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**EXHIBIT 10.26**

May 10, 2006

 

Thane Kreiner, Ph.D. Affymetrix, Inc. 3420 Central Expressway Santa Clara, CA 95054

 

Dear Dr. Kreiner:

 

Thisletter agreement (the “Agreement”)****will set forth our mutual agreementto change your role with Affymetrix, Inc. (the “Company”), effective as ofApril 20, 2006.

 

1.             *Position with theCompany. *You will becomeSenior Vice President of Marketing and Sales for the Company, with duties andresponsibilities determined by the CEO and reporting to the CEO.

 

2.             *Salary, Benefits andEquity. *While you remainemployed with the Company, you will receive an annual base salary of $335,000,payable in accordance with the Company’s standard payroll practices. You willbe eligible for an annual bonus of up to 60% of your annual salary andadditional stock awards in accordance with company compensation guidelines,including specifically 10,000 restricted shares to be given during the 2006equity awards for other employees. During your employment, you will continue to be eligible for employeebenefits under the terms of the Company’s benefit plans, and your equity awardswill continue to vest and remain outstanding in accordance with their terms.

 

3.             *Terminationof Employment.*

 

(a)           *At-WillEmployment. *Your employmentremains at-will, and no special or implied conditions of employment areestablished unless they are made in writing.

 

(b)           *Termination. *In the event your employment isterminated by the Company before the 18-month anniversary of the EffectiveDate, you will be entitled to receive the following, subject to your signingand letting become effective a release in the form set forth in Section 4 ofthis agreement and continued compliance with the covenants set forth in theConfidentiality Agreement, and Section 5 of this agreement: (i) an amount equalto the remaining base salary you would have received had you remained employedthrough such 18-month anniversary; (ii) continued Company-paid health coveragethrough the end of such 18-month anniversary; and, (iii) vesting of your equityawards to the extent they would have vested during such 18-month period had youremained employed.

 

(c)           *Return to FormerPosition with the Company.  *(i) At the end of 18 months asSenior Vice President for Marketing and Sales, at your option, you can returnto the position you held before the effective date of this agreement with thesame duties, salary, benefits, bonuses and equity awards of that position whenyou last held it.  The salary for theposition shall include any raises during the period before you returned to theposition. or (ii) if you leave the Senior Vice President of Marketing and Salesposition before 18 months, you are entitled to return to the

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position you held before theeffective date of this agreement with the same benefits described in (i) above,or become an Affymetrix fellow either for 18 months from the effective date ofthis agreement or 1 year from the end date of the Senior Vice President ofMarketing and Sales position, whichever is longer with the same salary,benefits, bonuses and equity awards as the position held before you assumed theposition of Senior Vice President of Marketing and Sales with duties to bedecided by the CEO.

 

4.             *Release.  *(a)  Youacknowledge that the following release shall extend to unknown, as well asknown claims, and hereby waive the application of any provision of law,including, without limitation, Section 1542**of the California Civil Code, thatpurports to limit the scope of a general release. Section 1542**ofthe California Civil Code provides:

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**“A GENERAL RELEASE****DOESNOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT****KNOW****ORSUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IFKNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”**

 

(b)           You agree to and****do fully and completely release, dischargeand waive any and all claims, complaints, causes of action or demands ofwhatever kind which you have or may have against the Company, its subsidiaries,affiliates, predecessors and successors and all its directors, officers,employees, stockholders and other investors by reason of any event, matter,cause or thing which has occurred prior to the date hereof (“Executive Claims”).You understand and accept that this Agreement specifically covers, but is notlimited to, any and all Executive Claims relating in any way to compensation,to any previous agreements between you and the Company related to youremployment, or to any other terms, conditions or circumstances of youremployment with the Company, whether for severance or based on statutory orcommon law claims for employment discrimination (including discrimination onthe basis of sex, age, religion or disability, including specifically anyclaims under the Age Discrimination in Employment Act (the “ADEA”),****Title VII of the Civil Rights Act of 1964, asamended, or the Americans with Disabilities Act of 1990), wrongful discharge,breach of contract or any other theory, whether legal or equitable.  Notwithstanding the foregoing, you do notwaive any rights to which you may be entitled to seek indemnification withrespect to liability incurred by you as an officer or director of the Companyin accordance with the Company’s bylaws and the indemnification agreementbetween you and the Company.

 

5.             *Outside Activities; Non-Solicitation, NoDisparagement.*

 

(a)           *Outside Activities.  *During your employment with the Company, you will not (i) engage inany other gainful employment, business or activity without the written consentof the CEO; (ii) assist any person or organization in competing with theCompany or its affiliates, in preparing to compete with the Company or itsaffiliates or in hiring any employees of the Company or its affiliates; (iii)own, directly or indirectly, any capital stock of any company which is incompetition with any line of business conducted by the Company or itsaffiliates; *provided*that (A) youmay own, directly or directly, up to 1% of the outstanding capital stock of anypublicly traded corporation in a passive investment and (B) you may serve onother corporate, civic or charitable boards or committees with the consent ofthe CEO so long as such service does not prevent you from carrying out yourduties and responsibilities to the Company.

 

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(b)           *Non-Solicitation.  *You acknowledge and recognize the highly competitive nature of thebusinesses of the Company and its affiliates and accordingly agree that duringyour employment with the Company and for a period of six months aftertermination: (i) you will not directly or indirectly induce any employee of theCompany or any of its affiliates to terminate his or her employment with theCompany or any of its affiliates; and (ii) you will not directly or indirectlysolicit customers or suppliers of the Company based on confidential informationof the Company or induce any such person to terminate his, her or itsrelationships with the Company.

 

(c)           *No Disparagement.  *During and after your employment with the Company, you agree thatyou shall not make negative statements or representations, or otherwisecommunicate negatively, directly or indirectly, in writing, orally, orotherwise, or take any action which may, directly or indirectly, disparage orbe damaging to the Company, its subsidiaries, affiliates, successors or theirofficers, directors, employees, business or reputation, except as may berequired by law or by any regulatory authority. The Company agrees that neitherit nor its officers and directors shall make any negative statements orrepresentations, or otherwise communicate negatively, directly or indirectly,in writing, orally or otherwise, or take any action which may, directly orindirectly, disparage or be damaging to you or your reputation.

 

6.             *Remedies. *(a)  You acknowledge and agree that the Company’sremedies at law for a breach or threatened breach of any of the provisions ofSection 5**of this Agreement would be inadequate and, inrecognition of this fact, you agree that, in the event of a breach orthreatened breach, in addition to any remedies at law, the Company, withoutposting any bond, shall be entitled to obtain equitable relief in the form ofspecific performance, temporary restraining order, temporary or permanentinjunction or any other equitable remedy which may then be available.

 

(b)           It is expressly understood and agreed that although youand the Company consider the restrictions contained in Section 5**tobe reasonable, if a final judicial determination is made by a court ofcompetent jurisdiction that the time or territory or any other restrictioncontained in Section 5**is an unenforceable restrictionagainst you, the provisions of Section 5**shall not be rendered void butshall be deemed amended to apply as to such maximum time and territory and tosuch other maximum extent as such court may judicially determine or indicate tobe enforceable.

 

7*.             EntireAgreement; Amendment. *Except as expressly set forth herein, andexcept for the Confidentiality Agreement, this Agreement shall supersede anyand all existing agreements between you and the Company or any of itsaffiliates relating to the terms of your employment and contains the entireunderstanding of the parties with respect to your employment.  This Agreement may not be altered, modifiedor amended except by a written agreement signed by both parties hereto.

 

8.             *No Waiver. *The failure of a party to insistupon strict adherence to any term of this Agreement on any occasion shall notbe considered a waiver of such party’s rights or deprive such party of theright thereafter to insist upon strict adherence to that term or any other termof this Agreement.

 

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9.*             Severability. *In the event that any one or more of theprovisions of this Agreement shall be or become invalid, illegal orunenforceable in any respect, the validity, legality or enforceability of theremaining provisions of this Agreement shall not be affected thereby.

 

10.           *Assignment. *This Agreement shall inure to thebenefit of and be binding upon the parties hereto and their respective heirs,representatives, successors and assigns. This Agreement shall not be assignableby you and shall be assignable by the Company only to an affiliate or successorthereof.

 

11.           *Acknowledgement. *You acknowledge that you havecarefully read this Agreement, fully understand and accept all of itsprovisions and sign it voluntarily of your own free will.

 

12.           *Withholding. *You agree that any payments towhich you may be entitled pursuant to this Agreement are subject to withholdingby the Company of any applicable federal, state or local taxes; *provided*that you understand that you remainultimately responsible for any tax consequences hereunder.

 

13.           *Governing Law. *This Agreement shall be governedby and construed in accordance with the laws of the State of California,without regard for the conflicts of law principles thereof.

 

14.           *Arbitration. *(a)  Any dispute or controversy arising out of,relating to, or in connection with this letter agreement, or theinterpretation, validity, construction, performance, breach, or terminationthereof, shall be settled by binding and confidential arbitration to be held inSanta Clara County, California, in accordance with the National Rules for theResolution of Employment Disputes then in effect of the American ArbitrationAssociation (the “Rules”).  The arbitrator may grant injunctionsor other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding onthe parties to the arbitration. Judgment may be entered on the arbitrator’sdecision in any court having jurisdiction.

 

(b)           The arbitrator(s) shall apply California law to the meritsof any dispute or claim, without reference to conflicts of law rules.  The arbitration proceedings shall be governedby federal arbitration law and by the Rules, without reference to statearbitration law.  You hereby consent tothe personal jurisdiction of the state and federal courts located in Californiafor any action or proceeding arising from or relating to this letter agreementor relating to any arbitration in which the parties are participants.

 

(c)           The Company and you shall each pay one-half of the costsand expenses of such arbitration, and each shall separately pay its counselfees and expenses.

 

15.           *Notices. *Except as otherwise explicitly provided inthis Agreement, any notice provided hereunder will be deemed to be given whendelivered in writing by hand or sent by overnight courier.  All notices to the Company will be markedconfidential and addressed to the Company’s General Counsel.  All notices to you will be addressed to yourmost recent address as reflected on the Company’s payroll and sent to suchother address as you may provide from time to time by notice to the Company, orany other persons or addresses as you may request from time to time by noticeto the Company.

 

16.           *Counterparts.*ThisAgreement may be signed in counterparts, each of which shall be an original,with the same effect as if the signatures thereto and hereto were upon the sameinstrument.

 

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Please acknowledge your acceptance of the foregoingby signing where indicated below.

 
|                         |   |   |   | AFFYMETRIX, INC.                                                                               |
|-------------------------|--------|--------|--------|------------------------------------------------------------------------------------------------|
|                    |   |   |   |                                                                                           |
|                    |   |   |   | By:                                                                                            | /s/ Barbara A.  Caulfield |   |
|                    |   |   |   |        Name: Barbara  A. Caulfield                     |
|                    |   |   |   |        Title: Executive  V.P. and General Counsel |
|                    |   |   |   |                                                                                           |
| Accepted and  Agreed:   |   |   |   |                                                                                           |
|                    |   |   |   |                                                                                           |
| /s/ Thane  Kreiner |   |   |   |                                                                                           |
| Thane Kreiner,  Ph.D.   |   |   |   |                                                                                           |
|                    |   |   |   |                                                                                           |
| 10 May 2006             |   |   |   |                                                                                           |
| Date                    |   |   |   |                                                                                           |

 

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