SOLEXA LETTERHEAD]
Exhibit 10.49
[SOLEXA LETTERHEAD]
May 19, 2006
VIA HAND DELIVERY
Re: New Alternative One-Time Bonus Arrangement
Dear Omead:
This letter contains the terms and conditions of the new alternative one-time bonus arrangement
that Solexa, Inc. (“Solexa” or the “Company”) is offering you, subject to the terms and conditions
set forth in this letter. This new bonus arrangement will be a supplemental bonus arrangement and
it does not replace or cancel any other current bonus program of the Company.
A. New Bonus Overview:
The two below potential bonuses are alternative one-time bonuses. Accordingly, if the terms and
conditions are met for one of these bonuses at any time, you will not earn or be eligible to
receive any additional such bonus, and you will not earn or be eligible to receive the other
one-time bonus (even if the applicable terms and conditions subsequently are met). In addition,
because the alternative one-time bonuses are intended to incentivize you with respect to your
employment services and your continued employment with the Company, in order to earn and be
eligible to receive either of the below alternative one-time bonuses, you must remain an employee
in good standing of the Company (or a successor entity) as of the date that such bonus is earned.
Additional specific terms and conditions of each alternative one-time bonus are set forth below.
1. One-Time Market Capitalization Bonus:
In the event that the closing price of the Company’s common stock equals or exceeds twenty-seven
dollars and sixty cents ($27.60) per share (as presently constituted) for each of twenty-five (25)
consecutive public trading days (the “Trading Period”), you will be entitled to receive a one-time
bonus of seventy-seven thousand, one hundred fifty-one (77,151) shares of the Company’s common
stock (as adjusted for stock splits, stock dividends or the like) pursuant to the Company’s 2005
Equity Incentive Plan (the “Plan”) (the “Market Capitalization Bonus”). If it is reasonably
determined by the Company that it would be inadvisable or impractical for you to sell or otherwise
dispose of a portion of the common stock constituting the Market Capitalization Bonus for the
purposes of paying applicable taxes, the Company may at its election provide you with cash
compensation in lieu of a portion of the common stock sufficient to pay, valued based on the
average of the per share closing prices during the Trading Period, the taxes applicable to the
Market Capitalization Bonus, with the remaining portion of the Market Capitalization Bonus to be
provided as Company common stock pursuant to the Plan.
If earned, the Market Capitalization Bonus will be provided to you within forty-five (45) days
after the Trading Period. Notwithstanding the preceding sentence, at your written election,
delivery of all or a portion of the Market Capitalization Bonus will be delayed until January 15 of
the tax year following the
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year in which the bonus is earned, without any interest or additional consideration being owed to you. The Company shall make all determinations and calculations
regarding whether and when the Market Period Capitalization Bonus has been earned and the amount of
the Market Capitalization Bonus.
2. One-Time Change in Control Bonus:
In the event of a Change in Control (as defined below), you shall be eligible to receive a bonus
equivalent to one quarter of one percent (.25%) of the amount by which the consideration received
by the Company’s stockholders as a direct result of the Change in Control exceeds the sum of One
Hundred Fifty Million Dollars ($150,000,000) plus the aggregate gross proceeds received by the
Company through sales of equity securities occurring after the date of this letter (the “Change in
Control Bonus”).
The Change in Control Bonus will be provided to you in the same form as the consideration received
by the Company’s stockholders as a direct result of the Change in Control. For example, if cash is
the consideration provided to the Company’s stockholders as a direct result of the Change in
Control, you will be provided a cash Change in Control Bonus; and if the consideration provided to
the Company’s stockholders as a direct result of the Change in Control consists of securities or
other non-cash consideration, your Change in Control Bonus (if earned) will be paid in such form
and determined based on the value thereof established in the Change in Control, provided that,
notwithstanding the preceding, the Company may in its sole discretion elect to substitute cash for
all or any portion of the securities or other non-cash consideration that would otherwise be
payable based on the value thereof established in the Change in Control. The Company shall make
all determinations and calculations regarding whether the Change in Control Bonus has been earned
and the amount of the Change in Control Bonus.
For purposes of the Change in Control Bonus, a “Change of Control” means the happening of any of
the following events: (a) a dissolution or liquidation of Solexa; (b) a sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all or substantially all
of the assets of Solexa; (c) a consolidation or merger of Solexa in which Solexa is not the
continuing or surviving corporation or pursuant to which the stock of Solexa would be converted
into cash, securities or other property, other than a merger or consolidation of Solexa in which
the holders of such entity’s stock immediately prior to the merger or consolidation hold more than
fifty percent (50%) of the stock or other forms of equity of the surviving corporation immediately
after the merger in substantially the same proportions of ownership of shares of Solexa
immediately prior to the merger or consolidation; or (d) a sale or exchange by the shareholders of
Solexa, in a single transaction or series of related transactions, of more than fifty percent (50%)
of the voting stock of such entity, after which the shareholders of such entity immediately before
such transaction do not retain immediately after such transaction, in substantially the same
proportions of their ownership of shares of Solexa immediately before the transaction, direct or
indirect beneficial ownership of more than fifty percent (50%) of the combined voting power of such
entity.
B. Miscellaneous:
Nothing in this letter is intended to alter the at-will nature of your employment with the Company.
In addition, this letter does not alter any existing agreement between you and the Company
(including but not limited to your offer letter agreement dated April 22, 2005), except to the
extent such other existing agreement contains any terms inconsistent with this letter, which
inconsistent terms are hereby superseded. This letter constitutes the complete, final and exclusive
embodiment of the entire agreement between the Company and you with regard to this subject matter.
It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it
supersedes any other such promises, warranties or representations. This letter agreement may not
be modified or amended except in a writing signed by you and a duly authorized officer of the
Company.
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This letter agreement will bind the heirs, personal representatives, successors and assigns of both you and the Company, and inure to the benefit of both you and the Company, their
heirs, successors and assigns. If any provision of this letter agreement is determined to be
invalid or unenforceable, in whole or in part, this determination shall not affect any other
provision of this letter agreement and the provision in question shall be modified so as to be
rendered enforceable in a manner consistent with the intent of the parties insofar as possible
under applicable law. This letter agreement shall be construed and enforced in accordance with the
laws of the State of California without regard to conflicts of law principles. Any ambiguity in
this letter agreement shall not be construed against either party as the drafter. Any waiver of a
breach of this letter agreement, or rights hereunder, shall be in writing and shall not be deemed
to be a waiver of any successive breach or rights hereunder. This letter agreement may be executed
in counterparts which shall be deemed to be part of one original, and facsimile signatures shall be
equivalent to original signatures.
To indicate your understanding and acceptance of this new bonus arrangement, please sign and date
this letter below, and return this letter to me within five (5) business days. You may retain the
enclosed additional copy of this letter for your files.
We are very pleased to offer this new arrangement, and look forward to a continued productive
employment relationship.
Sincerely,
Solexa, Inc.
Solexa, Inc.
/s/ Xxxx Xxxx
Xxxx Xxxx
Chief Executive Officer
Chief Executive Officer
UNDERSTOOD AND AGREED:
/s/ Xxxxx Xxxxxxx
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May 23, 2006
Date
