $30.59 per share pursuant to the terms of the Preferred Stock
Purchase Agreement. Under the terms of the Certificate of Determination of
Affymetrix, Inc. (which is an exhibit to the Preferred Stock Purchase
Agreement), shares of Affymetrix Preferred Stock are convertible into 1,257,229
shares of Affymetrix Common Stock at $39.77 per share. Until such time that
shares of Affymetrix Preferred Stock are converted into shares of Affymetrix
Common Stock, Glaxo Americas is entitled to receive an annual 6.5% cumulative
dividend on such shares. The Company has agreed that, among other things, so
long as shares of Affymetrix Preferred Stock are outstanding, the Company will
cause the Affymetrix Common Stock to be registered under the Exchange Act.
Page 16 of 102
<PAGE>
The Company also agreed that it would not amend the Certificate of Determination
without Glaxo Americas' consent. The Certificate of Determination provides for,
among other things, limited rights of redemption for each of the Company and
Glaxo Americas with respect to the shares of Affymetrix Preferred Stock.
On April 14, 1998, Glaxo Americas, the Company and the Trustee entered
into the Voting Trust Agreement pursuant to which the Trustee has the power to
vote or direct the vote of the shares of Affymetrix Preferred Stock with respect
to certain mergers, consolidations or reorganizations or sales, conveyances or
other dispositions of all or substantially all of the assets of the Company or
any transaction or proposal that requires the majority vote of each outstanding
class of capital stock voting as separate classes which would not have an
Adverse Effect on the shares of Affymetrix Preferred Stock. As this agreement
provides, the Trustee shall vote the shares of Affymetrix Preferred Stock at a
regular or special meeting of shareholders proportionately in accordance with
the votes cast by all holders of the Affymetrix Common Stock for and against
such transaction or proposal. However, if the transaction or proposal would have
an Adverse Effect on the shares of Affymetrix Preferred Stock, Glaxo Americas,
as the beneficial owner of such shares, is permitted to direct the Trustee to
vote in any way it desires. In all cases, the holder of shares of Affymetrix
Preferred Stock has the right to one vote for each share of Affymetrix Common
Stock into which shares of Affymetrix Preferred Stock can be converted on the
appropriate record date for determination of the shareholders entitled to vote.
ITEM 7. Material to be Filed as Exhibits.
1. Joint Filing Agreement among Glaxo Wellcome plc, Glaxo Group Limited,
Glaxo Venture Limited, Glaxo Wellcome Americas Inc., Affymax N.V.,
Affymax Technologies N.V., Mr. Douglas M. Hurt and Dr. Barry C. Ross.
2. Series AA Preferred Stock Purchase Agreement dated March 9, 1998
between Affymetrix, Inc. and Glaxo Wellcome Americas Inc. (without
disclosure letters).
3. Voting Trust Agreement dated as of April 14, 1998 among Glaxo Wellcome
Americas Inc., Affymetrix, Inc. and Wachovia Bank, N.A.
4. Governance Agreement dated July 6, 1995 between Affymetrix, Inc. and
Glaxo Wellcome plc.
5. Amendment to Governance Agreement dated April 14, 1998 among
Affymetrix, Inc., Glaxo Wellcome plc and Glaxo Wellcome Americas Inc.
6. Amendment No. 2 to Governance Agreement dated as of September 8, 1998
among Affymetrix, Inc., Glaxo Wellcome plc and Glaxo Wellcome Americas
Inc.
7. Affymetrix, Inc. Amended and Restated 1993 Stock Plan.
Page 17 of 102
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
GLAXO WELLCOME PLC
By: /s/ S. J. COWDEN
--------------------------------
Name: S. J. Cowden
Title: Company Secretary
Dated: February 16, 1999
Page 18 of 102
<PAGE>
SCHEDULE A TO SCHEDULE 13D
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT PRINCIPAL NAME, PRINCIPAL BUSINESS
POSITION OCCUPATION OR EMPLOYMENT AND ADDRESS OF CORPORATION
OR ORGANIZATION IN WHICH
SUCH EMPLOYMENT IS
CONDUCTED
<S> <C> <C>
GLAXO WELLCOME
PLC:
1. Sir Richard Sykes DSc, Chairman and Executive Glaxo Wellcome plc, Glaxo
FRS, United Kingdom, Director of Glaxo Wellcome Wellcome House, Berkeley
Chairman and Executive plc Avenue, Greenford,
Director Middlesex UB6 0NN,
England
2. Sir Roger Hurn, United Chairman of the General General Electric Company
Kingdom, Deputy Chairman Electric Company plc (utilities plc, One Bruton Street,
and Non-Executive Director company) London W1X 8AQ, England
3. Robert Ingram, United Chief Executive Officer and Glaxo Wellcome Inc., Five
States, Executive Director Executive Director of Glaxo Moores Drive, P.O. Box
Wellcome plc 13398, Research Triangle
Park, N.C. 27709, U.S.A.
4. Michele Barzach, France, Health strategy consultant Michele Barzach Sante, 2 Rue
Non-Executive Director of Michele Barzach Sante Cognacq - Jay, 7500 Paris,
(health consulting company) France
5. Derek Bonham, United Director of Texas Utilities Texas Utilities Company, 150
Kingdom, Non-Executive Company (utilities company) Brompton Road, London
Director SW3 1HX, England
6. James Cochrane, United Executive Director of Glaxo Glaxo Wellcome plc, Glaxo
Kingdom, Executive Director Wellcome plc, responsible for Wellcome House, Berkeley
Europe, Middle East & Africa Avenue, Greenford,
Middlesex UB6 0NN,
England
</TABLE>
Page 19 of 102
<PAGE>
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT PRINCIPAL NAME, PRINCIPAL BUSINESS
POSITION OCCUPATION OR EMPLOYMENT AND ADDRESS OF CORPORATION
OR ORGANIZATION IN WHICH
SUCH EMPLOYMENT IS
CONDUCTED
<S> <C> <C>
7. John Coombe, United Executive Director of Glaxo Glaxo Wellcome plc, Glaxo
Kingdom, Executive Director Wellcome plc, responsible for Wellcome House, Berkeley
Finance and Investor Relations Avenue, Greenford,
Middlesex UB6 0NN,
England
8. Peter Job, United Chief Executive Officer of Reuters Group plc, 85 Fleet
Kingdom, Non-Executive Reuters Group plc Street, London EC4P 4AJ,
Director (information services) England
9. Professor Arthur Li, Vice-Chancellor of the The Chinese University of
United Kingdom, Non- Chinese University of Hong Hong Kong, Shatin, New
Executive Director Kong (university) Territories, Hong Kong
10. John McArthur, Canada, Dean of Harvard Business Harvard Business School,
Non-Executive Director School (university) Fowler 32, Soldiers Field,
Boston, MA 02163, U.S.A.
11. Dr. James Niedel, United Executive Director of Glaxo Glaxo Wellcome plc, Glaxo
States, Executive Director Wellcome plc, responsible for Wellcome House, Berkeley
Science & Technology Avenue, Greenford,
Middlesex UB6 0NN,
England
12. Dr. Ronaldo Schmitz, A member of the board of Deutsche Bank AG, 6
Germany, Non-Executive Managing Directors of Bishopsgate, London EC2N
Director Deutsche Bank AG 4DA, England
(investment banking)
13. Professor Sir Richard Professor of Oxford University Oxford University, Zoology
Southwood FRS, Hon. (university) Department, South Parks
FRCP, United Kingdom, Road, Oxford, OX1 3PS,
Non-Executive Director England
14. Jeremy Strachan, United Executive Director Legal & Glaxo Wellcome plc, Glaxo
Kingdom, Executive Director Public Affairs and Business Wellcome House, Berkeley
Development of Glaxo Avenue, Greenford,
Wellcome plc Middlesex UB6 0NN,
England
</TABLE>
Page 20 of 102
<PAGE>
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT PRINCIPAL NAME, PRINCIPAL BUSINESS
POSITION OCCUPATION OR EMPLOYMENT AND ADDRESS OF CORPORATION
OR ORGANIZATION IN WHICH
SUCH EMPLOYMENT IS
CONDUCTED
<S> <C> <C>
15. Stephen Cowden, United Company Secretary of Glaxo Glaxo Wellcome plc, Glaxo
Kingdom, Company Wellcome plc Wellcome House, Berkeley
Secretary Avenue, Greenford,
Middlesex UB6 0NN,
England
GLAXO GROUP LIMITED:
1. Sir Richard Sykes DSc, Chairman and Executive Glaxo Wellcome plc, Glaxo
FRS, United Kingdom, Director of Glaxo Wellcome Wellcome House, Berkeley
Chairman plc Avenue, Greenford,
Middlesex UB6 0NN,
England
2. John Coombe, United Executive Director of Glaxo Glaxo Wellcome plc, Glaxo
Kingdom, Director Wellcome plc, responsible for Wellcome House, Berkeley
Finance and Investor Relations Avenue, Greenford,
Middlesex UB6 0NN,
England
3. Jeremy Strachan, United Executive Director Legal & Glaxo Wellcome plc, Glaxo
Kingdom, Director Public Affairs and Business Wellcome House, Berkeley
Development of Glaxo Avenue, Greenford,
Wellcome plc Middlesex UB6 0NN,
England
4. James Cochrane, United Executive Director of Glaxo Glaxo Wellcome plc, Glaxo
Kingdom, Director Wellcome plc, responsible for Wellcome House, Berkeley
Europe, Middle East & Africa Avenue, Greenford,
Middlesex UB6 0NN,
England
5. Stephen Cowden, United Company Secretary of Glaxo Glaxo Wellcome plc, Glaxo
Kingdom, Company Wellcome plc Wellcome House, Berkeley
Secretary Avenue, Greenford,
Middlesex UB6 0NN,
England
</TABLE>
Page 21 of 102
<PAGE>
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT PRINCIPAL NAME, PRINCIPAL BUSINESS
POSITION OCCUPATION OR EMPLOYMENT AND ADDRESS OF CORPORATION
OR ORGANIZATION IN WHICH
SUCH EMPLOYMENT IS
CONDUCTED
<S> <C> <C>
GLAXO WELLCOME
AMERICAS INC.:
1. John Coombe, United Executive Director of Glaxo Glaxo Wellcome plc, Glaxo
Kingdom, Executive Vice Wellcome plc, responsible for Wellcome House, Berkeley
President, Finance Finance and Investor Relations Avenue, Greenford,
Middlesex UB6 0NN,
England
2. Robert Ingram, United Chief Executive Officer and Glaxo Wellcome Inc., Five
States, Executive Vice Executive Director of Glaxo Moores Drive, P.O. Box
President Wellcome plc 13398, Research Triangle
Park, N.C. 27709, U.S.A.
3. Sir Richard Sykes, DSc, Chairman and Executive Glaxo Wellcome plc, Glaxo
FRS, President Director of Glaxo Wellcome Wellcome House, Berkeley
plc Avenue, Greenford,
Middlesex UB6 0NN,
England
4. Jack Smith, United States, Treasurer, Secretary and Glaxo Wellcome Americas
Treasurer, Secretary and General Manager of Glaxo Inc., 499 Park Avenue, New
General Manager Wellcome Americas Inc. York, N.Y. 10022, U.S.A.
GLAXO VENTURE LIMITED:
1. Sir Richard Sykes DSc, Chairman and Executive Glaxo Wellcome plc, Glaxo
FRS, United Kingdom, Director of Glaxo Wellcome Wellcome House, Berkeley
Director plc Avenue, Greenford,
Middlesex UB6 0NN,
England
2. John Coombe, United Executive Director of Glaxo Glaxo Wellcome plc, Glaxo
Kingdom, Director Wellcome plc Wellcome House, Berkeley
Avenue, Greenford,
Middlesex UB6 0NN,
England
</TABLE>
Page 22 of 102
<PAGE>
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT PRINCIPAL NAME, PRINCIPAL BUSINESS
POSITION OCCUPATION OR EMPLOYMENT AND ADDRESS OF CORPORATION
OR ORGANIZATION IN WHICH
SUCH EMPLOYMENT IS
CONDUCTED
<S> <C> <C>
3. Jeremy Strachan, United Executive Director Legal & Glaxo Wellcome plc, Glaxo
Kingdom, Director Public Affairs and Business Wellcome House, Berkeley
Development of Glaxo Avenue, Greenford,
Wellcome plc Middlesex UB6 0NN,
England
4. Stephen Cowden, United Company Secretary of Glaxo Glaxo Wellcome plc, Glaxo
Kingdom, Company Wellcome plc Wellcome House, Berkeley
Secretary Avenue, Greenford,
Middlesex UB6 0NN,
England
AFFYMAX N.V.:
1. Adrian Hennah, United Senior Vice President and Glaxo Wellcome Research &
Kingdom, Director Chief Financial Officer of Development, Glaxo
Glaxo Wellcome Inc. Wellcome House, Berkeley
Avenue, Greenford,
Middlesex UB6 0NN,
England
2. Dr. James Niedel, United Executive Director of Glaxo Glaxo Wellcome plc, Glaxo
States, Director Wellcome plc, responsible for Wellcome House, Berkeley
Science & Technology Avenue, Greenford,
Middlesex UB6 0NN,
England
3. Victoria Llewellyn, United Manager, Secretariat Services Glaxo Wellcome plc, Glaxo
Kingdom, Company of Glaxo Wellcome plc Wellcome House, Berkeley
Secretary Avenue, Greenford,
Middlesex UB6 0NN,
England
AFFYMAX
TECHNOLOGIES N.V.:
1. Dr. James Niedel, United Executive Director of Glaxo Glaxo Wellcome plc, Glaxo
States, Managing Director Wellcome plc, responsible for Wellcome House, Berkeley
Science & Technology Avenue, Greenford,
Middlesex UB6 0NN,
England
</TABLE>
Page 23 of 102
<PAGE>
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT PRINCIPAL NAME, PRINCIPAL BUSINESS
POSITION OCCUPATION OR EMPLOYMENT AND ADDRESS OF CORPORATION
OR ORGANIZATION IN WHICH
SUCH EMPLOYMENT IS
CONDUCTED
<S> <C> <C>
2. Dr. Barry Ross, United Director of Research Strategy Glaxo Research &
Kingdom, Managing Director and Alliances for Glaxo Development, Medicines
Wellcome Research & Research Centre, Gunnels
Development Wood Road, Stevenage,
Herts SG1 2NY, England
3. Dr. Allan Baxter, United Director of Group Discovery Glaxo Wellcome Research &
Kingdom, Managing Director for Glaxo Wellcome Research Development, Glaxo
& Development Wellcome House, Berkeley
Avenue, Greenford,
Middlesex UB6 0NN,
England
4. Adrian Hennah, United Senior Vice President and Glaxo Wellcome Research &
Kingdom, Managing Director Chief Financial Officer of Development, Glaxo
Glaxo Wellcome Inc. Wellcome House, Berkeley
Avenue, Greenford,
Middlesex UB6 0NN,
England
5. Victoria Llewellyn, United Manager, Secretariat Services Glaxo Wellcome plc, Glaxo
Kingdom, Company of Glaxo Wellcome plc Wellcome House, Berkeley
Secretary Avenue, Greenford,
Middlesex UB6 0NN,
England
6. Curacao Corporation (Dutch corporate director Curacao Corporation
Company N.V., Netherlands, company) Company N.V., De
Antilles, Managing Director Ruyterkade 62,
P.O. Box 812, Curacao,
Netherlands Antilles
</TABLE>
Page 24 of 102
<PAGE>
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBER DESCRIPTION NUMBERED PAGE
<S> <C> <C>
1. Joint Filing Agreement among Glaxo Wellcome 26
plc, Glaxo Group Ltd., Glaxo Venture Ltd.,
Glaxo Wellcome Americas Inc., Affymax N.V.,
Affymax Technologies N.V., Mr. Douglas M.
Hurt and Dr. Barry C. Ross.
2. Series AA Preferred Stock Purchase Agreement 28
dated March 9, 1998 between Affymetrix, Inc.
and Glaxo Wellcome Americas Inc. (without
disclosure letters).
3. Voting Trust Agreement dated as of April 14, 68
1998 among Glaxo Wellcome Americas Inc.,
Affymetrix, Inc. and Wachovia Bank, N.A.
4. Governance Agreement dated July 6, 1995 81
between Affymetrix, Inc. and Glaxo
Wellcome plc.
5. Amendment to Governance Agreement dated 89
April 14, 1998 among Affymetrix, Inc., Glaxo
Wellcome plc and Glaxo Wellcome Americas
Inc.
6. Amendment No. 2 to Governance Agreement 92
dated as of September 8, 1998 among
Affymetrix, Inc., Glaxo Wellcome plc and
Glaxo Wellcome Americas Inc.
7. Affymetrix, Inc. Amended and Restated 1993 95
Stock Plan.
</TABLE>
Page 25 of 102
<PAGE>
EXHIBIT 1 TO SCHEDULE 13D
JOINT FILING AGREEMENT
Each of the undersigned hereby agrees and consents that the Schedule
13D filed herewith (this "Schedule 13D") by Glaxo Wellcome plc ("Glaxo
Wellcome") is filed on behalf of each of them pursuant to the authorization
of each of them to Glaxo Wellcome to make such filing and that such Schedule
13D is filed jointly on behalf of each of them, pursuant to Sections 13(d)
and 13(g) of the U.S. Securities Exchange Act of 1934, as amended, and the
rules promulgated thereunder. Each of these persons is not responsible for
the completeness or accuracy of the information concerning the other persons
making this filing unless such person knows or has reason to believe that
such information is inaccurate. This agreement may be signed in counterparts.
GLAXO WELLCOME PLC GLAXO GROUP LIMITED
By: /s/ S. J. COWDEN By: /s/ S. J. COWDEN
---------------------- ------------------------------
Title: Secretary Title: Secretary
GLAXO VENTURE LIMITED GLAXO WELLCOME
AMERICAS INC.
By: /s/ S. J. COWDEN By: /s/ S. J. COWDEN
------------------------ ------------------------------
Title: Director Title: Director
AFFYMAX N.V. AFFYMAX TECHNOLOGIES N.V.
By: /s/ VICTORIA LLEWELLYN By: /s/ VICTORIA LLEWELLYN
---------------------------- -------------------------------
Title: Company Secretary Title: Company Secretary
Page 26 of 102
<PAGE>
MR. DOUGLAS M. HURT DR. BARRY C. ROSS
By: /s/ DOUGLAS M. HURT By: /s/ DR. BARRY C. ROSS
-------------------------- ---------------------------
Dated: February 16, 1999
Page 27 of 102
<PAGE>
EXHIBIT 2 TO SCHEDULE 13D
SERIES AA PREFERRED STOCK PURCHASE AGREEMENT
This SERIES AA PREFERRED STOCK PURCHASE AGREEMENT (the
"Agreement") dated March 9, 1998 is entered into by and between Affymetrix,
Inc., a California corporation (together with its successors, the "Company"),
and Glaxo Wellcome Americas Inc., a Delaware corporation ("Investor").
Unless otherwise defined herein, capitalized terms used herein
and not defined herein shall have the meanings given to them under the
Securities Act of 1933, as amended (the "Securities Act").
The parties hereto agree as follows:
1. PURCHASE AND SALE. In consideration of and upon the basis
of the representations, warranties and agreements and subject to the terms and
conditions set forth in this Agreement:
(a) Investor agrees to purchase from the Company and
the Company agrees to sell to Investor, on the Closing Date specified
in Section 2 hereof, 1,634,522 shares of the Company's Series AA
Preferred Stock (the "Preferred Shares") for a price per share equal to
$30.59 (the "Purchase Price"). On or before the Closing Date (as
defined below), the Company will have authorized the sale and issuance
to Investor of the Preferred Shares, having the rights, preferences and
privileges set forth in the Certificate of Determination attached
hereto as EXHIBIT A (the "Certificate of Determination").
(b) The term "Conversion Stock" shall mean any shares
of the Company's common stock, no par value per share (the "Common
Stock") issued or to be issued to Investor upon conversion of the
Preferred Shares pursuant to the terms of this Agreement and the
Certificate of Determination.
2. CLOSING.
(a) The closing of the sale of the Preferred Shares
(the "Closing") shall take place on March 31, 1998 upon satisfaction or, if
applicable, waiver of the conditions set forth in Sections 6 and 7 hereof, or at
such other date and time as the Investor and the Company shall mutually agree
(such date and time being referred to herein as the "Closing Date").
(b) At the Closing, the Company shall deliver to
Investor a certificate representing the Preferred Shares that Investor is
purchasing, duly registered on the books of the Company in the name of Investor,
against payment by Investor of the Purchase Price by check or wire transfer of
immediately available funds.
Page 28 of 102
<PAGE>
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as set forth in the Disclosure Letter delivered to
Investor by the Company concurrently with this Agreement, the Company hereby
represents and warrants to Investor as follows:
(a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
California and has all requisite corporate power and authority to carry
on its business as now conducted and as proposed to be conducted. The
Company is duly qualified to transact business and is in good standing
in each jurisdiction in which the failure to so qualify would have a
material adverse effect on its business or properties.
(b) All corporate action on the part of the Company,
its officers and directors necessary for the authorization, execution
and delivery of this Agreement, the Voting Trust Agreement dated of the
Closing Date between the Company, Wachovia Bank, N.A. (the "Trustee")
and Investor ("Voting Trust Agreement") in the form attached hereto as
EXHIBIT B, the Amendment to Governance Agreement dated as of the
Closing Date between the Company and Glaxo Wellcome PLC ("Glaxo") and
accepted and agreed to by the Investor (the "Amendment") in the form
attached hereto as EXHIBIT C, the performance of all obligations of the
Company hereunder and thereunder, and the authorization, issuance (or
reservation for issuance), sale and delivery of the Preferred Shares
being sold hereunder and the Common Stock issuable upon conversion of
the Preferred Shares has been taken or will be taken prior to the
Closing, and this Agreement, the Voting Trust Agreement and the
Amendment constitute valid and legally binding obligations of the
Company, enforceable in accordance with their respective terms, except
(i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement
of creditors' rights generally and (ii) as limited by laws relating to
the availability of specific performance, injunctive relief, or other
equitable remedies.
(c) The Company is not in violation or default of any
provision of its Amended and Restated Articles of Incorporation or
bylaws, or of any judgment, order, writ, or decree by which it is
bound. The Company is not in violation or default in any material
respect of any instrument or contract to which it is a party or by
which it is bound, or, to its knowledge, of any provision of any
federal or state statute, rule or regulation applicable to the Company.
The execution, delivery and performance of this Agreement, the Voting
Trust Agreement, and the Amendment, and the consummation of the
transactions contemplated hereby and thereby will not result in any
such violation or be in conflict with or constitute, with or without
the passage of time and giving of notice, either a default under any
such provision, instrument, judgment, order, writ, decree or contract
or an event that results in the creation of any lien, charge or
encumbrance upon any assets of the Company or the suspension,
revocation, impairment, forfeiture, or nonrenewal of any material
permit, license, authorization, or approval applicable to the Company,
its business or operations or any of its assets or properties.
(d) Except as may be required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR
Act"), no consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with,
any federal, state or local governmental authority on the part of the
Company is required in connection with the consummation of the
transactions contemplated by this Agreement, except (i) the filing of
the Certificate of Determination with the Secretary of State of
California; and (ii) the filing pursuant to
Page 29 of 102
<PAGE>
Regulation D promulgated by the Securities and Exchange Commission
under the Securities Act, which filing will be effected within 15 days
of the sale of the Preferred Shares hereunder, or such other
post-closing filings as may be required.
(e) Except as disclosed in the SEC Filings (as
defined below) and in the Company's registration statement on Form S-3
as filed with the SEC on October 17, 1997 (the "S-3"), (i) there is no
action, suit, proceeding or investigation pending or, to the Company's
knowledge, currently threatened against the Company that questions the
validity of this Agreement, the Voting Trust Agreement or the
Amendment, or the right of the Company to enter into such agreements,
or to consummate the transactions contemplated hereby or thereby, and
(ii) there is no action, suit, proceeding or investigation pending or,
to the knowledge of the Company, currently threatened in writing
against the Company, or against any executive officer or director of
the Company which might result, either individually or in the
aggregate, in any material adverse change in the business, properties,
financial condition or operating results of the Company, as such
business is presently conducted.
(f) The Company has timely filed all filings with the
United States Securities and Exchange Commission (the "SEC") under the
Securities Act or under Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or under the
rules and regulations promulgated by the SEC (any such filing, an "SEC
Filing") required to be filed by the Company pursuant to such acts and
no SEC Filing contained, on the date on which such document was filed
with the SEC, any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in
order to make the statements, in the light of the circumstances under
which they were made, not misleading. The financial statements of the
Company included in SEC Filings (including any similar documents filed
after the date of this Agreement) comply as to form in all material
respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles
(except, in the case of unaudited statements, as permitted by Form 10-Q
of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto), and fairly present
the consolidated financial position of Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal year-end audit
adjustments).
(g) Since the date of the Company's most recent
quarterly report on Form 10-Q or most recent periodic report on Form
8-K filed with the SEC, there has not been any development that has not
otherwise been publicly disclosed that is reasonably likely to result
in any material adverse change in the financial condition or results of
operations of the Company.
(h) Except as disclosed in the SEC Filings and the
S-3 and as contemplated hereby, the Company has not granted or agreed
to grant any registration rights, including piggy-back rights, to any
person or entity.
(i) As of February 28, 1998, the authorized capital
stock of the Company consisted of 27,500,000 shares of Preferred Stock,
none of which were issued and outstanding, and 50,000,000 shares of
Common Stock, 22,842,355 shares of which were issued and outstanding
(the "Preferred Stock" and the "Common Stock" are collectively referred
to herein as the "Capital
Page 30 of 102
<PAGE>
Stock"). All of the issued and outstanding shares of Capital Stock have
been duly authorized, validly issued and are fully paid and
nonassessable. There has been no material change in the capitalization
of the Company from February 28, 1998 to the date of this Agreement.
(j) The Preferred Shares that are being purchased by
the Investor hereunder, when issued, sold or delivered in accordance
with the terms hereof, for the consideration expressed herein, and the
shares of Common Stock issuable upon conversion of the Preferred
Shares, upon issuance in accordance with the terms of the Certificate
of Determination, will be duly and validly issued, fully paid and
nonassessable and will be free of any liens and encumbrances created by
the Company and, subject to the accuracy of the representations of the
Investor in this Agreement, will be issued in compliance with all
applicable federal and state securities laws.
4. REPRESENTATIONS AND WARRANTIES OF INVESTOR. Investor hereby
represents and warrants to the Company on the date hereof, and agrees with the
Company (unless otherwise specified as provided in the paragraphs below), as
follows:
(a) Investor understands that no United States
federal or state agency has passed on, reviewed or made any
recommendation or endorsement of the Preferred Shares or the Conversion
Stock.
(b) Investor has full power and authority to enter
into this Agreement, the Voting Trust Agreement and the Amendment, and
such Agreements constitute its valid and legally binding obligation,
enforceable in accordance with their terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors'
rights generally and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief, or other
equitable remedies.
(c) This Agreement is made with Investor in reliance
upon Investor's representation to the Company, which by Investor's
execution of this Agreement Investor hereby confirms, that the
Preferred Shares to be received by Investor and the Conversion Stock
issuable upon conversion thereof (collectively, the "Securities") will
be acquired for investment for Investor's own account, not as a nominee
or agent, and not with a view to the resale or distribution of any part
thereof, and that Investor has no present intention of selling,
granting any participation in, or otherwise distributing the same. By
executing this Agreement, Investor further represents that Investor
does not have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participations to such person or
to any third person, with respect to any of the Securities.
(d) Investor is an investor in securities of
companies in the development stage and acknowledges that it can bear
the economic risk of its investment, and has such knowledge and
experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in the Preferred
Shares. Investor also represents it has not been organized for the
purpose of acquiring the Preferred Shares.
(e) Investor is an "accredited investor" within the
meaning of SEC Rule 501(a) of Regulation D, as presently in effect.
Page 31 of 102
<PAGE>
(f) Investor understands that the Preferred Shares
are being offered and sold in reliance on a transactional exemption
from the registration requirements of Federal and state securities laws
and that the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and
understandings of the Investor set forth herein in order to determine
the applicability of such exemptions and the suitability of the
Investor to acquire the Preferred Shares.
(g) Investor understands that the Securities it is
purchasing are characterized as "restricted securities" under the
federal securities laws inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and that under
such laws and applicable regulations such securities may be resold
without registration under the Securities Act, only in certain limited
circumstances. In this connection, Investor represents that it is
familiar with SEC Rule 144, as presently in effect, and understands the
resale limitations imposed thereby and by the Securities Act.
(h) Without in any way limiting the representations
set forth above, Investor further agrees not to make any disposition of
all or any portion of the Securities unless and until the transferee
has agreed in writing for the benefit of the Company to be bound by the
terms of this Agreement provided and to the extent such terms are then
applicable, and:
1. There is then in effect a Registration
Statement under the Securities Act covering such proposed disposition
and such disposition is made in accordance with such Registration
Statement; or
2. (i) Investor shall have notified the
Company of the proposed disposition and shall have furnished the
Company with a detailed statement of the circumstances surrounding the
proposed disposition, and (ii) if reasonably requested by the Company,
Investor shall have furnished the Company with an opinion of counsel,
reasonably satisfactory to the Company that such disposition will not
require registration of such shares under the Securities Act. It is
agreed that the Company will not require opinions of counsel for
transactions made pursuant to Rule 144 except in circumstances that
require a determination of an entity's status as an "affiliate".
(i) It is understood that the certificates evidencing
the Securities will bear the following legends:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD
PURSUANT TO RULE 144 OF SUCH ACT."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON VOTING AND TRANSFER AS SET
FORTH IN THE VOTING TRUST AGREEMENT, DATED AS OF
MARCH 31, 1998, A COPY
Page 32 of 102
<PAGE>
OF WHICH IS AVAILABLE FROM THE COMPANY AND ANY
SUCCESSOR THERETO."
(j) The execution, delivery and performance of this
Agreement, the Voting Trust Agreement and the Amendment, and the
consummation by Investor of the transactions contemplated hereby and
thereby do not and will not (i) result in a violation of Investor's
charter documents or bylaws or (ii) conflict with any material
agreement, indenture or instrument to which Investor is a party, or
(iii) result in a violation of any order, judgment or decree of any
court or governmental agency applicable to Investor or, to the
Investor's knowledge, of any law, rule, or regulation. Except as may be
required under the HSR Act, Investor is not required to obtain any
consent or authorization of any governmental agency in order for it to
perform its obligations under this Agreement, under the Voting Trust
Agreement or under the Amendment.
5. COVENANTS.
(a) The Company covenants and agrees with Investor as
follows:
1. For so long as any of the Preferred
Shares are outstanding, and in any case for a period of 40 calendar
days thereafter, the Company will cause its Common Stock to continue to
be registered under Sections 12(b) or 12(g) of the Exchange Act, will
comply in all respects with its reporting and filing obligations under
said act, and will not take any action or file any document (whether or
not permitted by the Act or the Exchange Act or the rules thereunder)
to terminate or suspend its reporting and filing obligations under said
acts, except as permitted herein. For so long as any of the Preferred
Shares are outstanding, and in any case for a period of 40 calendar
days thereafter, the Company will use its best efforts to continue the
listing or trading of its Common Stock on Nasdaq National Market
("Nasdaq") or on a national securities exchange (as defined in the
Exchange Act) and will comply in all respects with the Company's
reporting, filing and other obligations under the bylaws or rules of
the National Association of Securities Dealers and Nasdaq.
Notwithstanding the foregoing, the provisions of this subsection shall
not in any way restrict the Company's ability to negotiate and
consummate the consolidation, reorganization or merger of the Company
with or into any other corporation or corporations or a sale,
conveyance, or other disposition of all or substantially all of the
Company's property or business
2. The Company will (i) comply with the
terms and conditions of the Preferred Shares as set forth in the
Certificate of Determination and (ii) not amend the Certificate of
Determination without Investor's express written consent.
3. For so long as any of the Preferred
Shares are outstanding, the Company shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but
unissued Common Stock, for issuance upon conversion of such Preferred
Shares, not less than the maximum number of shares of Common Stock then
so issuable in exchange for all Preferred Shares that have been issued
pursuant to this Agreement and not previously converted.
(b) The Investor covenants and agrees with the
Company that neither Investor nor any of Investor's affiliates nor any
person acting on its or their behalf will at any time offer or sell
Page 33 of 102
<PAGE>
any Preferred Shares or any Conversion Stock other than pursuant to
registration under the Securities Act or pursuant to an available
exemption therefrom.
(c) The covenants contained in this Section 5 shall
terminate upon the consummation of any consolidation, reorganization or
merger of the Company with or into any other corporation or
corporations or a sale, conveyance, or other disposition of all or
substantially all of the Company's property or business.
(d) With a view to making available the benefits of
certain rules and regulations of the SEC that may at any time permit
the sale of the restricted securities to the public without
registration, the Company agrees to:
1. Make and keep public information
available, as those terms are understood and defined in Rule 144 under
the Securities Act, at all times after the effective date of the first
registration under the Securities Act filed by the Company for an
offering of its securities to the general public;
2. Use its best efforts to then file with
the SEC in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act; and
3. So long as Investor owns any Preferred
Shares, to furnish to the Investor upon request, a written statement by
the Company as to its compliance with the reporting requirements of
said Rule 144 and of the Securities Act and of the Exchange Act, a copy
of the most recent annual or quarterly report of the Company, and such
other reports and documents of the Company as the Investor may
reasonably request in availing itself of any rule or regulation of the
SEC allowing the Investor to sell any such securities without
registration.
(e) HSR ACT FILING. Each of the Company and Investor
shall (i) promptly make or cause to be made the filings required of
such party or any of its affiliates or subsidiaries under the HSR Act
with respect to the purchase of the Preferred Shares, and (ii) comply
at the earliest practicable date with any request under the HSR Act for
additional information, documents, or other material received by such
party or any of its affiliates or subsidiaries from the Federal Trade
Commission or the Department of Justice or other appropriate regulatory
agency in respect of such filings and the sale of the Preferred Shares.
Each of the Company and Investor shall use commercially reasonable
efforts to take such action as may be required to cause the expiration
of the notice periods under the HSR Act with respect to the sale of
Preferred Shares as soon as possible after the execution of this
Agreement. The Company agrees to pay any filing fees in connection with
all filings required under the HSR Act in connection with the
transaction contemplated hereby, and agrees to pay reasonable legal
counsel fees and expenses not to exceed $5,000 incurred in connection
with such filings.
6. CONDITIONS PRECEDENT TO INVESTOR'S OBLIGATIONS. The
obligations of Investor under subsection 1(a) of this Agreement are subject to
the fulfillment on or before the Closing of each of the following conditions,
unless expressly waived in writing by the Investor:
Page 34 of 102
<PAGE>
(a) The representations and warranties of the Company
contained in Section 3 shall be true on and as of the Closing with the
same effect as though such representations and warranties had been made
on and as of the date of such Closing, except for representations and
warranties made as of a particular date, which shall be true and
correct as of such date.
(b) The Company shall have performed and complied
with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on
or before the Closing.
(c) The President of the Company shall deliver to
Investor at the Closing a certificate stating that the conditions
specified in Sections 6(a) and 6(b) have been fulfilled and stating
that there shall have been no material adverse change in the business,
affairs, operations, properties, assets or financial condition of the
Company since the date of this Agreement.
(d) The Company shall have caused the Certificate of
Determination to be filed with the Secretary of State of the State of
California in accordance with the laws thereof.
(e) No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of
competent jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement.
(f) The applicable waiting period under the HSR Act
relating to the sale of the Preferred Shares shall have expired or been
terminated.
(g) The Company, the Trustee and Investor shall have
entered into the Voting Trust Agreement.
(h) The Company shall have delivered to Investor a
certificate representing the Preferred Shares, duly registered on the
books of the Company in the name of the Investor.
(i) Investor shall have received from Gunderson
Dettmer Stough Villeneuve Franklin & Hachigian, LLP, counsel for the
Company, an opinion, dated as of the Closing Date, in substantially the
form attached hereto as EXHIBIT D.
(j) The Company and Glaxo shall have entered into the
Amendment and Investor shall have accepted and agreed to the Amendment.
7. CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS. The
obligations of the Company to Investor under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions by the
Investor, unless expressly waived in writing by the Company:
(a) The representations and warranties of the
Investor contained in Section 4 shall be true on and as of the Closing
with the same effect as though such representations and warranties had
been made on and as of the date of such Closing, except for
representations and warranties made as of a particular date, which
shall be true and correct as of such date.
Page 35 of 102
<PAGE>
(b) The Investor shall have performed and complied
with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on
or before the Closing.
(c) An appropriate officer of Investor shall deliver
to the Company at the Closing a certificate stating that the conditions
specified in Sections 7(a) and 7(b) have been fulfilled.
(d) No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of
competent jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement.
(e) The applicable waiting period under the HSR Act
relating to the sale of the Preferred Shares shall have expired or been
terminated.
(f) The Company, the Trustee and Investor shall have
entered into the Voting Trust Agreement.
(g) The Investor shall have delivered the aggregate
Purchase Price for the Preferred Shares.
(h) The Company and Glaxo shall have entered into the
Amendment and Investor shall have accepted and agreed to the Amendment.
(i) The Company shall have caused the Certificate of
Determination to be filed with the Secretary of State of the State of
California in accordance with the laws thereof.
8. FEES AND EXPENSES. Each of Investor and the Company agrees
to pay its own expenses incident to the performance of its obligations
hereunder, including, but not limited to the fees, expenses and disbursements of
such party's counsel, except as is otherwise expressly provided in this
Agreement.
9. SURVIVAL OF THE REPRESENTATIONS, WARRANTIES, ETC. The
respective representations, warranties, and agreements made herein by or on
behalf of the parties hereto shall remain in full force and effect for a period
of two years from the Closing Date, regardless of any investigation made by or
on behalf of the other party to this Agreement or any officer, director or
employee of, or person controlling or under common control with, such party and
will survive delivery of and payment for the Preferred Shares and any Conversion
Stock issuable hereunder.
10. TERMINATION.
(a) This Agreement may be terminated and the
transactions contemplated by this Agreement may be abandoned at any
time prior to the Closing as follows:
(i) by mutual written consent of the Company
and the Investor; or
Page 36 of 102
<PAGE>
(ii) by either the Company or the Investor
if the Closing shall not have occurred on or before May 31, 1998 (the
"Termination Date"); provided, however, that the right to terminate
this Agreement under this Section 10 shall not be available to any
party whose failure to fulfill any obligation under this Agreement has
been the cause of, or resulted in, the failure of the Closing to occur
on or before the Termination Date; and provided further, that if a
request for additional information is received from an appropriate
regulatory authority pursuant to the HSR Act, such date shall be
extended to the 90th day following acknowledgment by such regulatory
authority that Investor and the Company complied with such request.
(b) In the event of termination of this Agreement by
either the Company or Investor as provided in this Section 10, this
Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of the Company or Investor, other
than the provisions of this Section 10 and Section 12, and except to
the extent that such termination results from the willful and material
breach by a party of any of its representations, warranties, covenants
or agreements set forth in this Agreement.
11. NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon delivery by confirmed facsimile or reliable international
courier service or upon personal delivery to the party to be notified.
12. MISCELLANEOUS.
(a) This Agreement may be executed in one or more
counterparts and it is not necessary that signatures of all parties
appear on the same counterpart, but such counterparts together shall
constitute but one and the same agreement.
(b) This Agreement shall inure to the benefit of and
be binding upon the parties hereto, their respective successors and
assigns.
(c) This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of
California without regard to principles of conflict of laws.
(d) The provisions of this Agreement are severable,
and if any clause or provision hereof shall be held invalid, illegal or
unenforceable in whole or in part, such invalidity or unenforceability
shall not in any manner affect any other clause or provision of this
Agreement.
(e) The headings of the sections of this document
have been inserted for convenience of reference only and shall not be
deemed to be a part of this Agreement.
(f) This Agreement (including the terms and
conditions of the Certificate of Determination relating to the
Preferred Shares), the Voting Trust Agreement and the Amendment
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, between the parties hereto with
respect to the subject matter of this Agreement and is not intended to
confer upon any person other than the parties hereto any rights or
remedies hereunder or under the terms of the term sheets between such
parties.
Page 37 of 102
<PAGE>
(g) The term "affiliate" is used herein as defined in
Rule 144(a)(1) under the Securities Act.
Page 38 of 102
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement, all as of the day and year first above written.
AFFYMETRIX, INC.
By: /s/ STEPHEN FODOR
----------------------------
Name: Stephen Fodor
Title: President/CEO
GLAXO WELLCOME AMERICAS INC.
By: /s/ ROBERT A. INGRAM
-----------------------------
Name: Robert A. Ingram
Title: Executive Vice President
Page 39 of 102
<PAGE>
EXHIBIT A OF EXHIBIT 2
CERTIFICATE OF DETERMINATION
OF SERIES AA PREFERRED STOCK
OF AFFYMETRIX, INC.,
A CALIFORNIA CORPORATION
(PURSUANT TO SECTION 401 OF THE CALIFORNIA CORPORATIONS CODE)
The undersigned Stephen P.A. Fodor and Edward M. Hurwitz, do hereby
certify:
1. That they are the duly elected and acting President and Chief
Executive Officer and the Chief Financial Officer,
respectively, of Affymetrix, Inc., a California corporation
(the "Corporation").
2. The authorized number of shares of the Corporation's Preferred
Stock is 27,500,000, and the number of shares constituting
Series AA Preferred Stock is 1,634,522, none of the shares of
that series has been issued.
3. That pursuant to the authority conferred upon the Board of
Directors by the Amended and Restated Articles of
Incorporation of the Corporation, the Board of Directors
adopted the following resolution:
RESOLVED, that pursuant to the authority granted to and vested in
the Board of Directors of the Corporation in accordance with the provisions of
the Corporation's Amended and Restated Articles of Incorporation, the Board of
Directors hereby creates a new series of Preferred Stock designated as Series AA
Preferred Stock which shall be subject to the following rights, preferences,
privileges and restrictions thereof as follows:
RIGHTS, PREFERENCES, PRIVILEGES AND RESTRICTIONS OF PREFERRED
STOCK. The rights, preferences, privileges, and restrictions granted to and
imposed on the Series AA Preferred Stock, which series shall consist of one
million six hundred thirty four thousand five hundred twenty two (1,634,522)
shares (the "Series AA Preferred Stock"), are as set forth below in this
Certificate of Determination.
1. DIVIDEND PROVISIONS.
(a) Subject to the rights of any series of Preferred Stock that
may from time to time come into existence, the holders of
shares of Series AA Preferred Stock shall be entitled to
receive dividends payable in cash, out of any assets legally
available therefor, prior and in preference to any declaration
or payment of any dividend (payable other than in Common Stock
or other securities and rights convertible into or entitling
the holder thereof to receive, directly or indirectly,
additional shares of Common Stock of this Corporation) on the
Common Stock of this Corporation, at the rate per share per
annum of $1.99 (as adjusted for any stock splits, stock
dividends, combinations, recapitalizations or the like with
respect to the Series AA Preferred Stock) payable in two equal
installments on June 30 and December 31 of each year so long
as such share of Series AA Preferred Stock is then
outstanding. Such dividends shall accrue on each
Page 40 of 102
<PAGE>
share from the Purchase Date (as defined below), and shall
accrue from day to day, whether or not earned or declared.
Such dividends shall be cumulative so that, except as provided
below, if such dividends in respect of any previous or current
dividend period, at the annual rate specified above, shall not
have been paid, the deficiency shall first be fully paid
before any dividend or other distribution shall be paid on or
declared and set apart for the Common Stock. Cumulative
dividends with respect to a share of Series AA Preferred Stock
which are accrued, payable and/or in arrears shall, upon
conversion of such share to Common Stock or redemption of such
share, be paid to the extent assets are legally available
therefor pursuant to the provisions of Section 2 and Section
3, respectively, and any amounts for which assets are not
legally available shall be paid promptly as assets become
legally available therefor; any partial payment will be made
pro rata among the holders of such shares. The holders of the
outstanding Series AA Preferred Stock can waive any dividend
preference that such holders shall be entitled to receive
under this Section 1 upon the affirmative vote or written
consent of the holders of at least a majority of the Series AA
Preferred Stock then outstanding.
(b) Subject to the rights of any shares of Preferred Stock that
may from time to time come into existence and in addition to
the amounts paid pursuant to subsection 1(a) above, the
holders of shares of Series AA Preferred Stock shall be
entitled to receive an amount equal to any dividend paid
(other than dividends paid in Common Stock or other securities
and rights convertible into or entitling the holder thereof to
receive, directly or indirectly, additional shares of Common
Stock of this Corporation) on the Common Stock of this
Corporation (as determined on a per annum basis and on as a
converted basis for the Series AA Preferred Stock), payable
when, as and if declared by the Board of Directors. Such
dividends shall not be cumulative.
2. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up of
this Corporation, either voluntary or involuntary, subject to
the rights of series of Preferred Stock that may from time to
time come into existence, the holders of Series AA Preferred
Stock shall be entitled to receive, prior and in preference to
any distribution of any of the assets of this Corporation to
the holders of Common Stock by reason of their ownership
thereof, an amount per share equal to the sum of (i) $30.59
for each outstanding share of Series AA Preferred Stock (the
"Original Series AA Issue Price") (subject to adjustment of
such fixed dollar amounts for any stock splits, stock
dividends, combinations, recapitalizations or the like with
respect to the Series AA Preferred Stock), (ii) accrued but
unpaid dividends on such share, and (iii) a per share amount
equal to the difference obtained by subtracting (A) the
product of ten percent of the annual per share dividend
multiplied by a fraction, the numerator of which is the number
of days elapsed since the date upon which the first share of
Series AA Preferred Stock was first issued (the "Purchase
Date") and the denominator of which is 365, from (B) the
annual per share dividend. The sum obtained by adding the
amounts described in clauses (i), (ii) and (iii) of the
preceding sentence is referred to herein as the "Series AA
Liquidation Preference". If upon the occurrence of such event,
the assets and funds thus distributed among the holders of the
Series AA Preferred Stock shall be insufficient to
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<PAGE>
permit the payment to such holders of the full aforesaid
preferential amounts, then, subject to the rights of series of
Preferred Stock that may from time to time come into
existence, the entire assets and funds of this Corporation
legally available for distribution shall be distributed
ratably among the holders of the Series AA Preferred Stock in
proportion to the amount of such stock owned by each such
holder.
(b) Upon the completion of the distribution required by
subparagraph (a) of this Section 2 and any other distribution
that may be required with respect to series of Preferred Stock
that may from time to time come into existence, if assets
remain in this Corporation, the holders of the Common Stock of
this Corporation, shall receive an amount per share of Common
Stock equal to the quotient obtained by dividing (i) the
Series AA Liquidation Preference, by (ii) the number of shares
of Common Stock into which one (1) share of Series AA
Preferred Stock could then be converted pursuant to Section 4
hereof. If upon the occurrence of such event, the assets and
funds thus distributed among the holders of the Common Stock
shall be insufficient to permit the payment to such holders of
the full aforesaid preferential amount, then, subject to the
rights of series of Preferred Stock that may from time to time
come into existence, the entire remaining assets and funds of
this Corporation legally available for distribution shall be
distributed ratably among the holders of the Common Stock in
proportion to the amount of such stock owned by each such
holder.
(c) After the distributions described in subsection (a) and (b)
above have been paid, subject to the rights of series of
Preferred Stock that may from time to time come into
existence, the remaining assets of this Corporation available
for distribution to shareholders shall be distributed among
the holders of Series AA Preferred Stock and Common Stock pro
rata based on the number of shares of Common Stock held by
each (assuming full conversion of all such Series AA Preferred
Stock).
(d) (i) The following events shall be deemed to be a
liquidation, dissolution or winding up within the
meaning of this Section 2: (A) a consolidation or
merger of this Corporation with or into any other
corporation or corporations as a result of which the
holders of voting stock of this Corporation
immediately prior to such transaction do not own,
directly or indirectly, more than 50% of the voting
power of the surviving corporation or its parent
corporation immediately after such transaction, or
(B) a sale, conveyance or disposition of all or
substantially all of the assets of this Corporation.
(ii) In any of such events, the value of the assets
distributed to the shareholders of this Corporation
shall be determined as set forth herein. If the
assets distributed to the shareholders of this
Corporation consist of other than cash or securities,
the value of such assets shall be the fair market
value thereof, as determined by the this Corporation
and the holders of at least a majority of the voting
power of all the then outstanding shares of Preferred
Stock. If the assets distributed to the shareholders
of this Corporation consist of securities, such
securities shall be valued as follows:
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<PAGE>
(A) Securities not subject to investment letter or other
similar restrictions on free marketability covered by
(B) below:
(1) If traded on a securities exchange or through the
Nasdaq National Market, the value shall be deemed to
be the average of the closing prices of the
securities on such exchange or system over the twenty
(20) trading day period ending three (3) trading days
prior to the closing;
(2) If actively traded over-the-counter, the value shall
be deemed to be the average of the closing bid or
sale prices (whichever is applicable) over the twenty
(20) trading day period ending three (3) trading days
prior to the closing; and
(3) If there is no active public market, the value shall
be the fair market value thereof, as mutually
determined by this Corporation and the holders of at
least a majority of the voting power of all then
outstanding shares of Preferred Stock.
(B) The method of valuation of securities subject to
investment letter or other restrictions on free
marketability (other than restrictions arising solely
by virtue of a shareholder's status as an affiliate
or former affiliate) shall be to make an appropriate
discount from the market value determined as above in
(A) (1), (2) or (3) to reflect the approximate fair
market value thereof, as mutually determined by this
Corporation and the holders of at least a majority of
the voting power of all then outstanding shares of
such Preferred Stock.
3. REDEMPTION.
(a) REDEMPTION AT THE OPTION OF THIS CORPORATION.
(i) Subject to the rights of series of Preferred Stock that may
from time to time come into existence, at any time on or prior
to March 9, 2001, this Corporation may at any time it may
lawfully do so, at the option of the Board of Directors,
redeem in whole or in part the Series AA Preferred Stock by
paying in cash therefor a sum equal to (A) the Original Series
AA Issue Price (subject to adjustment of such fixed dollar
amount for any stock splits, stock dividends, combinations,
recapitalizations or the like with respect to the Series AA
Preferred Stock), plus (B) accrued but unpaid dividends on
such share (the "Early Redemption Price"); provided that the
closing sale price of this Corporation's Common Stock on the
Nasdaq National Market (or such other national securities
exchange on which the Common Stock is then listed) has been at
or above $52.00 (subject to adjustment of such fixed dollar
amount for any stock splits, stock dividends, combinations,
recapitalizations or the like with respect to the Common
Stock) for twenty (20) of thirty (30) consecutive trading days
prior to the applicable Corporation Redemption Date (as
defined below), which thirty (30) day period shall have ended
not more than ten (10) trading days prior to the date of the
Corporation Redemption Notice (as defined below). Any
redemption effected pursuant to this subsection 3(a)(i) shall
be made on a pro rata basis among the holders of the Series
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<PAGE>
AA Preferred Stock in proportion to the number of shares of
Series AA Preferred Stock then held by them.
(ii) Subject to the rights of series of Preferred Stock that may
from time to time come into existence, at any time after March
9, 2001, this Corporation may at any time it may lawfully do
so, at the option of the Board of Directors, redeem in whole
or in part the Series AA Preferred Stock by paying in cash
therefor a sum equal to the Series AA Liquidation Preference
(the "Late Redemption Price"). Any redemption effected
pursuant to this subsection 3(a)(ii) shall be made on a pro
rata basis among the holders of the Series AA Preferred Stock
in proportion to the number of shares of Series AA Preferred
Stock then held by them.
(iii) Subject to the rights of series of Preferred Stock that may
from time to time come into existence, at least twenty (20)
but no more than thirty (30) days prior to the date on which
this Corporation proposes to redeem any shares of Series AA
Preferred Stock (each a "Corporation Redemption Date"),
written notice shall be personally delivered, sent by reliable
international courier, or sent by confirmed facsimile to each
holder of record (at the close of business on the business day
next preceding the day on which notice is given) of the Series
AA Preferred Stock to be redeemed, at the address last shown
on the records of this Corporation for such holder, notifying
such holder of the redemption to be effected on the applicable
Corporation Redemption Date, specifying the number of shares
to be redeemed from such holder, the applicable Corporation
Redemption Date, the Early or Late Redemption Price, as
applicable, the place at which payment may be obtained and
calling upon such holder to surrender to this Corporation, in
the manner and at the place designated, his, her or its
certificate or certificates representing the shares to be
redeemed (the "Corporation Redemption Notice"). Except as
provided in subsection 3(a)(iv) or 3(a)(v), on or after each
Corporation Redemption Date, each holder of Series AA
Preferred Stock to be redeemed on such Corporation Redemption
Date shall surrender to this Corporation the certificate or
certificates representing such shares, in the manner and at
the place designated in the Corporation Redemption Notice, and
thereupon the Early or Late Redemption Price, as applicable,
of such shares shall be payable to the order of the person
whose name appears on such certificate or certificates as the
owner thereof and each surrendered certificate shall be
canceled. In the event less than all the shares represented
by any such certificate are redeemed, a new certificate shall
be issued representing the unredeemed shares. Any shares of
Series AA Preferred Stock that are not redeemed shall remain
subject to redemption by this Corporation pursuant to this
Section 3(a).
(iv) Each holder of Series AA Preferred Stock may, at anytime up to
two (2) trading days prior to the applicable Corporation
Redemption Date, elect to convert all shares of Series AA
Preferred Stock designated for redemption in the Corporation
Redemption Notice into shares of Common Stock pursuant to
Section 4 below.
(v) From and after each Corporation Redemption Date, unless there
shall have been a default in payment of the Early or Late
Redemption Price, as applicable, all rights of the holders of
shares of Series AA Preferred Stock designated for redemption
on such
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<PAGE>
Corporation Redemption Date in the Corporation Redemption
Notice as holders of Series AA Preferred Stock (except the
right to receive the Early or Late Redemption Price, as
applicable, without interest upon surrender of their
certificate or certificates) shall cease with respect to such
shares, and such shares shall not thereafter be transferred on
the books of this Corporation or be deemed to be outstanding
for any purpose whatsoever. Subject to the rights of series of
Preferred Stock that may from time to time come into
existence, if the funds of this Corporation legally available
for redemption of shares of Series AA Preferred Stock on any
Corporation Redemption Date are insufficient to redeem the
total number of shares of Series AA Preferred Stock to be
redeemed on such date, those funds that are legally available
will be used to redeem the maximum possible number of such
shares ratably among the holder(s) of such shares to be
redeemed such that an equal percentage of the number of shares
held by each holder of Series AA Preferred Stock is redeemed
(provided that this Corporation shall have no obligation to
issue or redeem any fractional shares). The shares of Series
AA Preferred Stock not redeemed shall remain outstanding and
entitled to all the rights and preferences provided herein.
Subject to the rights of series of Preferred Stock that may
from time to time come into existence, at any time thereafter
when additional funds of this Corporation are legally
available for the redemption of shares of Series AA Preferred
Stock, such funds will immediately be used to redeem the
balance of the shares that this Corporation has become obliged
to redeem on any Corporation Redemption Date but that it has
not redeemed.
(b) REDEMPTION AT OPTION OF SHAREHOLDERS.
(i) Subject to the rights of series of Preferred Stock that may
from time to time come into existence, at any time on or after
March 9, 2005, provided that this Corporation shall have
received a written request from the holders of not less than a
majority of the then outstanding Series AA Preferred Stock
that a specified percentage of such holders' shares of Series
AA Preferred Stock be redeemed, and concurrently with
surrender by such holders of the certificates representing
such shares, this Corporation shall, to the extent it may
lawfully do so, redeem the shares specified in such request by
paying in cash therefor a sum per share equal to (A) $30.59
per share of Series AA Preferred Stock (as adjusted for any
stock splits, stock dividends, recapitalizations or the like)
plus (B) accrued but unpaid dividends on such share (the
"Series AA Redemption Price"); provided, however, in no event
shall this Corporation be required to redeem more than 817,261
shares of Series AA Preferred Stock (as adjusted for any stock
splits, stock dividends, recapitalizations or the like) during
any twelve month period. Any request made pursuant to this
subsection 3(b)(i) shall be delivered at least one hundred and
eighty (180) days prior to the date on which the redemption is
requested to occur (a "Shareholder Redemption Date"). Any
redemption of Series AA Preferred Stock effected pursuant to
this subsection 3(b)(i) shall be made on a pro rata basis
among the holders of the Series AA Preferred Stock in
proportion to the number of shares of Series AA Preferred
Stock proposed to be redeemed by such holders.
(ii)Subject to the rights of series of Preferred Stock that may
from time to time come into existence, at least twenty (20)
but no more than thirty (30) days prior to a Shareholder
Redemption Date, written notice shall be personally delivered,
sent by reliable
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<PAGE>
international courier, or sent by confirmed facsimile to each
holder of record (at the close of business on the business day
next preceding the day on which notice is given) of the Series
AA Preferred Stock to be redeemed, at the address last shown
on the records of this Corporation for such holder, notifying
such holder of the redemption to be effected on the
Shareholder Redemption Date, specifying the number of shares
to be redeemed from such holder, the Shareholder Redemption
Date, the Series AA Redemption Price, the place at which
payment may be obtained and calling upon such holder to
surrender to this Corporation, in the manner and at the place
designated, his, her or its certificate or certificates
representing the shares to be redeemed (the "Shareholder
Redemption Notice"). Except as provided in subsection
(3)(b)(iii), on or after the Shareholder Redemption Date, each
holder of Series AA Preferred Stock to be redeemed on such
Redemption Date shall surrender to this Corporation the
certificate or certificates representing such shares, in the
manner and at the place designated in the Shareholder
Redemption Notice, and thereupon the Series AA Redemption
Price for such shares shall be payable to the order of the
person whose name appears on such certificate or certificates
as the owner thereof and each surrendered certificate shall be
cancelled. In the event less than all the shares represented
by any such certificate are redeemed, a new certificate shall
be issued representing the unredeemed shares.
(iii)From and after the Shareholder Redemption Date, unless there
shall have been a default in payment of the Series AA
Redemption Price, all rights of the holders of shares of
Series AA Preferred Stock designated for redemption on the
Shareholder Redemption Date in the Shareholder Redemption
Notice as holders of Series AA Preferred Stock (except the
right to receive the Series AA Redemption Price without
interest upon surrender of their certificate or certificates)
shall cease with respect to such shares, and such shares shall
not thereafter be transferred on the books of this Corporation
or be deemed to be outstanding for any purpose whatsoever.
Subject to the rights of series of Preferred Stock that may
from time to time come into existence, if the funds of this
Corporation legally available for redemption of shares of
Series AA Preferred Stock on the Shareholder Redemption Date
are insufficient to redeem the total number of shares of
Series AA Preferred Stock to be redeemed on such date, those
funds that are legally available will be used to redeem the
maximum possible number of such shares ratably among the
holders of such shares to be redeemed such that an equal
percentage of the number of shares held by each holder of
Series AA Preferred Stock is redeemed (provided that this
Corporation shall have no obligation to issue or redeem any
fractional shares). The shares of Series AA Preferred Stock
not redeemed shall remain outstanding and entitled to all the
rights and preferences provided herein. Subject to the rights
of series of Preferred Stock that may from time to time come
into existence, at any time thereafter when additional funds
of this Corporation are legally available for the redemption
of shares of Series AA Preferred Stock, such funds will
immediately be used to redeem the balance of the shares that
this Corporation has become obliged to redeem on the
Shareholder Redemption Date but that it has not redeemed.
4. CONVERSION. The holders of the Series AA Preferred Stock shall
have conversion rights as follows (the "Conversion Rights"):
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<PAGE>
(a) RIGHT TO CONVERT. Each share of Series AA Preferred Stock
shall be convertible, at the option of the holder thereof, at
any time after the Purchase Date of such share and on or prior
to the second trading day prior to the Redemption Date, if
any, as may have been fixed in any Redemption Notice with
respect to such share of the Series AA Preferred Stock, at the
office of this Corporation or any transfer agent for such
stock, into such number of fully paid and nonassessable shares
of Common Stock as is determined by dividing the Original
Series AA Issue Price by the Conversion Price applicable to
such share, determined as hereafter provided, in effect on the
date the certificate is surrendered for conversion (the
"Conversion Ratio"). The initial Conversion Price per share
for shares of Series AA Preferred Stock shall be $39.77 per
share; provided, however, that the Conversion Price for the
Series AA Preferred Stock shall be subject to adjustment as
set forth in subsection 4(d).
(b) AUTOMATIC CONVERSION. Each share of Series AA Preferred Stock
shall automatically be converted into shares of Common Stock
at the Conversion Ratio at the time in effect for such Series
AA Preferred Stock immediately upon the date specified by
written consent or agreement of the holders of a majority of
the then outstanding shares of Series AA Preferred Stock.
(c) MECHANICS OF CONVERSION. Before any holder of Series AA
Preferred Stock shall be entitled to convert the same into
shares of Common Stock, he or she shall surrender the
certificate or certificates therefor, duly endorsed, at the
office of this Corporation or of any transfer agent for the
Series AA Preferred Stock, and shall give written notice to
this Corporation at its principal corporate office, of the
election to convert the same and shall state therein the name
or names in which the certificate or certificates for shares
of Common Stock are to be issued. This Corporation shall, as
soon as practicable thereafter, issue and deliver at such
office to such holder of Series AA Preferred Stock, or to the
nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to which
such holder shall be entitled as aforesaid. Such conversion
shall be deemed to have been made immediately prior to the
close of business on the date of such surrender of the shares
of Series AA Preferred Stock to be converted, and the person
or persons entitled to receive the shares of Common Stock
issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of
Common Stock as of such date. If the conversion is in
connection with an underwritten offering of securities
registered pursuant to the Securities Act of 1933, the
conversion may, at the option of any holder tendering Series
AA Preferred Stock for conversion, be conditioned upon the
closing with the underwriters of the sale of securities
pursuant to such offering, in which event the persons entitled
to receive the Common Stock upon conversion of the Series AA
Preferred Stock shall not be deemed to have converted such
Series AA Preferred Stock until immediately prior to the
closing of such sale of securities.
(d) CONVERSION PRICE ADJUSTMENTS OF PREFERRED STOCK FOR SPLITS,
STOCK DIVIDENDS, COMBINATIONS AND THE LIKE. The Conversion
Price of the Series AA Preferred Stock shall be subject to
adjustment from time to time as follows:
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<PAGE>
(i) In the event this Corporation should at any time or
from time to time after the Purchase Date fix a
record date for the effectuation of a split or
subdivision of the outstanding shares of Common Stock
or the determination of holders of Common Stock
entitled to receive a dividend or other distribution
payable in additional shares of Common Stock or other
securities or rights convertible into, or entitling
the holder thereof to receive directly or indirectly,
additional shares of Common Stock (hereinafter
referred to as "Common Stock Equivalents") without
payment of any consideration by such holder for the
additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of
Common Stock issuable upon conversion or exercise
thereof), then, as of such record date (or the date
of such dividend distribution, split or subdivision
if no record date is fixed), the Conversion Price of
the Series AA Preferred Stock shall be appropriately
decreased so that the number of shares of Common
Stock issuable on conversion of each share of such
series shall be increased in proportion to such
increase of the aggregate of shares of Common Stock
outstanding and those issuable with respect to such
Common Stock Equivalents.
(ii) If the number of shares of Common Stock outstanding
at any time after the Purchase Date is decreased by a
combination of the outstanding shares of Common
Stock, then, following the record date of such
combination, the Conversion Price for the Series AA
Preferred Stock shall be appropriately increased so
that the number of shares of Common Stock issuable on
conversion of each share of such series shall be
decreased in proportion to such decrease in
outstanding shares.
(e) OTHER DISTRIBUTIONS. In the event this Corporation shall
declare a distribution payable in securities of other persons,
evidences of indebtedness issued by this Corporation or other
persons, assets (excluding cash dividends) or other options or
rights not referred to in subsection 4(d)(i), then, in each
such case for the purpose of this Subsection 4(e), the holders
of the Series AA Preferred Stock shall be entitled to a
proportionate share of any such distribution as though they
were the holders of the number of shares of Common Stock of
this Corporation into which their shares of Series AA
Preferred Stock are convertible as of the record date fixed
for the determination of the holders of Common Stock of this
Corporation entitled to receive such distribution.
(f) RECAPITALIZATIONS. If at any time or from time to time there
shall be a recapitalization of the Common Stock (other than a
subdivision, combination or merger or sale of assets
transaction provided for elsewhere in this Section 4 or
Section 2) provision shall be made so that the holders of the
Series AA Preferred Stock shall thereafter be entitled to
receive upon conversion of the Series AA Preferred Stock the
number of shares of stock or other securities or property of
this Corporation or otherwise, to which a holder of Common
Stock deliverable upon conversion would have been entitled on
such recapitalization. In any such case, appropriate
adjustment shall be made in the application of the provisions
of this Section 4 with respect to the rights of the holders of
the Series AA Preferred Stock after the recapitalization to
the
Page 48 of 102
<PAGE>
end that the provisions of this Section 4 (including
adjustment of the Conversion Price then in effect and the
number of shares purchasable upon conversion of the Series AA
Preferred Stock) shall be applicable after that event as
nearly equivalent as may be practicable.
(g) NO IMPAIRMENT. This Corporation will not, by amendment of its
Amended and Restated Articles of Incorporation or through any
reorganization, recapitalization, transfer of assets,
consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be
observed or performed hereunder by this Corporation, but will
at all times in good faith assist in the carrying out of all
the provisions of this Section 4 and in the taking of all such
action as may be necessary or appropriate in order to protect
the Conversion Rights of the holders of the Series AA
Preferred Stock against impairment.
(h) NO FRACTIONAL SHARES AND CERTIFICATE AS TO ADJUSTMENTS.
(i) No fractional shares shall be issued upon the
conversion of any share or shares of the Series AA
Preferred Stock, and the number of shares of Common
Stock to be issued shall be rounded down to the
nearest whole share. This Corporation shall provide
the holder of any fractional interest with an amount
of cash equal to the fair market value of one share
of this Corporation's Common Stock multiplied by such
fractional interest. Whether or not fractional shares
are issuable upon such conversion shall be determined
on the basis of the total number of shares of Series
AA Preferred Stock the holder is at the time
converting into Common Stock and the number of shares
of Common Stock issuable upon such aggregate
conversion.
(ii) Upon the occurrence of each adjustment or
readjustment of the Conversion Price of Series AA
Preferred Stock pursuant to this Section 4, this
Corporation, at its expense, shall promptly compute
such adjustment or readjustment in accordance with
the terms hereof and prepare and furnish to each
holder of Series AA Preferred Stock a certificate
setting forth such adjustment or readjustment and
showing in detail the facts upon which such
adjustment or readjustment is based. This
Corporation shall, upon the written request at any
time of any holder of Series AA Preferred Stock,
furnish or cause to be furnished to such holder a
like certificate setting forth (A) such adjustment
and readjustment, (B) the Conversion Price for such
series of Preferred Stock at the time in effect, and
(C) the number of shares of Common Stock and the
amount, if any, of other property that at the time
would be received upon the conversion of a share of
Series AA Preferred Stock.
(i) NOTICES OF RECORD DATE. In the event of any taking by this
Corporation of a record of the holders of any class of
securities for the purpose of determining the holders thereof
who are entitled to receive any dividend (other than a cash
dividend) or other distribution, any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class
or any other securities or property, or to receive any other
right,
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<PAGE>
this Corporation shall mail to each holder of Series AA
Preferred Stock, at least twenty (20) days prior to the date
specified therein, a notice specifying the date on which any
such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such
dividend, distribution or right.
(j) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. This
Corporation shall at all times reserve and keep available out
of its authorized but unissued shares of Common Stock, solely
for the purpose of effecting the conversion of the shares of
the Series AA Preferred Stock, such number of its shares of
Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of the Series
AA Preferred Stock; and if at any time the number of
authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding
shares of the Series AA Preferred Stock, in addition to such
other remedies as shall be available to the holder of such
Preferred Stock, this Corporation will take such corporate
action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such
purposes, including, without limitation, engaging in best
efforts to obtain the requisite shareholder approval of any
necessary amendment to this Certificate of Designation or the
Amended and Restated Articles of Incorporation.
(k) NOTICES. Any notice required by the provisions of this Section
4 to be given to the holders of shares of Series AA Preferred
Stock shall be deemed given if deposited in the United States
mail, postage prepaid, and addressed to each holder of record
at his address appearing on the books of this Corporation.
5. VOTING RIGHTS. The holder of each share of Series AA Preferred
Stock shall have the right to one vote for each share of
Common Stock into which such Series AA Preferred Stock could
then be converted at the record date for determination of the
shareholders entitled to vote thereon, and with respect to
such vote, such holder shall have full voting rights and
powers equal to the voting rights and powers of the holders of
Common Stock, and shall be entitled, notwithstanding any
provision hereof, to notice of any shareholders' meeting in
accordance with the bylaws of this Corporation, and shall be
entitled to vote, together with holders of Common Stock, with
respect to any question upon which holders of Common Stock
have the right to vote and otherwise as required by law.
Fractional votes shall not, however, be permitted and any
fractional voting rights available on an as-converted basis
(after aggregating all shares into which shares of Series AA
Preferred Stock held by each holder could be converted) shall
be rounded to the nearest whole number (with one-half being
rounded upward).
RESOLVED FURTHER, that the officers of the Corporation are each authorized
to execute, verify and file in the office of the California Secretary of State a
Certificate of Determination in accordance with this resolution and California
law.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and
correct of our own knowledge.
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<PAGE>
Executed on March __, 1998 at Menlo Park, California.
--------------------------------
Stephen P. A. Fodor
President and Chief Executive Officer
--------------------------------
Edward M. Hurwitz
Chief Financial Officer
Page 51 of 102
<PAGE>
EXHIBIT B OF EXHIBIT 2
VOTING TRUST AGREEMENT
THIS VOTING TRUST AGREEMENT (the "Agreement") is entered into
as of April __, 1998, by and among Affymetrix, Inc. (the "Company"), Wachovia
Bank, N.A. (the "Trustee"), and Glaxo Wellcome Americas Inc. ("GWA") as holder
of the Company's Series AA Preferred Stock. GWA and transferees of GWA pursuant
to Section 3 hereof are individually each referred to herein as a "Party" and
are collectively referred to herein as the "Parties." The Company's Board of
Directors is referred to hereto as the "Board."
RECITALS:
WHEREAS, on the date hereof, GWA purchased 1,634,522 shares of
the Company's Series AA Preferred Stock pursuant to that certain Series AA
Preferred Stock Purchase Agreement between the Company and GWA ("Securities
Purchase Agreement"); and
WHEREAS, in order to induce the Company to sell shares of
Preferred Stock to GWA, GWA has agreed to be bound by the terms of this
Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and
certain other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereby agree as follows:
1. VOTING TRUST CERTIFICATES.
(a) Upon execution of this Agreement, GWA shall deliver
to the Trustee all certificates held by GWA representing the Shares (as defined
herein), and the Trustee shall issue and deliver to GWA, a voting trust
certificate in substantially the form attached hereto as SCHEDULE I (a "Voting
Trust Certificate"), for the number of Shares owned by GWA and transferred to
the Trustee. The Company shall cause such Shares to be transferred to the
Trustee on the Company's books. Any Shares acquired by GWA after the date hereof
shall be issued to the Trustee, who shall, within five (5) business days (as
defined in the Securities Purchase Agreement), issue and deliver to GWA, a
Voting Trust Certificate for the number of additional Shares so acquired by GWA.
The Trustee shall have no responsibility for Shares not delivered to it.
(b) The Trustee shall hold the Shares in trust subject
to the terms of this Agreement. The Trustee shall distribute all dividends and
other distributions to GWA or GWA's successors (other than dividends or other
distributions payable in Shares which shall not be distributed but shall remain
subject to the terms of this Agreement) in proportion to their respective
interests as represented by the Voting Trust Certificates.
(c) All Voting Trust Certificates will be registered in
the trust system maintained by the Trustee for that purpose (the "Trust
Register"). The Trustee may treat the registered holder of each Voting Trust
Certificate as the absolute owner and holder of the Shares evidenced thereby and
of all of the other rights and interests represented thereby. All transfers of
Shares will be recorded by the Trustee in the Trust Register.
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<PAGE>
(d) If a Voting Trust Certificate is lost, stolen,
mutilated or destroyed, the Trustee will issue a duplicate Voting Trust
Certificate upon receipt by the Trustee of evidence satisfactory to the Trustee
and the Company of the loss, theft, mutilation or destruction, and upon receipt
of a bond, undertaking or other indemnity reasonably satisfactory to the Trustee
and the Company. The Trustee will also keep correct records of account of all
business transactions with respect to the Voting Trust, which records, including
the Trust Register, may be inspected by any Party and such Party's agents or
personal representatives at any time during normal business hours.
(e) In the event that during the term of this
Agreement, a Beneficial Owner elects to convert a portion of such Beneficial
Owner's Shares into Common Stock, such Beneficial Owner shall deliver to the
Trustee, (i) a notice containing the identity of the Beneficial Owner and the
number of Shares to be converted into Common Stock (the "Conversion Shares"),
and (ii) the original Voting Trust Certificate(s) representing the Conversion
Shares. Upon the Trustee's receipt of such notice and the appropriate Voting
Trust Certificate(s), the Trustee shall, as soon as practicable thereafter, (i)
deliver the Conversion Shares to the Company (or its designated transfer agent)
and (ii) issue and deliver to such Beneficial Owner a Voting Trust Certificate
representing the balance of the shares of Series AA Preferred Stock not to be
converted into Common Stock, if any, represented by the Voting Trust
Certificate(s) delivered by the Beneficial Owner to the Trustee pursuant to this
Section 1(e). Upon Trustee's delivery of the Conversion Shares to the Company
(or its designated transfer agent), the Trustee shall be fully acquitted and
discharged with respect to such Conversion Shares. After the Conversion Shares
have been delivered to the Company pursuant to this Section, the conversion of
such shares shall be governed by and pursuant to the terms and provisions of the
Certificate of Determination of Series AA Preferred Stock of the Company (the
"Certificate of Determination").
(f) In the event that during the term of this
Agreement, any Shares of a Beneficial Owner are subject to redemption pursuant
to Section 3(a) of the Certificate of Determination, the Company shall deliver
the Corporation Redemption Notice (as defined in the Certificate of
Determination) to the Trustee and to each Person set forth in Section 22 hereof
at least twenty (20) but not more than thirty (30) days prior to the Corporation
Redemption Date (as defined in the Certificate of Determination). At least ten
(10) days prior to the Corporation Redemption Date, each Beneficial Owner shall
deliver to the Trustee the original Voting Trust Certificate(s) representing the
Shares Beneficially Owned by such Person along with written instructions to the
Trustee to either (i) convert the Shares to be redeemed under Section 1(e) of
this Agreement or (ii) to surrender such Shares for redemption. The Trustee
shall, (i) at least three (3) days prior to the Corporation Redemption Date,
deliver the certificate(s) representing the Shares to be redeemed as set forth
in the Corporation Redemption Notice (and which have not previously been
converted) to the Company (or its designated transfer agent) and (ii) as soon as
practicable thereafter, issue and deliver to such Beneficial Owner a Voting
Trust Certificate representing the balance of the Shares not to be redeemed, if
any, represented by the Voting Trust Certificate(s) delivered by the Beneficial
Owner to the Trustee pursuant to this Section 1(f). Upon the Trustee's receipt
of the Early Redemption Price or Late Redemption Price (as such terms are
defined in the Certificate of Determination), as the case may be, payable with
respect to the Shares redeemed, the Trustee shall, as soon as practicable
thereafter, deliver the Early Redemption Price or Late Redemption Price, as the
case may be, payable with respect to the Shares redeemed to the Beneficial
Owners such that each Beneficial Owner receives that portion of the Early
Redemption Price or Late Redemption Price paid by the Company, as the case may
be, equal to the proportion of Shares Beneficially Owned by such Beneficial
Owner
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to the total number of Shares subject to this Agreement. Upon Trustee's
delivery of the Early Redemption Price or Late Redemption Price, as the case may
be, payable with respect to such Shares to the appropriate Beneficial Owner, the
Trustee shall be fully acquitted and discharged with respect to such redeemed
Shares.
(g) In the event that during the term of this
Agreement, Beneficial Owners holding at least a majority of the then outstanding
Shares elect to have some or all of such Beneficial Owners' Shares redeemed
pursuant to the provisions of Section 3(b) of the Certificate of Determination,
such Beneficial Owners shall deliver to the Trustee and the Company a notice
containing the identity of the Beneficial Owners, the percentage of the Shares
to be redeemed (the "Redemption Shares") and the date on which the redemption is
requested to occur. The Company agrees that such notice shall constitute notice
from the holders of the Shares under Section 3(b)(i) of the Certificate of
Determination. The Company shall deliver the Shareholder Redemption Notice (as
defined in the Certificate of Determination) to the Trustee and to each Person
set forth in Section 22 hereof at least twenty (20) but not more than thirty
(30) days prior to the Shareholder Redemption Date (as defined in the
Certificate of Determination). At least ten (10) days prior to the Shareholder
Redemption Date, each Beneficial Owner shall deliver to the Trustee the original
Voting Trust Certificate(s) representing the Shares Beneficially Owned by such
Person along with written instructions to the Trustee to either (i) convert the
Shares to be redeemed under Section 1(e) of this Agreement or (ii) to surrender
such Shares for redemption. The Trustee shall, (i) at least three (3) days prior
to the Shareholder Redemption Date, deliver the certificate(s) representing the
Redemption Shares as set forth in the Shareholder Redemption Notice (and which
have not previously been converted) to the Company (or its designated transfer
agent) and (ii) as soon as practicable thereafter, issue and deliver to such
Beneficial Owner a Voting Trust Certificate representing the balance of the
Shares not to be redeemed, if any, represented by the Voting Trust
Certificate(s) delivered by the Beneficial Owner to the Trustee pursuant to this
Section 1(g). Upon the Trustee's receipt of the Series AA Redemption Price (as
defined in the Certificate of Determination) payable with respect to such
Redemption Shares, the Trustee shall, as soon as practicable thereafter, deliver
the Series AA Redemption Price payable with respect to such Redemption Shares to
the appropriate Beneficial Owner. Upon Trustee's delivery of the Series AA
Redemption Price payable with respect to such Redemption Shares to the
appropriate Beneficial Owner, the Trustee shall be fully acquitted and
discharged with respect to such Redemption Shares.
2. TRUSTEE'S POWERS AND DUTIES.
(a) During the term of this Agreement, the Trustee
shall have the exclusive right to vote all Shares Beneficially Owned (as defined
herein) by a Party on all matters as to which such Party is entitled to vote at
a meeting of the shareholders of the Company, or otherwise, or to which such
Party is entitled to express consent or dissent to corporate action in writing
without a meeting. The Trustee shall give each Party not less than five (5)
business days prior written notice of any such vote or right to express consent
or dissent. The Trustee shall exercise such voting rights, solely as follows:
(i) With respect to any consolidation,
reorganization or merger of the Company with or into any other corporation
or corporations or a sale, conveyance, or other disposition of all or
substantially all of the Company's property or business (each a "Business
Combination") or any other transaction or proposal that requires the
majority vote of each
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<PAGE>
outstanding class of capital stock voting as separate classes and in each
case would not have an Adverse Effect on the Shares (as defined below), the
Trustee shall vote the Shares at a regular or special meeting of
shareholders (or by written consent) proportionately in accordance with the
votes cast by all holders of the Company's Common Stock for and against
such transaction or proposal. If the transaction or proposal would have an
Adverse Effect on the Shares, the Trustee shall vote the Shares in
accordance with Section 2(a)(ii) below.
(ii) For all other votes, consents or dissents
by holders of Shares and for votes that would have an Adverse Effect on the
Shares, the Trustee shall vote the Shares as follows:
(A) as directed in writing by the Beneficial
Owner of such Shares;
(B) if not so directed in writing,
proportionately in accordance with the votes cast by such
Beneficial Owner (or its affiliates) with respect to other
shares of the Company's stock owned by such Beneficial Owner
(or its affiliates); or
(C) if not so directed in writing and if
such Beneficial Owner does not own or vote any other shares of
the Company's stock on such matter, the Trustee shall not vote
such shares and such shares shall not be counted for the
purpose of determining whether a quorum is present or any
percentage of shares of the Company's capital stock is
achieved.
(b)For purposes of Section 2(a), "Adverse Effect on the
Shares" shall mean:
(i) any Business Combination in which the
Beneficial Owners of Shares would not receive as consideration for such Shares
(A) cash or securities with a fair market value equal to or greater than the
then applicable Series AA Liquidation Preference (as defined in the Certificate
of Determination of Series AA Preferred Stock) with respect to such Shares, and
(B) if the form of such consideration is other than cash, publicly-traded equity
securities of securities convertible into publicly-traded equity securities,
securities having rights, preferences, privileges or restrictions at least
equivalent to those of the Shares; or
(ii) any other proposal or transaction that
would:
(A) Increase or decrease the aggregate
number of authorized shares of the Series AA Preferred Stock, other than an
increase as provided in either subdivision (b) of Section 405 or
subdivision (c) of Section 902 of the California Corporation Code;
(B) Effect an exchange, reclassification,
or cancellation of all or part of the shares of Series AA Preferred Stock,
including a reverse stock split but excluding a stock split;
(C) Effect an exchange, or create a right
of exchange, of all or part of the shares of another class of capital stock
into shares of the Series AA Preferred Stock;
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<PAGE>
(D) Change the rights, preferences,
privileges or restrictions of the Shares, other than as a result of the
creation of a new series of Preferred Stock;
(E) Create a new class of shares having
rights, preferences or privileges prior to the Shares, or increase the
rights, preferences or privileges or the number of authorized shares of any
class having rights, preferences or privileges prior to the Shares;
(F) Reclassify the Shares into series
having different rights, preferences, privileges or restrictions, or
authorize the Board to do so; or
(G) Cancel or otherwise affect dividends
on the Shares which have accrued but have not been paid.
(c) Except as expressly granted under Section 2(a)(i)
above with respect to the voting rights enumerated therein, the Trustee shall
have no rights with respect to the Shares. Without limiting the preceding
sentence, the parties acknowledge that the Trustee shall have no authority to
sell, encumber or otherwise dispose of any Shares. The Trustee shall have no
voting or other rights with respect to any shares of capital stock Beneficially
Owned as of the date hereof by any Party other than the Shares.
3. TRANSFER. The provisions of this Agreement shall be binding
upon the successors in interest to any of the Shares. The Company shall not
permit the transfer of any of the Shares on their books or issue new
certificates representing the Shares or any new Voting Trust Certificates unless
and until the person to whom such units are to be transferred shall have
executed a written agreement, substantially in the form of this Agreement,
pursuant to which such person becomes a party to this Agreement. Nothing in the
foregoing sentence shall, however, invalidate any succession in ownership
occurring by operation of law, and any successor by operation of law shall be
bound by this Agreement as fully and completely as if the successor were a party
to this Agreement.
4. NO WITHDRAWAL. No Party may withdraw from this Agreement
prior to termination of this Agreement pursuant to Section 7 hereof.
5. REPLACEMENT OR REMOVAL OF TRUSTEE. In the event of the
Trustee's dissolution, resignation, removal or inability to act, the Parties
shall select a successor or Trustee mutually acceptable to the Company and the
holders of a majority of the Shares Beneficially Owned then outstanding. Any
Trustee may be removed by the affirmative vote of a majority of the Shares then
outstanding or the Company. Notwithstanding any change in the Trustee, the
certificates for Shares standing in the name of the Trustee may be endorsed and
transferred to any successor Trustee without the further action of any Party or
predecessor Trustee with the same effect as if endorsed and transferred by the
Trustee who has ceased to act.
6. TRUSTEE'S LIABILITY AND INDEMNITY. The Trustee shall not
be liable for any error of judgment or mistake of fact or law, or for any act or
omission undertaken in good faith in connection with the Trustee's powers and
duties under this Agreement, except for the Trustee's own willful misconduct or
gross negligence. The Trustee is authorized and empowered to construe this
Agreement and its reasonable construction made in good faith shall be conclusive
and binding upon
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<PAGE>
the Company and the Parties. The Trustee shall not be liable for acting on any
legal advice or on any notice, request or instruction or other document believed
by the Trustee to be genuine and to have been signed by the proper Party or
Parties. The Company shall indemnify the Trustee for, and hold the Trustee
harmless against, any expenses, claims, losses, damages or liabilities,
including without limitation attorneys' fees, incurred by the Trustee and
arising out of or in connection with the administration of this trust and its
rights and duties hereunder, except to the extent that a court of competent
jurisdiction determines that the Trustee is not entitled to such indemnification
because the action giving rise to such indemnification was the result of willful
misconduct or gross negligence by the Trustee. This indemnity shall survive the
termination of this Agreement.
7. TERM. This Agreement shall terminate and be of no further
force or effect on the earlier of (a) the closing of the acquisition of the
Company by another entity by means of any transaction or series of related
transactions (including, without limitation, any reorganization, merger or
consolidation) that results in the transfer of fifty percent (50%) or more of
the outstanding voting power of the Company or a sale of all or substantially
all of the assets of the Company, (b) such time as no Shares are outstanding, or
(c) ten (10) years from the date hereof.
At any time within two (2) years prior to the time of
expiration of this Agreement pursuant to Section 7(c), the Company and the
Parties may, by written agreement and with the written consent of the Trustee,
extend the duration of this Agreement for an additional period not exceeding ten
(10) years from the expiration date of this Agreement as originally fixed or as
last extended as provided in this paragraph.
As soon as practicable after the termination of this
Agreement, the Trustee shall deliver to each Party share certificates or
securities representing the number of Shares or other securities in respect of
which Voting Trust Certificates registered in the name of such Party are then
outstanding, upon the surrender of such Voting Trust Certificates properly
endorsed and upon payment by the persons entitled to receive such share
certificates or other securities of a sum sufficient to cover any tax or
governmental charge in respect of the transfer or delivery of such certificates.
If any Party cannot be located or fails or refuses to surrender Voting Trust
Certificates in exchange for Shares or other securities as aforesaid, the
Trustee shall deliver said Shares or other securities to the Company or to any
bank or trust company in California for the benefit of the Person or Persons
entitled thereto. Upon any such delivery, the Trustee shall be fully acquitted
and discharged with respect to said Shares or other securities.
8. COVENANTS OF THE COMPANY. The Company agrees to use its
best efforts to ensure that the rights granted hereunder are effective and that
the Parties hereto enjoy the benefits thereof. The Company will not, by any
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be performed hereunder by the Company, but will at all times in
good faith assist in the carrying out of all of the provisions of this Agreement
and in the taking of all such actions as may be necessary, appropriate or
reasonably requested by the holders of a majority of the outstanding Shares in
order to protect the rights of the Parties hereunder against impairment.
9. DEFINED TERMS. As used in this Agreement, the following
terms have the respective meanings set forth below:
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<PAGE>
BENEFICIAL OWNER: shall have the meaning set forth in Rule
13d-3(a) and (b) of the Rules and Regulations to the Securities Exchange
Act of 1934, as amended; and Beneficially Owned shall have a correlative
meaning.
PERSON: shall mean an individual, partnership, corporation,
trust, limited liability company or unincorporated organization, and a
government or agency or political subdivision thereof.
SHARES: shall consist of all shares of Series AA Preferred
Stock issued to GWA pursuant to the Securities Purchase Agreement or
thereafter obtained by a Party.
10. REMEDIES. The Company and the Parties agree and
acknowledge that money damages may not be an adequate remedy for breach of the
provisions of this Agreement and that the Company and any Party shall be
entitled, in its sole discretion, to apply to any court of competent
jurisdiction for specific performance, injunctive relief or such other equitable
remedy or remedies as the court may in its discretion order to enforce or
prevent any violations of the provisions of this Agreement, in addition to its
remedies at law. In respect of any such equitable remedy so sought, the Company
and the Parties hereby waive the requirement of the posting of any bond or the
necessity to show irreparable injury on the part of the Person seeking such
relief.
11. NOTICES. Unless otherwise provided, any notice required
or permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon delivery by confirmed facsimile or reliable international
courier service or upon personal delivery to the party to be notified.
12. MODIFICATION, AMENDMENT, WAIVER. Any term hereof may be
amended and the observance of any term hereof may be waived (either generally or
in a particular instance and either retroactively or prospectively) only with
the written consent of the holders of a majority of the then outstanding voting
Shares Beneficially Owned by the Party or Parties for whose benefit such term
has been included and the Company; provided that, the Trustee must consent in
writing to any amendment or modification that changes the rights, obligations
and/or liability of the Trustee under this Agreement. Any amendment or waiver so
effected shall be binding upon the Parties hereto. The failure of the Trustee,
the Company or any Party at any time to enforce any of the provisions of this
Agreement shall in no way be construed as a waiver of such provisions and shall
not affect the rights of the Trustee, the Company or any Party thereafter to
enforce the provisions of this Agreement in accordance with its terms.
13. COMPLETE AGREEMENT. This document, the Voting Trust
Certificates, the Securities Purchase Agreement and the Amended and Restated
Articles of Incorporation (including the Certificate of Determination thereto)
of the Company embody the complete agreement and understanding between and among
the Parties hereto with respect to the subject matter hereof, and supersede and
preempt any prior understandings, agreements or representations by or among the
parties hereto, written or oral, which may have related to the subject matter
hereof.
14. SUCCESSORS AND ASSIGNS. This Agreement will bind and
inure to the benefit of and be enforceable by the Parties and their respective
permitted transferees, successors and assigns.
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<PAGE>
15. LEGENDS.
(a) In addition to legends required by the Securities Purchase
Agreement, each certificate evidencing Shares shall bear a legend in
substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON VOTING AND TRANSFER AS SET FORTH IN THE VOTING
TRUST AGREEMENT, DATED ON OR ABOUT APRIL 1998, A COPY OF WHICH
IS AVAILABLE FROM THE COMPANY AND ANY SUCCESSOR THERETO.
(b) Each Voting Trust Certificate evidencing Shares shall
bear a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED, PLEDGED OR
HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH
ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
TO THE HOLDER HEREOF (WHICH COUNSEL SHALL BE REASONABLY
SATISFACTORY TO THE COMPANY) THAT SUCH REGISTRATION IS NOT
REQUIRED.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON VOTING AND TRANSFER AS SET FORTH IN THE VOTING
TRUST AGREEMENT, DATED AS OF APRIL __, 1998, A COPY OF WHICH
IS AVAILABLE FROM THE COMPANY AND ANY SUCCESSOR THERETO.
16. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which will be an original and all of which taken together
will constitute one and the same Agreement.
17. APPLICABLE LAW. All questions concerning this Agreement
will be governed by and interpreted in accordance with the internal laws of the
State of California, without regard to internal law concerning choice or
conflict of law. Any disputes arising hereunder shall be resolved before the
appropriate state or federal courts in the State of California, and the Parties
hereto hereby consent to the personal jurisdiction of such courts in respect of
such disputes.
18. SEVERABILITY. If any one or more of the provisions of
this Agreement, as applied to the Trustee, the Company or any Party or any
circumstance, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be unenforceable as to duration,
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<PAGE>
scope, activity or subject, such provisions shall be construed by limiting and
reducing it so as to make such provision enforceable to the extent compatible
with the then existing applicable law.
19. TRUSTEE'S EXPENSES. The Trustee shall be reimbursed by
the Company for its initial and annual fees pursuant to the fee letter dated as
of March 5, 1998, and all reasonable out-of-pocket expenses (including its
reasonable attorneys' fees) incurred pursuant to this Agreement.
20. NATURE OF RELATIONSHIP. The Trust created by this
Agreement is not intended to be, shall not be deemed to be and shall not be
treated as a general partnership, limited partnership, joint venture,
corporation, joint stock company or association. The relationship of the Parties
to the Trustee shall be solely that of beneficiaries of the Trust created by
this Agreement, and their rights and obligations shall be limited to those set
forth in this Agreement.
21. INVESTMENT REPRESENTATIONS. In acquiring Voting Trust
Certificates hereunder, each Party acknowledges and represents that such Party
has had an opportunity to discuss the business of the Company with the officers
and directors of the Company and has received satisfactory answers in response
to such inquiries. Such Party further acknowledges that the Voting Trust
Certificates are highly speculative and involve a high degree of risk and that
the Voting Trust Certificates have not been registered under the Securities Act
of 1933, as amended (the "Act") and may not be sold or otherwise disposed of
except pursuant to an exemption from the Act. Such Party represents and warrants
to the Trustee and the Company that such Party is acquiring the Voting Trust
Certificate for such Party's own account for investment and not with a view to
or for sale in connection with any distribution of said Voting Trust
Certificates or with any present intention of distributing or selling said
Voting Trust Certificates, and such Party does not presently have reason to
anticipate any change in circumstances or any particular occasion or event that
would cause it to sell said Voting Trust Certificate.
22. NOTICES. All notices, demands and other communications
made hereunder shall be in writing and shall be given either by personal
delivery, by nationally recognized overnight courier (with charges prepaid) or
by facsimile (with telephone confirmation), and shall be deemed to have been
given or made when personally delivered, the day following the date deposited
with such overnight courier service or when transmitted to telecopy machine and
confirmed by telephone, addressed to the respective parties at the following
addresses (or such other address for a party as shall be specified by like
notice):
If to the Company:
Affymetrix, Inc.
3380 Central Expressway
Santa Clara, California 95051
Attention: Edward Hurwitz, Chief Financial Officer
Telephone: 408-731-5000
Facsimile: 408-481-0422
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<PAGE>
With a copy (which shall not constitute notice) to:
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP
155 Constitution Drive
Menlo Park, California 94025
Attention: Carla S. Newell
Telephone: 650-463-5470
Facsimile: 650-321-2800
If to the Beneficial Owner:
Glaxo Wellcome Americas Inc.
499 Park Avenue
New York, New York 10022
Attention: Jack G. Smith
Telephone: 212-308-1210
Facsimile: 212-308-5263
If to the Trustee:
Wachovia Bank, N.A.
100 Main Street
Winston-Salem, North Carolina 27102
Attention: John N. Smith, III, Executive Services Department
Telephone: 336-770-6984
Facsimile: 336-770-4059
23. INSPECTION. A duplicate of this Agreement and any
extension hereof shall be filed with the Trustee and shall be open to inspection
by any shareholder of the Company, any holder of a Voting Trust Certificate or
the agent of either, upon the same terms as the record of shareholders of the
Company is open to inspection.
[remainder of page intentionally left blank]
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<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Agreement
as of the date first above written.
COMPANY:
AFFYMETRIX, INC.
By:
----------------------------------
Print Name:
--------------------------
Title:
-------------------------------
Address: 3380 Central Expressway
Santa Clara, CA 95051
TRUSTEE:
WACHOVIA BANK, N.A.
By:
----------------------------------
Print Name:
--------------------------
Title:
-------------------------------
Address: 100 Main Street
Winston-Salem, NC 27102
GWA:
GLAXO WELLCOME AMERICAS INC.
By:
----------------------------------
Print Name:
--------------------------
Title:
-------------------------------
Address: 499 Park Avenue
New York, NY 10022
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<PAGE>
SCHEDULE I
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144
PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL TO THE HOLDER HEREOF (WHICH COUNSEL SHALL BE
REASONABLY SATISFACTORY TO THE COMPANY) THAT SUCH REGISTRATION IS NOT
REQUIRED.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON VOTING AND TRANSFER AS SET FORTH IN THE VOTING TRUST AGREEMENT,
DATED AS OF APRIL __, 1998, A COPY OF WHICH IS AVAILABLE FROM THE
COMPANY AND ANY SUCCESSOR THERETO.
This certifies that Glaxo Wellcome Americas Inc. has deposited or has
caused to be deposited 1,634,522 shares of the Series AA Preferred Stock of
Affymetrix, Inc., a California corporation (the "Company"), under a Voting Trust
Agreement, dated as of April __, 1998 (the "Voting Trust Agreement"), among the
Company, Wachovia Bank, N.A. (the "Trustee"), and the Parties named in the
Voting Trust Agreement. The Trustee shall possess and be entitled to the
exclusive right to vote such shares upon the terms and subject to the conditions
stated in the Voting Trust Agreement.
This Voting Trust Certificate shall be transferable only on the records
of the Trustee upon surrender hereof by the registered holder in person or by
attorney duly authorized and, until so transferred, the Trustee may treat the
registered holder as the owner of this Voting Trust Certificate for all purposes
whatsoever, unaffected by any notice to the contrary. As a condition precedent
to the making of any transfer of this Voting Trust Certificate, the Trustee may
require the payment of a sum sufficient to cover the amount of any taxes or
other governmental charges incident thereto.
This Voting Trust Certificate is issued pursuant to, and the rights of
the holder hereof are subject to and limited by the terms and conditions of, the
Voting Trust Agreement. The holder of this Voting Trust Certificate, by the
acceptance hereof, assents to and agrees to be bound by all the terms and
conditions of the Voting Trust Agreement. Copies of the Voting Trust Agreement
are on file at the principal office of the Company and at the office of the
Trustee.
Certificates for the number of shares in respect of which this Voting
Trust Certificate was issued, or the net proceeds in cash or property of said
number of shares at the time of surrender hereof, all as provided in the Voting
Trust Agreement, shall be deliverable hereunder upon the termination of the
Voting Trust Agreement.
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Dated: ____________, 199_
WACHOVIA BANK, N.A.,
as Trustee
By:--------------------------
Its:-------------------------
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EXHIBIT C OF EXHIBIT 2
THIS AMENDMENT TO GOVERNANCE AGREEMENT ("Amendment") is
entered into as of April __, 1998, by and between Affymetrix, Inc. (the
"Company") and Glaxo Wellcome PLC ("Glaxo Wellcome"). Capitalized terms not
otherwise defined in this Amendment have the meaning given them in that certain
Governance Agreement (the "Governance Agreement") dated as of July 6, 1995, by
and between Affymetrix, Inc. and Glaxo Wellcome.
RECITALS
A. The Company and Glaxo Wellcome constitute all of the
parties to the Governance Agreement and desire to enter into this Amendment.
B. The Company and Glaxo Wellcome Americas Inc. ("GWA"), a
wholly owned subsidiary of Glaxo Wellcome, are entering into that certain Series
AA Preferred Stock Purchase Agreement ("Purchase Agreement") of even date
herewith pursuant to which GWA is purchasing shares of the Company's Series AA
Preferred Stock.
C. In order to induce the Company to enter into the Purchase
Agreement and to induce GWA to invest funds in the Company pursuant to the
Purchase Agreement, the Company and Glaxo Wellcome desire to make the amendments
described herein to the Governance Agreement.
NOW, THEREFORE, in consideration of the mutual promises and
covenants described below, the Company and Glaxo Wellcome hereby agree as
follows:
1. Paragraph 1 of the Governance Agreement shall be amended
and restated to read in full as follows:
"So long as GLAXO WELLCOME or any of its subsidiaries,
including, but not limited to, Glaxo Wellcome Americas Inc.,
(collectively, "GW") together own, or are part of a group that
owns, (a) a majority of the outstanding AFFYMETRIX voting
shares, GW (or such group) will have the right to designate
five out of nine AFFYMETRIX directors, (b) less than a
majority but greater than 35% of the outstanding AFFYMETRIX
voting shares, GW (or such group) will have the right to
designate four out of nine AFFYMETRIX directors, (c) less than
a 35% but greater than 25% of the outstanding AFFYMETRIX
voting shares, GW (or such group) will have the right to
designate three out of nine AFFYMETRIX directors, (d) less
than 25% but more than 15% of the outstanding AFFYMETRIX
voting shares, GW (or such group) will have the right to
designate two out of nine AFFYMETRIX directors and (e) less
than 15% but more than 5% of the outstanding AFFYMETRIX voting
shares, GW (or such group) will have the right to designate
one out of nine AFFYMETRIX directors, in each case such
designations to be included as part of the management slate to
be recommended to the shareholders subsequent to 1995. For
purposes of determining the percentage of outstanding voting
shares held by GW (or such group), shares of Series AA
Preferred Stock held by GW shall not be counted; provided
however, that upon conversion of the shares of Series AA
Preferred Stock
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owned by GW into shares of Common Stock, such shares of
Common Stock shall be counted for purposes of determining
the percentage of outstanding voting shares held by GW (or
such group). All discretionary proxies will be voted in
favor of such nominees. GW (or such group) will otherwise
vote its shares, or give its proxy to vote its shares, for
the other nominees on the slate of directors recommended to
the shareholders. The parties agree to take appropriate
action, if necessary, to comply with the requirements of the
California Corporations Code to make this provision valid
and enforceable, including without limitation, to enter into
a voting trust agreement."
2. The last sentence of paragraph 6.2(a) of the Governance
Agreement is hereby amended and restated to read in its
entirety as follows:
For the purposes of this Section 6.2 and Section 6.3,
Registrable Securities' shall mean all Common Stock of the
Company issued or issuable upon conversion of the Company's
Series 1 Subordinated Convertible Preferred Stock, Series 2
Subordinated Convertible Preferred Stock and Series AA
Preferred Stock, including Common Stock issued pursuant to
stock splits, stock dividends and similar distributions with
respect to such shares."
3. For the purposes of Section 6.1(a) of the Governance
Agreement, "Common Stock" shall include all shares of Common
Stock issued or issuable upon conversion of the Company's
Series AA Preferred Stock.
4. The terms and conditions of this Amendment and the
Governance Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the
parties.
5. This Amendment may be executed in two or more counterparts,
each which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
6. This Amendment shall be governed by and construed under the
laws of the State of California as applied to agreements
entered into solely between residents of and to be performed
entirely within such state.
7. The Governance Agreement and this Amendment constitute the
entire agreement between the parties hereto pertaining to
the subject matter thereof and hereof.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment to
Governance Agreement as of the day and year first above written.
AFFYMETRIX, INC. GLAXO WELLCOME PLC
By: By:
--------------------------------- ------------------------
Title: President/CEO Title: Director
AGREED TO AND ACCEPTED BY:
GLAXO WELLCOME AMERICAS INC.
By:
---------------------------------
Title: Executive Vice President
SIGNATURE PAGE TO AFFYMETRIX, INC.
AMENDMENT TO GOVERNANCE AGREEMENT
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EXHIBIT 3 TO SCHEDULE 13D
VOTING TRUST AGREEMENT
THIS VOTING TRUST AGREEMENT (the "Agreement") is entered
into as of April 14, 1998, by and among Affymetrix, Inc. (the "Company"),
Wachovia Bank, N.A. (the "Trustee"), and Glaxo Wellcome Americas Inc. ("GWA") as
holder of the Company's Series AA Preferred Stock. GWA and transferees of GWA
pursuant to Section 3 hereof are individually each referred to herein as a
"Party" and are collectively referred to herein as the "Parties." The Company's
Board of Directors is referred to hereto as the "Board."
RECITALS:
WHEREAS, on the date hereof, GWA purchased 1,634,522 shares of
the Company's Series AA Preferred Stock pursuant to that certain Series AA
Preferred Stock Purchase Agreement between the Company and GWA ("Securities
Purchase Agreement"); and
WHEREAS, in order to induce the Company to sell shares of
Preferred Stock to GWA, GWA has agreed to be bound by the terms of this
Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and
certain other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereby agree as follows:
1. VOTING TRUST CERTIFICATES.
(a) Upon execution of this Agreement, GWA shall deliver
to the Trustee all certificates held by GWA representing the Shares (as defined
herein), and the Trustee shall issue and deliver to GWA, a voting trust
certificate in substantially the form attached hereto as SCHEDULE I (a "Voting
Trust Certificate"), for the number of Shares owned by GWA and transferred to
the Trustee. The Company shall cause such Shares to be transferred to the
Trustee on the Company's books. Any Shares acquired by GWA after the date hereof
shall be issued to the Trustee, who shall, within five (5) business days (as
defined in the Securities Purchase Agreement), issue and deliver to GWA, a
Voting Trust Certificate for the number of additional Shares so acquired by GWA.
The Trustee shall have no responsibility for Shares not delivered to it.
(b) The Trustee shall hold the Shares in trust subject
to the terms of this Agreement. The Trustee shall distribute all dividends and
other distributions to GWA or GWA's successors (other than dividends or other
distributions payable in Shares which shall not be distributed but shall remain
subject to the terms of this Agreement) in proportion to their respective
interests as represented by the Voting Trust Certificates.
(c) All Voting Trust Certificates will be registered in
the trust system maintained by the Trustee for that purpose (the "Trust
Register"). The Trustee may treat the registered holder of each Voting Trust
Certificate as the absolute owner and holder of the Shares evidenced thereby and
of all of the other rights and interests represented thereby. All transfers of
Shares will be recorded by the Trustee in the Trust Register.
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(d) If a Voting Trust Certificate is lost, stolen,
mutilated or destroyed, the Trustee will issue a duplicate Voting Trust
Certificate upon receipt by the Trustee of evidence satisfactory to the Trustee
and the Company of the loss, theft, mutilation or destruction, and upon receipt
of a bond, undertaking or other indemnity reasonably satisfactory to the Trustee
and the Company. The Trustee will also keep correct records of account of all
business transactions with respect to the Voting Trust, which records, including
the Trust Register, may be inspected by any Party and such Party's agents or
personal representatives at any time during normal business hours.
(e) In the event that during the term of this
Agreement, a Beneficial Owner elects to convert a portion of such Beneficial
Owner's Shares into Common Stock, such Beneficial Owner shall deliver to the
Trustee, (i) a notice containing the identity of the Beneficial Owner and the
number of Shares to be converted into Common Stock (the "Conversion Shares"),
and (ii) the original Voting Trust Certificate(s) representing the Conversion
Shares. Upon the Trustee's receipt of such notice and the appropriate Voting
Trust Certificate(s), the Trustee shall, as soon as practicable thereafter, (i)
deliver the Conversion Shares to the Company (or its designated transfer agent)
and (ii) issue and deliver to such Beneficial Owner a Voting Trust Certificate
representing the balance of the shares of Series AA Preferred Stock not to be
converted into Common Stock, if any, represented by the Voting Trust
Certificate(s) delivered by the Beneficial Owner to the Trustee pursuant to this
Section 1(e). Upon Trustee's delivery of the Conversion Shares to the Company
(or its designated transfer agent), the Trustee shall be fully acquitted and
discharged with respect to such Conversion Shares. After the Conversion Shares
have been delivered to the Company pursuant to this Section, the conversion of
such shares shall be governed by and pursuant to the terms and provisions of the
Certificate of Determination of Series AA Preferred Stock of the Company (the
"Certificate of Determination").
(f) In the event that during the term of this
Agreement, any Shares of a Beneficial Owner are subject to redemption pursuant
to Section 3(a) of the Certificate of Determination, the Company shall deliver
the Corporation Redemption Notice (as defined in the Certificate of
Determination) to the Trustee and to each Person set forth in Section 22 hereof
at least twenty (20) but not more than thirty (30) days prior to the Corporation
Redemption Date (as defined in the Certificate of Determination). At least ten
(10) days prior to the Corporation Redemption Date, each Beneficial Owner shall
deliver to the Trustee the original Voting Trust Certificate(s) representing the
Shares Beneficially Owned by such Person along with written instructions to the
Trustee to either (i) convert the Shares to be redeemed under Section 1(e) of
this Agreement or (ii) to surrender such Shares for redemption. The Trustee
shall, (i) at least three (3) days prior to the Corporation Redemption Date,
deliver the certificate(s) representing the Shares to be redeemed as set forth
in the Corporation Redemption Notice (and which have not previously been
converted) to the Company (or its designated transfer agent) and (ii) as soon as
practicable thereafter, issue and deliver to such Beneficial Owner a Voting
Trust Certificate representing the balance of the Shares not to be redeemed, if
any, represented by the Voting Trust Certificate(s) delivered by the Beneficial
Owner to the Trustee pursuant to this Section 1(f). Upon the Trustee's receipt
of the Early Redemption Price or Late Redemption Price (as such terms are
defined in the Certificate of Determination), as the case may be, payable with
respect to the Shares redeemed, the Trustee shall, as soon as practicable
thereafter, deliver the Early Redemption Price or Late Redemption Price, as the
case may be, payable with respect to the Shares redeemed to the Beneficial
Owners such that each Beneficial Owner receives that portion of the Early
Redemption Price or Late Redemption Price paid by the Company, as the case may
be, equal to the proportion of Shares Beneficially Owned by such Beneficial
Owner
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to the total number of Shares subject to this Agreement. Upon Trustee's delivery
of the Early Redemption Price or Late Redemption Price, as the case may be,
payable with respect to such Shares to the appropriate Beneficial Owner, the
Trustee shall be fully acquitted and discharged with respect to such redeemed
Shares.
(g) In the event that during the term of this
Agreement, Beneficial Owners holding at least a majority of the then outstanding
Shares elect to have some or all of such Beneficial Owners' Shares redeemed
pursuant to the provisions of Section 3(b) of the Certificate of Determination,
such Beneficial Owners shall deliver to the Trustee and the Company a notice
containing the identity of the Beneficial Owners, the percentage of the Shares
to be redeemed (the "Redemption Shares") and the date on which the redemption is
requested to occur. The Company agrees that such notice shall constitute notice
from the holders of the Shares under Section 3(b)(i) of the Certificate of
Determination. The Company shall deliver the Shareholder Redemption Notice (as
defined in the Certificate of Determination) to the Trustee and to each Person
set forth in Section 22 hereof at least twenty (20) but not more than thirty
(30) days prior to the Shareholder Redemption Date (as defined in the
Certificate of Determination). At least ten (10) days prior to the Shareholder
Redemption Date, each Beneficial Owner shall deliver to the Trustee the original
Voting Trust Certificate(s) representing the Shares Beneficially Owned by such
Person along with written instructions to the Trustee to either (i) convert the
Shares to be redeemed under Section 1(e) of this Agreement or (ii) to surrender
such Shares for redemption. The Trustee shall, (i) at least three (3) days prior
to the Shareholder Redemption Date, deliver the certificate(s) representing the
Redemption Shares as set forth in the Shareholder Redemption Notice (and which
have not previously been converted) to the Company (or its designated transfer
agent) and (ii) as soon as practicable thereafter, issue and deliver to such
Beneficial Owner a Voting Trust Certificate representing the balance of the
Shares not to be redeemed, if any, represented by the Voting Trust
Certificate(s) delivered by the Beneficial Owner to the Trustee pursuant to this
Section 1(g). Upon the Trustee's receipt of the Series AA Redemption Price (as
defined in the Certificate of Determination) payable with respect to such
Redemption Shares, the Trustee shall, as soon as practicable thereafter, deliver
the Series AA Redemption Price payable with respect to such Redemption Shares to
the appropriate Beneficial Owner. Upon Trustee's delivery of the Series AA
Redemption Price payable with respect to such Redemption Shares to the
appropriate Beneficial Owner, the Trustee shall be fully acquitted and
discharged with respect to such Redemption Shares.
2. TRUSTEE'S POWERS AND DUTIES.
(a) During the term of this Agreement, the Trustee shall have the exclusive
right to vote all Shares Beneficially Owned (as defined herein) by a Party on
all matters as to which such Party is entitled to vote at a meeting of the
shareholders of the Company, or otherwise, or to which such Party is entitled to
express consent or dissent to corporate action in writing without a meeting. The
Trustee shall give each Party not less than five (5) business days prior written
notice of any such vote or right to express consent or dissent. The Trustee
shall exercise such voting rights, solely as follows:
(i) With respect to any consolidation, reorganization
or merger of the Company with or into any other corporation or corporations
or a sale, conveyance, or other disposition of all or substantially all of
the Company's property or business (each a "Business Combination") or any
other transaction or proposal that requires the majority vote of each
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outstanding class of capital stock voting as separate classes and in each
case would not have an Adverse Effect on the Shares (as defined below), the
Trustee shall vote the Shares at a regular or special meeting of
shareholders (or by written consent) proportionately in accordance with the
votes cast by all holders of the Company's Common Stock for and against
such transaction or proposal. If the transaction or proposal would have an
Adverse Effect on the Shares, the Trustee shall vote the Shares in
accordance with Section 2(a)(ii) below.
(ii) For all other votes, consents or dissents by
holders of Shares and for votes that would have an Adverse Effect on the
Shares, the Trustee shall vote the Shares as follows:
(A) as directed in writing by the Beneficial
Owner of such Shares;
(B) if not so directed in writing,
proportionately in accordance with the votes cast by such
Beneficial Owner (or its affiliates) with respect to other
shares of the Company's stock owned by such Beneficial Owner
(or its affiliates); or
(C) if not so directed in writing and if
such Beneficial Owner does not own or vote any other shares of
the Company's stock on such matter, the Trustee shall not vote
such shares and such shares shall not be counted for the
purpose of determining whether a quorum is present or any
percentage of shares of the Company's capital stock is
achieved.
(b) For purposes of Section 2(a), "Adverse Effect on
the Shares" shall mean:
(i) any Business Combination in which the Beneficial
Owners of Shares would not receive as consideration for such Shares
(A) cash or securities with a fair market value equal to or greater
than the then applicable Series AA Liquidation Preference (as defined
in the Certificate of Determination of Series AA Preferred Stock) with
respect to such Shares, and (B) if the form of such consideration is
other than cash, publicly-traded equity securities of securities
convertible into publicly-traded equity securities, securities having
rights, preferences, privileges or restrictions at least equivalent to
those of the Shares; or
(ii) any other proposal or transaction that would:
(A) Increase or decrease the aggregate
number of authorized shares of the Series AA Preferred
Stock, other than an increase as provided in either
subdivision (b) of Section 405 or subdivision (c) of Section
902 of the California Corporation Code;
(B) Effect an exchange, reclassification, or
cancellation of all or part of the shares of Series AA
Preferred Stock, including a reverse stock split but
excluding a stock split;
(C) Effect an exchange, or create a right of
exchange, of all or part of the shares of another class of
capital stock into shares of the Series AA Preferred Stock;
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(D) Change the rights, preferences,
privileges or restrictions of the Shares, other than as a
result of the creation of a new series of Preferred Stock;
(E) Create a new class of shares having
rights, preferences or privileges prior to the Shares, or
increase the rights, preferences or privileges or the number
of authorized shares of any class having rights, preferences
or privileges prior to the Shares;
(F) Reclassify the Shares into series having
different rights, preferences, privileges or restrictions,
or authorize the Board to do so; or
(G) Cancel or otherwise affect dividends on
the Shares which have accrued but have not been paid.
(c) Except as expressly granted under Section 2(a)(i)
above with respect to the voting rights enumerated therein, the Trustee shall
have no rights with respect to the Shares. Without limiting the preceding
sentence, the parties acknowledge that the Trustee shall have no authority to
sell, encumber or otherwise dispose of any Shares. The Trustee shall have no
voting or other rights with respect to any shares of capital stock Beneficially
Owned as of the date hereof by any Party other than the Shares.
3. TRANSFER. The provisions of this Agreement shall be
binding upon the successors in interest to any of the Shares. The Company shall
not permit the transfer of any of the Shares on their books or issue new
certificates representing the Shares or any new Voting Trust Certificates unless
and until the person to whom such units are to be transferred shall have
executed a written agreement, substantially in the form of this Agreement,
pursuant to which such person becomes a party to this Agreement. Nothing in the
foregoing sentence shall, however, invalidate any succession in ownership
occurring by operation of law, and any successor by operation of law shall be
bound by this Agreement as fully and completely as if the successor were a party
to this Agreement.
4. NO WITHDRAWAL. No Party may withdraw from this Agreement
prior to termination of this Agreement pursuant to Section 7 hereof.
5. REPLACEMENT OR REMOVAL OF TRUSTEE. In the event of the
Trustee's dissolution, resignation, removal or inability to act, the Parties
shall select a successor or Trustee mutually acceptable to the Company and the
holders of a majority of the Shares Beneficially Owned then outstanding. Any
Trustee may be removed by the affirmative vote of a majority of the Shares then
outstanding or the Company. Notwithstanding any change in the Trustee, the
certificates for Shares standing in the name of the Trustee may be endorsed and
transferred to any successor Trustee without the further action of any Party or
predecessor Trustee with the same effect as if endorsed and transferred by the
Trustee who has ceased to act.
6. TRUSTEE'S LIABILITY AND INDEMNITY. The Trustee shall not
be liable for any error of judgment or mistake of fact or law, or for any act or
omission undertaken in good faith in connection with the Trustee's powers and
duties under this Agreement, except for the Trustee's own willful misconduct or
gross negligence. The Trustee is authorized and empowered to construe this
Agreement and its reasonable construction made in good faith shall be conclusive
and binding upon
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the Company and the Parties. The Trustee shall not be liable for acting on any
legal advice or on any notice, request or instruction or other document believed
by the Trustee to be genuine and to have been signed by the proper Party or
Parties. The Company shall indemnify the Trustee for, and hold the Trustee
harmless against, any expenses, claims, losses, damages or liabilities,
including without limitation attorneys' fees, incurred by the Trustee and
arising out of or in connection with the administration of this trust and its
rights and duties hereunder, except to the extent that a court of competent
jurisdiction determines that the Trustee is not entitled to such indemnification
because the action giving rise to such indemnification was the result of willful
misconduct or gross negligence by the Trustee. This indemnity shall survive the
termination of this Agreement.
7. TERM. This Agreement shall terminate and be of no
further force or effect on the earlier of (a) the closing of the acquisition of
the Company by another entity by means of any transaction or series of related
transactions (including, without limitation, any reorganization, merger or
consolidation) that results in the transfer of fifty percent (50%) or more of
the outstanding voting power of the Company or a sale of all or substantially
all of the assets of the Company, (b) such time as no Shares are outstanding, or
(c) ten (10) years from the date hereof.
At any time within two (2) years prior to the time of
expiration of this Agreement pursuant to Section 7(c), the Company and the
Parties may, by written agreement and with the written consent of the Trustee,
extend the duration of this Agreement for an additional period not exceeding ten
(10) years from the expiration date of this Agreement as originally fixed or as
last extended as provided in this paragraph.
As soon as practicable after the termination of this
Agreement, the Trustee shall deliver to each Party share certificates or
securities representing the number of Shares or other securities in respect of
which Voting Trust Certificates registered in the name of such Party are then
outstanding, upon the surrender of such Voting Trust Certificates properly
endorsed and upon payment by the persons entitled to receive such share
certificates or other securities of a sum sufficient to cover any tax or
governmental charge in respect of the transfer or delivery of such certificates.
If any Party cannot be located or fails or refuses to surrender Voting Trust
Certificates in exchange for Shares or other securities as aforesaid, the
Trustee shall deliver said Shares or other securities to the Company or to any
bank or trust company in California for the benefit of the Person or Persons
entitled thereto. Upon any such delivery, the Trustee shall be fully acquitted
and discharged with respect to said Shares or other securities.
8. COVENANTS OF THE COMPANY. The Company agrees to use its
best efforts to ensure that the rights granted hereunder are effective and that
the Parties hereto enjoy the benefits thereof. The Company will not, by any
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be performed hereunder by the Company, but will at all times in
good faith assist in the carrying out of all of the provisions of this Agreement
and in the taking of all such actions as may be necessary, appropriate or
reasonably requested by the holders of a majority of the outstanding Shares in
order to protect the rights of the Parties hereunder against impairment.
9. DEFINED TERMS. As used in this Agreement, the following
terms have the respective meanings set forth below:
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BENEFICIAL OWNER: shall have the meaning set forth in Rule
13d-3(a) and (b) of the Rules and Regulations to the Securities Exchange
Act of 1934, as amended; and Beneficially Owned shall have a correlative
meaning.
PERSON: shall mean an individual, partnership, corporation,
trust, limited liability company or unincorporated organization, and a
government or agency or political subdivision thereof.
SHARES: shall consist of all shares of Series AA Preferred
Stock issued to GWA pursuant to the Securities Purchase Agreement or
thereafter obtained by a Party.
10. REMEDIES. The Company and the Parties agree and
acknowledge that money damages may not be an adequate remedy for breach of the
provisions of this Agreement and that the Company and any Party shall be
entitled, in its sole discretion, to apply to any court of competent
jurisdiction for specific performance, injunctive relief or such other equitable
remedy or remedies as the court may in its discretion order to enforce or
prevent any violations of the provisions of this Agreement, in addition to its
remedies at law. In respect of any such equitable remedy so sought, the Company
and the Parties hereby waive the requirement of the posting of any bond or the
necessity to show irreparable injury on the part of the Person seeking such
relief.
11. NOTICES. Unless otherwise provided, any notice required
or permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon delivery by confirmed facsimile or reliable international
courier service or upon personal delivery to the party to be notified.
12. MODIFICATION, AMENDMENT, WAIVER. Any term hereof may be
amended and the observance of any term hereof may be waived (either generally or
in a particular instance and either retroactively or prospectively) only with
the written consent of the holders of a majority of the then outstanding voting
Shares Beneficially Owned by the Party or Parties for whose benefit such term
has been included and the Company; provided that, the Trustee must consent in
writing to any amendment or modification that changes the rights, obligations
and/or liability of the Trustee under this Agreement. Any amendment or waiver so
effected shall be binding upon the Parties hereto. The failure of the Trustee,
the Company or any Party at any time to enforce any of the provisions of this
Agreement shall in no way be construed as a waiver of such provisions and shall
not affect the rights of the Trustee, the Company or any Party thereafter to
enforce the provisions of this Agreement in accordance with its terms.
13. COMPLETE AGREEMENT. This document, the Voting Trust
Certificates, the Securities Purchase Agreement and the Amended and Restated
Articles of Incorporation (including the Certificate of Determination thereto)
of the Company embody the complete agreement and understanding between and among
the Parties hereto with respect to the subject matter hereof, and supersede and
preempt any prior understandings, agreements or representations by or among the
parties hereto, written or oral, which may have related to the subject matter
hereof.
14. SUCCESSORS AND ASSIGNS. This Agreement will bind and
inure to the benefit of and be enforceable by the Parties and their respective
permitted transferees, successors and assigns.
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15. LEGENDS.
(a) In addition to legends required by the Securities
Purchase Agreement, each certificate evidencing Shares shall bear a
legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON VOTING AND TRANSFER AS SET FORTH IN THE VOTING
TRUST AGREEMENT, DATED ON OR ABOUT APRIL 1998, A COPY OF WHICH
IS AVAILABLE FROM THE COMPANY AND ANY SUCCESSOR THERETO.
(b) Each Voting Trust Certificate evidencing Shares shall bear
a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED, PLEDGED OR
HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH
ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
TO THE HOLDER HEREOF (WHICH COUNSEL SHALL BE REASONABLY
SATISFACTORY TO THE COMPANY) THAT SUCH REGISTRATION IS NOT
REQUIRED.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON VOTING AND TRANSFER AS SET FORTH IN THE VOTING
TRUST AGREEMENT, DATED AS OF APRIL __, 1998, A COPY OF WHICH
IS AVAILABLE FROM THE COMPANY AND ANY SUCCESSOR THERETO.
16. COUNTERPARTS. This Agreement may be executed in
separate counterparts, each of which will be an original and all of which taken
together will constitute one and the same Agreement.
17. APPLICABLE LAW. All questions concerning this Agreement
will be governed by and interpreted in accordance with the internal laws of the
State of California, without regard to internal law concerning choice or
conflict of law. Any disputes arising hereunder shall be resolved before the
appropriate state or federal courts in the State of California, and the Parties
hereto hereby consent to the personal jurisdiction of such courts in respect of
such disputes.
18. SEVERABILITY. If any one or more of the provisions of
this Agreement, as applied to the Trustee, the Company or any Party or any
circumstance, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be unenforceable as to duration,
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scope, activity or subject, such provisions shall be construed by limiting and
reducing it so as to make such provision enforceable to the extent compatible
with the then existing applicable law.
19. TRUSTEE'S EXPENSES. The Trustee shall be reimbursed by
the Company for its initial and annual fees pursuant to the fee letter dated as
of March 5, 1998, and all reasonable out-of-pocket expenses (including its
reasonable attorneys' fees) incurred pursuant to this Agreement.
20. NATURE OF RELATIONSHIP. The Trust created by this
Agreement is not intended to be, shall not be deemed to be and shall not be
treated as a general partnership, limited partnership, joint venture,
corporation, joint stock company or association. The relationship of the Parties
to the Trustee shall be solely that of beneficiaries of the Trust created by
this Agreement, and their rights and obligations shall be limited to those set
forth in this Agreement.
21. INVESTMENT REPRESENTATIONS. In acquiring Voting Trust
Certificates hereunder, each Party acknowledges and represents that such Party
has had an opportunity to discuss the business of the Company with the officers
and directors of the Company and has received satisfactory answers in response
to such inquiries. Such Party further acknowledges that the Voting Trust
Certificates are highly speculative and involve a high degree of risk and that
the Voting Trust Certificates have not been registered under the Securities Act
of 1933, as amended (the "Act") and may not be sold or otherwise disposed of
except pursuant to an exemption from the Act. Such Party represents and warrants
to the Trustee and the Company that such Party is acquiring the Voting Trust
Certificate for such Party's own account for investment and not with a view to
or for sale in connection with any distribution of said Voting Trust
Certificates or with any present intention of distributing or selling said
Voting Trust Certificates, and such Party does not presently have reason to
anticipate any change in circumstances or any particular occasion or event that
would cause it to sell said Voting Trust Certificate.
22. NOTICES. All notices, demands and other communications
made hereunder shall be in writing and shall be given either by personal
delivery, by nationally recognized overnight courier (with charges prepaid) or
by facsimile (with telephone confirmation), and shall be deemed to have been
given or made when personally delivered, the day following the date deposited
with such overnight courier service or when transmitted to telecopy machine and
confirmed by telephone, addressed to the respective parties at the following
addresses (or such other address for a party as shall be specified by like
notice):
If to the Company:
Affymetrix, Inc.
3380 Central Expressway
Santa Clara, California 95051
Attention: Edward Hurwitz, Chief Financial Officer
Telephone: 408-731-5000
Facsimile: 408-481-0422
Page 76 of 102
<PAGE>
With a copy (which shall not constitute notice) to:
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian,
LLP
155 Constitution Drive
Menlo Park, California 94025
Attention: Carla S. Newell
Telephone: 650-463-5470
Facsimile: 650-321-2800
If to the Beneficial Owner:
Glaxo Wellcome Americas Inc.
499 Park Avenue
New York, New York 10022
Attention: Jack G. Smith
Telephone: 212-308-1210
Facsimile: 212-308-5263
If to the Trustee:
Wachovia Bank, N.A.
100 Main Street
Winston-Salem, North Carolina 27102
Attention: John N. Smith, III, Executive Services
Department
Telephone: 336-770-6984
Facsimile: 336-770-4059
23. INSPECTION. A duplicate of this Agreement and any
extension hereof shall be filed with the Trustee and shall be open to inspection
by any shareholder of the Company, any holder of a Voting Trust Certificate or
the agent of either, upon the same terms as the record of shareholders of the
Company is open to inspection.
[remainder of page intentionally left blank]
Page 77 of 102
<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Agreement
as of the date first above written.
COMPANY:
AFFYMETRIX, INC.
By: /s/ STEPHEN FODOR
-----------------------------------
Print Name: STEPHEN FODOR
---------------------------
Title: PRESIDENT/CEO
---------------------------------
Address: 3380 Central Expressway
Santa Clara, CA 95051
TRUSTEE:
WACHOVIA BANK, N.A.
By: /s/ J.O. LONG
-----------------------------------
Print Name: J.O. LONG
---------------------------------
Title: SENIOR VICE PRESIDENT
--------------------------------
Address: 100 Main Street
Winston-Salem, NC 27102
GWA:
GLAXO WELLCOME AMERICAS INC.
By: /s/ ROBERT A. INGRAM
------------------------------------
Print Name: ROBERT A. INGRAM
----------------------------
Title: EXECUTIVE VICE PRESIDENT
---------------------------------
Address: 499 Park Avenue
New York, NY 10022
Page 78 of 102
<PAGE>
SCHEDULE I
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144
PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL TO THE HOLDER HEREOF (WHICH COUNSEL SHALL BE
REASONABLY SATISFACTORY TO THE COMPANY) THAT SUCH REGISTRATION IS NOT
REQUIRED.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON VOTING AND TRANSFER AS SET FORTH IN THE VOTING TRUST AGREEMENT,
DATED AS OF APRIL __, 1998, A COPY OF WHICH IS AVAILABLE FROM THE
COMPANY AND ANY SUCCESSOR THERETO.
This certifies that Glaxo Wellcome Americas Inc. has deposited or has
caused to be deposited 1,634,522 shares of the Series AA Preferred Stock of
Affymetrix, Inc., a California corporation (the "Company"), under a Voting Trust
Agreement, dated as of April __, 1998 (the "Voting Trust Agreement"), among the
Company, Wachovia Bank, N.A. (the "Trustee"), and the Parties named in the
Voting Trust Agreement. The Trustee shall possess and be entitled to the
exclusive right to vote such shares upon the terms and subject to the conditions
stated in the Voting Trust Agreement.
This Voting Trust Certificate shall be transferable only on the records
of the Trustee upon surrender hereof by the registered holder in person or by
attorney duly authorized and, until so transferred, the Trustee may treat the
registered holder as the owner of this Voting Trust Certificate for all purposes
whatsoever, unaffected by any notice to the contrary. As a condition precedent
to the making of any transfer of this Voting Trust Certificate, the Trustee may
require the payment of a sum sufficient to cover the amount of any taxes or
other governmental charges incident thereto.
This Voting Trust Certificate is issued pursuant to, and the rights of
the holder hereof are subject to and limited by the terms and conditions of, the
Voting Trust Agreement. The holder of this Voting Trust Certificate, by the
acceptance hereof, assents to and agrees to be bound by all the terms and
conditions of the Voting Trust Agreement. Copies of the Voting Trust Agreement
are on file at the principal office of the Company and at the office of the
Trustee.
Certificates for the number of shares in respect of which this Voting
Trust Certificate was issued, or the net proceeds in cash or property of said
number of shares at the time of surrender hereof, all as provided in the Voting
Trust Agreement, shall be deliverable hereunder upon the termination of the
Voting Trust Agreement.
Page 79 of 102
<PAGE>
Dated: ____________, 199_
WACHOVIA BANK, N.A.,
as Trustee
By:-------------------------------------
Its:------------------------------------
Page 80 of 102
<PAGE>
EXHIBIT 4 TO SCHEDULE 13D
GOVERNANCE AGREEMENT
IT IS HEREBY AGREED between AFFYMETRIX, INC. ("AFFYMETRIX" or
the "Company") and GLAXO WELLCOME PLC ("GLAXO WELLCOME") that the following
provisions with respect to the relationship between the parties shall be binding
obligations on each of them.
GUIDING PRINCIPLES.
1. It is the mutual interest of the parties that AFFYMETRIX be
independently financeable at this time and ultimately financeable as a public
company.
2. It is the mutual interest of the parties that AFFYMETRIX
have entrepreneurial independent management and access to collaborative partners
other than GLAXO WELLCOME, although GLAXO WELLCOME is a natural arm's-length
collaborator in areas of interest to GLAXO WELLCOME.
THE PARTIES THEREFORE AGREE as follows:
1. DIRECTORS. So long as GLAXO WELLCOME or any of its
subsidiaries (collectively "GW") together own, or are part of a group that owns,
(a) a majority of the outstanding AFFYMETRIX voting shares, GW (or such group)
will have the right to designate five out of nine AFFYMETRIX directors, (b) less
than a majority but greater than 35% of the outstanding AFFYMETRIX voting
shares, GW (or such group) will have the right to designate four out of nine
AFFYMETRIX directors, (c) less than 35% but greater than 25% of the outstanding
AFFYMETRIX voting shares, GW (or such group) will have the right to designate
three out of nine AFFYMETRIX directors, (d) less than 25% but more than 15% of
the outstanding AFFYMETRIX voting shares, GW (or such group) will have the right
to designate two out of nine AFFYMETRIX directors and (e) less than 15% but more
than 5% of the outstanding AFFYMETRIX voting shares, GW (or such group) will
have the right to designate one out of nine AFFYMETRIX directors, in each case
such designations to be included, as part of the management slate to be
recommended to the shareholders for election at each annual meeting of
shareholders subsequent to 1995. All discretionary proxies will be voted in
favor of such nominees. GW (or such group) will otherwise vote its shares, or
give its proxy to vote its shares, for the other nominees on the slate of
directors recommended to the shareholders. The parties agree to take appropriate
action, if necessary, to comply with the requirements of the California
Corporations Code to make this provision valid and enforceable including without
limitation, to enter into a voting trust agreement.
2. TRANSFER OF SECURITIES. If GW should transfer shares
equal to at least 40% of AFFYMETRIX' outstanding voting shares to a third party
or group or should participate in a group that controls at least 40% of the
AFFYMETRIX voting shares, the purchaser of such shares will agree to be subject
to the obligations and entitled to the rights set forth in Section 1 regarding
the designation of AFFYMETRIX directors.
Page 81 of 102
<PAGE>
3. BUSINESS COMBINATION. Until the earlier of June 1, 1999
or an IPO by AFFYMETRIX, GW will not vote for or otherwise act to consummate any
merger, consolidation or other business combination of AFFYMETRIX which would
result in AFFYMETRIX becoming a direct or indirect wholly owned subsidiary of GW
unless such transaction is approved by a majority of directors of AFFYMETRIX not
designated by GW (the "independent directors of AFFYMETRIX").
4. MATERIAL TRANSACTIONS WITH GW. GW will not enter into any
material transaction with AFFYMETRIX unless such transaction is first approved
by a majority of the independent directors or the holders of a majority of the
voting power of AFFYMETRIX which is held by shareholders not affiliated with GW.
However, both parties recognize the GW is a natural collaborator with AFFYMETRIX
and will give due consideration to make available to GW collaborative
opportunities in GW's areas of interest on fair and reasonable terms. At the
same time, GW will pursue its interest in a possible major collaboration with
AFFYMETRIX in the genomics area.
5. IPO LOCK-UP. Conditioned upon similar agreements for the
same period of time entered into by other significant shareholders and key
officers and directors, as reasonably requested by the lead underwriter in an
IPO, GW will not sell, directly or indirectly, in the public market any
AFFYMETRIX shares without the written consent of AFFYMETRIX and the lead
underwriter in the IPO for a period of up to six months after the IPO.
6. REGISTRATION RIGHTS.
6.1 REQUEST FOR REGISTRATION.
(a) If the Company shall receive, at any
time after six months following the initial public offering of Common Stock of
the Company (other than pursuant to a registration statement relating either to
the sale of securities to employees of the Company pursuant to a stock option,
stock purchase or similar plan or an SEC Rule 145 transaction), a written
request from GW, while it and its subsidiaries are the holders of at least ten
percent of the outstanding Common Stock of the Company, that the Company file an
underwritten registration statement under the Securities Act of 1933, as
amended, and any successor thereto (the "Act") covering the registration of at
least 40 percent of the shares of Common Stock of the Company held by GW and its
subsidiaries (a "Demand Registration"), the Company shall, subject to the
limitations set forth below, as soon as practicable, use its reasonable best
efforts to effect such registration under the Act.
(b) The underwriter shall be selected by
GW but shall be reasonably acceptable to the Company. GW (together with the
Company) shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting.
(c) In addition, the Company shall not
be obligated to effect, or to take any action to effect, any registration:
Page 82 of 102
<PAGE>
(i) Within 90 days after the
effective date of any registration statement offered by the Company, whether for
its own account or for the account of others; or
(ii) On Form S-1 (or any
comparable or successor form to such form) after the Company has effected four
Demand Registrations and such registrations have been declared or ordered
effective. GW shall nevertheless have the continuing right to additional
registrations on Form S-3 (or any comparable successor form to such form) even
though it has already had four effective Demand Registrations.
(d) The Company shall use its reasonable
best efforts to register and qualify the securities covered by any such
registration statement under such other securities or Blue Sky laws of such
jurisdictions in the United States as shall be reasonably requested by GW;
PROVIDED that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
services of process in any such states or jurisdictions, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Act.
(e) The Company shall cause all such
securities registered pursuant to any such registration to be listed on such
U.S. securities exchange or quotation system on which similar securities issued
by the Company are then listed.
(f) All expenses incurred in connection
with registrations, filings, or qualifications pursuant to any registration of
securities of GW and its subsidiaries hereunder, including, but not limited to,
underwriting discounts and commissions, registration, filing and qualification
fees, printing costs, accounting fees and fees and disbursements of counsel for
GW shall be borne by GW and fees and disbursements of counsel for the Company
shall be borne by the Company; PROVIDED, HOWEVER, that all such expenses except
underwriting discounts and commissions, registration, filing and qualification
expenses and fees and disbursements of counsel for GW shall be borne by the
Company in the event that the registration is effected on Form S-3 (or any
comparable or successor of such form), or would have been effected on Form S-3
(or any comparable or successor form), or would have been effected on Form S-3
(or any comparable or successor form) except for the failure of the Company to
comply with the rules and regulations necessary to be eligible to use such form.
6.2 PIGGYBACK REGISTRATION.
(a) In the event the Company decides to
register any of its Common Stock (either for its own account or the account of a
security holder or holders exercising their respective demand registration
rights) on a form that would be suitable for a registration involving solely
Common Stock held by GW, the Company will promptly give GW written notice
thereof (which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the applicable Blue Sky or
other state securities laws). Upon the written request of GW delivered to the
Company within 25 days after delivery of such written notice from the Company,
the Company shall, subject to the limitations set forth below, include in such
registration, all Registrable Securities (as defined below) that GW has
requested to be so registered. The Company shall not be obligated to include
Registrable Securities in more than four registrations of
Page 83 of 102
<PAGE>
the Company. For the purposes of this Section 6.2 and Section 6.3, "Registrable
Securities" shall mean all Common Stock of the Company issued or issuable upon
conversion of the Company's Series 1 Subordinated Convertible Preferred Stock
and Series 2 Subordinated Convertible Preferred Stock, including Common Stock
issued pursuant to stock splits, stock dividends and similar distributions with
respect to such shares.
(b) If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise GW as a part of the written notice given pursuant to
Section 6.2(a). In such event the right of GW to registration shall be
conditioned upon such underwriting and the inclusion of the Registrable
Securities in such underwriting to the extent provided in this Section 6.2. GW
shall (together with the Company and the other holders distributing their
securities through such underwriting) enter into an underwriting agreement with
the underwriter's representative for such offering. GW shall have no right to
participate in the selection of the underwriters for an offering pursuant to
this Section 6.2.
(i) In the event the
underwriter's representative advises GW in writing that market factors
(including, without limitation, the aggregate number of shares of Common Stock
requested to be registered, the general condition of the market, and the status
of the persons proposing to sell securities pursuant to the registration)
require a limitation of the number of shares to be underwritten, the
underwriter's representative may:
(1) in the case of the
Company's initial public offering, exclude some or all Registrable Securities
from such registration and underwriting; and
(2) in the case of any
registered public offering subsequent to the Company's initial public offering,
limit the number of shares of Registrable Securities to be included in such
registration and underwriting; provided, however, that the total number of
shares of Common Stock held by GW (including shares issued on conversion of the
Company's Series A Senior Convertible Preferred Stock) to be included in such
registration shall not be less than 21% of the total number of shares included
in such registration. In such event, the underwriter's representative shall so
advise GW and the number of shares of Registrable Securities that may be
included in the registration and underwriting (if any) shall be allocated as
follows: among GW and holders of other securities requesting and legally
entitled to include shares of Common Stock in such registrations, in proportion,
as nearly as practicable, to the respective amounts of securities (including
Registrable Securities) requesting and entitled to inclusion in such
registration held by GW and such other holders at the time of filing of the
registration statement. No Registrable Securities or other securities excluded
from the underwriting by reason of this Section 6.2(b) shall be included in such
registration statement.
(3) If GW disapproves
of the terms of any such underwriting, GW may elect to withdraw therefrom by
written notice to the Company and the underwriter delivered at least seven days
prior to the effective date of the registration statement. Any Registrable
Securities or other securities excluded or withdrawn from such underwriting
shall be withdrawn from such registration.
(c) In the event of any registration of
Registrable Securities pursuant to this Section 6.2, the Company will exercise
its best efforts to register and qualify the
Page 84 of 102
<PAGE>
securities covered by the registration statement under such other securities or
Blue Sky laws of such jurisdictions as GW shall reasonably request and as shall
be reasonably appropriate for the distribution of such securities; provided,
however, that the Company shall not be required to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
6.3 INDEMNIFICATION.
(a) To the extent permitted by law, the
Company will indemnify GW, and each subsidiary of GW with respect to which
registration, qualification or compliance of Registrable Securities has been
effected pursuant to this Agreement ("GW Holding Subsidiary"), each of their
officers, directors and constituent partners, legal counsel, and each person
controlling GW, and each underwriter, if any, and each person who controls any
underwriter against all claims, losses, damages or liabilities (or actions in
respect thereof) to the extent such claims, losses, damages or liabilities arise
out of or are based upon any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus or other document (including any
related Registration Statement) incident to any such registration, qualification
or compliance, or are based on any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by the Company of the
Securities Act, the Securities Exchange Act of 1934, as amended (the "1934
Act"), or any state securities law, or any rule or regulation promulgated under
the Securities Act, the 1934 Act or any state securities law, applicable to the
Company and relating to action or inaction required of the Company in connection
with any such registration, qualification or compliance; and the Company will
reimburse GW, each GW Holding Subsidiary, each of their officers, directors and
constituent partners, and legal counsel, each such underwriter, and each person
who controls GW or such underwriter, for any legal and any other expenses
reasonably incurred, as incurred, in connection with investigating or defending
any such claim, loss, damage, liability or action; provided, however, that the
indemnity contained in this Section 6.3 shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or action if settlement is
effected without the consent of the Company (which consent shall not
unreasonably be withheld); and provided, further, that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based upon any untrue statement or
omission based upon written information furnished to the Company by GW, a GW
Holding Subsidiary, their officers, directors, constituent partners, or legal
counsel, underwriter, or controlling person and stated to be for use in
connection with the offering of securities of the Company.
(b) To the extent permitted by law, GW
will, if Registrable Securities are included in the securities as to which such
registration, qualification or compliance is being effected pursuant to this
Agreement, indemnify the Company, each of its directors and officers, each legal
counsel and independent accountant of the Company, each underwriter, if any, of
the Company's securities covered by such a registration statement, each person
who controls the Company or such underwriter within the meaning of the
Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based upon any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document (including any
related registration statement) incident to any such registration, qualification
or compliance, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or any violation by GW of the Securities Act, the 1934 Act or
any state securities law, or
Page 85 of 102
<PAGE>
any rule or regulation promulgated under the Securities Act, the 1934 Act or any
state securities law, applicable to GW and relating to action or inaction
required of GW in connection with any such registration, qualification or
compliance; and will reimburse the Company, such directors, officers, partners,
persons, law and accounting firms, underwriters or control persons for any legal
and any other expenses reasonably incurred, as incurred, in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by GW and stated to be specifically for use in connection with the
offering of securities of the Company; provided, however, that GW's liability
under this Section 6.3 shall not exceed GW's proceeds from the offering of
securities made in connection with such registration; and provided, further,
that the indemnity contained in this Section 6.3 shall not apply to amounts paid
in settlement of any such claim, loss, damage, liability or action if settlement
is effected without the consent of GW (which consent shall not unreasonably be
withheld).
(c) Promptly after receipt by an
indemnified party under this Section 6.3 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 6.3, notify the indemnifying
party in writing of the commencement thereof and generally summarize such
action. The indemnifying party shall have the right to participate in and to
assume the defense of such claim, jointly with any other indemnifying party
similarly noticed; provided, however, that the indemnifying party shall be
entitled to select counsel for the defense of such claim with the approval of
any parties entitled to indemnification, which approval shall not be
unreasonably withheld; provided further, however, that if either party
reasonably determine that there may be a conflict between the position of the
Company and GW in conducting the defense of such action, suit or proceeding by
reason of recognized claims for indemnity under this Section 6.3, then counsel
for such party shall be entitled to conduct the defense to the extent reasonably
determined by such counsel to be necessary to protect the interest of such
party. The failure to notify an indemnifying party promptly of the commencement
of any such action, if prejudicial to the ability of the indemnifying party to
defend such action, shall relieve such indemnifying party, to the extent so
prejudiced, of any liability to the indemnified party under this Section 6.3,
but the omission so to notify the indemnifying party will not relieve such party
of any liability that such party may have to any indemnified party otherwise
other than under this Section 6.3.
7. EXISTING TECHNOLOGY LICENSE. Each party recognizes the
other party's concern in regard to the existing technology license between
Affymax Technologies N.V. and AFFYMETRIX: in the case of GW, AFFYMETRIX agrees
not to use in internal research DNA chip technology for affinity binding of
ligands for lead identification and analoging for drug discovery and, in the
case of AFFYMETRIX, GW and its subsidiaries agree not to use DNA chip technology
in internal research in the Affymetrix field.
8. CONVERTIBLE PROMISSORY NOTE. In partial consideration of
this Agreement, GW agrees that the Series B Preferred Stock financing currently
planned by AFFYMETRIX (the "Series B Financing") shall not be deemed to be a
"Subsequent Financing" under Section 5 of the Subordinated Convertible
Promissory Note dated December 15, 1994 in the principal amount of $6,000,000
issued by AFFYMETRIX to Affymax Technologies N.V. (the "Convertible Promissory
Note") and that
Page 86 of 102
<PAGE>
AFFYMETRIX shall not be required to convert or pay off the Convertible
Promissory Note upon the closing of the Series B Financing. In addition, the
parties agree that:
(a) In the event that the Convertible
Promissory Note is outstanding at the time of the consummation of a transaction
or series of transactions subsequent to the Series B Financing that comes within
the meaning of "Subsequent Financing", as defined in Section 5(a) of the
Convertible Promissory Note, the Convertible Promissory Note may, at GW's option
in the event of any Subsequent Financing or at the Company's option only in the
event of an initial public offering, be converted, in whole or in part, into the
shares of capital stock of the Company issued and sold at a conversion price per
share equivalent to the lesser of (x) $4.50 (which price shall be subject to
proportionate adjustment in the event of a stock split, reverse stock split,
stock dividend, a subdivision or combination of stock or any similar event) or
(y) the price per share of the capital stock sold in such Subsequent Financing;
(b) The Company's option to pay interest on
the Convertible Promissory Note due during calendar year 1996 by the issuance of
warrants shall be canceled;
(c) The Company shall not have any right
to prepay the Convertible Promissory Note at any time provided, nevertheless,
that proceeds from sale of more than 5,000,000 shares of Series B Senior
Preferred Stock in the currently contemplated offering may, with the written
consent of GW, be used to make prepayment within twenty days after closing of
such offering;
(d) GW shall have the right to convert the
Convertible Promissory Note at maturity at the aforesaid price so long as GW
does not then own, directly or indirectly, or such conversion does not result in
GW thereafter owning, directly or indirectly, more than 49 percent of the
Company's then outstanding voting securities; and
(e) Section 5(b) of the Convertible
Promissory Note shall be deleted.
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<PAGE>
IN WITNESS WHEREOF, the parties have entered into this
Agreement effective the 6th day of July, 1995.
GLAXO WELLCOME PLC
By: /s/ J. D. COOMBE
------------------------------------
Title: Director
AFFYMETRIX, INC.
By: /s/
------------------------------------
Title: Chairman
Page 88 of 102
<PAGE>
EXHIBIT 5 TO SCHEDULE 13D
AMENDMENT TO GOVERNANCE AGREEMENT
THIS AMENDMENT TO GOVERNANCE AGREEMENT ("Amendment") is
entered into as of April 14, 1998, by and between Affymetrix, Inc. (the
"Company") and Glaxo Wellcome PLC ("Glaxo Wellcome"). Capitalized terms not
otherwise defined in this Amendment have the meaning given them in that certain
Governance Agreement (the "Governance Agreement") dated as of July 6, 1995, by
and between Affymetrix, Inc. and Glaxo Wellcome.
RECITALS
A. The Company and Glaxo Wellcome constitute all of the
parties to the Governance Agreement and desire to enter into this Amendment.
B. The Company and Glaxo Wellcome Americas Inc. ("GWA"), a
wholly owned subsidiary of Glaxo Wellcome, are entering into that certain Series
AA Preferred Stock Purchase Agreement ("Purchase Agreement") of even date
herewith pursuant to which GWA is purchasing shares of the Company's Series AA
Preferred Stock.
C. In order to induce the Company to enter into the Purchase
Agreement and to induce GWA to invest funds in the Company pursuant to the
Purchase Agreement, the Company and Glaxo Wellcome desire to make the amendments
described herein to the Governance Agreement.
NOW, THEREFORE, in consideration of the mutual promises and
covenants described below, the Company and Glaxo Wellcome hereby agree as
follows:
1. Paragraph 1 of the Governance Agreement shall be amended
and restated to read in full as follows:
"So long as GLAXO WELLCOME or any of its subsidiaries,
including, but not limited to, Glaxo Wellcome Americas Inc.,
(collectively, "GW") together own, or are part of a group that
owns, (a) a majority of the outstanding AFFYMETRIX voting
shares, GW (or such group) will have the right to designate
five out of nine AFFYMETRIX directors, (b) less than a
majority but greater than 35% of the outstanding AFFYMETRIX
voting shares, GW (or such group) will have the right to
designate four out of nine AFFYMETRIX directors, (c) less than
a 35% but greater than 25% of the outstanding AFFYMETRIX
voting shares, GW (or such group) will have the right to
designate three out of nine AFFYMETRIX directors, (d) less
than 25% but more than 15% of the outstanding AFFYMETRIX
voting shares, GW (or such group) will have the right to
designate two out of nine AFFYMETRIX directors and (e) less
than 15% but more than 5% of the outstanding AFFYMETRIX voting
shares, GW (or such group) will have the right to designate
one out of nine AFFYMETRIX directors, in each case such
designations to be included as part of the management slate to
be recommended to the shareholders subsequent to 1995. For
purposes of determining the percentage of outstanding voting
shares held by GW (or such group), shares of Series AA
Preferred Stock held by GW shall not be counted;
Page 89 of 102
<PAGE>
provided however, that upon conversion of the shares of Series
AA Preferred Stock owned by GW into shares of Common Stock,
such shares of Common Stock shall be counted for purposes of
determining the percentage of outstanding voting shares held
by GW (or such group). All discretionary proxies will be voted
in favor of such nominees. GW (or such group) will otherwise
vote its shares, or give its proxy to vote its shares, for the
other nominees on the slate of directors recommended to the
shareholders. The parties agree to take appropriate action, if
necessary, to comply with the requirements of the California
Corporations Code to make this provision valid and
enforceable, including without limitation, to enter into a
voting trust agreement."
2. The last sentence of paragraph 6.2(a) of the Governance
Agreement is hereby amended and restated to read in its
entirety as follows:
For the purposes of this Section 6.2 and Section 6.3,
Registrable Securities' shall mean all Common Stock of the
Company issued or issuable upon conversion of the Company's
Series 1 Subordinated Convertible Preferred Stock, Series 2
Subordinated Convertible Preferred Stock and Series AA
Preferred Stock, including Common Stock issued pursuant to
stock splits, stock dividends and similar distributions with
respect to such shares."
3. For the purposes of Section 6.1(a) of the Governance
Agreement, "Common Stock" shall include all shares of Common
Stock issued or issuable upon conversion of the Company's
Series AA Preferred Stock.
4. The terms and conditions of this Amendment and the Governance
Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties.
5. This Amendment may be executed in two or more counterparts,
each which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
6. This Amendment shall be governed by and construed under the
laws of the State of California as applied to agreements
entered into solely between residents of and to be performed
entirely within such state.
7. The Governance Agreement and this Amendment constitute the
entire agreement between the parties hereto pertaining to the
subject matter thereof and hereof.
Page 90 of 102
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Amendment to
Governance Agreement as of the day and year first above written.
AFFYMETRIX, INC. GLAXO WELLCOME PLC
By: /s/ By: /s/ J.D. COOMBE
---------------------------- --------------------------------
Title: President/CEO Title: Director
AGREED TO AND ACCEPTED BY:
GLAXO WELLCOME AMERICAS INC.
By: /s/ ROBERT A. INGRAM
----------------------------
Title: Executive Vice President
SIGNATURE PAGE TO AFFYMETRIX, INC.
AMENDMENT TO GOVERNANCE AGREEMENT
Page 91 of 102
<PAGE>
EXHIBIT 6 TO SCHEDULE 13D
AMENDMENT NO. 2 TO GOVERNANCE AGREEMENT
THIS AMENDMENT TO GOVERNANCE AGREEMENT ("Amendment") is entered into as
of September 8, 1998 by and between Affymetrix, Inc. (the "Company") and Glaxo
Wellcome PLC ("Glaxo Wellcome"). Capitalized terms not otherwise defined in this
Amendment have the meaning given them in that certain Governance Agreement (the
"Governance Agreement") dated as of July 6, 1995, by and between Affymetrix,
Inc. and Glaxo Wellcome.
RECITALS
A. The Company and Glaxo Wellcome constitute all of the parties
to the Governance Agreement. The parties entered into an
Amendment to Governance Agreement, dated as of April 14, 1998,
by and between the Company and Glaxo Wellcome, and accepted
and agreed to by Glaxo Wellcome Americas, Inc. ("GWAI"). Such
amendment is hereinafter referred to as "Amendment No. 1."
B. The Company, Glaxo Wellcome and GWAI desire to make the
amendments described herein to the Governance Agreement, as
amended by Amendment No. 1.
NOW THEREFORE, in consideration of the mutual promises and covenants
described below, the Company and Glaxo Wellcome hereby agree as follows:
1. Paragraph 1 of the Governance Agreement shall be amended and
restated to read in full as follows:
"So long as GLAXO WELLCOME or any of its subsidiaries,
including, but not limited to, GWAI (collectively, "GW")
together own, or are part of a group that owns, (a) a majority
of the outstanding AFFYMETRIX voting shares, GW (or such
group) will have the right to designate five out of nine
AFFYMETRIX directors, (b) less than a majority but greater
than 35% of the outstanding AFFYMETRIX voting shares, GW (or
such group) will have the right to designate four out of nine
AFFYMETRIX directors, (c) less than a 35% but greater than 25%
of the outstanding AFFYMETRIX voting shares, GW (or such
group) will have the right to designate three out of nine
AFFYMETRIX directors, (d) less than 25% but more than 15% of
the outstanding AFFYMETRIX voting shares, GW (or such group)
will have the right to designate two out of nine AFFYMETRIX
directors and (e) less than 15% but more than 5% of the
outstanding AFFYMETRIX voting shares, GW (or such group) will
have the right to designate one out of nine AFFYMETRIX
directors, in each case such designations to be included as
part of the management slate to be recommended to the
shareholders for election at each annual meeting of
shareholders subsequent to 1995. For purposes of determining
the percentage of outstanding voting shares held by GW (or
such group), shares of Series AA Preferred Stock held by GW
shall not be counted; PROVIDED HOWEVER, that upon conversion
of the shares of Series AA Preferred Stock owned by GW into
shares of Common Stock, such shares of Common Stock shall be
counted for purposes of determining the percentage of
outstanding voting shares held by
Page 92 of 102
<PAGE>
GW (or such group). All discretionary proxies will be voted in
favor of such nominees. GW (or such group) will otherwise vote
its shares, or give its proxy to vote its shares, for the
other nominees on the slate of directors recommended to the
shareholders. In the event the Company increased the number of
directors to more than nine, or decreases the number of
directors to less than nine, the number of directors that GW
shall have the right to nominate shall be consistent with the
percentage of directors GW has the right to nominate pursuant
to Section 1 hereof; provided that, the number of directors
determined thereby shall be rounded down to the nearest whole
number of directors."
2. The parties further agree that the Company shall call a
special meeting of its shareholders as soon as practicable
after receiving from GW a written request that such a meeting
be held; provided however, that the requirements contained in
this sentence shall terminate on the date on which GW holds
less than 10% of the outstanding voting shares of the Company.
In addition, the Company agrees that within sixty days after
the date of the Company's reincorporation into Delaware (the
"Reincorporation"), it will amend its bylaws to provide that
special meetings of the stockholders may be called by any
holder of Series AA Preferred Stock that holds at least ten
percent (10%) of the voting stock of the Company (including
Series AA Preferred Stock and Common Stock).
3. The parties agree that GW will not become an Interested
Stockholder for purposes of Section 203 of the Delaware
Corporation Law as a result of the Reincorporation.
4. The rights of GW and obligations of the Company to nominate
directors of the Company under this Section 3 are subject to
the terms and conditions contained in Section 1 hereof.
5. This Amendment may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
6. This Amendment shall be governed by and construed under the
laws of the State of California as applied to agreements
entered into solely between residents of and to be performed
entirely within such state.
7. The Governance Agreement, Amendment No. 1 and this Amendment
constitute the entire agreement between the parties hereto
pertaining to the subject matter thereof and hereof.
Pag 93 of 102
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Amendment to
Governance Agreement as of the day and year first above written.
AFFYMETRIX, INC. GLAXO WELLCOME PLC
By: /s/ By: /s/ J.D. COOMBE
------------------------------ -----------------------------
Title: President/CEO Title: Director
AGREED TO AND ACCEPTED BY:
GLAXO WELLCOME AMERICAS INC.
By: /s/ ROBERT A. INGRAM
------------------------------
Title: Executive Vice President
SIGNATURE PAGE TO AFFYMETRIX, INC.
AMENDMENT TO GOVERNANCE AGREEMENT
Page 94 of 102
<PAGE>
EXHIBIT 7 TO SCHEDULE 13D
AFFYMETRIX, INC.
AMENDED AND RESTATED 1993 STOCK PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
1. Purpose; Definitions ................................................2.
2. Effective Date; Term of Plan ........................................3.
3. Number and Source of Shares of Stock Subject to the Plan ............3.
4. Administration of the Plan ..........................................3.
5. Persons Eligible to Participate in this Plan ........................4.
6. Grant of Options; Terms and Conditions of Grant .....................4.
7. Purchase Rights .....................................................6.
8. Payment of Taxes ....................................................7.
9. Adjustment for Changes in Capitalization ............................7.
10. Dissolution, Liquidation, Merger ....................................7.
11. Successor Corporations ..............................................7.
12. No Rights as Shareholder or to Continued Employment .................8.
13. Disqualifying Dispositions ..........................................8.
14. Termination; Amendment ..............................................8.
15. Governing Law .......................................................8.
</TABLE>
Page 95 of 102
<PAGE>
2
1. PURPOSE; DEFINITIONS.
(a) PURPOSE. The purpose of the Plan is to attract, retain and
motivate officers, key employees, consultants and directors of Affymetrix, Inc.
(the "Company"), or a Parent or a Subsidiary, by giving them the opportunity to
acquire Stock ownership in the Company. Options granted under this Plan will be
either Incentive Stock Options or Nonstatutory Stock Options. This Plan also
provides for the grant of Purchase Rights providing for the direct sale of Stock
to eligible participants.
(b) DEFINITIONS. For purposes of the Plan, the following terms have
the following meanings:
(i) "Administrator" means the committee referred to in
Section 4 or the Board in its capacity as administrator of the Plan in
accordance with Section 4.
(ii) "Board" means the Board of Directors of the Company.
(iii) "Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute.
(iv) "Commission" means the Securities and Exchange
Commission, and any successor agency.
(v) "Company" means Affymetrix, Inc.
(vi) "Effective Date" has the meaning set forth in Section
2.
(vii) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, and any successor statute.
(viii) "Grant Date" means the date of grant of any Option or
Purchase Right.
(ix) "Incentive Stock Option" means any Option intended to
be and designated as an "incentive stock option" within the meaning of Section
422 of the Code.
(x) "Option" means an Option granted under Section 6.
(xi) "Option Agreement" means the written option agreement
covering an Option.
(xii) "Optionee" means the holder of an Option.
(xiii) "Parent" has the meaning set forth in Section 425 of
the Code.
Page 96 of 102
<PAGE>
3
(xiv) "Plan" means this Affymetrix, Inc. Amended and
Restated 1993 Stock Plan, as amended from time to time.
(xv) "Purchase Right" means a Purchase Right granted
pursuant to Section 7.
(xvi) "Qualified Domestic Relations Order" has the meaning
set forth in Section 414 of the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder, and any successor statute or rule.
(xvii) "Rule 16b-3" means Rule 16b-3 under Section 16(b) of
the Exchange Act, as amended from time to time, and any successor rule.
(xviii) "Stock" means the Common Stock of the Company, and
any successor entity.
(xix) "Subsidiary" has the meaning set forth in Section 425
of the Code.
(xx) "Tax Date" means the date defined in Section 8.
(xxi) "Vesting Date" means the date on which an Option
becomes wholly or partially exercisable.
2. EFFECTIVE DATE; TERM OF PLAN. The Effective Date of this Plan shall be July
1, 1993. This Plan, but not Options already granted, shall terminate
automatically ten years after its adoption by the Board, unless terminated
earlier by the Board under Section 15. No Options or Purchase Rights shall be
granted after termination of this Plan but all Options and Purchase Rights
granted prior to termination shall remain in effect in accordance with their
terms.
3. NUMBER AND SOURCE OF SHARES OF STOCK SUBJECT TO THE PLAN; INDIVIDUAL
LIMITATION.
(a) NUMBER AND SOURCE OF SHARES. Subject to the provisions of Section
9, the total number of shares of Stock with respect to which Options and
Purchase Rights may be granted under this Plan is 5,200,000 shares of Stock. The
shares of Stock to be issued hereunder upon exercise of an Option or Purchase
Right may consist of authorized and unissued shares or treasury shares.
(b) INDIVIDUAL LIMITATION. The Company may not issue Options with a
fair market value exercise price as of the date of grant covering in the
aggregate more than 500,000 shares of Stock (subject to the provisions of
Section 9) to any one participant in any one-year period.
4. ADMINISTRATION OF THE PLAN. This Plan shall be administered by the Board or
upon delegation by the Board, either in its entirety or only as it relates to
persons subject to Section 16 of the Exchange Act, by a committee of at least
two members of the Board to which administration of this Plan is delegated by
the Board. The Administrator may delegate nondiscretionary administrative duties
to such employees of the Company, or a Parent or a Subsidiary, as it deems
proper.
Page 97 of 102
<PAGE>
4
The Administrator may also make rules and regulations which it deems
useful to administer this Plan. Any decision or action of the
Administrator in connection with this Plan or any Options or Purchase
Rights granted or shares of Stock purchased under this Plan shall be
final and binding. The Administrator shall not be liable for any
decision, action or omission respecting this Plan, or any Options or
Purchase Rights granted or shares of Stock sold under this Plan. The
Board at any time may abolish the committee and revest in the Board the
administration of the Plan.
5. PERSONS ELIGIBLE TO PARTICIPATE IN THIS PLAN. Options and Purchase Rights may
be granted under this Plan to officers, key employees, consultants and directors
of the Company, or a Parent or a Subsidiary.
6. GRANT OF OPTIONS; TERMS AND CONDITIONS OF GRANT.
(a) GRANT OF OPTIONS. The Administrator may, in its absolute
discretion, grant Options under this Plan at any time and from time to time
before the expiration of ten years from the Effective Date. The Administrator
shall specify the type of Option, the Grant Date, the number of shares of Stock
covered by the Option, the exercise price and the terms and conditions for
exercise of the Option. If the Administrator fails to specify the Grant Date,
the Grant Date shall be the date of the action taken by the Administrator to
grant the Option. Notwithstanding the foregoing, if an Incentive Stock Option is
approved in anticipation of employment of any employee, the Grant Date shall be
the date the intended Optionee is first treated as an employee of the Company,
or a Parent or a Subsidiary, for payroll purposes. As soon as practicable after
the Grant Date, the Company will provide the Optionee with a written Option
Agreement in the form approved by the Administrator, which sets forth the type
of Option, the Grant Date, the number of shares of Stock covered by the Option,
the exercise price and the terms and conditions for exercise of the Option.
(b) TERMS AND CONDITIONS OF GRANT. Options granted under this Plan
shall be subject to the following terms and conditions and such other terms and
conditions not inconsistent with this Plan as the Administrator may impose:
(i) TYPE OF OPTION. Any Option granted under the Plan shall be
in such form as the Administrator may from time to time approve. Incentive Stock
Options may be granted only to employees of the Company, or a Parent or a
Subsidiary. Subject to the foregoing, the Administrator shall have the authority
to grant to any participant Incentive Stock Options, Nonqualified Stock Options
or both types of Options. Any portion of an Option that is not designated as, or
does not qualify as, an Incentive Stock Option, shall constitute a Nonqualified
Stock Option.
(ii) EXERCISE OF OPTION. In order to exercise all or any
portion of any Option granted under this Plan, an Optionee must remain as an
officer, employee, consultant or director of the Company, or a Parent or a
Subsidiary, until the Vesting Date. The Option shall be exercisable on or after
each Vesting Date in accordance with the terms set forth in the Option
Agreement.
Notwithstanding any designation of an Option as an
Incentive Stock Option, to the extent that
exercisability of any Incentive Stock Option granted
under this
Page 98 of 102
<PAGE>
5
Plan or otherwise to the Optionee by the
Company, or a Parent or a Subsidiary, would result in
an Optionee being able to exercise for the first time
in any calendar year Incentive Stock Options to
purchase shares of Stock having a fair market value
(determined as of the Grant Date) in excess of
$100,000, the excess above $100,000 determined in
reverse order of the Grant Date shall be
automatically converted to a Nonstatutory Stock
Option. Notwithstanding the foregoing, the
Administrator in its absolute discretion may elect a
different order for determining which Incentive Stock
Option shall automatically be converted to a
Nonstatutory Stock Option or may determine to defer
the exercisability of an Incentive Stock Option or
portion of an Incentive Stock Option so that in no
event will Incentive Stock Options for Stock having a
fair market value in excess of $100,000 (determined
as of the Grant Date) become exercisable for the
first time in any calendar year.
(iii) OPTION TERM. The term of any Option shall be fixed by
the Administrator, but no Incentive Stock Option granted under this Plan may be
exercised more than ten years from the Grant Date. If, at the time the Company
grants an Option, the Optionee directly or by attribution owns stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Company, or a Parent or a Subsidiary, the Option shall not be exercisable more
than five years after the Grant Date.
(iv) EXERCISE PRICE. The exercise price shall be at least 100%
of the fair market value of the shares of Stock covered by the Option on the
Grant Date, as determined in good faith by the Administrator. If, at the time
the Company grants an Option, the Optionee directly or by attribution owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, or a Parent or a Subsidiary, the exercise price shall be
at least 110% of the fair market value of the shares of Stock covered by the
Option on the Grant Date determined in the same manner.
(v) METHOD OF EXERCISE. To the extent the right to purchase
shares of Stock has accrued, Options may be exercised, in whole or in part, from
time to time in accordance with their terms by written notice from the Optionee
to the Company stating the number of shares of Stock with respect to which the
Option is being exercised and accompanied by payment in full of the exercise
price. Payment may be made in cash, by check or by delivery, at the absolute
discretion of the Administrator, of shares of Stock held by the Optionee. If
authorized by the Administrator, exercise of an Option may be made pursuant to a
"cashless exercise sale" procedure, pursuant to which funds to pay for exercise
of the Option are delivered to the issuer by a broker upon receipt of stock
certificates from the issuer, or pursuant to which participants obtain margin
loans from brokers to fund the exercise of the Option. In the absolute
discretion of the Administrator, payment may be made by delivery of an
interest-bearing, full recourse promissory note. In the discretion of the
Administrator, the exercise price may be paid by a combination of the above.
(vi) OPTION AGREEMENT. The terms and conditions of each option
shall be set forth in the Option Agreement evidencing the Option. No Option
shall be exercisable until after execution of the Option Agreement by the
Company and the Optionee.
Page 99 of 102
<PAGE>
6
(vii) NONASSIGNABILITY OF OPTION RIGHTS. No Option shall be
transferable other than by will or by the laws of descent and distribution or
pursuant to a Qualified Domestic Relations Order. During the lifetime of an
Optionee, only the Optionee may exercise an Option.
(viii) EXERCISE AFTER TERMINATION OF EMPLOYMENT OR DEATH. If
for any reason other than permanent and total disability or death an Optionee
ceases to be employed by the Company, or a Parent or a Subsidiary, in the case
of an Incentive Stock Option or to be employed by or to be a consultant or
director of the Company, or a Parent or a Subsidiary, in the case of a
Nonstatutory Stock Option, Options held at the date of such termination (to the
extent then exercisable) may be exercised, in whole or in part, at any time
within 3 months after the date of such termination or such lesser period of not
less than 30 days specified in the Option Agreement, but in no event after the
earlier of (i) the expiration date of the Option as set forth in the Option
Agreement, and (ii) ten years from the Grant Date. If an Optionee becomes
permanently and totally disabled (within the meaning of Section 22(e)(3) of the
Code) or dies while employed by the Company, or a Parent or a Subsidiary, (or,
if the Optionee dies within the period that the Option remains exercisable after
termination of employment), Options then held (to the extent then exercisable)
may be exercised by the Optionee, the Optionee's personal representative, or by
the person to whom the Option is transferred by will or the laws of descent and
distribution or pursuant to a Qualified Domestic Relations Order, in whole or in
part, at any time within one year after the disability or death or any lesser
period of not less than 6 months specified in the Option Agreement, but in no
event after the earlier of (i) the expiration date of the Option as set forth in
the Option Agreement and (ii) ten years from the Grant Date.
(ix) COMPLIANCE WITH SECURITIES LAWS. The Company shall not be
obligated to issue any shares of Stock upon exercise of an Option except in
compliance with all applicable securities laws and the regulations of any stock
exchange on which the Company's securities may then be listed. Evidences of
ownership of shares of Stock acquired upon exercise of Options shall bear any
legend required by, or useful for purposes of compliance with, applicable
securities laws, this Plan or the Option Agreement evidencing the Option.
7. PURCHASE RIGHTS.
(a) GRANT. As soon as practicable after the Grant Date of a Purchase
Right, the Administrator shall advise the holder of such right in writing of the
terms, conditions and restrictions relating to the grant, including the number
of shares of Stock covered by the Purchase Right, the purchase price, and the
time within which the Purchase Right must be exercised.
(b) PURCHASE PRICE. The purchase price of a Purchase Right shall be at
least 85% of the fair market value of the shares of Stock on the Grant Date or
on the date the Stock is purchased, as determined in good faith by the
Administrator. If, at the time the Company grants a Purchase Right, the
purchaser directly or by attribution owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company, or a Parent
or a Subsidiary, the purchase price shall be at least 100% of the fair market
value of the shares of Stock on the Grant Date or on the date the Stock is
purchased, determined in the same manner.
Page 100 of 102
<PAGE>
7
8. PAYMENT OF TAXES. Unless the Administrator permits otherwise, the participant
shall pay the Company in cash, promptly when the amount of such obligations
becomes determinable (the "Tax Date"), all applicable local, state and federal
withholding taxes applicable, in the Administrator's absolute discretion, to (i)
the exercise of any Option or Purchase Right, or (ii) the transfer or other
disposition of shares acquired upon exercise of any Option or Purchase Right.
If and to the extent authorized by the Administrator in its absolute
discretion, a participant may make an election to (x) deliver to the
Company a promissory note of the participant on the terms set forth in
Section 6(b)(v), (y) tender shares of Stock to the Company or (z) have
shares of Stock or other securities of the Company withheld by the
Company, to pay the amount of tax that the Administrator in its
absolute discretion determines to be required to be withheld by the
Company.
Any shares of Stock so withheld or tendered shall be valued by the
Company at their fair market value on the Tax Date. The right to so
withhold or tender shares of Stock shall relate separately to each
Option or Purchase Right or any increment thereof covering not less
than 100 shares of Stock.
9. ADJUSTMENT FOR CHANGES IN CAPITALIZATION. The existence of outstanding
Options shall not affect the Company's right to effect adjustments,
recapitalizations, reorganizations or other changes in its or any other
corporation's capital structure or business, any merger or consolidation, any
issuance of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock, the dissolution or liquidation of the Company's or any
other corporation's assets or business or any other corporate act whether
similar to the events described above or otherwise. Subject to Section 10, if
the outstanding shares of the Stock are increased or decreased in number or
changed into or exchanged for a different number or kind of securities of the
Company or any other corporation by reason of a recapitalization,
reclassification, stock split, combination of shares, stock dividend or other
event, the number and kind of securities with respect to which Options may be
granted under this Plan, the number and kind of securities as to which
outstanding Options may be exercised, and the exercise price at which
outstanding Options may be exercised, shall be adjusted, to the extent possible,
so as to prevent dilution and without regard to any resulting tax consequences
to the Optionee.
10. DISSOLUTION, LIQUIDATION, MERGER. In the event of a dissolution or
liquidation of the Company, a merger in which the Company is not the surviving
corporation, or a sale of over 80% of the assets of the Company, the
Administrator, in its absolute discretion, may cancel each outstanding Option
upon payment in cash to the Optionee of the amount by which any cash and the
fair market value of any other property which the Optionee would have received
as consideration for the shares of Stock covered by the fully-vested portion of
the Option if the Option had been exercised before such liquidation,
dissolution, merger, or sale exceeds the exercise price of the Option.
11. SUCCESSOR CORPORATIONS. In the event of a merger in which the Company is not
the surviving corporation, the successor entity may assume the obligations under
all outstanding Options.
Page 101 of 102
<PAGE>
8
12. NO RIGHTS AS SHAREHOLDER OR TO CONTINUED EMPLOYMENT. An Optionee shall have
no rights as a shareholder with respect to any shares of Stock covered by an
Option until such Optionee has acquired title to such shares. Subject to
Sections 9 and 10, no adjustment shall be made for dividends or other rights for
which the record date is prior to the date title to the shares of Stock has been
acquired by the Optionee. The grant of an Option shall in no way be construed so
as to confer on any Optionee the right to continued employment by the Company,
or a Parent or a Subsidiary.
13. DISQUALIFYING DISPOSITIONS. If Stock acquired upon exercise of an Option is
disposed of in a disqualifying disposition within the meaning of Section 422 of
the Code, the holder of the shares of Stock immediately prior to the disposition
shall notify the Company in writing of the date and the terms of such
disposition and comply with any other requirements imposed by the Company in
order to enable the Company to secure the related income tax deduction to which
it is entitled.
14. TERMINATION; AMENDMENT. The Board may amend, suspend or terminate this Plan
at any time and for any reason, but no amendment, suspension or termination
shall be made which would impair the right of any person under any outstanding
Options or Purchase Rights without such person's consent. No amendment shall
require shareholder approval unless (a) shareholder approval is required by
Section 422 of the Code (for Incentive Stock Options); (b) shareholder approval
is required by other applicable laws, regulations or rules; or (c) the Board
otherwise concludes that shareholder approval is advisable.
15. GOVERNING LAW. This Plan and the rights of all persons under this Plan
shall be construed in accordance with and under applicable provisions of the
Code and the laws of the State of California.
Page 102 of 102
