AFFX Affymetrix, Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

________________

 

FORM 8-K

 

CURRENT REPORT

pursuant to Section 13 or 15(D) of the

Securities and Exchange Act of 1934

 

Date of report: November 5, 2015

(Date of earliest event reported)

 

AFFYMETRIX, INC.

 

(Exact name of registrant as specified in charter)

 

Delaware	0-28218	77-0319159
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

 

3420 Central Expressway

Santa Clara, California 95051

 

(Address of principal executive offices and zip code)

 

Registrant’s telephone number, including area code: (408) 731-5000

 

N/A

 

(Former name or former address, if changed since last report.)

 

______________________________

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

 

On November 5, 2015, the Compensation Committee of the Board of Directors of Affymetrix Inc. (the “Company”) completed a review of the Company’s Change of Control Policy and Executive Severance Policy as part of its periodic review of best practices in compensation matters, including a consideration of peer group practices and the regulatory environment.

 

As a result of such review over several months, the Compensation Committee approved a revised “double-trigger” Change of Control Policy, which provides severance benefits for all employees for certain termination events in connection with a change of control, as well as a revised Executive Severance Policy, which provides severance benefits to executive officers whose employment is terminated by the Company without cause at any time.

 

There were no material changes to the severance benefits of the Company’s named executive officers under either the Change of Control Policy or the Executive Severance Policy. Instead, the changes were primarily intended to reflect best governance practices and clarify administrative matters.

 

Under the Change of Control Policy, if a named executive officer is terminated without cause, or resigns due to certain adverse changes in his or her job, on or within 12 months following a change of control, the officer’s severance multiple remains two years of salary, bonus and health insurance premiums as well as full accelerated vesting of equity awards (at target level with respect to outstanding performance periods). The policy does not include any golden parachute excise tax gross-up provisions. Instead, in accordance with the committee’s review of best practices, an officer’s severance benefits will either be reduced below the level at which the excise tax applies or the officer will be responsible for paying the excise tax, whichever is better for the officer on an after-tax basis.

 

Under the Executive Severance Policy, if a named executive officer is terminated without cause (outside of a change of control scenario), the severance multiple remains one year of salary and health insurance premiums.

 

Any severance benefits under either the Change of Control Policy or the Executive Severance Policy are subject to execution of an agreement by the participant releasing claims against the Company.

 

The foregoing summary is qualified in its entirety by each of the Change of Control Policy and the Executive Severance Policy, filed as Exhibit 10.1 and 10.2, respectively, to this Form 8-K and incorporated herein by reference.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit No.	Description
10.1	Change of Control Policy
10.2	Executive Severance Policy

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

	AFFYMETRIX, INC.
Dated:  November 10, 2015	By:	/s/ Siang Chin
		Name: Siang Chin
		Title: Senior Vice President and General Counsel

 

 

 

 

EXHIBIT INDEX

 

Exhibit No.	Description
10.1	Change of Control Policy
10.2	Executive Severance Policy

 

 

 

 

Exhibit 10.1

 

CHANGE OF CONTROL PLAN

 

EFFECTIVE JANUARY 1, 2016

 

1.

Introduction. The purpose of the Affymetrix, Inc. Change of Control Plan (the “Plan”) is to provide severance benefits to eligible employees of Affymetrix, Inc. and its subsidiaries (the “Company”) when there has been a “change of control” of the Company followed by the eligible employee’s termination of employment under specified circumstances.

 

2.

Effective Date. The effective date of the Plan is January 1, 2016 (the “Effective Date”). As of the Effective Date, the Plan supersedes and replaces the Change of Control Plan dated May 14, 2010.

 

3.

Term. The Plan shall be in effect from the Effective Date until terminated by the Company. The Board shall have the power to amend or terminate this Plan from time to time in its discretion prior to the occurrence of a Change of Control. Following a Change of Control, this Plan may not be terminated or amended in a manner adversely to any Covered Employee for 12 months following a Change of Control. The termination or amendment of the Plan at any time shall not affect any benefits to which a Covered Employee has previously become entitled hereunder.

 

4.

Definitions. The following words and phrases shall have the following respective meanings:

 

4.1

“Administrator” means the Senior Vice President of Human Resources of the Company or his/her designee; provided that with respect to any Covered Employee who is a Section 16 officer of the Company, the Administrator shall be the Compensation Committee of the Board.

 

4.2

“Board” means the Board of Directors of the Company or the Compensation Committee thereof.

 

4.3

“Cash Severance Payment” means, for a Covered Employee, an amount equal to the Severance Multiple times the sum of (i) such Covered Employee’s Monthly Base Pay and (ii) such Covered Employee’s Monthly Target Bonus.

 

4.4

“Cause” means (i) willful and continued failure to substantially perform his or her duties to the Company (other than as a result of total or partial incapacity due to physical or mental illness); (ii) any willful act or omission constituting dishonesty, fraud or other malfeasance against the Company; (iii) conviction of a felony under the laws of the United States or any state thereof or any other jurisdiction in which the Company conducts business; or (iv) material breach of any of the policies of the Company. Notwithstanding the forgoing, for Non-U.S. Covered Employees, the definition of “Cause” shall be deemed to be modified to the extent that the definition (or an element thereof) is impermissible under applicable law, to the minimum extent required to comply with any such law.

 

4.5

“Change of Control” shall have the meaning set forth in the Company’s Amended and Restated 2000 Equity Incentive Plan.

 

4.6

“Code” means the Internal Revenue Code of 1986, as amended.

 

4.7

“Covered Employee” means each Full-Time Employee of the Company. An individual who is providing services as a probationary or fixed-term employee (or pursuant to any similar initial employment evaluation arrangement) shall, notwithstanding such probationary or fixed-term status, be eligible to participate in the Plan, if such individual is described in the preceding sentence.

 

4.8

“Full-Time Employee” means those employees employed by the Company who are regularly scheduled to perform 30 or more hours of work per week, without giving effect to any decrease in such regular work schedule following a Change of Control, but excluding temporary and seasonal employees. With respect to employees employed outside of the United States, the Administrator may modify the foregoing eligibility requirement as required by applicable law.

 

4.9

“Good Reason” means, except as otherwise provided pursuant to Exhibit A, without the Covered Employee’s written consent, (i) a 10% reduction in base pay or salary as in effect immediately prior to a Change of Control, (ii) a principal work location that is more than forty-five (45) miles from the Covered Employee’s principal work location immediately prior to the Change of Control, or (iii) if specified on Exhibit A with respect to the Covered Employee’s job level, a material reduction in job duties and responsibilities as such Covered Employee had prior to a Change of Control. In order to resign for Good Reason, the Covered Employee must provide the Company with written notice of the events constituting Good Reason within ninety (90) days of the date such event arises, upon the notice of which the Company will have a period of thirty (30) days during which it may remedy the condition. Unless the Company remedies such Good Reason within such thirty (30) day period, the Covered Employee’s employment with the Company shall terminate immediately following the expiration of such thirty (30) day cure period. Notwithstanding the forgoing, for Non-U.S. Covered Employees, the definition of “Good Reason”, and the foregoing notice and cure periods, shall be deemed to be modified to the extent that the definition (or an element thereof) or notice and cure periods is impermissible under applicable law, to the minimum extent required to comply with any such law.

 

4.10

“Monthly Base Pay” means the Covered Employee’s annualized regular straight-time salary as in effect on the date of termination of employment or, if greater, as in effect immediately prior to the Change of Control, in either case divided by 12.

 

4.11

“Monthly Target Bonus” means an amount, if any, equal to the annualized target amount which the Covered Employee is eligible to earn under the Company’s annual cash incentive plan in effect on the date of termination of employment or, if higher, such target amount as was in effect immediately prior to the occurrence of a Change of Control, in either case divided by 12.

 

4.12

“Qualifying Termination” means the Covered Employee’s employment is terminated upon or within 12 months following a Change of Control either (i) by the Company without Cause or (ii) by the Employee for Good Reason.

 

4.13

“Non-U.S. Covered Employee” means each Covered Employee primarily providing services outside of the United States.

 

4.14

“Release Period” means the forty-five (45) day period (or, for Non-US Employees, such other period required by applicable law), commencing on the date of the Covered Employee’s Separation from Service, by which he or she must sign the Release in order to receive a Severance Benefit.

 

4.15

“Section 409A” means Section 409A of the Code.

 

4.16

“Separation from Service” means the Covered Employee’s termination of employment with the Company and its Affiliates (which shall be interpreted in accordance with the requirements of Section 409A to the extent required).

 

4.17

“Severance Benefits” means the compensation and other benefits the Covered Employee will be provided with pursuant to Section 6 and Exhibit A.

 

4.18

“Severance Multiple” means the number of months set forth on Exhibit A as determined based on the Covered Employee’s job level as of the date of termination of employment.

 

5.

Treatment of Equity Awards Upon a Change of Control.

 

5.1

Treatment of Equity Awards. Upon the occurrence of a Change of Control, or the execution by the Company of any agreement with respect to a Change of Control, the Board shall take any one or more of the following actions with respect to outstanding compensatory stock options, restricted stock, restricted stock units or other equity awards (collectively, but subject to Section 5.2 below with respect to Performance Awards, “Equity Awards”) held by any Covered Employee at such time:

 

(a)

provide that outstanding Equity Awards shall be continued by the Company if the Company is the surviving entity or shall be assumed, or equivalent Equity Awards shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof), with such assumed or substituted awards being considered Equity Awards for purposes of Section 6 below;

 

(b)

upon written notice to the holders of Equity Awards, provide that all Equity Awards will become vested and, if applicable, exercisable in full as of a specified time (the “Acceleration Time”) prior to the Change of Control and will terminate immediately prior to the consummation of such Change of Control; or

 

(c)

provide that all outstanding Equity Awards shall terminate upon

 

consummation of such Change of Control and each holder of such Equity Awards shall receive, in exchange for each share subject to an Equity Award, cash and/or stock equivalent to the fair market value of the consideration received by a holder of common stock of the Company, over the per share exercise price or purchase price, if any, of such Equity Awards.

 

5.2

Performance Equity Awards. Except as expressly set forth in an award agreement or as determined by the Board, with respect to any Equity Awards that are subject to performance conditions, if a Change of Control occurs before the end of a performance period and before the achievement of the performance conditions has been determined (“Performance Awards”), such performance conditions shall be deemed achieved at the target level immediately prior to the Change of Control but shall remain subject to the service-based vesting conditions originally set forth in such Performance Award (the “Earned Performance Awards”), subject to Section 5.1 and Section 6. Any amounts over the target level shall be forfeited prior to the Change of Control and shall not be considered Equity Awards for purposes of Section 5.1 or Section 6.

 

6.

Change of Control Severance Payments and Benefits.

 

6.1

Termination Following a Change of Control. In the event of a Qualifying Termination, subject to the Release requirements set forth in Section 6.2, the Covered Employee shall receive the following Severance Benefits, in addition to any accrued compensation and benefits required to be provided under applicable law or Company plan:

 

(a)

Cash Severance Payment. The Covered Employee will be paid a lump sum single payment equal to his or her Cash Severance Payment, which will be paid within sixty (60) days following the Covered Employee’s Separation from Service.

 

(b)

Payment in Lieu of Medical Benefits. The Covered Employee will be paid a lump sum cash payment equal to (x) 135% of the initial monthly COBRA continuation premium (or similar non-U.S. coverage cost as determined by the Administrator) for the Participant and his or her eligible dependents for the coverage option and level of medical, dental and/or vision coverage in effect for the Participant immediately prior to the Date of Termination times (y) the Severance Multiple. Such payment will be paid within sixty (60) days following the Covered Employee’s Separation from Service. With respect to any Non-U.S. Covered Employee, in lieu of the foregoing cash payment, the Company may determine to provide such benefits coverage for a number of months following Separation from Service equal to the Severance Multiple (or a longer period that is expressly required by applicable statute) at the level provided to the Non-U.S. Covered Employee by the Company prior to termination (or, if greater, at the level required by statute) to the extent such continued participation is

 

permitted under the terms of any applicable group health plan and applicable law.

 

(c)

Accelerated Vesting of Equity Awards. Any Equity Awards that are outstanding and unvested as of the Separation from Service (including any Earned Performance Awards pursuant to Section 5.2) will not be forfeited on the Separation from Service but will become fully vested and, if applicable, exercisable or settled on the Release Effective Date (or as soon as practical thereafter, but in no event later than 60 days following the Separation from Service).

 

6.2

Release. As a condition to receiving Severance Benefits under this Plan, each Covered Employee will be required to sign, within the Release Period, a waiver and release of all claims arising out of the termination of the Covered Employee’s employment with the Company and its subsidiaries and affiliates in a form that is acceptable to the Company (the “Release”) and let such Release become effective by its terms (the “Release Effective Date”). Notwithstanding the foregoing, a Non-U.S. Covered Employee shall not be required to execute a Release as a condition to receiving Severance Benefits to the extent such a condition is prohibited by applicable law. The Administrator may modify, in good faith, the form of Release for Non-U.S. Covered Employees to the minimum extent necessary to comply with applicable local law and preserve the intent of the Release.

 

6.3

No Duplication of Benefits; Applicable Law. To the extent permitted by applicable law, any Severance Benefit payable under the Plan shall be reduced by (i) any Base Pay paid to the Covered Employee for any statutory or contractual notice period (including any payment in lieu of notice or payment made in any such notice period during which the Covered Employee is not providing active services) and (ii) any statutory severance amounts paid to the Covered Employee (the aggregate amount of any such reduction being referred to hereinafter as, the “Offset”). To the extent that a Non-U.S. Covered Employee is entitled under applicable law or an agreement with the Company to severance payments or benefits that are more favorable to the employee, the employee will be entitled to such greater payments or benefits. The Administrator may modify, in good faith, the notice and cure procedure set forth in the Plan for Non-U.S. Covered Employees to the minimum extent necessary to comply with applicable local law; provided that such modifications shall, to the maximum extent permissible under applicable local law, be no less favorable to such Non-U.S. Covered Employee than those set forth herein.

 

7.

Section 280G Limitation for Officers, Highly Compensated Employees and 1% Stockholders.

 

(a)

Anything in this Plan to the contrary notwithstanding, in the event that any payment or benefit received or to be received by the Covered Employee (including any payment or benefit received in connection with a Change of Control or the

 

termination of the Covered Employee’s employment, whether pursuant to the terms of the Plan or any other plan, arrangement or agreement) (all such payments and benefits, including the Severance Benefits, being hereinafter referred to as the “Total Payments”) would be subject (in whole or part), to the excise tax imposed by Section 4999 of the Code (including any interest or penalties incurred by the Covered Employee with respect thereto, the “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, arrangement or agreement, the Severance Benefits shall be reduced to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax but only if:

 

(A)

the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to

 

(B)

the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Covered Employee would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).

 

(b)

In such event, the Total Payments shall be reduced in the following order: (1) cash payments not subject to Section 409A; (2) cash payments subject to Section 409A; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits. To the extent any payment is to be made over time (e.g., in installments, etc.), then the payments shall be reduced in reverse chronological order.

 

(c)

The calculations contemplated by this Section shall be done by such accounting or tax experts as may be designated by the Company prior to a Change of Control and shall be binding on the Company and the Covered Employee.

 

8.

Withholding. The Company will withhold from any amounts payable under the Plan all U.S. federal, state, local and other taxes, and non-U.S. income and employment taxes, social contributions and any other tax-related items, required to be withheld therefrom and any other required payroll deductions.

 

9.

ERISA. For Covered Employees in the United States, with respect to the Severance Benefits under Section 5 of the Plan, the Plan is intended to be a “welfare benefit plan” within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and to meet the descriptive requirements of a plan constituting a “severance pay plan” within the meaning of regulations published by the Secretary of Labor at Title 29, Code of Federal Regulations, Section 2510.2(b). This document constitutes both the written instrument under which the Plan is maintained and the summary plan description for the Plan.

 

10.

Administration. The Plan will be administered and interpreted by the Administrator (in the Administrator’s reasonable, good faith discretion). The Administrator has the authority to act for the Company (in a non-fiduciary capacity) as to any matter pertaining to the Plan; provided, however, that this authority does not apply with respect to (a) the Company’s power to amend or terminate the Plan or (b) any action that could reasonably be expected to increase significantly the cost of the Plan, the authority to take such actions is subject to the prior approval of the Board. For Covered Employees providing services in the United States, the Administrator is the “named fiduciary” of the Plan for purposes of ERISA and will be subject to the fiduciary standards of ERISA when acting in such capacity.

 

11.

Eligibility to Participate. An employee acting as the Administrator will not be excluded from participating in the Plan if otherwise eligible, but he or she is not entitled to act or pass upon any matters pertaining specifically to his or her own benefit or eligibility under the Plan. The chief executive officer of the Company will act upon any matters pertaining specifically to the benefit or eligibility of the Administrator under the Plan.

 

12.

Claims Procedure. Any employee or other person who believes he or she is entitled to any payment under the Plan may submit a claim in writing to the Administrator or his or her designee. If the claim is denied (in full or in part), the claimant will be provided a written notice explaining the specific reasons for the denial and referring to the provisions of the Plan on which the denial is based. The notice will also describe any additional information needed to perfect the claim, an explanation as to why such information is necessary and an explanation of the Plan’s claims procedure and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under section 502(a) of ERISA following an adverse benefit determination on appeal, if applicable. The denial notice will be provided within 90 days after the claim is received. If special circumstances require an extension of time (up to 90 days), written notice of the extension will be given within the initial 90-day period. The foregoing period may be extended up to 120 days with respect to Non-U.S. Covered Employees to the extent permitted by applicable law and upon written notice to the Non-U.S. Covered Employee.

 

13.

Appeal Procedure. If the claimant’s claim is denied, the claimant (or his or her authorized representative) may apply in writing to the Administrator for a review of the decision denying the claim. Review must be requested within 60 days following the date the claimant received the written notice of their claim denial or else the claimant loses the right to review. The claimant (or representative) then has the right to review pertinent documents and to submit issues and comments in writing. The Administrator will provide written notice of his or her decision on review within 60 days after it receives a review request. If additional time (up to 60 days) is needed to review the request, the claimant (or representative) will be given written notice of the reason for the delay. If the claimant’s appeal is denied (in full or in part), the claimant will be provided a written notice explaining the specific reasons for the denial and referring to the provisions of the Plan on which the denial is based. The notice will also describe the claimant’s right to receive, upon request and without charge, reasonable access to, and

 

copies of, all documents, records and other information relevant to the claim for benefits. The notice will also include a statement of the claimant’s right to bring a civil action under section 502(a) of ERISA, if applicable. No person may bring an action for any alleged wrongful denial of Plan benefits in a court of law unless the claims procedures set forth above are exhausted and a final determination is made by the Administrator. If a Covered Employee or another interested person challenges a decision of the Administrator, a review by the court of law will be limited to the facts, evidence and issues presented to the Administrator during the claims procedure set forth above. Facts and evidence that become known to a Covered Employee or the other interested person after having exhausted the claims procedure must be brought to the attention of the Administrator for reconsideration of the claims determination. Issues not raised with the Administrator will be deemed waived. Notwithstanding the forgoing, Sections 12 and 13 shall be deemed to be modified to the extent necessary to comply with laws governing claim procedures applicable to Non-U.S. Covered Employees.

 

14.

Source of Payments. All Severance Benefits will be paid in cash from the general funds of the Company; no separate fund will be established under the Plan; and the Plan will have no assets. No right of any person to receive any payment under the Plan will be any greater than the right of any other general unsecured creditor of the Company.

 

15.

Inalienability. In no event may any current or former employee of the Company or any of its subsidiaries or affiliates sell, transfer, anticipate, assign or otherwise dispose of any right or interest under the Plan. At no time will any such right or interest be subject to the claims of creditors nor liable to attachment, execution or other legal process.

 

16.

No Enlargement of Employment Rights. Neither the establishment nor maintenance of the Plan, any amendment of the Plan, nor the making of any benefit payment hereunder, will be construed to confer upon any individual any right to be continued as an employee of the Company. The Company expressly reserves the right to discharge any of its employees, including Covered Employees, at any time, with or without cause, in accordance with the employee’s contract of employment, if any, and any applicable laws.

 

17.

Section 409A Compliance. This Plan is intended to comply with or be exempt from all of the requirements of Section 409A and any regulatory, administrative or judicial guidance thereunder and shall be administered and interpreted in accordance with that intention. This Plan is intended to meet the requirements of the short term deferral or separation pay plan exemptions under Section 409A. Any payment from the Plan that is subject to the requirements of Section 409A may only be made in a manner and upon an event permitted by Section 409A. If the Covered Employee is a specified employee (as defined under Section 409A) as of his or her date of Separation from Service and any Severance Benefit is determined to be nonqualified deferred compensation subject to Section 409A, then, to the extent required to comply with Section 409A, such payment (or the applicable portion thereof) shall not be made until the date which is the earlier of: (a) the date six months after the Covered Employee’s Separation from Service, or (b) the date of the Covered Employee’s death. Payments upon termination of employment subject to the requirements of Section 409A may only be made upon a Separation from

 

Service. Each payment under the Plan shall be treated as a separate payment for purposes of Section 409A and a series of installment payments shall be treated as a series of separate payments. In no event may an employee, directly or indirectly, designate the calendar year of any payment to be made under the Plan. If the maximum period during which an employee has the ability to consider and revoke the Release hereunder would span two taxable years of the employee, then, regardless of when the employee signs the Release and the revocation period expires, payment of severance benefits hereunder will be made or commence in the second of such taxable years to the extent required to comply with Section 409A.

 

18.

Applicable Law and Choice of Forum. The provisions of the Plan will be construed, administered and enforced in accordance with ERISA and, to the extent applicable, the laws of the State of California and any action brought under the Plan will be brought in the State of California, in each case, except as otherwise required by the laws or mandatory rules of a jurisdiction outside the United States in which a Non-U.S. Covered Employee is employed (in which such case the applicable law and choice of forum required in such jurisdiction shall apply).

 

19.

Severability. If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability will not affect any other provision of the Plan, and the Plan will be construed and enforced as if such provision had not been included.

 

20.

Headings. Headings in this Plan document are for purposes of reference only and will not limit or otherwise affect the meaning hereof.

 

21.

Indemnification. The Company hereby agrees to indemnify and hold harmless the officers and employees of the Company, and the members of its boards of directors, from all losses, claims, costs or other liabilities arising from their acts or omissions in connection with the administration, amendment or termination of the Plan, to the maximum extent permitted by applicable law. This indemnity will cover all such liabilities, including judgments, settlements and costs of defense. The Company will provide this indemnity from its own funds to the extent that insurance does not cover such liabilities. This indemnity is in addition to and not in lieu of any other indemnity provided to such person by the Company by written agreement, by-laws, incorporation documents or state law.

 

23.

Representations by the Company. Except as provided in Section 3 or 10 above, no employee, officer, director, or agent of the Company has the authority to alter, vary, modify, or waive the terms and conditions of the Plan. No verbal or written representations that are in addition to or contrary to the terms of the Plan and its written amendments shall be binding on the Plan, the Administrator or the Company.

 

24. Additional Information.

 

Plan Name:	Affymetrix, Inc. Change of Control Plan
Plan Sponsor:	Affymetrix, Inc.

 

 

Identification Numbers:	EIN:
	PLAN:
Plan Year:	Calendar year
Plan Administrator:	Affymetrix, Inc.
	Attention:  General Counsel
	3420 Central Expressway
	Santa Clara, California 95051
	(408) 731-5000
Agent for Service of Legal Process:	Affymetrix Inc.
	Attention:  General Counsel
	3420 Central Expressway
	Santa Clara, California 95051
	(408) 731-5000

EXHIBIT A

 

Employee Job Level	Severance Multiple	”Good Reason” Definition
13 and above	24	See note 1.
12	12	See note 1.
9 to 11	9	See note 2.
5 to 8	6	See note 2.
4 and below	3	See note 2.

	(1)	These job levels include clause (iii) of the definition of Good Reason.

 

(2)

These job levels do not include clause (iii) of the definition of Good Reason. Only clauses (i) and (ii) apply.

 

Exhibit 10.2

 

EXECUTIVE SEVERANCE POLICY
(Amended and Effective as of November 5, 2015)

 

I. PURPOSE AND ELIGIBILITY

 

Affymetrix Inc. (the “Company”) has adopted this Executive Severance Policy (“Policy”) to provide guidelines for the granting of severance pay and/or certain other benefits (as set forth in Section III.B below, “Severance Pay”) under specified circumstances to employees of the Company who are Level 13 or above employees (each, an “Eligible Employee”). The Company may amend or terminate this Policy at any time.

 

II. TERMS AND CONDITIONS OF ELIGIBILITY

 

Eligibility. Payments and benefits under this Policy are not required under the Company’s standard policies generally applicable to salaried employees. This Policy applies to Eligible Employees of the Company who have an Involuntary Termination (as defined below) on or after the effective date of this Policy (the “Participants”).

 

No Duplication of Benefits. This Policy supersedes any and all prior policies or practices in effect from time to time relating to severance, separation or termination pay for the Eligible Employees. The acceptance of any Severance Pay under this Policy shall constitute a waiver of any severance pay or other severance benefits the Participant would have been entitled to under any prior policies or practices, any employment or other agreement between the Company and the Participant, and under any other severance policy of the Company; provided that in the event an Eligible Employee is eligible to receive severance pay or benefits in connection with or following a change in control of the Company under the Company’s separate change of control policy, this Policy shall be superseded thereby and there shall be no duplication of benefits.

 

Offset of Statutorily Required Payments. Payments and benefits under this Policy shall be reduced by any specific statutory requirements, including without limitation the Worker Adjustment and Notification Act of 1988 (WARN) or similar state or local law, for notice periods, damages in lieu of notice periods or the payment of severance pay and/or other benefits.

 

Severance Pay Subject to Signing Release. Notwithstanding anything to the contrary contained in this Policy, a Participant shall not be entitled to receive any Severance Pay or other benefits under the Policy unless and until the Participant has signed and returned a general release of claims (the “Release”), in a form prescribed by the Administrator, within 21 calendar days (or, if determined by the Administrator to be required by applicable law, 45 calendar days) after the date of Participant’s Involuntary Termination and a 7-day period during which the Participant may revoke the Release has elapsed.

 

III. DETERMINATION OF SEVERANCE PAY

 

A. Qualifying Termination Events.

 

Involuntary Termination. An “Involuntary Termination” means, with respect to any Eligible Employee, the unilateral termination of the Participant’s employment by the Company without Cause (as defined below), but only if such termination constitutes a “separation from service” with respect to the Company (or its applicable affiliate) within the meaning of Section 409A of the Code.

 

Exclusions from Eligibility for Severance. Under no circumstance will Severance Pay be granted to a Participant who resigns from the Company for any reason or whose employment terminates due to death or disability. In addition, Severance Pay will not be granted to a Participant who is discharged by the Company for any of the following reasons (“Cause”), as determined in the Company’s sole discretion:

 

1. The continued failure of the Participant to substantially perform his/her duties after receiving notice, oral or written, in the form of performance review, performance appraisal or performance improvement plan, which identifies the manner in which the Company believes that the Participant has not substantially performed the Participant’s duties.

 

2. Material violation of any code of conduct adopted by the Company, as such may be amended from time to time, or any successor code of conduct.

 

3. Material violations of Company policies, as such may be adopted or amended from time to time, including, without limitation policies or procedures on financial reporting or accounting policies or procedures.

 

4. Disclosure or misappropriation of confidential information, trade secrets or corporate opportunities.

 

5. Violation of employee agreements including, without limitation, agreements pertaining to invention and confidential disclosure and non-competition and non-solicitation.

 

6. Refusing to participate or cooperate in an investigation conducted by, or on behalf of, the Company.

 

7. Being arrested for a criminal offense or commission of an act which constitutes a felony or misdemeanor under applicable federal, state, foreign or local law.

 

8. Misappropriation, falsification and/or unauthorized alteration of Company records.

 

9. Commission of any other act that is detrimental to the Company’s business or reputation.

 

Sale of Business. Severance Pay will not be granted under this Policy if the Company sells or otherwise disposes of the business in which the Participant was employed and:

 

(a) such sale constitutes a change of control as defined in the Company’s change of control policy, in which case, this Policy is superseded by the change of control policy and there shall be no duplication of benefits; or

 

(b) such sale does not constitute a change of control as defined in the Company’s change of control policy, but either (a) the Participant accepts employment with the buyer of such business, or (b) the Participant rejects an offer of employment by the buyer of such business involving position, compensation and benefits which are substantially similar or better, taken as a whole, than the Participant’s position, compensation and benefits with the Company immediately prior to such sale or disposition.

 

Change in Position. For the avoidance of doubt, Severance Pay will not be granted under the Policy if the Company restructures or eliminates the position in which Participant was employed and the Participant rejects an offer of employment by the Company of a position with substantially similar or better compensation and benefits, taken as a whole, as immediately prior to such change.

 

B. Severance Pay.

 

1. In the event of Participant’s Involuntary Termination, and subject to the conditions (including signing and letting become effective a Release) set forth above, a Participant will be eligible to receive the following Severance Pay:

 

(a) An amount equal to 12 months of Participant’s then current base salary, which shall be paid in a lump sum within sixty (60) days following the Participant’s Involuntary Termination; and

 

(b) If a Participant timely elects COBRA coverage for Participant and his or her eligible dependents, reimbursement of COBRA premiums for up to 12 months following the Participant’s Involuntary Termination, subject to earlier cessation in the event the Participant becomes eligible for group health coverage from another employer.

 

2. The Severance Pay is subject to applicable tax withholding.

 

C. Section 409A.

 

1. This Policy shall be interpreted in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), including without limitation any Treasury Regulations or other Department of Treasury guidance that may be issued or amended after the effective date of this Policy. Notwithstanding any provision of the Policy to the contrary, in the event that following the Effective Date the Committee determines that any payment or benefit under the Policy may be subject to Section 409A, the Committee may adopt such amendments to the Policy or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Committee determines are necessary or appropriate to (A) exempt the payment or benefit from Section 409A and/or preserve the intended tax treatment of the payment or benefit, or (B) comply with the requirements of Section 409A.

 

2. The Severance Pay is intended to be exempt from Section 409A under the “short-term deferral” exemption or the separation pay plan exemption.

 

3. In no event may a Participant, directly or indirectly, designate the calendar year of any payment to be made under the Plan. If the maximum period during which an employee has the ability to consider and revoke the Release hereunder would span two taxable years of the employee, then, regardless of when the Participant signs the Release and the revocation period expires, payment of Severance Pay hereunder will be made or commence in the second of such taxable years to the extent required to comply with Section 409A.

 

4. Each installment or payment under this Policy shall be considered a separate payment for purposes of Section 409A.

 

5. If, on the date of Participant’s Involuntary Termination, (A) such Participant is a “specified employee” (within the meaning of Section 409A as determined by the Committee in accordance with Section 1.409A-1(i) of the Treasury Regulations) and (B) the Administrator makes a good-faith determination that payment or benefit under the Policy constitutes “deferred compensation” (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to preserve the tax treatment intended for such payment or to avoid additional tax, interest, or penalties under Section 409A, then the Company shall not pay such amount on the otherwise scheduled payment date but shall instead pay it on (or within ten (10) business days following) the first business day after such six-month period, without interest.

 

6. For purposes of this Policy, whether a “separation from service” has occurred shall be determined by the Administrator in accordance with Treasury Regulation Section 1.409A-1(h). If a Participant provides services for the Company as both an employee and as a director, to the extent permitted by Section 1.409A-1(h)(5) of the Treasury Regulations, the services provided by such Participant as a director shall not be taken into account in determining whether the Participant has experienced a separation from service as an employee.

 

7. A Participant shall be solely responsible and liable for the satisfaction of all taxes, interest, and penalties that may be imposed on such Participant or for such Participant’s account in connection with any payment or benefit under the Policy (including any taxes, interest, and penalties under Section 409A), and the Company shall have no obligation to indemnify or otherwise hold such Participant harmless from any or all of such taxes, interest, or penalties.

 

D. Non-Solicitation and Confidentiality; Non-Disparagement.

 

1. The non-solicitation provision of any agreement signed by the Participant shall remain in effect for the time period defined in said agreement. The obligation of confidentiality by the Participant set forth in the Company’s agreement(s) with the Participant or policies of the Company binding on or covering the Participant shall remain in effect for perpetuity or otherwise for the time period defined in said agreement.

 

2. A Participant shall not, directly or indirectly, make or cause to be made any statements to any third parties criticizing or disparaging, or commenting negatively on the character or business reputation of, the Company and its affiliates, and each of their respective directors, officers and predecessors. The foregoing obligations shall not apply to any statements or opinions that are made under oath in any investigation, civil or administrative proceeding or arbitration in which the individual has been compelled to testify by subpoena or other judicial process or which are privileged communications.

 

E. Other Employee Benefits.

 

Nothing in this Policy will affect the benefits or rights that a Participant may have accrued as of the Participant’s termination of employment pursuant to the Company’s equity incentive plans, 401(k) or other retirement plan, Nonqualified Deferred Compensation Plan, medical/dental benefits or any vacation or paid time-off policy. This Policy is not intended to describe the provisions or administrative practices of any other employee benefit and/or compensation program, policy or plan.

 

IV. AMENDMENT OR TERMINATION OF POLICY

 

The Company reserves the right to amend, modify or terminate this Policy or any portion of it at any time, and for any reason, without any prior notice to or approval of any Eligible Employee. No such amendment, modification or change shall adversely affect any Severance Pay previously paid or actually provided to a Participant.

 

V. PLAN ADMINISTRATION AND CLAIMS PROCEDURES

 

A. Administration.

 

1. The Policy shall be administered by the Company (the “Administrator”). The Administrator shall have the sole and absolute discretion to interpret all provisions of the Policy (including, without limitation, by supplying omissions from, correcting deficiencies in, or resolving inconsistencies or ambiguities in, the language of the Policy), to make factual findings with respect to any issue arising under the Policy, to determine the rights and status under the Policy of Participants or other persons, to resolve questions (including factual questions) or disputes arising under the Policy and to make any determinations with respect to the benefits provided under the Policy and the persons entitled thereto. Without limiting the generality of the foregoing, the Administrator shall have the authority: (i) to determine whether a particular person is a Participant, and (ii) to determine if a person is entitled to benefits under the Policy and, if so, the amount, scope and duration of such benefits. The Administrator’s determination of the rights of any person under the Policy shall be final and binding on all persons, subject only to the provisions set forth below under “Claims Procedures”.

 

2. The Administrator may delegate (or revoke the delegation of) any of its administrative duties, including, without limitation, duties with respect to the processing, review, investigation, approval and provision of benefits, to a designated internal and/or external administrator or administrators.

 

3. The Administrator’s determinations under this Policy need not be uniform and may be made by it selectively, for any nondiscriminatory reason and for no reason, among the persons who receive, or are eligible to receive, awards hereunder (whether or not such persons are similarly situated).

 

B. Regulations. The Administrator shall promulgate any rules, regulations and interpretations it deems necessary in order to carry out the purposes of the Policy or to interpret the provisions of the Policy; provided, however, that no rule, regulation or interpretation shall be contrary to the provisions of the Policy. The rules, regulations and interpretations made by the

 

Administrator shall, subject only to the provisions set forth below under “Claims Procedures”, be final and binding on all persons.

 

C. Claims Procedures.

 

1. The Administrator shall determine the rights of any person to any benefit under the Policy. Any person who believes that he or she has not received a benefit to which he or she is entitled under the Policy must file a claim in writing with the Administrator specifying the basis for his or her claim and the facts upon which he or she is relying in making such a claim.

 

2. The Administrator will notify a claimant of its decision regarding his or her claim within a reasonable period of time, but not later than 90 calendar days following the date on which the claim is filed, unless circumstances require a longer period for adjudication and the claimant is notified in writing of the reasons for an extension of time prior to the end of the initial 90-day period and the date by which the Administrator expects to make the final decision. In no event will the Administrator extend its processing of a claim beyond 180 calendar days after the date on which the claim is first filed with the Administrator.

 

3. If a claim is denied, the Administrator will notify the claimant of its decision in writing and the notice will contain the following information:

 

(a) The specific reason(s) for the denial;

 

(b) A specific reference to the pertinent Policy provision(s) on which the denial is based;

 

(c) A description of additional information or material necessary for the claimant to reverse the denial of his or her claim, if any, and an explanation of why such information or material is necessary; and

 

(d) An explanation of the Policy’s claim review procedures and the applicable time limits under such procedures and a statement as to the claimant’s right to bring a civil action under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) after all of the Policy’s review procedures have been satisfied.

 

4. If additional information or material is needed, an applicable claimant shall be provided at least 45 calendar days after receiving notice of such need to provide the information or material and any otherwise applicable time period specified in this Section for making a determination or for filing a request for a review of a denied claim shall

 

be extended by the same period during which the information or material is being obtained.

 

5. Within 60 calendar days after receipt of a denial of a claim, the claimant must file with the Administrator, a written request for review of such claim. If a request for review is not filed within such 60-day period, the claimant shall be deemed to have acquiesced to the original decision of the Administrator on his or her claim. If a request for review is filed, the Administrator shall review the claim. The claimant will be provided, upon request and free of charge, reasonable access to and copies of all documents, information and material relevant to the claimant’s claim for benefits. The claimant may submit positions and comments in writing, and the review will take into account all information submitted by the claimant regardless of whether it was reviewed as part of the original determination. The decision by the Administrator with respect to the review will be given no later than 60 calendar days after receipt of the request for review, unless circumstances warrant an extension of time not to exceed an additional 60 calendar days. If an extension is needed, written notice of the extension will be furnished to the claimant before the end of the initial 60-day period, indicating the circumstances requiring the extension and the date by which the Administrator expects to make a decision.

 

6. If the Administrator denies the claim after review, the Administrator will notify the claimant of its decision in writing and the notice will contain the following information:

 

(a) The specific reason(s) for the denial;

 

(b) A reference to the specific Policy provision(s) on which the denial is based;

 

(c) A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all information relevant to the claimant’s claim for benefits; and

 

(d) A statement of the claimant’s right to bring a civil action under ERISA.

 

7. The Administrator’s decision on review shall be, to the extent permitted by applicable law, final and binding on all interested persons.

 

8. For the avoidance of doubt, any documents, information and material relevant to a claim for benefits that a claimant may access or copy in accordance with the provisions of this Section shall be deemed

 

confidential for purposes of the covenant set forth in Section III.D.1 above.

 

D. Mediation. After an applicable claimant has exhausted all administrative remedies as provided under “Claims Procedures” above, the claimant may submit any dispute to mediation by written notice to the Administrator and to any other relevant party or parties. The mediator shall be selected by agreement of the parties. If the parties cannot agree on a mediator, a mediator shall be designated by the American Arbitration Association at the request of a party. Any mediator so designated must be acceptable to all parties. The mediation shall be conducted as specified by the mediator and agreed upon by the parties. The parties agree to discuss their differences in good faith and to attempt, with facilitation by the mediator, to reach an amicable resolution of the dispute. The mediation shall be treated as a settlement discussion and any matters discussed, information disclosed, determinations made or agreements reached during mediation proceedings shall be confidential and deemed to be confidential information. The mediator may not testify for either party in any later proceeding relating to the dispute. No recording or transcript shall be made of the mediation proceedings. Each party shall bear its own costs in the mediation. The fees and expenses of the mediator shall be shared equally by the parties.

 

VI. MISCELLANEOUS

 

A. No Employment Rights. The Participant’s rights as an employee, and the rights of the Company (and any of its affiliates) to discharge a Participant as an employee, shall not be enlarged or affected by reason of the Policy. Nothing contained in the Policy shall be deemed to alter in any manner the management rights of the Company with respect to the employment status, title or job duties or responsibilities of any Participant.

 

B. No Mitigation. The Participant shall not be required to mitigate damages or the amount of the Severance Pay by seeking other employment or otherwise.

 

C. Legal Status of Policy. The Policy, as a “severance pay arrangement” within the meaning of Section 3(2)(B)(i) of ERISA, is intended to be excepted from the definitions of “employee pension benefit plan” and “pension plan” set forth under Section 3(2) of ERISA, and is intended to meet the descriptive requirements of a plan constituting a “severance pay plan” within the meaning of regulations published by the Secretary of Labor at Title 29, Code of Federal Regulations §2510.3-2(b). This Policy is the formal Plan Document and, to the extent required by law, is intended to constitute a Summary Plan Description as defined by ERISA.

 

D. Unfunded Policy. This Policy is intended to be an unfunded plan maintained primarily for the purpose of providing severance pay for a select group of employees, within the meaning of Section 401 of ERISA. All payments

 

under this Policy are made from the Company’s general assets. Benefits under this Policy are not insured under Title IV of ERISA.

 

E. Governing Law. Any dispute, controversy, or claim of whatever nature arising out of or relating to this Policy or breach thereof shall be governed by and under the laws of the State of California, to be interpreted as a contract between residents of the State of California performed entirely within the State of California.