Tableof Contents

 

 

 

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

 

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**FORM 10-K/A**

 

**(Amendment No. 1)**

 
| **(Mark One)** | ** **                                                                                                         |
|----------------|--------------------------------------------------------------------------------------------------------------------|
| **x**          | **ANNUAL REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |

 
| **FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008** |
|-------------------------------------------------|
| ** **                                      |
| **OR**                                          |

 
| **o** | **TRANSITION REPORT PURSUANT TO SECTION 13  OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|-------|------------------------------------------------------------------------------------------------------------------------|

 
| **FOR THE TRANSITION PERIOD  FROM         TO         ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **                                                                                                                                        |
| **COMMISSION FILE NUMBER 0-28218**                                                                                                                |

 

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**AFFYMETRIX, INC.**

(Exact name of registrant asspecified in its charter)

 

| **DELAWARE**                                                           | ** ** | **77-0319159**                        |
|------------------------------------------------------------------------|------------|---------------------------------------|
| (State or other  jurisdiction of                                       | ** ** | (IRS Employer  Identification Number) |
| incorporation or  organization)                                        | ** ** | ** **                            |
|                                                                   | ** ** | ** **                            |
| **3420  CENTRAL EXPRESSWAY**                                           |       |                                  |
| **SANTA  CLARA, CALIFORNIA**                                           |       | **95051**                             |
| (Address of principal  executive offices)                              |       | (Zip Code)                            |
|                                                                   |       |                                  |
| **(408) 731-5000**                                                |
| (Registrant’s telephone  number, including area code)             |
|                                                                   |
| Securities  registered pursuant to Section 12(b) of the Act: |

 

| **Title of Each Class** | ** ** | **Name of Each Exchange on Which Registered** |
|----------------------------------------|------------|-----------------------------------------------------------------------------|
| Common Stock, $0.01 par  value         |       | The Nasdaq Global Market                                                    |
| Preferred Stock Purchase  Rights       |       | The Nasdaq Global Market                                                    |

 

Securitiesregistered pursuant to Section 12(g) of the Act:

**None**

 

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Indicate by check mark ifthe registrant is a well-known seasoned issuer, as defined in Rule 405 ofthe Securities Act. Yes o No x

 

Indicate by check mark ifthe registrant is not required to file reports pursuant to Section 13 or Section15(d) of the Act. Yes o  No x

 

Indicate by check markwhether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required tofile such reports), and (2) has been subject to such filing requirementsfor the past 90 days. Yes x  No o

 

Indicate by check markwhether the registrant has submitted electronically and posted on its corporateWeb site, if any, every Interactive Data File required to be submitted andposted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter)during the preceding 12 months (or for such shorter period that the registrantwas required to submit and post such filed). Yes o  No o

 

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 ofRegulation S-K is not contained herein, and will not be contained, to thebest of registrant’s knowledge, in definitive proxy or information statementsincorporated by reference in Part III of this Form 10-K or any amendmentto this Form 10-K. x

 

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company. See the definitions of “largeaccelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2of the Exchange Act. (Check one).

 

| Large accelerated filer x                                              |   | Accelerated filer o              |
|-----------------------------------------------------------------------------|--------|----------------------------------|
| Non-accelerated filer o (Do not check  if a smaller reporting company) |   | Smaller reporting company o |

 

Indicate by check mark whetherthe registrant is a shell company (as defined in Rule 12b-2 of theExchange Act). Yes o  No x

 

The aggregate market value ofthe registrant’s common stock held by non-affiliates of the registrant at June 30,2008, based on the closing price of such stock on the Nasdaq Global Market onsuch date, was approximately $716 million. The number of shares of theregistrant’s Common Stock, $0.01 par value, outstanding on February 20,2009, was 70,685,572.

 

**DOCUMENTS INCORPORATED BY REFERENCE**

 

None.

 

 

 

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**EXPLANATORY NOTE**

 

Pursuant to General Instruction G(3) toForm 10-K, this Amendment No. 1 on Form 10-K/A (this “Amendment No. 1”)to our Annual Report on Form 10-K for the fiscal year ended December 31,2008, which was filed with the U.S. Securities and Exchange Commission on March 2,2009 (the “Original Filing”), is being filed for the sole purpose of includinginformation in Part III, Items 10 through 14, because the definitiveproxy statement for our 2009 Annual Meeting of Shareholders will not be filedwith the SEC within 120 days after the end of our 2008 fiscal year. Thereference on the cover of the Original Filing to the incorporation by referenceto portions of our definitive proxy statement into Part III of theOriginal Filing is hereby deleted.

 

In accordance with Rule 12b-15 underthe Exchange Act, Part III, Items 10 through 14 of the Original Filing arehereby amended and restated in their entirety, and Part IV, Item 15of the Original Filing is hereby amended and restated in its entirety solely toinclude as exhibits the new certifications required by Section 302of Sarbanes-Oxley Act of 2002. ThisAmendment No. 1 does not amend or otherwise update any other informationin the Original Filing. Accordingly, this Amendment No. 1 should be readin conjunction with the Original Filing and with our filings with the SECsubsequent to the Original Filing.  ThisAmendment No. 1 does not reflect events occurring after the filing of theOriginal Filing or modify or update disclosures, including the exhibits to theOriginal Filing, affected by subsequent events.

 

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**AFFYMETRIX, INC.**

 

**FORM 10-K**

**DECEMBER 31, 2008**

 

**TABLE OF CONTENTS**

 
| **Item No.** | ** ** | ** **                                                                                       | ** ** | **Page**   |
|--------------|------------|--------------------------------------------------------------------------------------------------|------------|------------|
| ** **   | ** ** | ** **                                                                                       | ** ** | ** ** |
|         |       | PART III                                                                                    |       | 1          |
| 10.          |       | Directors,  Executive Officers and Corporate Governance                                          |       | 1          |
| 11.          |       | Executive  Compensation                                                                          |       | 3          |
| 12.          |       | Security  Ownership of Certain Beneficial Owners and Management and Related Stockholder  Matters |       | 14         |
| 13.          |       | Certain  Relationships and Related Transactions, and Director Independence                       |       | 16         |
| 14.          |       | Principal  Accounting Fees and Services                                                          |       | 18         |
|         |       |                                                                                             |       |       |
|         |       | PART IV                                                                                     |       | 19         |
| 15.          |       | Exhibits  and Financial Statement Schedules                                                      |       | 19         |
|         |       | Signatures                                                                                       |       | 23         |

 

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**PART III**

** **

**ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE**

** **

**Directors**

 

Our bylawsprovide for a Board of Directors (“Board”) consisting of at least six but notmore than eleven directors. The term of office of all of our current directorswill expire at our 2009 annual meeting. Currently, we have eight directors.

 
| **Name**                                | ** ** | **Age** | ** ** | **Principal Occupation**                                                                                                                                                   | ** ** | **Director  Since** |
|-----------------------------------------|------------|---------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------|
| Stephen P.A. Fodor, Ph.D.               |       | 55      |       | Founder and Executive Chairman of  Affymetrix, Inc.                                                                                                                        |       | 1993                |
|                                    |       |    |       |                                                                                                                                                                            |       |                |
| Kevin M. King                           |       | 52      |       | Chief Executive Officer and President of  Affymetrix, Inc.                                                                                                                 |       | 2009                |
|                                    |       |    |       |                                                                                                                                                                            |       |                |
| Paul Berg, Ph.D.                        |       | 82      |       | Cahill Professor in Cancer Research and  Biochemistry, Emeritus; Director, Emeritus, Beckman Center for Molecular and  Genetic Medicine, Stanford University School of Medicine |       | 1993                |
|                                    |       |    |       |                                                                                                                                                                            |       |                |
| Susan D. Desmond-Hellmann, M.D., M.P.H. |       | 51      |       | President, Product Development,  Genentech, Inc.                                                                                                                           |       | 2004                |
|                                    |       |    |       |                                                                                                                                                                            |       |                |
| John D. Diekman, Ph.D.                  |       | 66      |       | Managing Partner, 5AM Ventures                                                                                                                                                  |       | 1993                |
|                                    |       |    |       |                                                                                                                                                                            |       |                |
| Robert H. Trice, Ph.D.                  |       | 62      |       | Senior Vice President, Business  Development, Lockheed Martin Corporation                                                                                                       |       | 2006                |
|                                    |       |    |       |                                                                                                                                                                            |       |                |
| Robert P. Wayman                        |       | 63      |       | Executive Vice President and Chief  Financial Officer (Retired), Hewlett-Packard Company                                                                                        |       | 2007                |
|                                    |       |    |       |                                                                                                                                                                            |       |                |
| John A. Young                           |       | 77      |       | President and Chief Executive Officer  (Retired), Hewlett-Packard Company                                                                                                       |       | 1993                |

 

*Stephen P.A. Fodor, Ph.D.,* is our Founder andExecutive Chairman.  Dr. Fodor hasserved as our director since 1993, Executive Chairman since 2009, ChiefExecutive Officer from 1997 to 2008 and Chairman from 1999 to 2008. At varioustimes between 1993 and 1997, Dr. Fodor served as our President, ChiefOperating Officer and Chief Technology Officer. Dr. Fodor was VicePresident and Director of Physical Sciences at the Affymax Research Institutefrom 1989 to 1993. Dr. Fodor is also a founder and the Chairman of theBoard of Perlegen Sciences, Inc. (“Perlegen”), a genomics company formedin September 2000 by the Company and currently partly owned by theCompany. Dr. Fodor also serves as a director of Sunesis Pharmaceuticals, Inc.and a Trustee of the Carnegie Institution of Washington.

* *

*Kevin M. King* is ourChief Executive Officer and President.  Mr. Kinghas served as CEO since January 2009 and as President since September 2007.  Mr. King joined us in January 2007as President of Life Sciences Business and Executive Vice President and servedin that capacity until September 2007. From February 2005 until June 2006,Mr. King was President and Chief Executive Officer of Thomson Healthcare.From 1997 to 2004, Mr. King held various managerial positions at GeneralElectric Healthcare, most recently as Vice President and General Manager ofGlobal Clinical Systems from June 2000 to November 2004.

 

*Paul Berg, Ph.D.,* has served as a directorsince 1993. Dr. Berg is Cahill Professor of Cancer Research andBiochemistry, Emeritus and Director, Emeritus of the Beckman Center forMolecular and Genetic Medicine at the Stanford University School of Medicine.He received the Nobel Prize in Chemistry in 1980, the National Medal of Sciencein 1983, and is a member of the National Academy of Sciences, the RoyalSociety, London, and the French Academy of Sciences. Dr. Berg also servesas the Board liaison to our Scientific Advisory Board. Dr. Berg alsoserves as a director of Gilead Sciences, Inc. and is on the Advisory Boardof Schering-Plough BioPharma, a subsidiary of Schering-Plough Corp.

* *

*Susan D. Desmond-Hellmann, M.D., M.P.H.,* hasserved as a director since 2004. Dr. Desmond-Hellmann served as President,Product Development at Genentech, Inc. from February 2004 toMay 1, 2009, and currently serves as advisor and member of Genentech’sScientific Advisory Board. Dr. Hellmann joined Genentech in 1995 as aclinical scientist, was named Chief Medical Officer in 1996, and becameexecutive vice president, Development and Product Operations, in 1999.

 

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*John D. Diekman, Ph.D.,* has served as adirector since 1993. Dr. Diekman has served as a managing partner of 5AMVentures, a life sciences investment partnership, since August 2002. From June 1998until July 2002, Dr. Diekman served as a managing director of BayCity Capital, a life sciences merchant bank. Dr. Diekman served asChairman of the Company from 1993 to August 1999 and served as ViceChairman from July 1999 to December 1999. Dr. Diekman served asChief Executive Officer of the Company from July 1995 to March 1997.Prior to such time, Dr. Diekman served as President and Chief OperatingOfficer of Affymax N.V. from 1991 to March 1995 and as Chairman ofthe Board of Affymax from 1994 to July 1995.

* *

*Robert H. Trice, Ph.D.,* has served as adirector since 2006. Dr. Trice has been Senior Vice President for BusinessDevelopment at Lockheed Martin Corporation since October 1998 and assumedadditional duties as Senior Vice President for Strategy and BusinessDevelopment at Lockheed Martin Corporation effective March 1, 2009.

* *

*Robert P. Wayman* has served as a directorsince 2007. Mr. Wayman served as Executive Vice President and ChiefFinancial Officer of Hewlett-Packard Company from 1984 until his retirement in December of2006. Mr. Wayman also served as Interim Chief Executive Officer ofHewlett-Packard Company from February 2005 through March 2005 andserved on the Board of Directors of Hewlett-Packard Company from February 2005to March 2007 and from 1993 to 2002. Mr. Wayman has served as adirector of Sybase Inc. since 1995.

* *

*John A. Young* has served as a director since1993. Mr. Young retired as President and Chief Executive Officer ofHewlett-Packard Company in October 1992 after a career with the companywhich began in 1958. He serves as a director of Fluidigm Corporation, Nanosys, Inc.and Perlegen. He is a member of the National Academy of Engineering. He servedas co-chairman of President Clinton’s Committee of Advisors on Science andTechnology from 1993 to 2000.

** **

**AuditCommittee**

 

We have aseparately-designated standing audit committee. The Audit Committee consists of three members, Dr. Diekman, Dr. Triceand Mr. Wayman, its Chairman. The Board has determined that Mr. Waymanis qualified as an “audit committee financial expert” within the meaning ofapplicable SEC regulations and has the accounting and related financialsophistication required by NASDAQ listing standards. The Board also hasdetermined that each of the Audit Committee members is independent within themeaning of the NASDAQ listing standards, applicable SEC regulations and our *Corporate Governance Guidelines,* and thateach member has the financial literacy required by the NASDAQ listingstandards.

 

**ExecutiveOfficers**

 

Our executiveofficers, and their ages and positions are as follows:

 
| **Name**                  | ** ** | **Age** | ** ** | **Position**                                             |
|---------------------------|------------|---------|------------|----------------------------------------------------------|
| Stephen P.A. Fodor, Ph.D. |       | 55      |       | Founder and Executive Chairman                           |
| Kevin M. King             |       | 52      |       | Chief Executive Officer and President                    |
| John C. Batty             |       | 54      |       | Executive Vice President and Chief  Financial Officer    |
| John F. Runkel, Jr.  |       | 53      |       | Executive Vice President, General Counsel  and Secretary |

 

*Stephen P.A. Fodor, Ph.D.*  See “Directors”, above.

 

*Kevin M. King.* See “Directors”, above.

* *

*John C. Batty* joined us in June 2007 asExecutive Vice President and Chief Financial Officer. Mr. Batty served asSenior Vice President of Finance and Chief Financial Officer of CredenceSystems Corporation from 2005 to 2007. From 1999 to 2005, Mr. Batty heldseveral management positions with Network Equipment Technologies Inc., aglobal provider of networking technology platforms, most recently as its ChiefOperating Officer from 2001 to 2004.

* *

*John F.Runkel, Jr.*joined us in October 2008 asExecutive Vice President, General Counsel and Secretary. Mr. Runkel servedas Senior Vice President, General Counsel and Secretary of Intuitive Surgical, Inc.,a provider of minimally-invasive robotic surgery technology, from 2006 to2007. From 2004 to 2005, Mr. Runkel served as Senior Vice Presidentof VISX Incorporated, a provider of laser vision correction technology, and asVice President, General Counsel and Secretary from 2001 to 2004.

 

There are nofamily relationships among our directors or executive officers.

 

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**Section 16(a) BeneficialOwnership Reporting Compliance**

 

Section 16(a) ofthe Securities Exchange Act of 1934 requires our executive officers anddirectors and persons who beneficially own more than ten percent of our commonstock to file with the SEC initial reports of beneficial ownership and reportsof changes in beneficial ownership of common stock. Executive officers,directors and ten percent stockholders are required by SEC regulations tofurnish us with copies of all Section 16(a) forms they file. To thebest of our knowledge, during the year ended December 31, 2008, allexecutive officers, directors and ten percent stockholders complied with all Section 16(a) filingrequirements.

** **

**Code of Ethics**

 

We have adopteda code of business conduct and ethics for directors, officers (including ourChief Executive Officer, Chief Financial Officer and Corporate Controller) andemployees, known as the Code of Business Conduct and Ethics. The Code ofBusiness Conduct and Ethics is available on our website at *http://www.affymetrix.com* in the CorporateGovernance section under the “Investors” link. Stockholders may request a freecopy of the Code of Business Conduct and Ethics by sending an email request to *investor@affymetrix.com*.

** **

**ITEM 11. EXECUTIVE COMPENSATION**

** **

**Compensation Discussion and Analysis**

*** ***

***CompensationPrinciples and Practices***

 

We call ourcompensation program a “Total Rewards” program to reflect our view thatcompensation and benefits should be viewed at an aggregate level, with thefollowing primary guiding principles:

 

·                  Aligning compensation strategy withour business objectives;

 

·                  Creating a positive work environmentthat includes recognition based on merit and a focus on customer satisfaction;

 

·                  Attracting, retaining and motivatingemployees by offering a competitive compensation and benefits package; and

 

·                  Using long-term equity awards toalign employee and stockholder interests.

 

TheCompensation Committee reviews and provides oversight of our compensation andbenefit policies generally and determines compensation for our executiveofficers. The compensation for our Chief Executive Officer is recommended bythe Compensation Committee and approved or ratified by the full Board.  The Compensation Committee strives to achievea Total Rewards package for Affymetrix executives that is closely tied to bothindividual and corporate performance, and aligned with the interests ofstockholders.

*** ***

***Process for Determining Executive Compensation***

 

TheCompensation Committee has retained the outside compensation consulting firm ofHewitt Associates on an ongoing basis to inform the Compensation Committee onmarket practices, programs and compensation levels; evaluate our compensationpractices; and assist in developing and implementing the executive compensationprogram and philosophy.

 

The Compensation Committee alsogives considerable weight to the recommendations of members of seniormanagement, including our Chief Executive Officer. The Compensation Committeebelieves this involvement of management is appropriate because they understandthe daily contributions of other officers. For example, although our ChiefExecutive Officer does not recommend the form or amount of his owncompensation, he recommends to the Compensation Committee the bonus amounts forthe other executive officers based on his review of each individual’sperformance for the year, company performance and market data.

 

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The CompensationCommittee reviews market data and compensation surveys in order to be informedof the market levels for executive compensation for our peer companies. Thecompensation survey that we use is provided by a third party.  Our “peer companies” are a group ofbiotechnology companies with employee population sizes of more than 500 andhigh technology companies with revenues between $200 and $500 million. Weuse this group of companies as an indicator of market practice because we feelthat these companies are likely to compete with us in the recruitment of seniorpersonnel. In determining an executive’s compensation, the CompensationCommittee takes into account market practice as well as the factors describedbelow.

*** ***

***Elements ofExecutive Compensation for Fiscal 2008***

 

Our executiveofficers’ compensation currently has the following primary components:

 

·                  base salary;

 

·                  annual cash bonuses based oncorporate and individual performance;

 

·                  long-term incentives in the form ofstock options and restricted stock awards; and

 

·                  other health, welfare and retirementbenefits.

 

In determiningcompensation for our executive officers, the Compensation Committee considers avariety of factors. For 2008 compensation, the most important factors includedwhether we achieved our specific financial and strategic goals and theindividual’s contribution to the achievement of these goals. Other factors thatare taken into account by the Compensation Committee include:

 

·                  extraordinary performance by anindividual during the year;

 

·                  retention concerns;

 

·                  the executive’s tenure andexperience;

 

·                  the executive’s historicalcompensation;

 

·                  comparison to the compensation ofother executive officers (those at Affymetrix as well as other companies).

 

In reviewingexecutives’ overall Total Rewards package, the Compensation Committee considersan aggregate view of base salary and bonus opportunity, accumulated equityaward gains, and the dollar value of benefits and perquisites, but generallyviews the various components of compensation as related but distinct.

 

Applying thefactors described above with respect to fiscal 2008, the Compensation Committeedetermined that no cash bonuses would be paid to executive officers and thatexecutive officers (other than Mr. King in connection with his promotion)would receive no salary increases in 2009. However, the Compensation Committeegranted equity awards to executive officers in 2008 and 2009 to tie executivecompensation to stockholder value creation, so that executive officers realizevalue through these equity awards to the extent our stock price increases.

* *

*Base Salary*

 

Base salariesfor our executive officers are established based on the scope of theirresponsibilities, taking into account competitive market compensation paid byother companies for similar positions. Base salaries for our executive officersare intended to be competitive with the compensation paid to executives withcomparable qualifications, experience and responsibilities in the same orsimilar businesses of comparable size. Base salaries are reviewed annually andadjusted from time to time to realign salaries with market levels.

 

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Executiveswith the greatest level of responsibility and accountability have the highestbase salaries to reflect the time commitment, level of risk and experienceassociated with those positions. Therefore, our Chief Executive Officer has ahigher base salary than other executive officers. In addition, the level ofsalary paid to our Executive Chairman reflects his full-time position atAffymetrix and his experience with our business and technology.

 

Salaries for2008 for our executive officers were raised between 4% to 11% from 2007 levelsbased on our 2007 performance (including achievement of our 2007 corporategoals), review of compensation surveys and the Compensation Committee’sdetermination of individual officers’ responsibilities, performance andexperience. The Compensation Committee determined that there will be noincrease in the salaries of our executive officers in 2009 from 2008 levels,except for Mr. King. As previously disclosed, in connection with Mr. King’spromotion to Chief Executive Officer and President of our company in January 2009,he received an increase in his annual base salary from $500,000 to $675,000,reflecting the significant increase in his duties and responsibilities as wellas taking into consideration market practice for chief executive officers inour peer group. Mr. King’s housing allowance was discontinued commencingin 2009.

* *

*Cash Performance Bonus Program*

 

Our bonusprogram is designed to reward participants based on attainment of specifiedlevels of corporate financial and strategic goals as well as subjective factorsrelated to the individual’s performance.

 

Although weuse pre-established financial goals as a baseline for determining the aggregatelevel of funding of our bonus pool for the year, we consider a combination ofachievement of financial goals and strategic goals, and other factors specificto the individual. In its determination of any pay-out under the bonus program,the Compensation Committee retains discretion to reduce or refuse to authorizeany award under the bonus program despite attainment of any specificobjectives, but also to grant bonuses based on individual performance even ifcorporate performance targets are not met.

 

Each named executiveofficer has an assigned target bonus level, expressed as a percent of basesalary for the fiscal year, which for fiscal 2008 ranged from 50% to 75% ofbase salary. As with our base salary levels, executives with the greatest levelof responsibility and accountability have the highest bonus target levels inorder to place a significant portion of their total compensation at risk toreflect the impact they have on our overall corporate performance. As furtherdescribed below, after review of the corporate financial and strategicperformance for the year, the Compensation Committee establishes a generalfunding level for our bonus program, and then reviews individual factors inapproving the actual bonus payment for each named executive officer.

 

For fiscal2008, the Compensation Committee measured our performance according tofinancial and strategic goals that we set for the year. Our financial goalsrequired us to achieve specified revenue and operating profit levels, and ourstrategic goals included the delivery of growth and profit, increasing customersatisfaction and the promotion of innovation, integrity and excellence.

 

While weachieved some of our strategic goals, the Compensation Committee did not awardany bonus to our named executive officers because our financial results did notmeet our financial goals for 2008.

* *

*Equity Incentives*

* *

*Overview.* Our equity awards program is intended to align the long-term interestsof executives with the interests of stockholders by enabling them to realize valuebased on stock price performance. We believe that the use of stock-based awardsoffers the best incentive to achieving these long-term goals. Our equityprogram is designed to encourage our employees to work towards the long-termsuccess of Affymetrix and to encourage their long-term employment by imposingvesting schedules over several years.

* *

*Types of Equity Awards.*  We use a combination of stock options andrestricted stock awards. Because of the direct relationship between the valueof an option and the increased market price of our common stock after the grantdate, we feel that stock options continue to be important to motivate ourexecutive officers to manage Affymetrix in a manner that is consistent withboth the interests of our stockholders and our business objectives. Inaddition, we grant restricted stock awards, which we feel have two primarybenefits. First, because restricted stock awards have no exercise price, we cangrant smaller amounts of restricted stock awards for an equivalent initialvaluation to a larger number of options, thereby resulting in fewer sharesbeing granted to our employee base in any year. In addition, we believerestricted stock awards help retain our executive officers and key employees inboth good and bad market conditions.

 

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*Grants During 2008.*  Guidelines for executive equity grants arebased on each individual executive’s position, responsibilities, performanceand contribution to the achievement of our long-term goals, and competitiveequity award data from biotechnology and high technology companies. During2008, the Compensation Committee approved both options and restricted stockawards for our named executive officers (as disclosed under the “Grants ofPlan-Based Awards” table in this Amendment No. 1). With respect to ourannual grants of equity awards, the aggregate value of these annual awards,measured by initial Black-Scholes value for stock options and intrinsic valuefor restricted stock awards, for each individual was set at the 50th percentile relative to peer companies forsimilar positions. In addition, we granted Mr. Runkel new hire equityawards at higher than average market levels as an incentive for him to join ourcompany. We also granted Mr. King equity awards in connection with hispromotion to Chief Executive Officer and President.

* *

*Other Benefit Plans*

* *

*Perquisites and Other Personal Benefits. *To remaincompetitive in the market for a high caliber management team, we provide someof our executive officers with fringe benefits. The Compensation Committeeperiodically reviews the benefits made available to executive officers toensure that they are in line with market practice and reasonable under thecircumstances. In 2008, the Compensation Committee approved the use of aprivate jet service for business and personal travel by Dr. Fodor thatresulted in $66,501 of incremental costs to us. This benefit was discontinuedfor 2009. We provided Mr. King with relocation benefits (including ahousing allowance) which continued during 2008 as reported in “SummaryCompensation Table”, including assistance with the sale of his home asdescribed under “Related Party Transactions” in this Amendment No. 1. Hishousing allowance was discontinued for 2009.

* *

*Deferred Compensation Plan.** *We have a deferredcompensation plan that allows certain of our employees, including executiveofficers, to defer the receipt of cash compensation. This is not a funded plan,and we do not make matching contributions to the deferred compensation plan.For 2008, none of our named executive officers participated or had an accountbalance in the plan.

* *

*RetirementPlans*. Executive officers are eligible to participate in all of our employeebenefit plans, such as medical, dental, vision, group life, and accidentaldeath and dismemberment insurance, as well as our 401(k) plan (withmatching contributions from Affymetrix), in each case on the same basis asother employees, subject to applicable law. Executive officers are alsoeligible to participate in our long-term disability plan on the same basis asother employees, except that the long-term disability benefit for executiveofficers is 75% of their monthly salary, up to a maximum of $20,000 per month,whereas the benefit for all other employees is 60% of their monthly salary.

*** ***

***Recoupment Policyfor Performance-Based Compensation***

 

In March 2009, we adopted a policy forrecoupment of incentive compensation. The policy provides that if we restateour reported financial results for any period beginning after the date ofadoption, the Board of Directors will review the bonus and other awards made toexecutive officers based on financial results during the period subject to therestatement.  To the extent practicableand in the best interests of stockholders, the Board of Directors will seek torecover or cancel any such awards that were based on having met or exceededperformance targets that would not have been met under the restated financialresults.

*** ***

***Change in Controland Severance Arrangements***

 

We have achange in control severance policy that provides for the treatment ofoutstanding equity awards and the receipt of severance benefits for employees(including all of our named executive officers) who are terminated, or whosejobs are materially adversely affected, as a result of a change in control. OurBoard of Directors may amend or terminate this policy at any time prior to achange in control, and the Compensation Committee periodically evaluates thebenefits provided and other terms of the policy. In 2008, after reviewingmarket practices and the potential costs, the Compensation Committee increasedthe cash severance benefits to our executive officers from 18 months’ basesalary to 24 months’ base salary. The purpose of this policy is to mitigatesome of the risk that exists for executives working in a company of our sizewhile there remains significant acquisition activity in the biotechnology industry.We believe the policy helps attract and retain qualified executives who couldhave other job alternatives that may appear to them to be less risky absentthis policy. In addition, in the event there were a potential change in controlthat could be beneficial to stockholders, we believe these severance packageswould provide an incentive for these executives and other employees to continueto help successfully execute the acquisition from its early stages untilclosing while providing reasonable protection to our executives and otheremployees against a significant downsizing or restructuring that could resultfrom the acquisition.

 

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***Accounting and TaxConsiderations***

 

For proposedequity awards, the Compensation Committee reviews the estimated employeestock-based compensation expenses in accordance with SFAS 123R. Thisvaluation is one of the considerations used in reviewing the marketcompetitiveness of individual equity awards.

 

We generallytry to utilize available tax deductions whenever appropriate. The CompensationCommittee, when determining executive compensation programs, considers allrelevant factors, including the tax deductions that may result from suchcompensation, and weighs against that, our need to attract, retain and rewardhigh-performing executives. We have paid, and will continue to pay,compensation to executive officers that may not be fully deductible if webelieve that is necessary to attract, retain and reward high-performingexecutives. Stock options granted under our stock plans generally are intendedto qualify as performance-based compensation under Section 162(m) ofthe Internal Revenue Code of 1986, as amended, which limits the deductibilityof non-performance-based compensation paid to certain covered employees thatexceeds $1 million in any year, but the restricted stock awards we havegranted to date are not eligible for this deduction. We will continue to reviewour executive compensation plans periodically to determine what changes, ifany, should be made as the result of the limitation on deductibility.

** **

**SummaryCompensation Table**

 

The followingtable sets forth the compensation, for the most recent three fiscal years, foreach person who served as our principal executive or financial officer during2008 and our other three most highly compensated executive officers for fiscalyear 2008 (collectively referred to as the “named executive officers” in thisAmendment No. 1.)

 
| **Name and Principal  Position** | ** ** | **Year** | ** ** | **Salary  ($)** | ** ** | **Bonus  ($)** | ** ** | **Stock  Awards  ($)*** | ** ** | **Option  Awards  ($)*** | ** ** | **Non-Equity  Incentive  Plan  Compensation  $** | ** ** | **Change in  Pension  Value and  Nonqualified  Deferred  Compensation  Earnings  ($)** | ** ** | **All Other  Compensation  ($)(1)** | ** ** | **Total  ($)** | ** ** |
|--------------------------------------------|------------|----------|------------|-----------------|------------|----------------|------------|-------------------------|------------|--------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------------------------------------------------------|------------|------------------------------------------|------------|----------------|------------|
| Stephen P.A. Fodor(2)                      |       | 2008     |       | 655,673         |       | —         |       | 327,804                 |       | 523,837                  |       | —                                           |       | —                                                                                           |       | 78,506                                   | (3)        | 1,585,820      |       |
| Founder and  Executive                     |       | 2007     |       | 630,673         |       | —         |       | 66,243                  |       | 286,629                  |       | 635,000                                          |       | —                                                                                           |       | 73,256                                   | (3)        | 1,691,801      |       |
| Chairman                                   |       | 2006     |       | 606,154         |       | —         |       | 37,505                  |       | 291,184                  |       | —                                           |       | —                                                                                           |       | 47,468                                   | (3)        | 982,311        |       |
|                                       |       |     |       |            |       |           |       |                    |       |                     |       |                                             |       |                                                                                             |       |                                     |       |           |       |
| Kevin M. King(2)                           |       | 2008     |       | 491,346         |       | —         |       | 566,756                 |       | 267,791                  |       | —                                           |       | —                                                                                           |       | 188,497                                  | (4)        | 1,514,390      |       |
| Chief Executive  Officer                   |       | 2007     |       | 432,692         |       | 100,000        | (5)        | 700,578                 |       | 120,032                  |       | 400,000                                          |       | —                                                                                           |       | 230,746                                  | (6)        | 1,984,048      |       |
| and President                              |       |     |       |            |       |           |       |                    |       |                     |       |                                             |       |                                                                                             |       |                                     |       |           |       |
|                                       |       |     |       |            |       |           |       |                    |       |                     |       |                                             |       |                                                                                             |       |                                     |       |           |       |
| John C. Batty(7)                           |       | 2008     |       | 376,538         |       | —         |       | 186,865                 |       | 107,849                  |       | —                                           |       | —                                                                                           |       | 12,004                                   |       | 683,256        |       |
| Executive Vice                             |       | 2007     |       | 186,923         |       | —         |       | 80,279                  |       | 33,474                   |       | 140,000                                          |       | —                                                                                           |       | 4,393                                    |       | 445,069        |       |
| President and  Chief                       |       |     |       |            |       |           |       |                    |       |                     |       |                                             |       |                                                                                             |       |                                     |       |           |       |
| Financial Officer                          |       |     |       |            |       |           |       |                    |       |                     |       |                                             |       |                                                                                             |       |                                     |       |           |       |
|                                       |       |     |       |            |       |           |       |                    |       |                     |       |                                             |       |                                                                                             |       |                                     |       |           |       |
| Barbara A. Caulfield(8)                    |       | 2008     |       | 256,885         |       | —         |       | 119,252                 |       | 85,142                   |       | —                                           |       | —                                                                                           |       | 7,877                                    |       | 469,156        |       |
| Executive Vice                             |       | 2007     |       | 411,577         |       | 950,000        | (9)        | 71,633                  |       | 146,409                  |       | 210,000                                          |       | —                                                                                           |       | 20,523                                   |       | 1,810,142      |       |
| President and  General                     |       | 2006     |       | 387,596         |       | —         |       | 28,128                  |       | 121,499                  |       | —                                           |       | —                                                                                           |       | 76,715                                   |       | 613,938        |       |
| Counsel                                    |       |     |       |            |       |           |       |                    |       |                     |       |                                             |       |                                                                                             |       |                                     |       |           |       |
|                                       |       |     |       |            |       |           |       |                    |       |                     |       |                                             |       |                                                                                             |       |                                     |       |           |       |
| John F. Runkel(10)                         |       | 2008     |       | 62,308          |       | —         |       | 5,229                   |       | 2,792                    |       | —                                           |       | —                                                                                           |       | 3,199                                    |       | 73,528         |       |
| Executive Vice                             |       |     |       |            |       |           |       |                    |       |                     |       |                                             |       |                                                                                             |       |                                     |       |           |       |
| President and  General                     |       |     |       |            |       |           |       |                    |       |                     |       |                                             |       |                                                                                             |       |                                     |       |           |       |
| Counsel                                    |       |     |       |            |       |           |       |                    |       |                     |       |                                             |       |                                                                                             |       |                                     |       |           |       |

 

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*                                         Thereported dollar value of stock awards and option awards is equal to thecompensation expense recognized in our fiscal year financial statements underSFAS123R with respect to restricted stock awards and stock options,respectively, made to the named executive officers during that fiscal year andprior years. See Note 15 —Stockholders’ Equity of the Original Filing,regarding assumptions underlying valuation of our equity awards. Thecalculation for the expense recognized for stock options includes such factorsas the number of shares, stock price on the grant date, expected term of theaward and other factors, and so stock options that currently have exerciseprices above our stock price are still considered to have a value for thispurpose. The actual value of an option, if any, will depend on the futuremarket price of our common stock and the option holder’s individual exerciseand sale decisions. For a description of restricted stock and option awardsmade, exercised and vested during fiscal 2008, and outstanding at the end offiscal 2008, see the tables set forth below.

 

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(1)                                  Includesdiscretionary matching contributions made under our 401(k) plan andpremiums paid by us on term life insurance policies for the benefit of thenamed executive officers.

 

(2)                                  Dr. Fodorwas our Chairman and Chief Executive Officer for 2006, 2007 and 2008. In January 2009,Dr. Fodor became our Executive Chairman. Mr. King joined us in January 2007,and he was our President from September 2007 to December 2008. In January 2009,Mr. King was promoted to Chief Executive Officer and President.

 

(3)                                  Includes$66,502, $56,088 and $31,892 in aggregate incremental costs to Affymetrixassociated with the personal jet service for Dr. Fodor in 2008, 2007 and2006, respectively. These jet service costs are measured by the paymentsactually made by the Company to the third-party provider of the jet servicesand may be different than the amount attributed to Dr. Fodor as income fortax purposes.

 

(4)                                  Includes:

 

·                  the amounts described in footnote(1);

 

·                  $138,996 of housing allowance paid toMr. King in 2008; and

 

·                  Relocation benefits totaling $37,497in 2008 that represent reimbursement of relocation expenses for Mr. Kingand the carrying costs of Mr. King’s residence in New Jersey pending sale.

 

(5)                                  Representsa signing bonus when Mr. King joined the Company.

 

(6)           Includes:

 

·                  the amounts described in footnote(1);

 

·                  $46,332 of housing allowance paid to Mr. Kingin 2007; and

 

·                  payments totaling $173,169 in 2007that represent reimbursement of relocation expenses for Mr. King, thecarrying costs of Mr. King’s residence in New Jersey pending sale and thecosts of providing temporary housing to Mr. King in the Bay Area.

 

(7)                                  InJune 2007, Mr. Batty was appointed as Executive Vice President andChief Financial Officer. His compensation for 2007 reflects this partial yearof service.

 

(8)                                  EffectiveJune 13, 2008, Ms. Caulfield resigned as our Executive Vice Presidentand General Counsel. Her compensation for 2008 reflects this partial year ofservice.

 

(9)                                  Representsa special bonus awarded to Ms. Caulfield during 2007.

 

(10)                            InOctober 2008, Mr. Runkel was appointed our Executive Vice Presidentand General Counsel. His compensation for 2008 reflects this partial year ofservice.

 

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**Grants of Plan-Based Awards**

 

The followingtable sets forth information regarding stock options, restricted stock awardsand incentive plan awards granted to our named executive officers during thefiscal year 2008.

 
| ** **           | ** ** | ** **      | ** ** | **Estimated Possible  Payouts  Under Non-Equity  Incentive Plan  Awards(1)** | ** ** | **All Other  Stock  Awards:  Number of  Shares of  Stock or** | ** ** | **All Other  Option  Awards:  Number of  Securities  Underlying** | ** ** | **Exercise  of Base  Price of  Option** | ** ** | **Grant  Date Fair  Value of  Stock and  Option** | ** ** |
|----------------------|------------|-----------------|------------|---------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------|------------|---------------------------------------------------|------------|------------------------------------------------------------------|------------|
| **Name**             | ** ** | **Grant  Date** | ** ** | **Target  ($)**                                                                             | ** ** | **Units  (#)(2)**                                                                 | ** ** | **Options  (#)(2)**                                                         | ** ** | **Awards  ($/sh)**                                | ** ** | **Awards  ($)(3)**                                               | ** ** |
| Stephen P.A. Fodor   |       | 02/06/08        |       | $                                                                                           | 495,000    |                                                                              | 75,000     |                                                                        | 150,000    |                                              | 19.92      |                                                             | 1,136,340  |   |
|                 |       | 02/06/08        |       |                                                                                        |       |                                                                              |       |                                                                        |       |                                              |       | 1,494,000                                                        |       |
|                 |       | 06/27/08        |       |                                                                                        |       | 25,000                                                                            |       | 200,000                                                                     |       | 10.29                                             |       | 775,880                                                          |       |
|                 |       | 06/27/08        |       |                                                                                        |       |                                                                              |       |                                                                        |       |                                              |       | 251,500                                                          |       |
|                 |       |            |       |                                                                                        |       |                                                                              |       |                                                                        |       |                                              |       |                                                             |       |
| Kevin M. King        |       | 02/05/08        |       | $                                                                                           | 325,000    |                                                                              | 24,000     |                                                                        | 50,000     |                                              | 20.48      |                                                             | 389,430    |   |
|                 |       | 02/05/08        |       |                                                                                        |       |                                                                              |       |                                                                        |       |                                              |       | 491,520                                                          |       |
|                 |       | 06/27/08        |       |                                                                                        |       | 20,000                                                                            |       | 150,000                                                                     |       | 10.29                                             |       | 581,910                                                          |       |
|                 |       | 06/27/08        |       |                                                                                        |       |                                                                              |       |                                                                        |       |                                              |       | 201,200                                                          |       |
|                 |       |            |       |                                                                                        |       |                                                                              |       |                                                                        |       |                                              |       |                                                             |       |
| John C. Batty        |       | 02/05/08        |       | $                                                                                           | 190,000    |                                                                              | 9,200      |                                                                        | 20,000     |                                              | 20.48      |                                                             | 155,772    |   |
|                 |       | 02/05/08        |       |                                                                                        |       |                                                                              |       |                                                                        |       |                                              |       | 188,416                                                          |       |
|                 |       | 06/27/08        |       |                                                                                        |       | 13,000                                                                            |       | 65,000                                                                      |       | 10.29                                             |       | 252,161                                                          |       |
|                 |       | 06/27/08        |       |                                                                                        |       |                                                                              |       |                                                                        |       |                                              |       | 130,780                                                          |       |
|                 |       |            |       |                                                                                        |       |                                                                              |       |                                                                        |       |                                              |       |                                                             |       |
| Barbara A. Caulfield |       | 02/05/08        |       | $                                                                                           | 0          | (4)                                                                               | 9,200      |                                                                        | 20,000     |                                              | 20.48      |                                                             | 155,772    |   |
|                 |       | 02/05/08        |       |                                                                                        |       |                                                                              |       |                                                                        |       |                                              |       | 188,416                                                          |       |
|                 |       |            |       |                                                                                        |       |                                                                              |       |                                                                        |       |                                              |       |                                                             |       |
| John F. Runkel       |       | 10/20/08        |       | $                                                                                           | 0          | (5)                                                                               | 30,000     |                                                                        | 30,000     |                                              | 5.05       |                                                             | 80,892     |   |
|                 |       | 10/20/08        |       |                                                                                        |       |                                                                              |       |                                                                        |       |                                              |       | 151,500                                                          |       |

 

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(1)           There is no thresholdor maximum bonus amount with respect to any named executive officer. Our namedexecutive officers have target bonuses that range from 50% to 75% of theirannual base salaries. The amount of the bonus payment actually paid is based ona combination of company and individual performance factors as described in “CompensationDiscussion and Analysis” above. No bonus payments were made with respect toservices rendered in fiscal 2008.

 

(2)           All of the stock options have seven-year terms. Each of the stock and option awardsreported in this table vest in equal annual installments over four years fromthe grant date, except as follows:

 

·                  Mr. King’s 50,000 stock options grantedon February 5, 2008 vested with respect to 20,000 shares on February 5,2009, and the remaining shares will vest in equal installments of 10,000 shareson February 5, 2010, February 5, 2011 and February 5, 2012.

 

(3)           This column representsthe full grant date fair valuation of each equity award computed underSFAS 123R. See Note 15 —Stockholders’ Equity of the Original Filingregarding assumptions underlying valuation of our equity awards.

 

(4)           Ms. Caulfield leftAffymetrix in June 2008.

 

(5)           Mr. Runkel joinedAffymetrix in October 2008 and was not eligible for a cash bonus forfiscal 2008.

 

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**Outstanding Equity Awards at Fiscal Year End**

 

Thefollowing table sets forth information regarding outstanding stock options andrestricted stock awards as of December 31, 2008 for the named executiveofficers.

 
| ** **                 | ** ** | **Option Awards**                                                              | ** ** | **Stock Awards**                                                                 | ** ** |
|----------------------------|------------|-------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------|------------|
| **Name**                   | ** ** | **Number of  Securities  Underlying  Unexercised  Options:  Exercisable  (#)** | ** ** | **Number of  Securities  Underlying  Unexercised  Options:  Unexercisable  (#)** | ** ** | **Equity  Incentive  Plan  Awards:  Number of  Securities  Underlying  Unexercised  Unearned  Options  (#)** | ** ** | **Option  Exercise  Price  ($)** | ** ** | **Option  Expiration  Date** | ** ** | **Number   of  Shares or  Units of  Stock that  Have Not  Vested  (#)** | ** ** | **Market  Value of  Shares or  Units of  Stock that  Have Not  Vested  ($)(1)** | ** ** | **Equity  Incentive  Plan  Awards:  Number of  Unearned  Shares,   Units  or Other  Rights that  Have Not  Vested  (#)** | ** ** | **Equity  Incentive  Plan  Awards:  Market or  Payout  Value  of Unearned  Shares,   Units  or Other  Rights That  Have Not  Vested  ($)** | ** ** |
| Stephen P.A.  Fodor, Ph.D. |       | 300,000                                                                             |       | —                                                                                |       |   |   | 24.44 |   | 06/30/2009 |   |   |   |   |   |   |   |   |   |
|                       |       | 300,000                                                                             |       | —                                                                                |       |   |   | 47.85 |   | 10/01/2010 |   |   |   |   |   |   |   |   |   |
|                       |       | 100,000                                                                             |       | —                                                                                |       |   |   | 32.99 |   | 11/15/2011 |   |   |   |   |   |   |   |   |   |
|                       |       | 32,500                                                                              |       | 32,500                                                                                | (2)        |   |   | 27.82 |   | 05/26/2013 |   |   |   |   |   |   |   |   |   |
|                       |       | —                                                                              |       | 150,000                                                                               | (3)        |   |   | 19.92 |   | 02/06/2015 |   |   |   |   |   |   |   |   |   |
|                       |       | —                                                                              |       | 200,000                                                                               | (4)        |   |   | 10.29 |   | 06/27/2015 |   |   |   |   |   |   |   |   |   |
|                       |       |                                                                                |       |                                                                                  |       |   |   |   |   |   |   | 106,000 | (5) | 316,940 |   |   |   |   |   |
|                       |       |                                                                                |       |                                                                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Kevin M. King              |       | 10,000                                                                              |       | 30,000                                                                                | (6)        |   |   | 24.68 |   | 01/08/2014 |   |   |   |   |   |   |   |   |   |
|                       |       | 10,000                                                                              |       | 30,000                                                                                | (7)        |   |   | 25.71 |   | 06/06/2014 |   |   |   |   |   |   |   |   |   |
|                       |       | —                                                                              |       | 50,000                                                                                | (8)        |   |   | 20.48 |   | 02/05/2015 |   |   |   |   |   |   |   |   |   |
|                       |       | —                                                                              |       | 150,000                                                                               | (9)        |   |   | 10.29 |   | 06/27/2015 |   |   |   |   |   |   |   |   |   |
|                       |       |                                                                                |       |                                                                                  |       |   |   |   |   |   |   | 86,000 | (10) | 257,140 |   |   |   |   |   |
|                       |       |                                                                                |       |                                                                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| John C. Batty              |       | 7,500                                                                               |       | 22,500                                                                                | (11)       |   |   | 26.61 |   | 06/18/2014 |   |   |   |   |   |   |   |   |   |
|                       |       | —                                                                              |       | 20,000                                                                                | (12)       |   |   | 20.48 |   | 02/05/2015 |   |   |   |   |   |   |   |   |   |
|                       |       | —                                                                              |       | 65,000                                                                                | (13)       |   |   | 10.29 |   | 06/27/2015 |   |   |   |   |   |   |   |   |   |
|                       |       |                                                                                |       |                                                                                  |       |   |   |   |   |   |   | 44,700 | (14) | 133,653 |   |   |   |   |   |
|                       |       |                                                                                |       |                                                                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Barbara A.  Caulfield      |       | —                                                                              |       | —                                                                                |       |   |   | — |   | — |   | — |   | — |   |   |   |   |   |
|                       |       |                                                                                |       |                                                                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| John F. Runkel             |       | —                                                                              |       | 30,000                                                                                | (15)       |   |   | 5.05 |   | 10/20/2015 |   |   |   |   |   |   |   |   |   |
|                       |       |                                                                                |       |                                                                                  |       |   |   |   |   |   |   | 30,000 | (16) | 89,700 |   |   |   |   |   |

 

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| (1)    |   | Assumes a stock price of $2.99 a share, which was the closing market  price of the Company’s stock on December 31, 2008 (the last trading day  of fiscal 2008).                                                                                                                                                                                                                                    |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| (2)    |   | Options vest in four equal annual installments of 16,250 shares from  the grant date of May 26, 2006.                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| (3)    |   | Options vest in four equal annual installments of 37,500 shares from  the grant date of February 6, 2008.                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| (4)    |   | Options vest in four equal annual installments of 50,000 shares from  the grant date of June 27, 2008.                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| (5)    |   | 12,000 restricted stock awards were granted on May 26, 2006 and  vest in four equal annual installments from the grant date. 75,000 restricted  stock awards were granted on February 6, 2008 and vest in four equal  annual installments from the grant date. 25,000 restricted stock awards were  granted on June 27, 2008 and vest in four equal annual installments from  the grant date. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| (6)    |   | Options vest in four equal annual installments of 10,000 shares from  the grant date of January 8, 2007.                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| (7)    |   | Options vest in four equal annual installments of 10,000 shares from  the grant date of June 6, 2007.                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| (8)    |   | Options vested with respect to 20,000 shares on February 5, 2009  and will vest with respect to the remaining 30,000 shares in equal annual  installments of 10,000 shares on February 5, 2010, February 5, 2011  and February 5, 2012.                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                         |
| (9)    |   | Options vest in four equal annual installments of 37,500 shares from  the grant date of June 27, 2008.                                                                                                                                                                                                                                                                                                  |

 

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| (10)   |   | 60,000  restricted stock awards were granted on January 8, 2007 and vested with respect  to 20,000 shares on July 8, 2007, with respect to 10,000 shares on  January 8, 2008 and with respect to 15,000 shares on January 8,  2009, and will vest with respect to the remaining 15,000 shares on  January 8, 2010. 16,000 restricted stock awards were granted on  June 6, 2007 and vest in four equal annual installments from the grant  date. 24,000 restricted stock awards were granted on February 5, 2008  and vest in four equal annual installments from the grant date. 20,000  restricted stock awards were granted on June 27, 2008 and vest in four  equal annual installments from the grant date. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (11)   |   | Options vest in four equal annual installments of 7,500 shares from  the grant date of June 18, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (12)   |   | Options vest in four equal annual installments of 5,000 shares from  the grant date of February 5, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (13)   |   | Options vest in four equal annual installments of 16,250 shares from  the grant date of June 27, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (14)   |   | 30,000 restricted stock awards were granted on June 18, 2007 and  vest in four equal annual installments from the grant date. 9,200 restricted  stock awards were granted on February 5, 2008 and vest in four equal  annual installments from the grant date. 13,000 restricted stock awards were  granted on June 27, 2008 and vest in four equal annual installments from  the grant date.                                                                                                                                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (15)   |   | Options vest in four equal annual installments of 7,500 shares from  the grant date of October 20, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (16)   |   | 30,000 restricted stock awards were granted on October 20, 2008  and vest in four equal annual installments from the grant date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

** **

**Options Exercised and Stock Vested**

 

The following table setsforth certain information regarding options and stock awards exercised andvested, respectively, during 2008 for the named executive officers.

 
| ** **                | ** ** | **Option Awards**                                          | ** ** | **Stock Awards**                     | ** ** |
|---------------------------|------------|-----------------------------------------------------------------|------------|-------------------------------------------|------------|
| **Name**                  | ** ** | **Number of  Shares Acquired  on Exercise  (#)** | ** ** | **Value Realized  on Exercise** | ** ** | **Number of  Shares Acquired  on Vesting  (#)** | ** ** | **Value Realized  on Vesting  ($)(1)** | ** ** |
| Stephen P.A. Fodor, Ph.D. |       | —                                                          |       | —                                    |       | 3,000 |   | $ | 35,370 |   |
| Kevin M. King             |       | —                                                          |       | —                                    |       | 14,000 |   | $ | 274,580 |   |
| John C. Batty             |       | —                                                          |       | —                                    |       | 7,500 |   | $ | 83,550 |   |
| Barbara A. Caulfield      |       | —                                                          |       | —                                    |       | 4,250 |   | $ | 50,367 |   |
| John F. Runkel            |       | —                                                          |       | —                                    |       | — |   | — |   |

 

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(1)                                  The amount inthis column reflects the closing price of our common stock on the date of vestingmultiplied by the number of shares vesting.

 

**Change in Control and Severance Arrangements**

 

*Change inControl Severance.*  The Companyhas a change in control policy. The policy applies to all employees anddirectors, but our named executive officers receive greater benefits.

 

The Company’s change in control policy may be amendedor terminated by the Board at any time prior to a change in control. However,the policy may not be terminated or amended in a manner adversely to any personcovered by the policy for 12 months following a change in control (whichincludes such transactions as a change in at least 50% of the voting power ofour stock through a merger or acquisition by a person or a group). Thetermination or amendment of the policy at any time shall not affect anybenefits to which a person covered by the policy previously has becomeentitled.

 

Subject to signing a releaseof claims, upon a qualifying termination a named executive officer willreceive:

 

·                  full vesting of all equityawards;

 

·                  24 monthsof base salary;

 

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·                  24 monthsof continued health benefits (unless the named executive officer earlierbecomes eligible for group benefits from another employer); and

 

·                  6 monthsof outplacement services.

 

A “qualifying termination”means (i) an involuntary termination without cause in connection with, orwithin 12 months following, a change in control, or (ii) resignation ofemployment within 6 months following a change in control due to a materialreduction in base salary, target bonus opportunity or job duties andresponsibilities from those in effect immediately prior to the change incontrol.

 

Upon a change in control,outstanding equity awards may be assumed by the acquirer, become fully vestedor be cashed out.

 

The following table showsthe severance benefits that would be received by each named executive officerupon a qualifying termination following a change in control, assuming theindividual was terminated on December 31, 2008 and based on the individual’sbase salary for fiscal 2008 as set forth in the Summary Compensation Tableabove.

 
| **Name**                  | ** ** | **Cash Severance  ($)** | ** ** | **Accelerated Equity  Value ($)(1)** | ** ** | **Other Benefits  Value ($)(2)** | ** ** |
|---------------------------|------------|------------------------------|------------|------------------------------------------------|------------|--------------------------------------------|------------|
| Stephen P.A. Fodor, Ph.D. |       | 1,320,000                    |       | 316,940                                        |       | 32,280                                     |       |
| John C. Batty             |       | 750,000                      |       | 133,653                                        |       | 32,280                                     |       |
| John F. Runkel, Jr.  |       | 720,000                      |       | 89,700                                         |       | 32,280                                     |       |
| Kevin M. King             |       | 1,000,000                    |       | 257,140                                        |       | 32,280                                     |       |

 

----

(1)                                  The value ofunvested restricted stock or restricted stock units is based on $2.99 pershare, the closing price of our common stock on December 31, 2008. Thevalue of accelerated vesting of the options is based solely on the excess, ifany, of $2.99 per share over the exercise price of the unvested portion (as of December 31,2008) of the individual’s stock options. All of the unvested stock options heldby our named executive officers as of December 31, 2008 have exerciseprices higher than the closing price of our common stock on December 31,2008.

 

(2)                                  Represents theestimated value of health, dental and vision insurance coverage andoutplacement services.

** **

**Compensation of Directors**

 

The following table setsforth compensation for our non-employee directors for fiscal year 2008.

 
| **Name**                         | ** ** | **Fees  Earned or  Paid in  Cash ($)(1)** | ** ** | **Stock  Awards  ($)(2)(3)(4)** | ** ** | **Option  Awards  ($)(2)(3)(4)** | ** ** | **Non-Equity  Incentive  Plan  Compensation  ($)** | ** ** | **Change in  Pension Value  and  Non-Qualified  Deferred  Compensation  Earnings** | ** ** | **All Other  Compensation  ($)** | ** ** | **Total ($)** | ** ** |
|----------------------------------|------------|----------------------------------------------------------|------------|---------------------------------|------------|----------------------------------|------------|----------------------------------------------------|------------|----------------------------------------------------------------------------------------------|------------|---------------------------------------|------------|--------------------|------------|
| Paul Berg, Ph.D.                 |       | 83,063                                                   | (5)        | —                          |       | 112,700                          |       | —                                             |       | —                                                                                       |       | —                                |       | 195,763            |       |
| Susan D. Desmond- Hellmann, M.D. |       | 73,333                                                   |       | —                          |       | 112,700                          |       | —                                             |       | —                                                                                       |       | —                                |       | 186,033            |       |
| John D. Diekman, Ph.D.           |       | 82,500                                                   |       | —                          |       | 112,700                          |       | —                                             |       | —                                                                                       |       | —                                |       | 195,200            |       |
| Vernon R. Loucks, Jr.       |       | 62,500                                                   |       | —                          |       | 112,700                          |       | —                                             |       | —                                                                                       |       | —                                |       | 175,200            |       |
| Robert H. Trice, Ph.D.           |       | 78,333                                                   |       | 45,459                          |       | 46,562                           |       | —                                             |       | —                                                                                       |       | —                                |       | 170,354            |       |
| Robert P. Wayman                 |       | 81,666                                                   |       | 37,984                          |       | 132,051                          |       | —                                             |       | —                                                                                       |       |                                  |       | 251,701            |       |
| John A. Young                    |       | 90,000                                                   |       | 45,459                          |       | 0                                |       | —                                             |       | —                                                                                       |       | —                                |       | 135,459            |       |

 

----

(1)                                  This columnrepresents the cash compensation received in 2008 for Board and committeeservices.

 

(2)                                  For 2008, eachnon-employee director could elect for a grant of (a) 24,952 stock optionswhich vest one year after the date of grant and have an exercise price equal to$11.30 per share, (b) 9,524 restricted stock units, which vest in equalinstallments over three years from the date of grant, or (c) a combinationof 12,476 stock options and 4,762 restricted stock units.

 

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(3)                                  At December 31,2008, each of our directors held the following number of options and restrictedstock units: Dr. Berg, 95,999 options; Dr. Desmond-Hellmann, 75,999options; Dr. Diekman, 95,999 options; Mr. Loucks, 65,999 options; Dr. Trice,30,000 options and 12,556 restricted stock units; Mr. Wayman, 32,476options and 7,794 restricted stock units; and Mr. Young, 60,000 optionsand 12,556 restricted stock units. For grants during 2008, the grant date fairvalue for each restricted stock unit was $11.30, and for each option was $4.44.

 

(4)                                  The reporteddollar value of stock awards and option awards is equal to the compensationexpense recognized in our 2008 financial statements under SFAS123R with respectto all equity awards made to the directors during 2008 and prior years. SeeNote 15—Stockholders’ Equity of the Original Filing regarding assumptionsunderlying valuation of our equity awards. The calculation for the expenserecognized for stock options includes such factors as the number of shares,stock price on the grant date, expected term of the award and other factors,and so stock options that currently have exercise prices above our stock priceare still considered to have a value for this purpose. The actual value of anoption, if any, will depend on the future market price of our common stock andthe option holder’s individual exercise and sale decisions. The calculation forthe expense recognized for stock awards is based on the fair market value ofour common stock on the grant date.

 

(5)                                  This amountincludes payment of $23,063 to Dr. Berg in 2008 for his service as Boardliaison to our Scientific Advisory Board.

** **

**Compensation Committee Interlocks and InsiderParticipation**

 

Our Compensation Committeeconsists of three members, Dr. Berg, Dr. Desmond-Hellmann and Mr. Young,its Chairman. Each of the members of the Compensation Committee is independentwithin the meaning of the NASDAQ listing standards. During 2008, none of ourexecutive officers served on the compensation committee or board of any othercompany whose executive officers serve as a member of our board or compensationcommittee, and no compensation committee member had any relationship requiringdisclosure under Item 404 of Regulation S-K.

** **

**Compensation CommitteeReport**

 

We have reviewed anddiscussed the Compensation Discussion and Analysis required by Item 402(b) ofRegulation S-K with management. Based on our review and discussion withmanagement, we have recommended to the Board of Directors that the CompensationDiscussion and Analysis be included in this annual report on Form 10-K andAffymetrix’ proxy statement on Schedule 14A.

 
| Submitted by: |   | John A. Young, Chairman  Paul Berg, Ph.D.  Susan D. Desmond-Hellmann, M.D., M.P.H.  Members of the Compensation Committee |
|---------------|--------|---------------------------------------------------------------------------------------------------------------------------|

 

*Notwithstandinganything to the contrary set forth in any of the Company’s previous filingsunder the Securities Act of 1933, as amended, or the Securities Exchange Act of1934, as amended, that incorporate future filings, including this**annualreport on Form 10-K**, in wholeor in part, the foregoing Compensation Committee Report shall not beincorporated by reference into any such filings.*

 

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**ITEM 12.****                ****SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ANDRELATED STOCKHOLDER MATTERS.**

 

**Security Ownership of Certain Beneficial Owners andManagement**

 

The following table setsforth the beneficial ownership of our shares of common stock as of April 15,2009 by:

 

·                  each personknown to us to beneficially own more than five percent of our outstandingshares of common stock;

 

·                  each directorand nominee for director;

 

·                  each of theofficers named in the Summary Compensation Table above; and

 

·                  all directorsand executive officers as a group.

 

Unless otherwise indicated,the address of each of the individuals named below is: c/o Affymetrix, Inc.,3420 Central Expressway, Santa Clara, California 95051.

 
| **Name and Address of Beneficial Owner**                | ** ** | **Shares Beneficially  Owned(1)** | ** ** | **Percentage of Shares  Beneficially Owned(1)(2)** | ** ** |
|----------------------------------------------------------------------------------|------------|----------------------------------------|------------|-------------------------------------------------------------------|------------|
| ***Greater than 5%***                                                            |       |                                   |       |                                                              |       |
| Barclays Global Investors, NA.(3)   400 Howard Street   San Francisco, CA 94105  |       | 4,835,597                              |       | 6.84                                                              | %          |
| PRIMECAP Management Company(4)   225 South Lake Avenue #400   Pasadena, CA 91101 |       | 5,113,218                              |       | 7.23                                                              | %          |
| ***Directors and Executive Officers***                                           |       |                                   |       |                                                              |       |
| John C. Batty(5)                                                                 |       | 69,027                                 |       | *                                                                 |       |
| Paul Berg, Ph.D.(6)                                                              |       | 159,535                                |       | *                                                                 |       |
| Susan D. Desmond-Hellmann, M.D., M.P.H.(7)                                       |       | 75,999                                 |       | *                                                                 |       |
| John D. Diekman, Ph.D.(8)                                                        |       | 257,795                                |       | *                                                                 |       |
| Stephen P.A. Fodor, Ph.D.(9)                                                     |       | 1,000,780                              |       | 1.40                                                              | %          |
| Kevin M. King(10)                                                                |       | 247,622                                |       | *                                                                 |       |
| John F. Runkel(11)                                                               |       | 30,000                                 |       | *                                                                 |       |
| Robert H. Trice, Ph.D.(12)                                                       |       | 36,205                                 |       | *                                                                 |       |
| Robert P. Wayman(13)                                                             |       | 37,094                                 |       | *                                                                 |       |
| John A. Young(14)                                                                |       | 211,427                                |       | *                                                                 |       |
| **All directors and executive officers as a group  (10 persons)**(15)            |       | 2,125,484                              |       | 2.95                                                              | %          |

 

----

*                                         Representsbeneficial ownership of less than one percent of the common stock.

 

(1)                                  Beneficialownership is determined in accordance with the rules of the SEC. Incomputing the number of shares beneficially owned by a person and thepercentage of ownership of that person, shares of common stock subject tooptions held by that person that are currently exercisable or exercisablewithin 60 days of April 15, 2009 are deemed outstanding. Thoseshares, however, are not deemed outstanding for the purpose of computing thepercentage ownership of other persons. The persons named in this table havesole voting and investment power with respect to all shares of common stockshown as beneficially owned by them, subject to community property laws whereapplicable and except as indicated in the other footnotes to this table.

 

(2)                                  Percentage ofbeneficial ownership is based on 70,694,542 shares of common stock outstandingas of April 15, 2009.

 

(3)                                  Barclays GlobalInvestors, N.A. (“Barclays”), as set forth on Schedule 13G filed with theSEC on February 5, 2009, has sole voting power with respect to 1,501,460shares, and sole dispositive power with respect to 1,761,154 shares. BarclaysGlobal Fund Advisors, a Barclays affiliate, has sole voting power with respectto 2,629,627 shares and sole dispositive power with respect to 3,024,884shares. Barclays Global Investors, Ltd., a Barclays affiliate, has soledispositive power with respect to 49,559 shares.

 

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(4)                                  PRIMECAPManagement Company, as set forth on Schedule 13G/A filed with the SEC on February 12,2009, has sole voting power with respect to 2,725,318 shares and soledispositive power with respect to 5,113,218 shares.

 

(5)                                  Includes 12,500shares issuable upon exercise of options exercisable within 60 days of April 15,2009.

 

(6)                                  Includes 95,999shares issuable upon exercise of options exercisable within 60 days of April 15,2009.

 

(7)                                  Includes 75,999shares issuable upon exercise of options exercisable within 60 days of April 15,2009.

 

(8)                                  Includes 95,999shares issuable upon exercise of options exercisable within 60 days of April 15,2009, 81,398 shares held by John D. Diekman and Susan P. Diekman, as trusteesof a revocable trust dated June 30, 1995, and 400 shares held in Mr. Diekman’sretirement account.

 

(9)                                  Includes786,250 shares issuable upon exercise of options exercisable within60 days of April 15, 2009 and 30,000 shares held by The Fodor FamilyTrust.

 

(10)                            Includes 60,000shares issuable upon exercise of options exercisable within 60 days of April 15,2009.

 

(11)                            Includes noshares issuable upon exercise of options exercisable within 60 days of April 15,2009.

 

(12)                            Includes 34,690shares issuable upon exercise of options exercisable, and restricted stockunits vesting, within 60 days of April 15, 2009.

 

(13)                            Includes 35,579shares issuable upon exercise of options exercisable, and restricted stockunits vesting, within 60 days of April 15, 2009.

 

(14)                            Includes 64,690shares  issuable upon exercise of optionsexercisable, and restricted stock units vesting, within 60 days of April 15,2009.

 

(15)                            Includes1,261,706 shares issuable upon exercise of options exercisable, and restrictedstock units vesting, within 60 days of April 15, 2009.

** **

**Equity Compensation Plan Information**

 

The following tablesummarizes information regarding our stock incentive plans as of December 31,2008.

 
| ** **                                                 | ** ** | **(a)**                                                                                                                                          | ** ** | **(b)**                                                                                                     | ** ** | **(c)**                                                                                                                                                                                                    | ** ** |
|------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| **Plan Category**                                     | ** ** | **Number of securities  to be issued upon  exercise of  outstanding options,  warrants and rights** | ** ** | **Weighted-average  exercise price of  outstanding options,  warrants and rights** | ** ** | **Number of securities  remaining available for  future issuance under  equity compensation plans  (excluding securities  reflected in column(a))** | ** ** |
| Equity compensation plans approved by security holders(1)  |       | 5,353,501                                                                                                                                        |       | $                                                                                                           | 21.71      | (3)                                                                                                                                                                                                        | 2,381,394  |   |
| Equity compensation plans not approved by security holders |       | 937,625                                                                                                                                          | (2)        | $                                                                                                           | 30.92      | (3)                                                                                                                                                                                                        | 804,026    | (4) |
| Total                                                      |       | 6,291,126                                                                                                                                        |       | $                                                                                                           | 23.08      | (3)                                                                                                                                                                                                        | 3,185,420  |   |

 

----

(1)                                  Includes theAmended and Restated 1993 Stock Plan and the Amended and Restated 1996Non-Employee Directors Stock Option Plan, which have expired, and the Amendedand Restated 2000 Equity Incentive Plan.

 

(2)                                  Includesoptions under the 1998 Stock Plan plus options to purchase an aggregate of42,654 shares outstanding under the Affymetrix/GMS 1998 Stock Plan, theAffymetrix/Neomorphic 1998 Stock Plan and the Affymetrix/ParAllele 2001 StockPlan (“Acquired Plans”), each of which was assumed in connection withacquisitions by Affymetrix and under which no future awards will be issued.

 

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(3)                                The calculationof the weighted average exercise price does not include 33,706 shares subjectto restricted stock units that are exercisable for no consideration.

 

(4)                                The onlynon-stockholder-approved plan under which shares remain available for issuanceof future awards is the 1998 Stock Incentive Plan, or the 1998 Stock Plan.

 

***1998 Stock Incentive Plan***

 

In 1998, the Board adoptedthe non-stockholder-approved Affymetrix 1998 Stock Incentive Plan, or the 1998Stock Plan. Our directors and officers are not eligible to receive grants underthe 1998 Stock Plan. Options granted under the 1998 Stock Plan expire no laterthan ten years from the date of grant. The option price is required to be atleast 100% of the fair market value of the common stock on the date of grant.Vesting terms of options or restricted stock granted under the 1998 Stock Planfrom time to time are determined by the Board.

 

**ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORINDEPENDENCE**

 

**Certain Transactions**

 

***Related Person Transaction Policy***

 

Under a written policy thathas been adopted by our Board of Directors, we review all transactionsinvolving us in which any of our directors, director nominees, significantshareholders and executive officers or their immediate family members areparticipants to determine whether such person has a direct or indirect materialinterest in the transaction. All directors, director nominees and executiveofficers are required to promptly notify our Secretary of any proposedtransaction involving us and in which such person has a direct or indirectmaterial interest. Such proposed transaction is then reviewed by either ourBoard as a whole or a designated committee thereof consisting of a majority ofindependent directors to determine whether or not to approve or ratify thetransaction based on the following criteria:

 

·                  The characterand materiality of the related person’s interest in the transaction;

 

·                  The commercialreasonableness of the terms of the transaction;

 

·                  The benefit orlack thereof to the company;

 

·                  The opportunitycosts of alternate transactions;

 

·                  The actual orapparent conflict of interest of the related person; and

 

·                  Any othermatters the reviewing body deems appropriate.

 

After such review, thereviewing body approves or ratifies the transaction only if it determines that thetransaction is in, or not inconsistent with, the best interests of the Companyand our stockholders. On an annual basis, the reviewing body reviews previouslyapproved transactions with related parties under the standard described aboveto determine whether such transactions should continue. Transactions involvingPerlegen Sciences, Inc. that would otherwise be subject to the relatedperson transaction policy set forth above are instead reviewed by the PerlegenOversight Committee, as described below.

*** ***

***Relocation Assistance***

 

As part of our December 2006offer letter with Mr. King, we agreed to provide him with relocationassistance in selling his primary residence in New Jersey through a third-partyservice provider. Consistent with this agreement, we arranged through arelocation services firm for the purchase of Mr. King’s house in September 2007for $2,225,000, which was an appraised value of Mr. King’s house asdetermined by independent real estate professionals. This relocation assistancewas approved by the Compensation Committee. As a result of market conditionsand other factors, we recognized a loss of approximately $400,000 upon theresale of the house in April 2008.

 

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***Director and Executive OfficerIndemnification Agreements***

 

We have entered intoindemnification agreements with each of our directors and executive officers.These agreements require us to indemnify our directors and executive officersto the fullest extent permitted by Delaware law.

*** ***

***Perlegen Sciences, Inc.***

 

Perlegen Sciences, Inc.(“Perlegen”) is engaged in the business of scanning human genomes in an effortto identify variations and patterns within the human genome to discover geneticcharacteristics associated with disease, identify responsiveness to drugtherapy and create targeted medicines. We formed Perlegen in 2000 as awholly-owned subsidiary and spun it off in March 2001 in a private equityfinancing which raised approximately $101 million. Following severalsubsequent rounds of private equity financings by Perlegen and our sale of aportion of our Perlegen shares to third parties for cash, our ownershipinterest, including that of our affiliates, was approximately 22% as of December 31,2008. We also have certain commercial and licensing arrangements with Perlegenwhich are described in the Original Filing.

 

Dr. Fodor, ourexecutive chairman, also serves as chairman of the Board of Perlegen, and heholds shares representing approximately 0.84% of Perlegen’s stock as of December 31,2008. Dr. Fodor received no cash compensation from Perlegen in 2006; hereceived $15,000 and $16,250 related to Perlegen board service in 2007 and2008, respectively. Dr. Fodor has also received, as a director ofPerlegen, options to acquire 25,000 shares in 2006 and 50,000 shares in each of2007 and 2008. We have the right to name two representatives to the Perlegenboard of directors, and these positions are currently occupied by Dr. Fodorand Mr. Young, both members of our board of directors. Dr. Berg, whois another of our directors, is a member of Perlegen’s scientific advisoryboard. Mr. Young and Dr. Berg receive customary fees and hold optionsto purchase Perlegen stock as a result of their positions with Perlegen. Dr. Diekmanand Dr. Berg, both members of our board of directors, each serves as atrustee of separate trusts that invested an aggregate of approximately $577,000in the private rounds of Perlegen financings in 2001, 2003 and 2005.Transactions between Perlegen and Affymetrix are overseen by a committee of theAffymetrix board of directors, the Perlegen Oversight Committee, whose membersare Dr. Desmond-Hellmann and Dr. Trice. None of these individualshold positions with, or securities of, Perlegen.

** **

**Director Independence**

 

As required by the NASDAQlisting standards and our *CorporateGovernance Guidelines,* a majority of the Board is “independent” asdefined by the NASDAQ listing standards. The Board is required to make anaffirmative determination at least annually as to the independence of eachdirector. The Board has determined that six of its current members (Paul Berg,Ph.D., Susan D. Desmond-Hellmann, M.D., M.P.H., John D. Diekman, Ph.D., RobertH. Trice, Ph.D., Robert P. Wayman, and John A. Young) are independent.

 

In making the independencedeterminations, the following relationships were considered:

 

·                  Dr. Diekman served as our Chairman from1993 to August 1999 and as our Vice Chairman from July 1999 to December 1999.Dr. Diekman has an interest in venture funds that were minorityshareholders of Panomics, Inc., which we acquired in December 2008for approximately $73 million. Neither Dr. Diekman nor any of theventure funds has received any payment from us, except arising out of suchventure funds’ stock ownership in Panomics. The total amount that Dr. Diekmanhas received or may be entitled to receive through his interest in such venturefunds is less than $120,000.

 

·                  Therelationship between some of our directors and Perlegen, Inc. as disclosedunder “Certain Transactions”, above.

*** ***

***Audit Committee.***  The Audit Committee consists of threemembers, Dr. Diekman, Dr. Trice and Mr. Wayman, its Chairman.The Board has determined that each of the Audit Committee members isindependent within the meaning of the NASDAQ listing standards, applicable SECregulations and our *Corporate GovernanceGuidelines,* and that each member has the financial literacy requiredby the NASDAQ listing standards.

 

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***Compensation Committee.***  The Compensation Committee consists of threemembers, Dr. Berg, Dr. Desmond-Hellmann and Mr. Young, itsChairman. Each of the members of the Compensation Committee is independentwithin the meaning of the NASDAQ listing standards.

*** ***

***Nominating and Corporate Governance Committee.***  The Nominating and Corporate GovernanceCommittee consists of two members, Mr. Young and Dr. Diekman, itsChairman. Each of the members of the Nominating and Corporate GovernanceCommittee is independent within the meaning of the NASDAQ listing standards.

** **

**ITEM14.  PRINCIPAL ACCOUNTING FEES ANDSERVICES**

** **

**Fees Paid to Ernst & Young LLP**

 

During fiscal years 2007 and2008, the aggregate fees billed by Ernst & Young LLP forprofessional services were as follows:

 
| ** **            | ** ** | **Fiscal Year Ended**      | ** ** |
|-----------------------|------------|----------------------------|------------|
| ** **            | ** ** | **December 31, 2008** | ** ** | **December 31, 2007** | ** ** |
| Audit Fees(1)         |       | $                          | 1,765,000  |   | $ | 1,784,000 |   |
| Audit-Related Fees(2) |       | $                          | 331,000    |   | $ | 240,000 |   |
| Tax Fees(3)           |       | $                          | 270,000    |   | $ | 337,000 |   |
| All Other Fees(4)     |       | $                          | 6,000      |   | $ | 6,000 |   |

 

----

(1)                                  Fees for auditservices include fees associated with the audits of (i) our consolidatedfinancial statements and (ii) management’s assessment and theeffectiveness of our internal control over financial reporting, the reviews ofour quarterly reports on Form 10-Q, and statutory audits requiredinternationally. Audit fees also include amounts associated with SECregistration statements and consents.

 

(2)                                  Audit-relatedservices consist primarily of accounting consultations on various transactions.In fiscal 2007, audit-related fees also included amounts associated with duediligence and other related services provided in connection with ouracquisition of USB Corporation. In fiscal 2008, audit-related fees alsoincluded amounts associated with due diligence and other related servicesprovided in connection with our acquisitions of True Materials, Inc. andPanomics, Inc.

 

(3)                                  Tax feesconsist primarily of tax consultation services.

 

(4)                                  The amountlisted as “All Other Fees” consists of fees for products and services otherthan those services reported above.

 

**Audit Committee Pre-Approval of Audit and PermissibleNon-Audit Services of Independent Registered Public Accounting Firm**

** **

As required by the AuditCommittee charter, the Audit Committee pre-approves the engagement of Ernst &Young LLP for all audit and permissible non-audit services. The AuditCommittee annually reviews the audit and permissible non-audit servicesperformed by Ernst & Young LLP and reviews and approves the feescharged by Ernst & Young LLP. The Audit Committee has consideredthe role of Ernst &Young LLP in providing tax and audit servicesand other permissible non-audit services to Affymetrix and has concluded thatthe provision of such services was compatible with the maintenance of Ernst &Young LLP’s independence in the conduct of its auditing functions.

 

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** **

**PART IV**

** **

**ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**

** **

(a)(1)       Financial Statements. The financialstatements required to be filed in our Annual Report on Form 10-K are setforth in Part II, Item 8 of the Original Filing.

 

(a)(2)       Financial Statement Schedules.  The financial statement schedule required tobe filed in our Annual Report on Form 10-K is set forth inSchedule II—Valuation and Qualifying Accounts to the Original Filing. Allother schedules have been omitted as they are not required, not applicable orthe information is otherwise included.

 

(a)(3)       Exhibits:

 
| **EXHIBIT  NUMBER** | ** ** | **DESCRIPTION  OF DOCUMENT**                                                                                                                                                                             |
|---------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.1(1)†        |       | Agreement and Plan of Merger by and among Panomics, Inc., the  Company, Panda Acquisition Corporation and Andrew Schwab, as Equityholders’  Representative dated as of November 11, 2008. |
|                |       |                                                                                                                                                                                                     |
| 3.1(2)              |       | Restated Certificate of Incorporation.                                                                                                                                                                   |
|                |       |                                                                                                                                                                                                     |
| 3.2(3)              |       | Amended and Restated Bylaws.                                                                                                                                                                             |
|                |       |                                                                                                                                                                                                     |
| 3.3(4)              |       | Summary of Rights to Purchase Shares of Preferred Stock pursuant to  the Rights Agreement dated as of October 15, 1998.                                                                             |
|                |       |                                                                                                                                                                                                     |
| 4.1(5)              |       | Rights Agreement, dated October 15, 1998, between the Company  and American Stock Transfer & Trust Company, as Rights Agent.                                                               |
|                |       |                                                                                                                                                                                                     |
| 4.2(6)              |       | Amendment No. 1 to Rights Agreement, dated as of February 7,  2000, between the Company and American Stock Transfer & Trust  Company, as Rights Agent.                                |
|                |       |                                                                                                                                                                                                     |
| 4.3(7)              |       | Indenture dated as of December 15, 2003, between the Company and  The Bank of New York, as Trustee.                                                                                                 |
|                |       |                                                                                                                                                                                                     |
| 4.4(8)              |       | Indenture dated as of November 16, 2007, between the Company and  the Bank of New York Trust Company, N.A. as Trustee.                                                                              |
|                |       |                                                                                                                                                                                                     |
| 10.1(9)‡       |       | 1993 Stock Plan, as amended.                                                                                                                                                                             |
|                |       |                                                                                                                                                                                                     |
| 10.2(9)‡       |       | 1996 Nonemployee Directors Stock Option Plan.                                                                                                                                                            |
|                |       |                                                                                                                                                                                                     |
| 10.3(10)            |       | Lease between Sobrato Interests and the Company dated June 12,  1996 (3380 Central Expressway, Santa Clara, CA).                                                                               |
|                |       |                                                                                                                                                                                                     |
| 10.4(10)            |       | Lease between Sobrato Interests and the Company dated May 31,  1996 (3450 Central Expressway, Santa Clara, CA).                                                                                |
|                |       |                                                                                                                                                                                                     |
| 10.5(11)‡      |       | 1998 Stock Incentive Plan.                                                                                                                                                                               |
|                |       |                                                                                                                                                                                                     |
| 10.6(11)‡      |       | Form of Officer and Director Indemnification Agreement.                                                                                                                                             |
|                |       |                                                                                                                                                                                                     |
| 10.7(12)‡      |       | Amendment No. 1 to the 1996 Nonemployee Directors Stock Option  Plan of the Company                                                                                                                 |
|                |       |                                                                                                                                                                                                     |
| 10.8(13)‡      |       | Amended and Restated 1996 Non-Employee Directors Stock Plan.                                                                                                                                             |
|                |       |                                                                                                                                                                                                     |
| 10.9(14)*           |       | Common Terms Agreement between F. Hoffmann-La Roche Ltd. and the  Company dated January 29, 2003.                                                                                              |

 

19

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| **EXHIBIT  NUMBER** | ** ** | **DESCRIPTION  OF DOCUMENT**                                                                                                                                 |
|---------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.10(14)*          |       | License Agreement between F. Hoffmann-La Roche Ltd. and the  Company dated January 29, 2003.                                                       |
|                |       |                                                                                                                                                         |
| 10.11(14)*          |       | Affymetrix Instrument and Chip Supply Agreement between  F. Hoffmann-La Roche Ltd. and the Company dated  January 29, 2003.              |
|                |       |                                                                                                                                                         |
| 10.12(14)*          |       | Research & Development Collaboration Agreement between  F. Hoffmann-La Roche Ltd. and the Company dated  January 29, 2003.      |
|                |       |                                                                                                                                                         |
| 10.13(14)*          |       | Diagnostic Product and Instrument Agency Agreement between  F. Hoffmann-La Roche Ltd. and the Company dated  January 29, 2003.           |
|                |       |                                                                                                                                                         |
| 10.14(14)*          |       | Affymetrix Instrument Agency Agreement between F. Hoffmann-La  Roche Ltd. and the Company dated January 29, 2003.                                  |
|                |       |                                                                                                                                                         |
| 10.15(15)           |       | Lease between Sobrato Interests and the Company dated July 3,  2002 (3420 Central Expressway, Santa Clara, CA).                                         |
|                |       |                                                                                                                                                         |
| 10.16(15)           |       | First Amendment to Lease between Sobrato Interests and the Company  dated September 30, 2003 (3420 Central Expressway, Santa Clara, CA).                |
|                |       |                                                                                                                                                         |
| 10.17(16)‡     |       | Affymetrix, Inc. Amended and Restated 2000 Equity Incentive  Plan, as adopted effective March 9, 2000 and amended through  June 23, 2008.     |
|                |       |                                                                                                                                                         |
| 10.18(17)‡     |       | Form of Non-Qualified Stock Option Agreement under the  Affymetrix, Inc. Amended and Restated 1996 Non-Employee Directors Stock  Plan.             |
|                |       |                                                                                                                                                         |
| 10.19(1)‡      |       | Form of Stock Option Agreement under the Affymetrix, Inc.  Amended and Restated 2000 Equity Incentive Plan.                                        |
|                |       |                                                                                                                                                         |
| 10.20(A)(18)‡  |       | Nonqualified Supplemental Deferred Compensation Plan of the Company                                                                                          |
|                |       |                                                                                                                                                         |
| 10.20(B)(18)‡  |       | Nonqualified Supplemental Deferred Compensation Plan Adoption  Agreement.                                                                                    |
|                |       |                                                                                                                                                         |
| 10.21(19)           |       | Fifth Amendment to Lease between Sobrato Interests and the Company  dated July 3, 2002 (3380 Central Expressway, Santa Clara, CA).                      |
|                |       |                                                                                                                                                         |
| 10.22(19)           |       | First Amendment to Lease between Sobrato Interests and the Company  dated July 3, 2002 (3450 Central Expressway, Santa Clara, CA).                      |
|                |       |                                                                                                                                                         |
| 10.23(20)           |       | Lease between Keppel Logistics Pte Ltd. and Affymetrix  Pte Ltd. dated as of January 1, 2006 (7 Gul Circle, Singapore  629363).               |
|                |       |                                                                                                                                                         |
| 10.24(1)‡      |       | Form of Restricted Stock Agreement under the Affymetrix, Inc.  Amended and Restated 2000 Equity Incentive Plan.                                    |
|                |       |                                                                                                                                                         |
| 10.25(21)‡     |       | Agreement between the Company and Thane Kreiner, Ph.D. dated  May 10, 2006.                                                                             |
|                |       |                                                                                                                                                         |
| 10.26(22)‡     |       | Agreement between the Company and Susan E. Siegel dated May 30,  2006.                                                                                  |
|                |       |                                                                                                                                                         |
| 10.27(23)‡     |       | Offer Letter from the Company to Kevin M. King dated  December 18, 2006.                                                                                |
|                |       |                                                                                                                                                         |
| 10.28(24)**         |       | Amendment Agreement dated December 22, 2006 by and among  F. Hoffmann-La Roche Ltd., Roche Molecular Systems, Inc.  and the Company |

 

20

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| **EXHIBIT  NUMBER** | ** ** | **DESCRIPTION  OF DOCUMENT**                                                                                                                         |
|---------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.29(25)‡     |       | Offer Letter from the Company to John C. Batty dated May 16,  2007.                                                                             |
|                |       |                                                                                                                                                 |
| 10.30(26)‡     |       | Separation Agreement dated July 27, 2007 between the Company and  Thane Kreiner.                                                                |
|                |       |                                                                                                                                                 |
| 10.31(27)           |       | Settlement and Release Agreement dated January 9, 2008 between  the Company and Illumina, Inc.                                             |
|                |       |                                                                                                                                                 |
| 10.32(28)           |       | Affymetrix, Inc. Change of Control Plan, as amended through  November 5, 2008.                                                             |
|                |       |                                                                                                                                                 |
| 10.33(28)‡     |       | Offer Letter from the Company to John F. (Rick) Runkel dated  October 6, 2008.                                                                  |
|                |       |                                                                                                                                                 |
| 10.34(1)‡      |       | Offer Letter from the Company to Frank Witney dated November 7,  2008.                                                                          |
|                |       |                                                                                                                                                 |
| 21(1)               |       | List of Subsidiaries.                                                                                                                                |
|                |       |                                                                                                                                                 |
| 23(1)               |       | Consent of Independent Registered Public Accounting Firm.                                                                                            |
|                |       |                                                                                                                                                 |
| 31.1(1)             |       | Certification of Chief Executive Officer Pursuant to Section 302  of Sarbanes-Oxley Act of 2002 with respect to the Original Filing.            |
|                |       |                                                                                                                                                 |
| 31.2(1)             |       | Certification of Principal Financial Officer Pursuant to  Section 302 of Sarbanes-Oxley Act of 2002 with respect to the Original  Filing.       |
|                |       |                                                                                                                                                 |
| 31.3                |       | Certification of Chief Executive Officer Pursuant to Section 302  of Sarbanes-Oxley Act of 2002 with respect to this Amendment No. 1.      |
|                |       |                                                                                                                                                 |
| 31.4                |       | Certification of Principal Financial Officer Pursuant to  Section 302 of Sarbanes-Oxley Act of 2002 with respect to this Amendment  No. 1. |
|                |       |                                                                                                                                                 |
| 32.1(1)             |       | Certification of Chief Executive Officer Pursuant to Section 906  of Sarbanes-Oxley Act of 2002.                                                |
|                |       |                                                                                                                                                 |
| 32.2(1)             |       | Certification of Principal Financial Officer Pursuant to  Section 906 of Sarbanes-Oxley Act of 2002.                                            |

 

----

(1)                                  Incorporated byreference to the corresponding exhibit to the Original Filing (File No. 000-28218).

 

(2)                                  Incorporated byreference to Registrant’s Form 8-K as filed on June 13, 2000 (File No. 000-28218).

 

(3)                                  Incorporated byreference to Registrant’s Form 10-Q as filed on November 7, 2008(File No. 000-28218).

 

(4)                                  Incorporated byreference to Registrant’s Form 8-K as filed on October 16, 1998 (FileNo. 000-28218).

 

(5)                                  Incorporated byreference to Registrant’s Form 8-A as filed on October 16, 1998 (FileNo. 000-28218).

 

(6)                                  Incorporated byreference to Registrant’s Form 8-A/A as filed on March 29, 2000 (FileNo. 000-28218).

 

(7)                                  Incorporated byreference to Registrant’s Form S-3 as filed on January 29, 2004 (FileNo. 333-112311).

 

(8)                                  Incorporated byreference to Registrant’s Form 8-K as filed on November 19, 2007(File No. 000-28218).

 

(9)                                  Incorporated byreference to Registrant’s Registration Statement on Form S-1 (File No. 333-3648),as amended.

 

(10)                            Incorporated byreference to Registrant’s Quarterly Report on Form 10-Q as filed on August 14,1996 (File No. 000-28218).

 

21

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(11)                            Incorporated byreference to Registrant’s Report on Form 10-K as filed on March 31,1999 (File No. 000-28218).

 

(12)                            Incorporated byreference to Registrant’s Registration Statement on Form S-3 as filed on July 12,1999 (File No. 333-82685), as amended.

 

(13)                            Incorporated byreference to Registrant’s Form 10-Q as filed on May 15, 2001 (File No. 000-28218).

 

(14)                            Incorporated byreference to Registrant’s Form 10-Q as filed on May 15, 2003 (File No. 000-28218).

 

(15)                            Incorporated byreference to Registrant’s Form 10-K as filed on March 15, 2004 (File No. 000-28218).

 

(16)                            Incorporated byreference to Registrant’s Form 10-Q as filed on August 8, 2008 (File No. 000-28218).

 

(17)                            Incorporated byreference to Registrant’s Form 10-Q as filed on November 9, 2004(File No. 000-28218).

 

(18)                            Incorporated byreference to Registrant’s Form 8-K as filed on November 7, 2008 (FileNo. 000-28218).

 

(19)                            Incorporated byreference to Registrant’s Form 10-K as filed on March 16, 2005 (File No. 000-28218).

 

(20)                            Incorporated byreference to Registrant’s Form 10-K as filed on March 9, 2006 (File No. 000-28218).

 

(21)                            Incorporated byreference to Registrant’s Form 10-K as filed on March 1, 2007 (File No. 000-28218).

 

(22)                            Incorporated byreference to Registrant’s Form 8-K as filed on May 30, 2006 (File No. 000-28218).

 

(23)                            Incorporated byreference to Registrant’s Form 8-K as filed on December 19, 2006(File No. 000-28218).

 

(24)                            Incorporated byreference to Registrant’s Form 8-K as filed on December 22, 2006(File No. 000-28218).

 

(25)                            Incorporated byreference to Registrant’s Form 8-K as filed on June 6, 2007 (File No. 000-28218).

 

(26)                            Incorporated byreference to Registrant’s Form 8-K as filed on August 1, 2007 (File No. 000-28218).

 

(27)                            Incorporated byreference to Registrant’s Form 10-K as filed on February 29, 2008(File No. 000-28218).

 

(28)                            Incorporated byreference to Registrant’s Form 10-Q as filed on November 7, 2008(File No. 000-28218).

 

†                                          The merger agreementhas been included with the Original Filing to provide you with informationregarding its terms and is not intended to modify or supplement any factualdisclosures about the Company or Panomics in our public reports filed with theSEC. In particular, the merger agreement is not intended to be, and should notbe relied upon as, disclosure regarding any facts and circumstances relating tothe Company or Panomics. The representations and warranties were negotiatedwith the principal purpose of establishing the circumstances in which a partymay have the right not to close the merger if the representations andwarranties of the other party proved to be untrue due to a change incircumstance or otherwise, and allocated risk between the parties rather than establishingmatters as facts.  The representationsand warranties also may be subject to a contractual standard of materialitydifferent from those generally applicable to shareholders.

 

‡                                          Managementcontract, compensatory plan, contract or arrangement

 

*                                         Confidentialtreatment granted

 

**                                  Confidentialtreatment requested

 

22

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** **

**SIGNATURES**

** **

Pursuant to the requirementsof Section 13 or 15(d) of the Securities Exchange Act of 1934, theregistrant has caused this report to be signed on its behalf by theundersigned, thereunto duly authorized.

 
|                | AFFYMETRIX, INC.  (Registrant) |
|---------------------|--------------------------------|
|                |                           |
|                | By:                            | */S/*KEVIN M. KING |
| April 29, 2009 |                           | Kevin M. King. |
|                |                           | *DIRECTOR,  PRESIDENT AND   CHIEF EXECUTIVE OFFICER* |

 

Pursuant to the requirementsof the Securities Exchange Act of 1934, this report has been signed below bythe following persons on behalf of the registrant and in the capacities and onthe dates indicated.

 
| ** ** | **Name**                         | ** ** | **Title**                                                      | ** ** | **Date**            |
|------------|----------------------------------|------------|----------------------------------------------------------------|------------|---------------------|
|       |                             |       |                                                           |       |                |
| By:        | /s/ KEVIN M. KING                |       | Director, President and Chief Executive Officer                |       |                |
|       | Kevin M. King                    |       | (Principal Executive Officer)                                  |       | April 29, 2009 |
|       |                             |       |                                                           |       |                |
| By:        | */s/*JOHN C. BATTY               |       | Executive Vice President and Chief Financial Officer           |       |                |
|       | John C. Batty                    |       | (Principal Financial Officer and Principal Accounting Officer) |       | April 29, 2009 |
|       |                             |       |                                                           |       |                |
| By:        | *                                |       | Founder and Executive Chairman of the Board                    |       |                |
|       | Stephen P.A. Fodor, Ph.D.        |       |                                                           |       | April 29, 2009 |
|       |                             |       |                                                           |       |                |
| By:        | *                                |       | Director                                                       |       | April 29, 2009 |
|       | Paul Berg, Ph.D.                 |       |                                                           |       |                |
|       |                             |       |                                                           |       |                |
| By:        | *                                |       | Director                                                       |       | April 29, 2009 |
|       | Susan D. Desmond-Hellmann,  M.D. |       |                                                           |       |                |
|       |                             |       |                                                           |       |                |
| By:        | *                                |       | Director                                                       |       | April 29, 2009 |
|       | John D. Diekman, Ph.D.           |       |                                                           |       |                |
|       |                             |       |                                                           |       |                |
| By:        | *                                |       | Director                                                       |       | April 29, 2009 |
|       | Robert H. Trice, Ph.D.           |       |                                                           |       |                |
|       |                             |       |                                                           |       |                |
| By:        | *                                |       | Director                                                       |       | April 29, 2009 |
|       | Robert P. Wayman                 |       |                                                           |       |                |
|       |                             |       |                                                           |       |                |
| By:        | *                                |       | Director                                                       |       | April 29, 2009 |
|       | John A. Young                    |       |                                                           |       |                |

 
| (*)    | By:                                                                                       | */s/*JOHN C. BATTY |   |
|--------|-------------------------------------------------------------------------------------------|--------------------|--------|
|   | John C. Batty                                                                             |               |
|   | Attorney-in-Fact, pursuant to the power of attorney  filed as part of the Original Filing |

 

23

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** **

**INDEX TO EXHIBITS**

** **
| **EXHIBIT  NUMBER** | ** ** | **DESCRIPTION  OF DOCUMENT**                                                                                                                                                                             |
|---------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.1(1)†        |       | Agreement and Plan of Merger by and among Panomics, Inc., the  Company, Panda Acquisition Corporation and Andrew Schwab, as Equityholders’  Representative dated as of November 11, 2008. |
|                |       |                                                                                                                                                                                                     |
| 3.1(2)              |       | Restated Certificate of Incorporation.                                                                                                                                                                   |
|                |       |                                                                                                                                                                                                     |
| 3.2(3)              |       | Amended and Restated Bylaws.                                                                                                                                                                             |
|                |       |                                                                                                                                                                                                     |
| 3.3(4)              |       | Summary of Rights to Purchase Shares of Preferred Stock pursuant to  the Rights Agreement dated as of October 15, 1998.                                                                             |
|                |       |                                                                                                                                                                                                     |
| 4.1(5)              |       | Rights Agreement, dated October 15, 1998, between the Company  and American Stock Transfer & Trust Company, as Rights Agent.                                                               |
|                |       |                                                                                                                                                                                                     |
| 4.2(6)              |       | Amendment No. 1 to Rights Agreement, dated as of  February 7, 2000, between the Company and American Stock  Transfer & Trust Company, as Rights Agent.                                |
|                |       |                                                                                                                                                                                                     |
| 4.3(7)              |       | Indenture dated as of December 15, 2003, between the Company and  The Bank of New York, as Trustee.                                                                                                 |
|                |       |                                                                                                                                                                                                     |
| 4.4(8)              |       | Indenture dated as of November 16, 2007, between the Company and  the Bank of New York Trust Company, N.A. as Trustee.                                                                              |
|                |       |                                                                                                                                                                                                     |
| 10.1(9)‡       |       | 1993 Stock Plan, as amended.                                                                                                                                                                             |
|                |       |                                                                                                                                                                                                     |
| 10.2(9)‡       |       | 1996 Nonemployee Directors Stock Option Plan.                                                                                                                                                            |
|                |       |                                                                                                                                                                                                     |
| 10.3(10)            |       | Lease between Sobrato Interests and the Company dated June 12,  1996 (3380 Central Expressway, Santa Clara, CA).                                                                               |
|                |       |                                                                                                                                                                                                     |
| 10.4(10)            |       | Lease between Sobrato Interests and the Company dated May 31,  1996 (3450 Central Expressway, Santa Clara, CA).                                                                                |
|                |       |                                                                                                                                                                                                     |
| 10.5(11)‡      |       | 1998 Stock Incentive Plan.                                                                                                                                                                               |
|                |       |                                                                                                                                                                                                     |
| 10.6(11)‡      |       | Form of Officer and Director Indemnification Agreement.                                                                                                                                             |
|                |       |                                                                                                                                                                                                     |
| 10.7(12)‡      |       | Amendment No. 1 to the 1996 Nonemployee Directors Stock Option  Plan of the Company                                                                                                                 |
|                |       |                                                                                                                                                                                                     |
| 10.8(13)‡      |       | Amended and Restated 1996 Non-Employee Directors Stock Plan.                                                                                                                                             |
|                |       |                                                                                                                                                                                                     |
| 10.9(14)*           |       | Common Terms Agreement between F. Hoffmann-La Roche Ltd. and the  Company dated January 29, 2003.                                                                                              |
|                |       |                                                                                                                                                                                                     |
| 10.10(14)*          |       | License Agreement between F. Hoffmann-La Roche Ltd. and the  Company dated January 29, 2003.                                                                                                   |
|                |       |                                                                                                                                                                                                     |
| 10.11(14)*          |       | Affymetrix Instrument and Chip Supply Agreement between  F. Hoffmann-La Roche Ltd. and the Company dated  January 29, 2003.                                                          |
|                |       |                                                                                                                                                                                                     |
| 10.12(14)*          |       | Research & Development Collaboration Agreement between  F. Hoffmann-La Roche Ltd. and the Company dated  January 29, 2003.                                                  |

 

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Table of Contents

 
| **EXHIBIT  NUMBER** | ** ** | **DESCRIPTION  OF DOCUMENT**                                                                                                                                 |
|---------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.13(14)*          |       | Diagnostic Product and Instrument Agency Agreement between  F. Hoffmann-La Roche Ltd. and the Company dated January 29,  2003.           |
|                |       |                                                                                                                                                         |
| 10.14(14)*          |       | Affymetrix Instrument Agency Agreement between F. Hoffmann-La  Roche Ltd. and the Company dated January 29, 2003.                                  |
|                |       |                                                                                                                                                         |
| 10.15(15)           |       | Lease between Sobrato Interests and the Company dated July 3,  2002 (3420 Central Expressway, Santa Clara, CA).                                         |
|                |       |                                                                                                                                                         |
| 10.16(15)           |       | First Amendment to Lease between Sobrato Interests and the Company  dated September 30, 2003 (3420 Central Expressway, Santa Clara, CA).                |
|                |       |                                                                                                                                                         |
| 10.17(16)‡     |       | Affymetrix, Inc. Amended and Restated 2000 Equity Incentive  Plan, as adopted effective March 9, 2000 and amended through  June 23, 2008.     |
|                |       |                                                                                                                                                         |
| 10.18(17)‡     |       | Form of Non-Qualified Stock Option Agreement under the  Affymetrix, Inc. Amended and Restated 1996 Non-Employee Directors Stock  Plan.             |
|                |       |                                                                                                                                                         |
| 10.19(1)‡      |       | Form of Stock Option Agreement under the Affymetrix, Inc.  Amended and Restated 2000 Equity Incentive Plan.                                        |
|                |       |                                                                                                                                                         |
| 10.20(A)(18)‡  |       | Nonqualified Supplemental Deferred Compensation Plan of the Company                                                                                          |
|                |       |                                                                                                                                                         |
| 10.20(B)(18)‡  |       | Nonqualified Supplemental Deferred Compensation Plan Adoption Agreement.                                                                                     |
|                |       |                                                                                                                                                         |
| 10.21(19)           |       | Fifth Amendment to Lease between Sobrato Interests and the Company  dated July 3, 2002 (3380 Central Expressway, Santa Clara, CA).                      |
|                |       |                                                                                                                                                         |
| 10.22(19)           |       | First Amendment to Lease between Sobrato Interests and the Company  dated July 3, 2002 (3450 Central Expressway, Santa Clara, CA).                      |
|                |       |                                                                                                                                                         |
| 10.23(20)           |       | Lease between Keppel Logistics Pte Ltd. and Affymetrix  Pte Ltd. dated as of January 1, 2006 (7 Gul Circle, Singapore  629363).               |
|                |       |                                                                                                                                                         |
| 10.24(1)‡      |       | Form of Restricted Stock Agreement under the Affymetrix, Inc.  Amended and Restated 2000 Equity Incentive Plan.                                    |
|                |       |                                                                                                                                                         |
| 10.25(21)‡     |       | Agreement between the Company and Thane Kreiner, Ph.D. dated  May 10, 2006.                                                                             |
|                |       |                                                                                                                                                         |
| 10.26(22)‡     |       | Agreement between the Company and Susan E. Siegel dated May 30,  2006.                                                                                  |
|                |       |                                                                                                                                                         |
| 10.27(23)‡     |       | Offer Letter from the Company to Kevin M. King dated  December 18, 2006.                                                                                |
|                |       |                                                                                                                                                         |
| 10.28(24)**         |       | Amendment Agreement dated December 22, 2006 by and among  F. Hoffmann-La Roche Ltd., Roche Molecular Systems, Inc.  and the Company |
|                |       |                                                                                                                                                         |
| 10.29(25)‡     |       | Offer Letter from the Company to John C. Batty dated May 16,  2007.                                                                                     |
|                |       |                                                                                                                                                         |
| 10.30(26)‡     |       | Separation Agreement dated July 27, 2007 between the Company and  Thane Kreiner.                                                                        |
|                |       |                                                                                                                                                         |
| 10.31(27)           |       | Settlement and Release Agreement dated January 9, 2008 between  the Company and Illumina, Inc.                                                     |
|                |       |                                                                                                                                                         |
| 10.32(28)           |       | Affymetrix, Inc. Change of Control Plan, as amended through  November 5, 2008.                                                                     |

 

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Table of Contents

 
| **EXHIBIT  NUMBER** | ** ** | **DESCRIPTION  OF DOCUMENT**                                                                                                                         |
|---------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.33(28)‡     |       | Offer Letter from the Company to John F. (Rick) Runkel dated  October 6, 2008.                                                                  |
|                |       |                                                                                                                                                 |
| 10.34(1)‡      |       | Offer Letter from the Company to Frank Witney dated November 7,  2008.                                                                          |
|                |       |                                                                                                                                                 |
| 21(1)               |       | List of Subsidiaries.                                                                                                                                |
|                |       |                                                                                                                                                 |
| 23(1)               |       | Consent of Independent Registered Public Accounting Firm.                                                                                            |
|                |       |                                                                                                                                                 |
| 31.1(1)             |       | Certification of Chief Executive Officer Pursuant to Section 302  of Sarbanes-Oxley Act of 2002 with respect to the Original Filing.            |
|                |       |                                                                                                                                                 |
| 31.2(1)             |       | Certification of Principal Financial Officer Pursuant to  Section 302 of Sarbanes-Oxley Act of 2002 with respect to the Original  Filing.       |
|                |       |                                                                                                                                                 |
| 31.3                |       | Certification of Chief Executive Officer Pursuant to Section 302  of Sarbanes-Oxley Act of 2002 with respect to this Amendment No. 1.      |
|                |       |                                                                                                                                                 |
| 31.4                |       | Certification of Principal Financial Officer Pursuant to  Section 302 of Sarbanes-Oxley Act of 2002 with respect to this Amendment  No. 1. |
|                |       |                                                                                                                                                 |
| 32.1(1)             |       | Certification of Chief Executive Officer Pursuant to Section 906  of Sarbanes-Oxley Act of 2002.                                                |
|                |       |                                                                                                                                                 |
| 32.2(1)             |       | Certification of Principal Financial Officer Pursuant to Section 906  of Sarbanes-Oxley Act of 2002.                                            |

 

----

(1)                                  Incorporated byreference to the corresponding exhibit to the Original Filing (File No. 000-28218).

 

(2)                                  Incorporated byreference to Registrant’s Form 8-K as filed on June 13, 2000 (File No. 000-28218).

 

(3)                                  Incorporated byreference to Registrant’s Form 10-Q as filed on November 7, 2008(File No. 000-28218).

 

(4)                                  Incorporated byreference to Registrant’s Form 8-K as filed on October 16, 1998 (FileNo. 000-28218).

 

(5)                                  Incorporated byreference to Registrant’s Form 8-A as filed on October 16, 1998 (FileNo. 000-28218).

 

(6)                                  Incorporated byreference to Registrant’s Form 8-A/A as filed on March 29, 2000 (FileNo. 000-28218).

 

(7)                                  Incorporated byreference to Registrant’s Form S-3 as filed on January 29, 2004 (FileNo. 333-112311).

 

(8)                                  Incorporated byreference to Registrant’s Form 8-K as filed on November 19, 2007(File No. 000-28218).

 

(9)                                  Incorporated byreference to Registrant’s Registration Statement on Form S-1 (File No. 333-3648),as amended.

 

(10)                            Incorporated byreference to Registrant’s Quarterly Report on Form 10-Q as filed on August 14,1996 (File No. 000-28218).

 

(11)                            Incorporated byreference to Registrant’s Report on Form 10-K as filed on March 31,1999 (File No. 000-28218).

 

(12)                            Incorporated byreference to Registrant’s Registration Statement on Form S-3 as filed on July 12,1999 (File No. 333-82685), as amended.

 

(13)                            Incorporated byreference to Registrant’s Form 10-Q as filed on May 15, 2001 (File No. 000-28218).

 

(14)                            Incorporated byreference to Registrant’s Form 10-Q as filed on May 15, 2003 (File No. 000-28218).

 

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Table of Contents

 

(15)                            Incorporated byreference to Registrant’s Form 10-K as filed on March 15, 2004 (File No. 000-28218).

 

(16)                            Incorporated byreference to Registrant’s Form 10-Q as filed on August 8, 2008 (File No. 000-28218).

 

(17)                            Incorporated byreference to Registrant’s Form 10-Q as filed on November 9, 2004(File No. 000-28218).

 

(18)                            Incorporated byreference to Registrant’s Form 8-K as filed on November 7, 2008 (FileNo. 000-28218).

 

(19)                            Incorporated byreference to Registrant’s Form 10-K as filed on March 16, 2005 (File No. 000-28218).

 

(20)                            Incorporated byreference to Registrant’s Form 10-K as filed on March 9, 2006 (File No. 000-28218).

 

(21)                            Incorporated byreference to Registrant’s Form 10-K as filed on March 1, 2007 (File No. 000-28218).

 

(22)                            Incorporated byreference to Registrant’s Form 8-K as filed on May 30, 2006 (File No. 000-28218).

 

(23)                            Incorporated byreference to Registrant’s Form 8-K as filed on December 19, 2006(File No. 000-28218).

 

(24)                            Incorporated byreference to Registrant’s Form 8-K as filed on December 22, 2006(File No. 000-28218).

 

(25)                            Incorporated byreference to Registrant’s Form 8-K as filed on June 6, 2007 (File No. 000-28218).

 

(26)                            Incorporated byreference to Registrant’s Form 8-K as filed on August 1, 2007 (File No. 000-28218).

 

(27)                            Incorporated byreference to Registrant’s Form 10-K as filed on February 29, 2008(File No. 000-28218).

 

(28)                            Incorporated byreference to Registrant’s Form 10-Q as filed on November 7, 2008(File No. 000-28218).

 

†                                          The mergeragreement has been included with the Original Filing to provide you withinformation regarding its terms and is not intended to modify or supplement anyfactual disclosures about the Company or Panomics in our public reports filedwith the SEC. In particular, the merger agreement is not intended to be, andshould not be relied upon as, disclosure regarding any facts and circumstancesrelating to the Company or Panomics. The representations and warranties werenegotiated with the principal purpose of establishing the circumstances inwhich a party may have the right not to close the merger if the representationsand warranties of the other party proved to be untrue due to a change incircumstance or otherwise, and allocated risk between the parties rather thanestablishing matters as facts.  Therepresentations and warranties also may be subject to a contractual standard ofmateriality different from those generally applicable to shareholders.

 

‡                                          Managementcontract, compensatory plan, contract or arrangement

 

*                                         Confidentialtreatment granted

 

**                                  Confidentialtreatment requested

 

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