<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
AFFYMETRIX, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------
<PAGE>
[LOGO]
AFFYMETRIX, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
JUNE 9, 1999
------------------------
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of Affymetrix, Inc., a Delaware
corporation ("Affymetrix" or the "Company"), will be held on Wednesday, June 9,
1999 at 4:00 p.m. local time, at 3380 Central Expressway, Santa Clara,
California, for the following purposes:
1. To elect directors to serve until the next annual meeting of
stockholders or until their successors are elected.
2. To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company for the fiscal year ending December 31, 1999.
3. To change the number of authorized shares of Common Stock and Preferred
Stock of the Company.
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
These items of business are more fully described in the Proxy Statement
accompanying this notice.
Only stockholders of record at the close of business on April 13, 1999 are
entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting, please mark, sign, date
and return the enclosed proxy card as soon as possible in the postage-prepaid
envelope enclosed for that purpose. Any stockholder attending the meeting may
vote in person even if the stockholder has returned a proxy.
By Order of the Board of Directors,
Vernon A. Norviel
Secretary
Santa Clara, California
May 5, 1999
<PAGE>
AFFYMETRIX, INC.
3380 CENTRAL EXPRESSWAY
SANTA CLARA, CA 95051
------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
---------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Affymetrix, Inc. ("Affymetrix" or the "Company") for use at the annual meeting
of stockholders to be held on Wednesday, June 9, 1999 at 4:00 p.m., local time,
or at any adjournment of the meeting, for the purposes set forth in this Proxy
Statement and in the accompanying Notice of Annual Meeting of Stockholders. The
annual meeting will be held at 3380 Central Expressway, Santa Clara, California
95051. The Company's telephone number is (408) 731-5000.
These proxy solicitation materials were mailed on or about May 5, 1999,
together with the Company's 1998 Annual Report to Stockholders, to all
stockholders of record on April 13, 1999.
RECORD DATE
Stockholders of record at the close of business on April 13, 1999 (the
"Record Date") are entitled to notice of and to vote at the meeting. At the
Record Date, there were approximately 24,156,308 shares of Common Stock and
1,634,522 shares of Series AA Preferred Stock (the "Series AA Stock")
outstanding.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company a written
notice of revocation or a duly executed proxy bearing a later date or time, or
by attending the meeting and voting in person.
VOTING AND SOLICITATION
Holders of Common Stock and holders of Series AA Stock are entitled to vote
at the meeting. Each share of Common Stock and Series AA Stock entitles the
holder to one vote on each matter to come before the meeting. The Company's
Certificate of Incorporation does not provide for cumulative voting.
In connection with the issuance of the Series AA Stock, the Company and
Glaxo Wellcome Americas Inc. ("GWA") entered into a voting trust agreement (the
"Voting Trust Agreement"), pursuant to which the Series AA Stock is required to
be voted proportionately in accordance with the votes cast by all holders of the
Company's Common Stock for and against on certain matters.
The cost of soliciting proxies will be borne by the Company. Proxies may
also be solicited by certain of the Company's directors, officers and employees,
without additional compensation, personally or by telephone, facsimile or
letter.
QUORUM; ABSTENTIONS AND BROKER NON-VOTES
The required quorum for the transaction of business at the annual meeting is
a majority of the combined number of shares of Common Stock and Preferred Stock
outstanding on the Record Date. Broker non-votes and shares held by persons
abstaining will be counted in determining whether a quorum is present at the
annual meeting. However, abstentions are counted as votes against a proposal for
purposes of determining whether or not a proposal has been approved, whereas
broker non-votes are not
<PAGE>
counted as shares voting. Thus broker non-votes can have the effect of
preventing approval of proposals where the affirmative vote of the majority of
outstanding shares is required.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company which are intended to be presented
by such stockholders at next year's annual meeting must be received by the
Company no later than December 28, 1999 in order that they may be included in
the proxy statement and form of proxy relating to the 2000 annual meeting.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
The Bylaws of the Company provide for a Board of Directors (the "Board")
consisting of not fewer than six nor more than eleven directors. The size of the
Board is currently set at nine and eight of the directors are to be elected at
the meeting. The vacant seat resulting from the resignation of Mr. Hurt remains
to be filled. Unless otherwise instructed, the proxy holders will vote the
proxies received by them for the Company's eight nominees named below, all of
whom are presently directors of the Company. If any nominee of the Company is
unable or declines to serve as a director at the time of the Annual Meeting, the
proxies will be voted for any nominee designated by the present Board to fill
the vacancy. If additional persons are nominated for election as directors, the
proxy holders intend to vote all proxies received by them for the nominees
listed below. The Company is not presently aware of any nominee who will be
unable or will decline to serve as a director. The term of office of each person
elected as a director will continue until the next annual meeting of
stockholders or until a successor has been elected and qualified.
The names of the nominees, and certain information about them as of the
Record Date, are set forth below.
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
- ---------------------------------- --- -------------------------------------------------------- ---------------
<S> <C> <C> <C>
John D. Diekman, Ph.D............. 56 Chairman of the Board; Partner of Bay City Capital LLC 1992
Stephen P.A. Fodor, Ph.D.......... 45 President and Chief Executive Officer 1993
Paul Berg, Ph.D................... 72 Professor of Biochemistry, Stanford University 1993
Vernon R. Loucks, Jr.............. 64 Chairman and Chief Executive Officer, Baxter 1993
International, Inc.
Barry C. Ross, Ph.D............... 50 Director, Group Research Strategy and Alliances, Glaxo 1995
Wellcome Research and Development Limited
David B. Singer................... 36 President and Chief Executive Officer, GeneSoft, Inc. 1993
Lubert Stryer, M.D................ 61 Professor of Neurobiology, Stanford University 1996
John A. Young..................... 66 President and Chief Executive Officer (retired), 1993
Hewlett-Packard Co.
</TABLE>
JOHN D. DIEKMAN, PH.D., has served as a Director of the Company and Chairman
since the Company's inception. Dr. Diekman served as Chief Executive Officer of
the Company from July 1995 to March 1997. Prior to such time, Dr. Diekman served
as President and Chief Operating Officer of Affymax N.V.
2
<PAGE>
("Affymax") from July 1991 to March 1995 and as Chairman of the Affymax Board of
Directors from July 1994 to July 1995. Dr. Diekman has served as a partner of
Bay City Capital LLC, a life sciences merchant bank, since March 1997. Dr.
Diekman also currently serves as a director of Quidel Corp. and LJL Biosystems,
Inc.
STEPHEN P.A. FODOR, PH.D., is the President and Chief Executive Officer of
the Company and has been a Director of the Company since February 1993. At
various times between February 1993 and March 1997, Dr. Fodor served as
President, Chief Operating Officer and Chief Technology Officer of the Company.
Dr. Fodor previously was Vice President and Director of Physical Sciences at the
Affymax Research Institute from November 1992 to February 1993. Dr. Fodor also
currently serves as a director of EOS Biotechnology, Inc.
PAUL BERG, PH.D., has been a Director of the Company since August 1993. Dr.
Berg is Cahill Professor in Cancer Research, Professor of Biochemistry and
Director of the Beckman Center for Molecular and Genetic Medicine at Stanford
University School of Medicine. He received the Nobel Prize in Chemistry in 1980,
the National Medal of Science in 1983 and is a member of the National Academy of
Sciences, the Royal Society, London and the French Academy of Sciences. Dr. Berg
also serves as a member of the Company's Scientific Advisory Board. Dr. Berg
also serves as a director of Transgene S.A., Gilead Sciences, Inc. and on the
Policy Board of DNAX (a subsidiary of Schering-Plough Corp.).
VERNON R. LOUCKS, JR., has been a Director of the Company since August 1993.
Mr. Loucks is Chairman of the Board of Baxter International Inc. He held the
titles of Chairman and Chief Executive Officer from May of 1980 through December
of 1998. Mr. Loucks also serves as a director of Anheuser-Busch Companies, Inc.,
The Dun and Bradstreet Corp., Emerson Electric Co. and The Quaker Oats Company.
BARRY C. ROSS, PH.D., a Director of the Company since March 1995, has served
as Director of Group Research Strategy and Alliances at Glaxo Wellcome Research
and Development Ltd. since 1995. Dr. Ross joined Glaxo in 1984 and served as
Director, Medicinal Chemistry from 1989 to 1993 and Director of Research and
Development from 1993 to 1995. Dr. Ross was designated by Glaxo Wellcome as its
nominee to serve on the Board of Directors.
DAVID B. SINGER, has been a Director of the Company since February 1993
served as Vice Chairman of the Company's Board of Directors from July 1995 to
April 1996. He has been President and Chief Executive Officer of GeneSoft, Inc.
since September 1998. From May 1996 to July 1998, he served as Senior Vice
President and Chief Financial Officer of Heartport, Inc. Mr. Singer was
President and Chief Executive Officer of the Company from February 1993 to June
1995.
LUBERT STRYER, M.D., has served as a Director of the Company since September
1996. Dr. Stryer is Winzer Professor in the School of Medicine, and a Professor
of Neurobiology at Stanford University since 1976. Dr. Stryer received the
American Chemical Society Award in Biological Chemistry (Eli Lilly Award). He is
a member of the National Academy of Sciences and received an honorary Doctor of
Science from the University of Chicago. Dr. Stryer also serves as Chairman of
the Company's Scientific Advisory Board. Dr. Stryer also serves as a director of
Aurora Biosciences Corporation.
JOHN A. YOUNG, has served as a Director of the Company since August 1993.
Mr. Young retired as President and Chief Executive Officer of Hewlett-Packard
Co. in October 1992. Mr. Young also serves as a director of Wells Fargo &
Company, Chevron Corp., SmithKline Beecham Corp., Novell, Inc., International
Integration, Inc., and Lucent Technologies, and is a member of the Business
Council and the National Academy of Engineering.
There are no family relationships among directors or executive officers of
the Company.
3
<PAGE>
REQUIRED VOTE
The nominees receiving the highest number of affirmative votes of the shares
of Common Stock and Series AA Stock voting together as a single class in person
or by proxy and entitled to be voted for them will be elected as directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE ELECTION
OF THE NOMINEES.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of nine meetings during
the fiscal year ended December 31, 1998. Each director other than Mr. Loucks and
Mr. Young attended at least seventy-five percent of the meetings of the Board of
Directors and each committee on which the director served during 1998.
The Board of Directors has an Audit Committee, a Compensation Committee and
a Nominating Committee.
The Audit Committee of the Board of Directors, which consisted of Mr.
Douglas Hurt, Mr. David Singer and Mr. John Young, held three meetings during
1998. The Audit Committee oversees the actions taken by the Company's
independent auditors and reviews the Company's internal financial and accounting
controls and policies.
The Compensation Committee of the Board of Directors, which consisted of Dr.
Paul Berg and Mr. John Young, held five meetings during 1998. The Compensation
Committee is responsible for determining salaries, incentives and other forms of
compensation for officers and other employees of the Company and administers
various incentive compensation and benefit plans.
The Nominating Committee, which consisted of Dr. Stephen Fodor, Dr. John
Diekman, Mr. Vernon Loucks and Mr. John Young, held one meeting in 1998. The
nominating committee is responsible for nominating Directors for election.
COMPENSATION OF DIRECTORS
Each non-employee director receives a fee of $2,500 per Board meeting
attended as well as reimbursement of expenses incurred in attending Board
meetings. In addition, the Company's 1996 Nonemployee Directors Stock Option
Plan (the "Directors Plan") provides for a grant of 33,333 shares of Common
Stock if a person who is neither an officer nor an employee of the Company and
who has not previously been a member of the Board is elected or appointed
director. Each such option vests at the rate of one-fifth of the number of
shares covered by the option on each anniversary of the grant date so long as
the director is serving on the Board. In addition, the Directors Plan calls for
the grant on the date of the first board meeting after each annual meeting of
the stockholders of the Company held after January 1, 2001 of an option to
purchase 6,667 shares of the Company's Common Stock to be vested in full one
year after the date of grant for the following nonemployee directors:
- nonemployee directors elected prior to March 1996 who continue to serve on
the Board; and
- nonemployee directors elected after March 1996 who continue to serve on
the Board; provided such stock option will not be granted until fifty-four
(54) months after the initial option grant to such nonemployee director.
The exercise price of all options granted pursuant to the Directors Plan is
the fair market value of the Company's Common Stock at the time of grant.
4
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP, independent auditors,
to audit the financial statements of the Company for the fiscal year ending
December 31, 1999. Ernst & Young LLP has audited the Company's financial
statements since the Company's inception. Representatives of Ernst & Young LLP
are expected to be present at the meeting with the opportunity to make a
statement if they desire to do so, and are expected to be available to respond
to appropriate questions.
REQUIRED VOTE
The affirmative vote of the holders of a majority of the shares of the
Company's Common Stock and Series AA Stock voting together as a single class in
person or by proxy on this proposal at the annual meeting is required to approve
the appointment of the independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
PROPOSAL NO. 3 AMENDMENT TO THE
COMPANY'S CERTIFICATE OF INCORPORATION
The Board of Directors has determined that it is in the best interests of
the Company and its stockholders to amend the Company's Certificate of
Incorporation to (a) increase the number of authorized shares of Common Stock of
the Company from fifty million (50,000,000) shares to seventy-five million
(75,000,000) shares and (b) decrease the number of authorized shares of
Preferred stock of the Company from twenty-seven million five hundred thousand
(27,500,000) shares to five million (5,000,000) shares. Accordingly, the Board
of Directors has unanimously approved the proposed Restated Certificate of
Incorporation of the Company, in the form attached hereto as APPENDIX A (the
"Restated Certificate"), and hereby solicits the approval of the Company's
stockholders of the Restated Certificate. If the stockholders approve the
Restated Certificate, the Board of Directors currently intends to file the
Restated Certificate with the Secretary of State of the State of Delaware as
soon as practicable following such stockholder approval. If the Restated
Certificate is not approved by the stockholders, the existing Certificate of
Incorporation will continue in effect.
The objective of the increase in the authorized number of shares of Common
Stock is to ensure that the Company has sufficient shares available for future
issuances of Common Stock or securities convertible into Common Stock. The Board
of Directors believes that it is prudent to increase the authorized number of
shares of Common Stock to the proposed levels in order to provide a reserve of
shares available for issuance to meet business needs as they arise. Such future
activities may include, without limitation, financings, establishing strategic
relationships with corporate partners, providing equity incentives to employees,
officers or directors, or effecting stock splits or dividends. The additional
shares of authorized Common Stock may also be used to acquire or invest in
complementary businesses or products. Although the Company has no current plans
or proposals to issue additional shares of Common Stock (except pursuant to
employee stock incentive plans), the Company may continue to evaluate potential
acquisitions of or investments with third parties. In the event that the Board
of Directors does undertake a plan, or otherwise enter into an agreement,
understanding or arrangement, to issue additional shares of Common Stock or
securities convertible into shares of the Common Stock, the Board of Directors
intends to issue such shares of its capital stock only upon terms and conditions
that the Board of Directors deems advisable and in the best interests of the
Company and its stockholders. The increase in the number of authorized shares of
Common Stock will increase the franchise taxes payable to the State of Delaware,
but this increase will be offset in part by a decrease in the number of shares
of authorized Preferred Stock as proposed herein.
The objectives of the decrease in the authorized number of shares of
Preferred Stock are to minimize the amount of franchise taxes that the Company
is obligated to pay in the State of Delaware.
5
<PAGE>
SUMMARY OF AUTHORIZED AND OUTSTANDING CAPITAL STOCK
The Company's authorized capital stock currently consists of fifty million
(50,000,000) shares of Common Stock and twenty-seven million five hundred
thousand (27,500,000) shares of Preferred Stock. The Company's Common Stock is
not subject to any preemptive rights. The Company's Certificate of Incorporation
provides that the Company's Preferred Stock may be divided into any number of
series, and that the Company's Board of Directors may fix the number of, and
determine the rights, preferences, privileges and restrictions granted to or
imposed upon, any such series. As of March 24, 1999, there were twenty-four
million one hundred fifty-six thousand three hundred eight (24,156,308) shares
of the Company's Common Stock and one million six hundred thirty-four thousand
five hundred twenty-two (1,634,522) shares of the Company's Preferred Stock
issued and outstanding. If the proposed Restated Certificate of Incorporation is
adopted by the Company's stockholders at the Annual Meeting, the Company will
have available for issuance forty-six million four hundred forty-one thousand
one hundred ninety-three (46,441,193) shares of Common Stock, assuming full
conversion of all outstanding convertible securities or options to purchase such
securities, and three million three hundred sixty-five thousand four hundred
seventy-eight (3,365,478) shares of Preferred Stock.
EFFECTS OF THE PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION
If the stockholders approve the proposed Restated Certificate, the Board of
Directors may cause the issuance of additional shares of Common Stock without
further vote of the stockholders of the Company, except as provided under
Delaware corporate law or under the rules of any securities exchange on which
shares of Common Stock of the Company are then listed. Current holders of Common
Stock have no preemptive or similar rights, which means that current
stockholders do not have a prior right to purchase any new issue of Common Stock
of the Company in order to maintain their appropriate ownership thereof. The
issuance of additional shares of Common Stock would decrease the proportionate
equity interest of the Company's current stockholders and, depending upon the
price paid for such additional shares, could result in dilution to the Company's
current stockholders.
The proposed Restated Certificate's increase in the authorized number of
shares of the Company's Common Stock could also have certain anti-takeover
effects. For example, although the Company has no present intention to do so,
shares of the Company's Common Stock and/or securities convertible into the
Company's Common Stock could be issued in a private placement or public
offering, or rights to purchase shares of the Company's Common Stock and/or
securities convertible into the Company's Common Stock could be issued, to
create voting impediments to or otherwise frustrate third party attempts to
effect a takeover or otherwise gain control of the Company through a public
tender offer, proxy contest or other means. In addition, the proposed Restated
Certificate could discourage an attempt by a third party to acquire control of
the Company through a public tender offer, proxy contest or other means and,
therefore, could deprive the Company's stockholders of benefits that could
result from such an attempt to takeover, or otherwise gain control of, the
Company. Such benefits could include, among other things, the realization of a
premium over the market price of their shares of the Company's capital stock in
a tender offer, or even the temporary increase in the market price for such
shares that such an attempt could cause. The Board of Directors, however, is not
aware of any present efforts or attempt to takeover, or otherwise gain control
of, the Company through a public tender offer, proxy contest or any other means.
Despite the potential anti-takeover effects of the proposed Restated
Certificate described above, the Board of Directors believes that the increased
financial flexibility and other benefits offered by the proposed amendment far
outweigh any of the disadvantageous anti-takeover effects of such amendment. To
the extent that the proposed amendment may have certain anti-takeover effects,
the Board of Directors believes that the proposed amendment and the
anti-takeover effects thereof may encourage third parties seeking to acquire or
otherwise gain control over the Company to negotiate directly with the Board of
Directors. In this regard, the Board of Directors further believes that such
negotiations will enable the Board of Directors to consider a takeover
transaction proposed by a third party in a non-disruptive
6
<PAGE>
atmosphere and to effectively discharge its fiduciary obligation to consider and
act upon any proposed takeover transaction in a manner that best serves the
interests of the Company's stockholders by maximizing stockholder value.
REQUIRED VOTE
The affirmative vote of the holders of a majority of the shares of Common
Stock and Series AA stock voting together as a single class in person or by
proxy and entitled to be voted on this proposal at the annual meeting is
required to approve this amendment to the Company's Certificate of
Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE AMENDMENT
TO THE COMPANY'S CERTIFICATE OF INCORPORATION.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING,
PLEASE COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
STOCK OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock of
the Company as of March 24, 1999 by: (a) each person known to the Company who
beneficially owns five percent or more of the outstanding shares of its Common
Stock; (b) each director; (c) each of the officers named in the Summary
Compensation Table below; and (d) all directors and executive officers as a
group:
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENTAGE OF SHARES
BENEFICIAL OWNER OWNED(1) BENEFICIALLY OWNED(1)(2)
- -------------------------------------------------------------------- ----------------- ---------------------------
<S> <C> <C>
Glaxo Wellcome plc(3)............................................... 7,705,067 31.9%
Greenford Road
Greenford, Middlesex, UBG OHE, UK
Paul A. Berg, Ph.D.(4).............................................. 68,447 *
John D. Diekman, Ph.D.(5)........................................... 195,667 *
Stephen P.A. Fodor, Ph.D.(6)........................................ 272,220 1.1%
Vernon R. Loucks, Jr.(7)............................................ 74,998 *
Vernon A. Norviel(8)................................................ 56,240 *
Kenneth J. Nussbacher(9)............................................ 68,887 *
Richard P. Rava, Ph.D.(10).......................................... 28,222 *
Barry C. Ross, Ph.D.(11)............................................ 7,745,065 32.1%
Sue Siegel(12)...................................................... 50,000 *
David B. Singer(13)................................................. 129,640 *
Lubert Stryer, M.D.(14)............................................. 114,584 *
John A. Young(15)................................................... 61,332 *
All directors and executive officers as a group (15 persons)(16).... 8,929,086 37.0%
</TABLE>
- ------------------------
* Represents beneficial ownership of less than one percent of the Common
Stock.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of Shares
beneficially owned by a person and the percentage of ownership of that
person, shares of Common Stock subject to options held by that person that
are currently exercisable or exercisable within 60 days of March 24, 1999
are deemed outstanding. Such shares, however, are not deemed outstanding
for the purpose of computing the percentage ownership of each other person.
The persons named in this table have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them,
subject to community property laws where applicable and except as indicated
in the other footnotes to this table.
7
<PAGE>
(2) Percentage of beneficial ownership is based on 24,156,308 shares of Common
Stock outstanding as of March 24, 1999. This total includes 1,000,000
shares of Common Stock issued pursuant to a private placement of the
Company's Common Stock on March 15, 1999, but does not include 1,634,522
shares of Series AA Preferred Stock issued on April 14, 1998.
(3) Glaxo Wellcome's shares are held through its subsidiary, Affymax N.V.and
Affymax Technologies N.V., and include 203,881 shares issuable upon
exercise of outstanding warrants at $8.25 per share. This total does not
include the 1,634,522 shares of Series AA Stock issued to GWA, a wholly
owned subsidiary of Glaxo Wellcome, on April 14, 1998, which, on an as
converted basis, increases Glaxo Wellcome's beneficial ownership to 35.3%.
(4) Includes 18,333 shares issuable upon exercise of options exercisable within
60 days of March 24, 1999.
(5) Includes 84,999 shares issuable upon exercise of options exercisable within
60 days of March 24, 1999.
(6) Includes 188,887 shares issuable upon exercise of options exercisable
within 60 days of March 24, 1999.
(7) Includes 19,999 shares issuable upon exercise of options exercisable within
60 days of March 24, 1999.
(8) Includes 56,240 shares issuable upon exercise of options exercisable within
60 days of March 24, 1999.
(9) Includes 43,887 shares issuable upon exercise of options exercisable within
60 days of March 24, 1999.
(10) Includes 16,222 shares issuable upon exercise of options exercisable within
60 days of March 24, 1999.
(11) Includes 7,705,067 shares of Common Stock beneficially owned by Glaxo
Wellcome, of which Dr. Ross disclaims beneficial ownership, and 39,998
shares issuable upon exercise of options exercisable within 60 days of
March 24, 1999 granted to Dr. Ross in consideration of serving on the
Board. This total does not include the 1,634,522 shares of Series AA Stock
issued to GWA, a wholly owned subsidiary of Glaxo Wellcome, on April 14,
1998, of which Dr. Ross disclaims beneficial ownership.
(12) Includes 50,000 shares issuable upon exercise of options exercisable within
60 days of March 24, 1999.
(13) Includes 19,999 shares issuable upon exercise of options exercisable within
60 days of March 24, 1999.
(14) Includes 10,001 shares issuable upon exercise of options exercisable within
60 days of March 24, 1999.
(15) Includes 19,999 shares issuable upon exercise of options exercisable within
60 days of March 24, 1999.
(16) Includes 624,564 shares issuable upon exercise of options exercisable
within 60 days of March 24, 1999. Also includes 7,705,067 shares owned by
Glaxo Wellcome, of which Dr. Ross disclaims beneficial ownership. This
total does not include the 1,634,522 shares of Series AA Stock issued to
GWA on April 14, 1998, of which Dr. Ross disclaims beneficial ownership.
The inclusion of such shares, on an as converted basis, would increase the
beneficial ownership of all directors and executive officers as a group to
40.1%.
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than ten percent of a registered class
of the Company's equity securities, to file with the Securities and Exchange
Commission (the "SEC") initial reports of ownership and reports of changes in
ownership of Common Stock and other equity securities of the Company. Executive
officers, directors and ten percent stockholders are required by SEC regulation
to furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge (based solely on review of the copies of such
reports furnished to the Company or written representations that no other
reports were required), during the year ended December 31, 1998, all executive
officers, directors and ten percent stockholders complied with all Section 16(a)
filing requirements.
8
<PAGE>
MANAGEMENT
The executive officers of the Company, and their ages and position as of the
Record Date, are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Stephen P.A. Fodor................................... 45 President and Chief Executive Officer
Karen H. Haynes...................................... 38 Vice President, Human Resources and Administration
Edward M. Hurwitz.................................... 35 Vice President and Chief Financial Officer
Vernon A. Norviel.................................... 40 Senior Vice President and General Counsel, Corporate
Secretary
Kenneth J. Nussbacher................................ 46 Executive Vice President
Richard P. Rava...................................... 41 Senior Vice President, Chief Technology Officer
Sue E. Siegel........................................ 38 Senior Vice President, Marketing and Sales
Ron D. Verdoorn...................................... 48 Executive Vice President, Global Manufacturing
</TABLE>
STEPHEN P.A. FODOR, PH.D. See "Election of Directors."
KAREN H. HAYNES was appointed Vice President, Human Resources and
Administration in March 1997. From 1993 to 1997, Ms. Haynes held various human
resources management positions at Affymax and Affymetrix, most recently as
Director of Human Resources for Affymetrix from 1995 to 1997. Prior to 1993, Ms.
Haynes held human resources positions at Lattice Semiconductor and Measurex
Corporation.
EDWARD M. HURWITZ, J.D., joined Affymetrix in May 1997 as Vice President and
Chief Financial Officer. From April 1994 to March 1997 Mr. Hurwitz served as
Senior Biotechnology Analyst at Robertson Stephens & Company. From 1992 to 1994,
Mr. Hurwitz held the position of Senior Biotechnology Analyst at Smith Barney
Shearson.
VERNON A. NORVIEL, J.D., was appointed Vice President and General Counsel of
the Company in February 1996 and Senior Vice President, General Counsel and
Corporate Secretary in December 1997. From 1987 to 1996, Mr. Norviel was an
associate and then a partner with Townsend and Townsend and Crew LLP. In 1995
and for a portion of 1996 (prior to becoming a full-time employee of the
Company), Mr. Norviel worked part-time for the Company.
KENNETH J. NUSSBACHER, J.D., has been Executive Vice President since joining
the Company in September 1995. From September 1995 to May 1997, Mr. Nussbacher
also served as Chief Financial Officer. From 1989 to 1995, Mr. Nussbacher held
various management positions at Affymax, most recently as Executive Vice
President for Business and Legal Affairs and Managing Director of Affymax
Technologies N.V.
RICHARD P. RAVA, PH.D., was appointed as Senior Vice President, Operations
and Technology in September 1996 and Senior Vice President and Chief Technology
Officer in January 1999. From September 1994 to September 1996, Dr. Rava was
Vice President of Research and Engineering. Dr. Rava joined the Company in
February 1993 as Director of Biomedical Engineering. From 1992 to 1993, Dr. Rava
was a Senior Scientist at Affymax Research Institute.
SUE E. SIEGEL, joined Affymetrix in April 1998 as Senior Vice President,
Marketing and Sales. Prior to joining Affymetrix, Ms. Siegel was part of the
Amersham Pharmacia Biotech organization where she served most recently as
President for the Hoefer Pharmacia Biotech business unit. She served previously
in various capacities during her nine year tenure with Amersham Pharmacia
Biotech including Vice President, Business Development and Licensing, Director
of Marketing for North America, Director of Sales and Marketing for the
Molecular Science Business Unit and was instrumental in building the sales
organization in North America.
9
<PAGE>
RONALD D. VERDOORN, joined Affymetrix in January 1999 as Executive Vice
President, Global Manufacturing. Prior to joining Affymetrix, Mr. Verdoorn most
recently held the position of Executive Vice President and Chief Operating
Officer at Seagate Technology. During his 15-year tenure at Seagate, he served
in various capacities including Senior Vice President, Worldwide Manufacturing
Operations; Vice President and General Manager, Thailand Operations; Vice
President, Far East Manufacturing, Singapore; and Vice President Manufacturing.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning the
compensation of the Company's Chief Executive Officer ("CEO") and each of the
four other most highly compensated executive officers during 1998 (collectively,
the "Named Executive Officers") for services in all capacities as officers to
the Company during fiscal years 1996, 1997 and 1998.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL -------------------
COMPENSATION($) SECURITIES
----------------------- UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(#)
- ----------------------------------------------------------- --------- --------- ------------ -------------------
<S> <C> <C> <C> <C>
Stephen P.A. Fodor......................................... 1998 331,709 -- --
President and Chief 1997 292,323 -- 100,000
Executive Officer 1996 240,824 -- --
Vernon A. Norviel(1)....................................... 1998 247,766 -- --
Senior Vice President, 1997 200,045 -- 25,000
and General Counsel, 1996 122,775 -- 86,667
Corporate Secretary
Kenneth J. Nussbacher...................................... 1998 251,464 -- --
Executive Vice President 1997 220,583 -- 50,000
1996 193,555 -- --
Richard P. Rava............................................ 1998 240,430 -- --
Senior Vice President, 1997 200,045 -- 50,000
Chief Technology Officer 1996 165,061 -- --
Sue Siegel................................................. 1998 164,725 210,000(2) 225,000
Senior Vice President,
Marketing and Sales
</TABLE>
- ------------------------
(1) Mr. Norviel was appointed Vice President and General Counsel in February
1996 and Senior Vice President, General Counsel and Secretary in December
1997. In 1996, Mr. Norviel devoted 80% of his time to the Company and 20% of
his time as a partner with Townsend and Townsend and Crew LLP. Compensation
for 1996 was for a partial year.
(2) Ms. Siegel joined the Company in April 1998, and received this amount as a
signing bonus.
10
<PAGE>
The following tables set forth information regarding stock options granted
to and exercised by the Named Executive Officers during the last fiscal year, as
well as options held by such officers as of December 31, 1998, the last day of
the Company's 1998 fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS(1) VALUE AT ANNUAL RATES
-------------------------------- OF STOCK PRICE
% OF TOTAL OPTIONS APPRECIATION FOR
GRANTED TO EXERCISE OR OPTION TERM(2)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
- --------------------------------------- ----------- ------------------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Stephen P.A. Fodor..................... -- -- -- -- -- --
Vernon A. Norviel...................... -- -- -- -- -- --
Kenneth J. Nussbacher.................. -- -- -- -- -- --
Richard P. Rava........................ -- -- -- -- -- --
Sue E. Siegel(3)....................... 125,000 14.27% 31.0625 04/20/08 2,441,880 6,188,203
Sue E. Siegel(4)....................... 100,000 11.42% 21.2813 10/15/08 1,338,361 3,391,678
</TABLE>
- ------------------------
(1) Each of these options was granted pursuant to the Company's Amended and
Restated 1993 Stock Plan and is subject to the terms of such plan.
(2) In accordance with the rules of the SEC, shown are the hypothetical gains or
"option spreads" that would exist for the respective options. These gains
are based on assumed rates of annual compounded stock price appreciation of
5% and 10% from the date the option was granted over the full option term.
The 5% and 10% assumed rates of appreciation are mandated by the rules of
the SEC and do not represent the Company's estimate or projection of future
increase in the price of its Common Stock.
(3) Stock options granted upon Ms. Siegel's date of hire. Options to vest
equally in six month intervals over two and one-half years.
(4) Stock options granted on October 15, 1998. Options to vest annually equally
over five years.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
<TABLE>
<CAPTION>
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED VALUE UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
ON EXERCISE REALIZED OPTIONS AT DECEMBER 31, 1998 DECEMBER 31, 1998
NAME (#) ($)(1) EXERCISABLE/UNEXERCISABLE(#) EXERCISABLE/UNEXERCISABLE($)(2)
- ----------------------------------------- ----------- -------- ---------------------------- --------------------------------
<S> <C> <C> <C> <C>
Stephen P.A. Fodor....................... -- -- 179,999/186,668 4,198,477/2,021,531
Vernon A. Norviel........................ 3,125 74,531 38,573/81,003 695,653/998,970
Kenneth J. Nussbacher.................... 10,000 280,125 34,999/96,668 816,352/1,088,531
Richard P. Rava.......................... 6,667 169,259 6,668/78,668 156,781/669,931
Sue E. Siegel............................ -- -- 25,000/200,000 0/271,870
</TABLE>
- ------------------------
(1) Based on the value of the Company's Common Stock on the date of exercise
minus the exercise price of the options multiplied by the number of shares
underlying the option.
(2) Assuming a stock price of $24.00 per share, which was the average of the
high and the low trading price of a share of Common Stock reported on the
Nasdaq National Market on December 31, 1998.
11
<PAGE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee (the "Committee") of the Board of Directors is
generally responsible for the design, structure and administration of the
executive officer compensation program, including reviewing compensation and
stock option grants for the Company's executive team. Executive compensation is
initially recommended by the President and Chief Executive Officer (other than
for himself). The basis for such recommendations includes performance reviews
and competitive base salary data. The compensation and performance of the
President and Chief Executive Officer are separately evaluated. In determining
compensation policies, the Committee has access to compensation and benefits
surveys for regional biotechnology companies that compete with the Company. The
Committee consists of two non-employee directors.
COMPENSATION POLICIES
The Committee, together with the Company's Board of Directors, has developed
an executive compensation program, which (i) relates each executive's level of
compensation to Affymetrix's success in achieving its annual and long-term
performance goals, (ii) rewards individual achievement, and (iii) seeks to
attract and retain qualified executives. Affymetrix positions its executive
compensation with the compensation of similar management positions in peer
companies consisting primarily of regional biotechnology and other high
technology companies. The level of compensation paid to executive officers of
the Company also takes into account the Company's technological achievements
during the year, new product offerings to customers, the Company's success in
entering into significant technology agreements with collaborators, as well as
an evaluation of the individual performance and contribution of each executive
to the Company's overall performance for the year. The Committee does not use
either the profitability of the Company or the market value of its stock in
setting executive officer base compensation.
Compensation for senior management consists of (i) cash compensation, which
is based on such factors as the individual officer's level of responsibility for
meeting the Company's strategic, technological, and financial objectives, and
(ii) stock options which are intended to align the interests of executives with
the interests of the stockholders. Guidelines for executive stock option grants
are developed through analysis of long-term incentive awards based on each
individual executive's position, responsibilities, performance and contribution
to the achievement of the Company's long-term goals using competitive stock
option data from regional biotechnology companies.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
In determining Dr. Fodor's 1998 compensation, the Compensation Committee
considered the policies describes above as well as Dr. Fodor's overall
compensation package relative to that of other chief executives in the Company's
industry. Other considerations included the effectiveness of Dr. Fodor's
leadership of the Company and the resulting success of the Company in attainment
of specific milestones. These milestones included offering new products to the
marketplace, significantly increasing the worldwide installed base of GeneChip
systems, expanding the sales and technical support infrastructure and investing
in new research initiatives for the long term. The Compensation Committee
believes compensation for the Company's Chief Executive Officer is within the
range of compensation paid to chief executive officers with comparable
qualifications, experience and responsibilities in the same or similar
businesses of comparable size.
COMPENSATION PAYABLE TO EXECUTIVE OFFICERS
The 1998 compensation of other Affymetrix executive officers also took into
account the above policies, including the individual contribution of each
executive to the Company's performance during the year. With respect to cash
compensation payable to its executive officers for 1998, the Committee
benchmarks its base salary structure to salary survey data at the 50th
percentile using data from regional
12
<PAGE>
biotech salary surveys. The Compensation Committee believes compensation for the
Company's executive officers is within the range of compensation paid to
executives with comparable qualifications, experience and responsibilities in
the same or similar businesses of comparable size. The Compensation Committee
also strives to achieve equitable relationships both among the compensation of
individual officers and between the compensation of officers and other employees
throughout the Company.
SECTION 162(m) COMPLIANCE
Section 162(m) of the Internal Revenue Code of 1986, as amended, limits the
Company to a deduction for federal income tax purposes of no more than
$1,000,000 of compensation paid to the Named Executive Officers in a taxable
year. Compensation above $1,000,000 may be deducted if it is "performance-based
compensation" within the meaning of the Code.
The Compensation Committee has determined that stock options granted under
the Company's 1993 Stock Plan with an exercise price at least equal to the fair
market value of the Company's Common Stock on the date of grant should be
treated as "performance-based compensation." At the 1997 Annual Meeting of
Stockholders, the stockholders approved an amendment to the 1993 Stock Plan
which allows compensation recognized by a Named Executive Officer as a result of
the grant of such a stock option to be deductible by the Company.
Dr. Paul Berg
Mr. John Young
13
<PAGE>
CERTAIN TRANSACTIONS
On April 14, 1998, the Company sold 1,634,522 shares of Series AA Stock for
$30.59 per share to GWA in a private placement. The Series AA Stock is
convertible into Common Stock at approximately $40 per share. Until such time as
the Series AA Stock is converted into Common Stock, Affymetrix is required to
pay cumulative dividends at the annual rate of 6.5% cumulative dividend on such
shares. The Series AA Stock and the Common Stock underlying the Series AA Stock
have not been registered under the Securities Act of 1933.
In connection with the issuance of the Series AA Stock, the Company and
Glaxo Wellcome agreed to amend the Governance Agreement, which was originally
entered into as of July 1995. Pursuant to the Governance Agreement, Glaxo
Wellcome currently has the right to designate three of the nine directors of the
Company. Glaxo Wellcome also agreed that any merger, consolidation or business
combination whereby the Company would become a direct or indirect wholly-owned
subsidiary of Glaxo Wellcome and any material transaction between the Company
and Glaxo Wellcome must be approved by a majority of the independent directors
of the Company. In addition, pursuant to the Governance Agreement, the Company
granted Glaxo Wellcome certain registration rights with respect to its shares.
In addition, the Company and Glaxo Wellcome amended the Governance Agreement,
effective upon September 29, 1998, to (a) give Glaxo Wellcome the right to call
a special meeting of the stockholders, so long as Glaxo Wellcome continues to
hold at least ten percent (10%) of the outstanding capital stock of the Company,
and (b) clarify the number of directors Glaxo Wellcome has the right to
designate in the event of a change in the size of the Board.
In connection with the issuance and sale of Series AA Stock, the Company and
GWA also entered into the Voting Trust Agreement. Pursuant to this agreement,
with respect to any consolidation, reorganization or merger of the Company or
any other transaction requiring a majority vote of each outstanding class of
capital stock voting as separate class, the Series AA Stock is required to be
voted proportionately in accordance with the votes cast by all holders of the
Company's Common Stock for and against such transaction, except where such
transaction would have an adverse effect on the Series AA Stock.
In February 1999, the Company made a $200,000 secured loan to Karen Haynes
to assist her in purchasing a house. The loan bears an interest rate of 4.67%
and is due on the first to occur of February 26, 2000, the opening of the
Company's stock trading window for sale of stock by an executive officer, or
termination of Ms. Haynes employment.
In April 1997, the Company made a $500,000 secured loan to Dr. Fodor to
assist him in purchasing a house. The loan bears an interest rate of 6.49% and
is due on the first to occur of April 11, 2002, the sale of Dr. Fodor's house,
or termination of Dr. Fodor's employment.
In April 1997, the Company made a $100,000 secured loan to Dr. Goldberg to
assist him in purchasing a house. The loan bears an interest rate of 6.49% and
is due on the first to occur of April 27, 2002, the sale of Dr. Goldberg's
house, or termination of Dr. Goldberg's employment.
The Company has entered into indemnification agreements with each of its
directors and executive officers. Such agreements require the Company to
indemnify such persons to the fullest extent permitted by Delaware law.
In 1998, the Company adopted a change in control policy which provides for
the treatment of the outstanding options to purchase shares of the Company's
capital stock ("Options"). Pursuant to the policy, in the event of (i) a merger
of the Company resulting in the transfer of fifty percent (50%) or more of the
outstanding voting power of the Company, (ii) a sale of all or substantially all
of the Company's assets, or (iii) the complete liquidation of the Company (each
an "Acquisition Event"), then the Company shall take any one or more of the
following actions with respect to the Options:
- Provide that the Options shall be assumed by the acquiring or succeeding
corporation;
14
<PAGE>
- Except in the case of an Acquisition Event which is accounted for as a
"pooling of interests" transaction, provide that all such Options become
fully exercisable prior to the Acquisition Event;
- In the event that, upon the consummation of the Acquisition Event, the
stockholders of the Company shall receive a cash payment for any shares of
capital stock then held by such stockholders, provide that all Options be
terminated as of the Acquisition Event and that all holders of Options
receive a cash payment for each such Option; and/or
- Provide that any other outstanding stock-based awards become (i) except in
the case of a "pooling of interests" transaction, exercisable or
realizable as of the Acquisition Event, or (ii) assumed or substituted by
the acquiring or succeeding corporation.
The policy further provides that it is subject to amendment by the Board of
Directors any time prior to a change of control.
In April 1998, the Company entered into a series of agreements with EOS
Biotechnology, Inc. ("EOS") pursuant to which the Company received $6,000,000 of
Series C Preferred Stock of EOS in exchange for probe array chips; collaborative
work and rights to certain of the Company's technology. In connection with these
agreements, the Company received the right to designate one nominee to EOS'
Board of Directors. Currently, such director is Dr. Fodor, the Company's
President and Chief Executive Officer. The Company also received certain
registration and information rights from EOS. In January 1999, the Company
entered into an Internal License Agreement with EOS pursuant to which the
Company licensed certain of its intellectual property to EOS.
15
<PAGE>
STOCK PERFORMANCE GRAPH(1)
STOCKHOLDER RETURN COMPARISON
The graph below compares the cumulative total return* on the Company's
Common Stock for period commencing June 6, 1996 (the date on which the Company's
Common Stock was first publicly traded) and ending December 31, 1998 compared to
the CRSP Total Return Index for the Nasdaq National Market (U.S. companies) and
the CRSP Total Return Index for the NASDAQ Pharmaceutical Stocks (SIC 283). The
stock price performance shown on the graph below is not necessarily indicative
of future price performance.
COMPARISON OF CUMULATIVE STOCKHOLDER RETURN*
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AFFYMETRIX, INC. NASDAQ STOCK MARKET-US NASDAQ PHARMACEUTICAL
<S> <C> <C> <C>
06/06/96 $100.000 $100.000 $100.000
06/28/96 $87.770 $96.308 $89.824
12/31/96 $116.187 $104.619 $89.143
06/30/97 $200.000 $117.081 $91.397
12/31/97 $179.137 $128.178 $92.044
06/30/98 $138.489 $154.172 $93.777
12/31/98 $140.288 $180.619 $117.665
</TABLE>
- ------------------------
(1) The Compensation Committee Report, the Stock Performance Graph and related
disclosure are not soliciting material, are not deemed to be filed with the
SEC, and are not to be incorporated by reference in any filing of the
Company under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, whether made before or after the date of
this proxy statement and irrespective of any general incorporation language
in such filing.
* Assumes $100 invested on June 6, 1996 in the Company's Common Stock and in
each index listed above. The total return for the Company's Common Stock and
the indices used assumes the reinvestment of dividends, even though
dividends have never been declared on the Company's Common Stock.
16
<PAGE>
OTHER MATTERS
The Company knows of no other matters to be submitted at the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy to vote the shares they represent as the
Board of Directors may recommend.
It is important that your shares be represented at the meeting, regardless
of the number of shares which you hold. Please complete, date, execute and
return, at your earliest convenience, the accompanying proxy card in the
envelope which has been enclosed.
BY ORDER OF THE BOARD OF DIRECTORS
Vernon A. Norviel
Secretary
Dated: May 5, 1999
17
<PAGE>
APPENDIX A
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF AFFYMETRIX, INC., A DELAWARE CORPORATION
(PURSUANT TO SECTIONS 228, 242 AND 245
OF THE DELAWARE GENERAL CORPORATION LAW)
Affymetrix, Inc. (the "Corporation"), a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "General
Corporation Law") originally incorporated on September 29, 1998.
DOES HEREBY CERTIFY:
FIRST: The name of the corporation is Affymetrix, Inc. (the "Corporation").
SECOND: The address of the Corporation's registered office in the State of
Delaware is 9 E. Lockerman Street, City of Dover, County of Kent. The name of
the Corporation's registered agent at such address is National Corporate
Research.
THIRD: The nature of the business or purposes to be conducted or promoted by
the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the Delaware General Corporation Law.
FOURTH: I. The Corporation is authorized to issue two classes of stock to be
designated, respectively, Common Stock, par value $0.01 per share ("Common
Stock"), and Preferred Stock, par value $0.01 per share ("Preferred Stock"). The
total number of shares of all classes of stock which the Corporation shall have
authority to issue is eighty million (80,000,000), consisting of seventy-five
(75,000,000) shares of Common Stock and five million (5,000,000) shares of
Preferred Stock.
II. The board of directors is authorized from time to time, subject to any
limitations prescribed by law, to provide for the issuance of shares of
Preferred Stock in one or more series, and in connection with the creation of
any such series, by resolution or resolutions providing for the issuance of
shares thereof, to establish from time to time the number of shares to be
included in each such series, to determine and fix such voting powers, full or
limited or no voting powers, and to fix the designation, preferences, and
relative, participating, optional or other special rights of the shares of each
such series, and any qualifications, limitations or restrictions thereof. The
number of authorized shares of Preferred Stock may be increased or decreased
(but not below the number of shares thereof then outstanding) by the affirmative
vote of the holders of a majority of the Common Stock, without a vote of the
holders of the Preferred Stock, or of any series thereof, unless a vote of any
such holders is required pursuant to the terms of any resolution or resolutions
providing for the issue of such stock adopted by the board of directors of the
Corporation.
FIFTH: There shall be a series of Preferred Stock designated as "Series AA
Preferred Stock" and the number of shares constituting such series shall be one
million six hundred thirty four thousand five hundred twenty two (1,634,522)
shares (the "Series AA Preferred Stock"). The rights, preferences, privileges,
and restrictions granted to and imposed on the Series AA Preferred Stock are
asset forth below:
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
A-1
<PAGE>
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 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 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
A-2
<PAGE>
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 stockholders 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 stockholders of this Corporation shall be determined as set forth
herein. If the assets distributed to the stockholders 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 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
stockholders of this Corporation consist of securities, such securities
shall be valued as follows:
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 stockholder'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.
A-3
<PAGE>
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 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 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. 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).
A-4
<PAGE>
(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 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 STOCKHOLDERS.
(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 "Stockholder 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 Stockholder 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
A-5
<PAGE>
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 Stockholder Redemption Date,
specifying the number of shares to be redeemed from such holder, the
Stockholder 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 "Stockholder Redemption Notice"). Except as provided in subsection
(3)(b)(iii), on or after the Stockholder 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 Stockholder 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 Stockholder 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 Stockholder Redemption Date in the
Stockholder 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 Stockholder 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 Stockholder 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"):
(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).
A-6
<PAGE>
(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:
(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
A-7
<PAGE>
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 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
A-8
<PAGE>
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,
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 stockholder 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 stockholders 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 stockholders' 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 be in
grounded upward).
SIXTH: The following provisions are inserted for the management of the
business and for the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
A. The business and affairs of the Corporation shall be managed by or
under the direction of the board of directors. In addition to the powers and
authority expressly conferred upon them by statute or by this Certificate of
Incorporation or the Bylaws of the Corporation, the directors are hereby
empowered to exercise all such powers and do all such acts and things as may
be exercised or done by the Corporation.
B. The directors of the Corporation need not be elected by written
ballot unless the Bylaws of the Corporation so provide. Directors need not
be stockholders.
C. Any action required or permitted to be taken by the stockholders of
the Corporation must be effected at a duly called annual or special meeting
of stockholders of the Corporation and may not be effected by any consent in
writing by such stockholders.
A-9
<PAGE>
D. Advance notice of stockholder nominations for the election of
directors and of business to be brought by stockholders before any meeting
of the stockholders of the Corporation shall be given in the manner provided
in the Bylaws of the Corporation.
E. Special meetings of stockholders of the Corporation may be called
only by the Chairman of the Board or the President or by the board of
directors acting pursuant to a resolution adopted by a majority of the
entire board of directors. For purposes of this Certificate of
Incorporation, the term "entire board of directors" shall mean the total
number of authorized directors whether or not there exist any vacancies in
previously authorized directorships.
SEVENTH: The board of directors is expressly empowered to adopt, alter,
amend or repeal Bylaws of the Corporation. Any adoption, alteration, amend
mentor repeal of the Bylaws of the Corporation by the board of directors shall
require the approval of a majority of the entire board of directors. The
stockholders shall also have power to adopt, amend or repeal the Bylaws of the
Corporation; provided, however, that, in addition to any vote of the holders of
any class or series of stock of the Corporation required by law or by this
Certificate of Incorporation, the affirmative vote of the holders of at least a
majority of the voting power of all of the then-outstanding shares of the
capital stock of the Corporation entitled to vote generally in the election of
directors, voting together as a single class, shall be required to adopt, alter,
amend or repeal any provision of the Bylaws of the Corporation.
EIGHTH: The corporation reserves the right to amend and repeal any provision
contained in this Certificate of Incorporation in the manner from time to time
prescribed by the laws of the State of Delaware. All rights herein conferred are
granted subject to this reservation.
NINTH: To the fullest extent permitted by Delaware General Corporation Law,
a director of the corporation shall not be personally liable to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an improper personal
benefit. If the Delaware General Corporation Law is amended to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the corporation shall be
eliminated or limited to the fullest extent permitted by the Delaware General
Corporation Law, as so amended. Any repeal or modification of this provision
shall not adversely affect any right or protection of a director of the
corporation existing at the time of such repeal or modification.
A-10
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Certificate this
day of , 1999.
--------------------------------------
Stephen P.A. Fodor
PRESIDENT
ATTEST:
- --------------------------------------
SECRETARY
A-11
<PAGE>
- -------------------------------------------------------------------------------
PROXY AFFYMETRIX, INC. PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
JUNE 11, 1998
The undersigned shareholder of Affymetrix, Inc. (the "Company") hereby
appoints John D. Diekman and Kenneth J. Nussbacher and each of them with full
power of substitution to each, the true and lawful attorneys, agents and
proxyholders of the undersigned, and hereby authorizes them to represent and
vote, as specified herein, all of the shares of Common Stock of the Company
held of record by the undersigned on April 15, 1998, at the Annual Meeting of
Shareholders of the Company to be held on June 11, 1998 (the "Annual
Meeting") at 10:00 a.m. at 3380 Central Expressway, Santa Clara, California
and any adjournments or postponements thereof.
Check here for
address change / /
NEW ADDRESS:__________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE
1. To elect as directors, to hold office until the next meeting of
shareholders and until their successors are elected, the nine (9) nominees
listed to the right:
NOMINEES: John D. Diekman, Ph.D.
Stephen P.A. Fodor, Ph.D.
Paul Berg, Ph.D.
Douglas M. Hurt
Vernon R. Loucks, Jr.
Barry C. Ross, Ph.D.
David B. Singer
Lubert Stryer, M.D.
John A. Young
VOTE FOR ALL THE NOMINEES VOTE WITHHELD
(EXCEPT AS DIRECTED FROM ALL
TO THE CONTRARY) NOMINEES
/ / / /
INSTRUCTIONS: To withhold vote for any individual nominee, write the
nominee's name in the space provided below:
2. To authorize the Company to change the Company's state of incorporation
from California to Delaware.
FOR AGAINST ABSTAIN
/ / / / / /
3. To ratify the appointment of Ernst & Young LLP as independent auditors of
the Company for the fiscal year ending December 31, 1998.
FOR AGAINST ABSTAIN
/ / / / / /
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED. IN
THE ABSENCE OF DIRECTION, THE SHARES WILL BE VOTED FOR THE PROPOSALS. THE
UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS RELATING TO THE ANNUAL MEETING.
Please sign exactly as name appears hereon. Joint owners should each sign.
Trustees and others acting in a representative capacity should indicate the
capacity in which they sign and give their full title. If a corporation,
please have an authorized officer sign and indicate the full corporate name.
If a partnership, please sign in partnership name by an authorized person.
Please mark, sign and date this proxy and return it promptly whether you plan
to attend the meeting or not. If you do attend, you may vote in person if you
desire.
SIGNATURE(S)_________________________________________ DATE____________________
- -------------------------------------------------------------------------------
