Document:

exv10w62

 

Exhibit 10.62

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE
ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.

SOLEXA, INC.

WARRANT TO PURCHASE COMMON STOCK

May 6, 2005

Void After May 6, 2010

     This Certifies That, for value received, Seven Hills Partners LLC, or assigns (the
“Holder”), is entitled to subscribe for and purchase at the Exercise Price (defined below) from
Solexa, Inc., a Delaware corporation, with its principal office at 25861 Industrial Boulevard,
Hayward, CA 94545 (the “Company”) up to ninety thousand (90,000) shares of the common
stock of the Company, par value $0.01 per share (the “Common Stock”).

     1. Definitions. As used herein, the following terms shall have the
following respective meanings:

          (a) “Exercise Period” shall mean the period commencing with the date that is one hundred and
eighty (180) days after the date hereof and ending five (5) years from the date hereof, unless
sooner terminated as provided below.

          (b) “Exercise Price” shall mean five dollars ($5.00) per share, subject to adjustment pursuant
to Section 5 below.

          (c) “Exercise Shares” shall mean the shares of the Common Stock issuable upon exercise of this
Warrant.

     2. Exercise of Warrant. The rights represented by this Warrant may be
exercised in whole or in part at any time during the Exercise Period, by delivery of the following
to the Company at its address set forth above (or at such other address as it may designate by
notice in writing to the Holder):

          (a) An executed Notice of Exercise in the form attached hereto;

          (b) Payment of the Exercise Price in cash or by check; and

          (c) This Warrant.

     Certificates for shares purchased hereunder shall be transmitted by the transfer agent of the
Company to the Holder by crediting the account of the Holder’s prime broker with the
Depository Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”)

1.

 

system if
the Company is a participant in such system (and so long as the legend may be removed in accordance
with Section 4.10 of the Purchase Agreement), and otherwise by physical delivery to the address
specified by the Holder in the Notice of Exercise within 5 Trading Days from the delivery to the
Company of the Notice of Exercise Form, surrender of this Warrant and payment of the aggregate
Exercise Price as set forth above (“Warrant Share Delivery Date”). This Warrant shall be deemed to
have been exercised on the date the Exercise Price is received by the Company. The Warrant Shares
shall be deemed to have been issued, and Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such shares for all purposes, as of
the date the Warrant has been exercised by payment to the Company of the Exercise Price.

     The person in whose name any certificate or certificates for Exercise Shares are to be issued
upon exercise of this Warrant shall be deemed to have become the holder of record of such shares on
the date on which this Warrant was surrendered and payment of the Exercise Price was made,
irrespective of the date of delivery of such certificate or certificates, except that, if the date
of such surrender and payment is a date when the stock transfer books of the Company are closed,
such person shall be deemed to have become the holder of such shares at the close of business on
the next succeeding date on which the stock transfer books are open.

     2.1 Net Exercise. Notwithstanding any provisions herein to the contrary, after the Filing
Date (as defined in Section 7.2 of the Securities Purchase Agreement dated April 21, 2005, by and
among the Company and the individuals and entities identified on the signature pages hereto (the
“Purchase Agreement”)), if (i) the Registration Statement (as defined in the Purchase Agreement)
has not been declared effective until such time as the Registration Statement is declared effective
or at any time a Registration Statement is no longer effective and (ii) the fair market value of
one share of the Company’s Common Stock is greater than the Exercise Price (at the date of
calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder
may elect to receive shares equal to the value (as determined below) of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the principal office of the Company
together with the properly endorsed Notice of Exercise in which event the Company shall issue to
the Holder a number of shares of Common Stock computed using the following formula:

	 	 	 	 	 
	 	 	X = Y (A-B)
	

	 	 	 	A
	 
	 	 	 	 
	Where X =	 	the number of shares of Common Stock to be issued to the Holder
	 
	 	 	 	 
	Y=	 	the number of shares of Common Stock purchasable under the

Warrant or, if only a portion of the Warrant is being exercised, the portion of

the Warrant being canceled (at the date of such calculation)
	 
	 	 	 	 
	A=	 	the fair market value of one share of the Company’s Common

Stock (at the date of such calculation)
	 
	 	 	 	 
	B=	 	Exercise Price (as adjusted to the date of such calculation)

 2.

 

     For purposes of the above calculation, the “fair market value” of one share of Common Stock
shall mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq
SmallCap Market or other trading market where such security is listed or traded as reported by
Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by
the Company and reasonably acceptable to the holders if Bloomberg Financial Markets is not then
reporting sales prices of such security) (collectively,
“Bloomberg”) for the ten (10) consecutive
trading days immediately preceding such date, or (ii) if the Nasdaq SmallCap Market is not the
principal trading market for the shares of Common Stock, the average of the reported sales prices
reported by Bloomberg on the principal trading market for the Common Stock during the same period,
or, if there is no sales price for such period, the last sales price reported by Bloomberg for such
period, or (iii) if neither of the foregoing applies, the last sales price of such security in the
over-the-counter market on the pink sheets or bulletin board for such security as reported by
Bloomberg, or if no sales price is so reported for such security, the last bid price of such
security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date
on any of the foregoing bases, the fair market value shall be as determined by the Board of
Directors of the Company in the exercise of its good faith judgment.

     Notwithstanding anything herein to the contrary, if there is no Registration Statement
effective on the last day of the Exercise Period, this Warrant shall be automatically exercised via
net exercise pursuant to this Section 2.1.

     2.2 Issuance of New Warrants. Upon any partial exercise of this Warrant, the Company, at its
expense, will forthwith and, in any event within five (5) business days, issue and deliver to the
Holder a new warrant or warrants of like tenor, registered in the name of the Holder, exercisable,
in the aggregate, for the balance of the Warrant Shares.

     2.3 Payment of Taxes and Expenses. The Company shall pay any recording, filing, stamp or
similar tax which may be payable in respect of any transfer involved in the issuance of, and the
preparation and delivery of certificates (if applicable) representing, (i) any Warrant Shares
purchased upon exercise of this Warrant and/or (ii) new or replacement warrants in the Holder’s
name or the name of any transferee of all or any portion of this Warrant.

     2.4 Rescission Rights. If the Company fails to cause its transfer agent to transmit to the
Holder a certificate or certificates representing the Warrant Shares pursuant to this Section 2 by
the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

     3. Covenants of the Company.

     3.1 Covenants as to Exercise Shares. The Company covenants and agrees that all Exercise
Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes,
liens and charges with respect to the issuance thereof. The Company further covenants and agrees
that the Company will at all times during the Exercise Period, have authorized and reserved, free
from preemptive rights, a sufficient number of shares of its Common Stock to provide for the
exercise of the rights represented by this Warrant. If at any time during the Exercise Period the
number of authorized but unissued shares of Common Stock

 3.

 

shall not be sufficient to permit exercise of this Warrant, the Company will take such
corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.

     3.3 Notices of Record Date. In the event of any taking by the Company of a record of the
holders of any class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend (other than a cash dividend which is the same as cash dividends
paid in previous quarters) or other distribution, the Company shall mail to the Holder, at least
ten (10) days prior to the date specified herein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend or distribution.

     4. Disposition of Warrant and Exercise Shares.

          (a) The Holder further agrees not to make any disposition of all or any part of the Warrant or
Exercise Shares in any event unless and until:

               (i) The Company shall have received a letter secured by the Holder from the Securities and
Exchange Commission stating that no action will be recommended to the Commission with respect to
the proposed disposition; or

               (ii) There is then in effect a registration statement under the Act covering such proposed
disposition and such disposition is made in accordance with said registration statement; or

               (iii) The Holder shall have notified the Company of the proposed disposition and shall have
furnished the Company with a detailed statement of the circumstances surrounding the proposed
disposition, and if reasonably requested by the Company, the Holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, for the Holder to the
effect that such disposition will not require registration of such Warrant or Exercise Shares under
the Act or any applicable state securities laws; provided, however, that no such opinion of counsel
shall be required for sales (i) under Rule 144, (ii) to one of its nominees, affiliates or a
nominee thereof, (iii) to a pension or profit-sharing fund established and maintained for its
employees or for the employees of any affiliate, (iv) from a nominee to any of the aforementioned
persons as beneficial owner of this Warrant or such Warrant Shares, or (v) to a qualified
institutional buyer, so long as such transfer is effected in compliance with Rule 144A under the
Securities Act.

          (b) The Holder understands and agrees that subject to Section 4.10 of the Purchase Agreement,
all certificates evidencing the shares to be issued to the Holder may bear the following legend:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED.”

 4.

 

     5. Adjustment of Exercise Price and Shares. 

          (a) In the event of changes in the outstanding Common Stock of the Company by reason of stock
dividends, split-ups, recapitalizations, reclassifications, combinations or exchanges of shares,
separations, reorganizations, liquidations, consolidation, acquisition of the Company (whether
through merger or acquisition of substantially all the assets or stock of the Company), or the
like, the number and class of shares available under the Warrant in the aggregate and the Exercise
Price shall be correspondingly adjusted to give the Holder of the Warrant, on exercise for the same
aggregate Exercise Price, the total number, class, and kind of shares or other property as the
Holder would have owned had the Warrant been exercised prior to the event and had the Holder
continued to hold such shares until the event requiring adjustment. The form of this Warrant need
not be changed because of any adjustment in the number of Exercise Shares subject to this Warrant.

          (b) If at any time or from time to time the holders of Common Stock of the Company (or any
shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall
have received or become entitled to receive, without payment therefor,

               (i) Common Stock or any shares of stock or other securities which are at any time directly or
indirectly convertible into or exchangeable for Common Stock, or any rights or options to subscribe
for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution
(other than a dividend or distribution covered in Section 5(a) above),

               (ii) any cash paid or payable otherwise than as a cash dividend or

               (iii) Common Stock or additional stock or other securities or property (including cash) by way
of spinoff, split-up, reclassification, combination of shares or similar corporate rearrangement
(other than shares of Common Stock pursuant to Section 5(a) above),

then and in each such case, the Holder hereof will, upon the exercise of this Warrant, be entitled
to receive, in addition to the number of shares of Common Stock receivable thereupon, and without
payment of any additional consideration therefor, the amount of stock and other securities and
property (including cash in the cases referred to in clauses (ii) and (iii) above) which such
Holder would hold on the date of such exercise had he been the holder of record of such Common
Stock as of the date on which holders of Common Stock received or became entitled to receive such
shares or all other additional stock and other securities and property.

     6. Subsequent Financings. 

               (i) If, at any time prior to the second and one half (2 1/2) year anniversary of the date
hereof, the Company issues additional shares of Common Stock or rights, warrants, options or other
securities or debt convertible, exercisable or exchangeable for shares of Common Stock or otherwise
entitling any individual or entity to acquire shares of Common Stock (collectively, “Common Stock
Equivalents”) at an effective net price to the Company per share of Common Stock (the “Effective
Price”) less than four dollars ($4.00) (as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like after the date hereof), then the Exercise Price shall be reduced to
equal the product of (A) the Exercise Price in effect

 5.

 

immediately prior to such issuance of Common Stock or Common Stock Equivalents times (B) a
fraction, the numerator of which is the sum of (1) the number of shares of Common Stock outstanding
immediately prior to such issuance, plus (2) the number of shares of Common Stock which the
aggregate Effective Price of the Common Stock issued (or deemed to be issued) would purchase at the
Exercise Price, and the denominator of which is the aggregate number of shares of Common Stock
outstanding or deemed to be outstanding immediately after such issuance. For purposes of this
paragraph, in connection with any issuance of any Common Stock Equivalents, (A) the maximum number
of shares of Common Stock potentially issuable at any time upon conversion, exercise or exchange of
such Common Stock Equivalents (the “Deemed Number”) shall be deemed to be outstanding upon issuance
of such Common Stock Equivalents, (B) the Effective Price applicable to such Common Stock shall
equal the minimum dollar value of consideration payable to the Company to purchase such Common
Stock Equivalents and to convert, exercise or exchange them into Common Stock (net of any
discounts, fees, commissions and other expenses), divided by the Deemed Number, and (C) no further
adjustment shall be made to the Exercise Price upon the actual issuance of Common Stock upon
conversion, exercise or exchange of such Common Stock Equivalents.

               (ii) If, at any time while this Warrant is outstanding, the Company issues Common Stock
Equivalents with an Effective Price or a number of underlying shares that floats or resets or
otherwise varies or is subject to adjustment based (directly or indirectly) on market prices of the
Common Stock (a “Floating Price Security”) in a transaction the primary purpose of which is to
raise capital, then for purposes of applying the preceding paragraph in connection with any
subsequent exercise, the Effective Price will be determined separately on each Exercise Date and
will be deemed to equal the lowest Effective Price at which any holder of such Floating Price
Security is entitled to acquire Common Stock on such Exercise Date (regardless of whether any such
holder actually acquires any shares on such date).

               (iii) Notwithstanding the foregoing, no adjustment will be made under this Section 6 in
respect to any issuance of Common Stock (A) upon exercise or conversion of any options or other
securities described in the SEC Documents (as defined in the Purchase Agreement) or Disclosure
Schedule to the Purchase Agreement or otherwise pursuant to any employee benefit plan of the
Company or its subsidiaries or hereafter adopted by the Company, or (B) in connection with any
grant of options to employees, officers, directors or consultants of the Company pursuant to a
stock option plan duly adopted by the Company’s board of directors or in respect of the issuance of
Common Stock upon exercise of any such options.

     7. Fractional Shares. No fractional shares shall be issued upon the
exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Exercise Shares
(including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of
determining whether the exercise would result in the issuance of any fractional share. If, after
aggregation, the exercise would result in the issuance of a fractional share, the Company shall, in
lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction a sum
in cash equal to the product resulting from multiplying the then current fair market value of an
Exercise Share by such fraction.

     8. Fundamental Transactions. If, at any time while this Warrant is
outstanding, (i) the Company effects any merger of the Company with or into another entity, (ii)

 6.

 

the Company effects any sale of all or substantially all of its assets in one or a series of
related transactions, (iii) any tender offer or exchange offer (whether by the Company or another
individual or entity) is completed pursuant to which holders of Common Stock are permitted to
tender or exchange their shares for other securities, cash or property, or (iv) the Company effects
any reclassification of the Common Stock or any compulsory share exchange pursuant to which the
Common Stock is effectively converted into or exchanged for other securities, cash or property
(other than as a result of a subdivision or combination of shares of Common Stock covered by
Section 5 above) (in any such case, a “Fundamental Transaction”), then, upon any subsequent
exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that
would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental
Transaction, at the option of the Holder, (a) upon exercise of this Warrant, the number of shares
of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the “Alternate Consideration”) receivable upon or as
a result of such reorganization, reclassification, merger, consolidation or disposition of assets
by a Holder of the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on
the amount of Alternate Consideration issuable in respect of one share of Common Stock in such
Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then the Holder shall be given the
same choice as to the Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. To the extent necessary to effectuate the foregoing
provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall
issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the
Holder’s right to exercise such warrant into Alternate Consideration. The terms of any agreement
pursuant to which a Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this Section 8 and insuring that
this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.

     9. No Stockholder Rights. This Warrant in and of itself shall not entitle
the Holder to any voting rights or other rights as a shareholder of the Company.

     10. Registration Rights. The Holder of the Warrant Shares shall be entitled
to the registration rights to such Warrant Shares provided by the Purchase Agreement.

     11. Transfer of Warrant. Subject to applicable laws and the restriction on
transfer set forth on the first page of this Warrant, this Warrant and all rights hereunder are
transferable, by the Holder in person or by duly authorized attorney, upon delivery of this Warrant
and the form of assignment attached hereto to any transferee designated by Holder. The transferee
shall sign an investment letter in form and substance reasonably satisfactory to the Company and
its counsel.

 7.

 

     12. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to indemnity or otherwise as it
may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute an original contractual obligation
of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be
at any time enforceable by anyone.

     13. Notices, etc. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the party to be
notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the
recipient, if not, then on the next business day, (c) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after
deposit with a nationally recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the Company at the address listed on
the signature page and to Holder at:

	 	 	 
	 

	 	Seven Hills Partners LLC
	

	 	c/o Seven Hills Group LLC
	

	 	88 Kearny Street
	

	 	San Francisco, CA 94108
	

	 	Attn: Kempton Dunn III
	

	 	Fax: (415) 869-6262

or at such other address as the Company or Holder may designate by ten (10) days advance written
notice to the other parties hereto.

     14. Acceptance. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to all of the terms and conditions contained herein.

     15. Governing Law. This Warrant and all rights, obligations and liabilities
hereunder shall be governed by the laws of the State of California.

     16. Remedies. The Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific performance of its
rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant
and hereby agrees to waive the defense in any action for specific performance that a remedy at law
would be adequate. In any action or proceeding brought to enforce any provision of this Warrant or
where any provision hereof is validly asserted as a defense, the successful party to such action or
proceeding shall be entitled to recover reasonable attorneys’ fees in addition to any other
available remedy.

 8.

 

     In Witness Whereof, the Company has caused this Warrant to be executed by its duly
authorized officer as of May 6, 2005.

	 	 	 	 	 
	 	 	SOLEXA, INC.
	 
	 	 	 	 
	

	 	By:
	 	/s/ John West
	 	 	 	 	 

	 	 	 	 	 
	

	 	Name:
	 	John West
	 
	 	 	 	 
	

	 	Title:
	 	Chief Executive Officer
	 
	 	 	 	 
	

	 	Address:
	 	25861 Industrial Boulevard
	

	 	 	 	Hayward, CA 94545

 

 

NOTICE OF EXERCISE

TO: Solexa, Inc. 

     (1)o
The undersigned hereby elects to purchase
                                shares of the
Common Stock of Solexa, Inc.  (the “Company”) pursuant to the terms of the attached
Warrant, and tenders herewith payment of the exercise price in full, together with all applicable
transfer taxes, if any.

          o
The undersigned hereby elects to purchase
                                shares of Common Stock of the
Company pursuant to the terms of the net exercise provisions set forth in Section 2.1 of the
attached Warrant, and shall tender payment of all applicable transfer taxes, if any.

     (2) Please issue a certificate or certificates representing said shares of Common Stock of the
Company in the name of the undersigned or in such other name as is specified below:

(Name)

(Address)

     (3) The undersigned represents that (i) the aforesaid shares of Common Stock are being
acquired for the account of the undersigned for investment and not with a view to, or for resale in
connection with, the distribution thereof and that the undersigned has no present intention of
distributing or reselling such shares, other than as contemplated by Article 7 of the Securities
Purchase Agreement dated as of April 21, 2005 by and among the Company and the purchasers named
therein (the “Purchase Agreement”); (ii) the undersigned is aware of the Company’s business affairs
and financial condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision regarding its investment in the Company; (iii) the undersigned
is experienced in making investments of this type and has such knowledge and background in
financial and business matters that the undersigned is capable of evaluating the merits and risks
of this investment and protecting the undersigned’s own interests; (iv) the undersigned understands
that the shares of Common Stock issuable upon exercise of this Warrant have not been registered
(except to the extent a registration statement pursuant to and as contemplated by Article 7 of the
Purchase Agreement is effective) under the Securities Act of 1933, as amended (the “Securities
Act”), by reason of a specific exemption from the registration provisions of the Securities Act,
which exemption depends upon, among other things, the bona fide nature of the investment intent as
expressed herein, and, because such securities have not been registered under the Securities Act,
they must be held indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available; (v) the undersigned is aware that the aforesaid
shares of Common Stock may not be sold pursuant to Rule 144 adopted under the Securities Act unless
certain conditions are met and until the undersigned has held the shares for the number of years
prescribed by Rule 144, that among the conditions for use of the Rule is the availability of
current information to the public about the

 

 

Company; and (vi) the undersigned agrees not to make any disposition of all or any part of the
aforesaid shares of Common Stock unless and until there is then in effect a registration statement
under the Securities Act covering such proposed disposition and such disposition is made in
accordance with said registration statement, or the undersigned has provided upon the Company’s
reasonable request, an opinion of counsel satisfactory to the Company, stating that such
registration is not required.

	 	 	 
	 	 	 
	 
	 	 
	(Date)

	 	(Signature)
	 
	 	 
	 
	 	 
	 	 	 
	 
	 	 
	

	 	(Print name)

 

 

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute this form
and supply required information. Do not use this
form to purchase shares.)

     For Value Received, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to

	 	 	 
	Name:
	 	 
	 	 	 
	 
	 	 
	

	 	(Please Print)
	 
	 	 
	Address:
	 	 
	 	 	 
	 
	 	 
	

	 	(Please Print)

Dated: __________, 20__

	 	 	 
	Holder’s
	 	 
	 
	 	 
	Signature:
	 	 
	 	 	 
	 
	 	 
	Holder’s
	 	 
	 
	 	 
	Address:
	 	 
	 	 	 

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the
face of the Warrant, without alteration or enlargement or any change whatever. Officers of
corporations and those acting in a fiduciary or other representative capacity should file proper
evidence of authority to assign the foregoing Warrant.exv10w30

 

EXHIBIT 10.30

	 	 	 	 	 
	TO:

	 	 	 	 
	

	 	 	 	 
	 
	 	 	 	 
	

	 	2005 EXECUTIVE INCENTIVE PLAN (EIP)	 	 

THORATEC CORPORATION

EXECUTIVE INCENTIVE PLAN (EIP)

Corporate

FY 2005

 

 

	 	 	 	 	 
	TO:

	 	 	 	 
	

	 	 	 	 
	 
	 	 	 	 
	

	 	2005 EXECUTIVE INCENTIVE PLAN (EIP)	 	 

	I.  	Objective
	 
	   	Thoratec’s Executive Incentive Plan, hereinafter referred to as EIP is intended to reward
executive personnel who significantly impact and influence Thoratec’s productivity in
proportion to their accomplishment of specified objectives.
	 
	   	The purpose of the plan is to ensure maximum return to Thoratec by encouraging greater
initiative, resourcefulness, teamwork and efficiency on the part of senior management whose
performance and responsibilities directly affect company profits.
	 
	   	Awarding of the bonus will be based on accomplishing a set of annual objectives, determined
by the Chief Executive Officer (“CEO”) and the Board of Directors, typically at the
beginning of the year. Bonus determinations and payouts will take place after the financial
statements have been prepared for the fiscal year.
	 
	II.  	Determination Of The Fund
	 
	   	The availability of, and participants in, the fund will be set by the CEO and approved by
the Board of Directors as part of the annual budgeting process.
	 
	III.  	Effective Date
	 
	   	The effective date of this program is January 2, 2005, the beginning of the plan year, and
will continue in effect until December 31, 2005, or until terminated or amended by the Board
of Directors. This plan supersedes all prior EIP plans.
	 
	IV.  	Eligibility
	 
	   	Participation in the plan is limited to Officers and others in comparable levels of
responsibility who have a direct and significant influence on Thoratec’s growth and
profitability. Employees must be regular and not eligible for any other Thoratec commission,
bonus or incentive plan in order to be eligible to participate in the EIP.
	 
	   	Participating employees will be determined at the beginning of the fiscal year, or at such
time during the Fiscal Year that an employee achieves an eligible position. Employees will
be notified of their eligibility and plan objectives, as soon as possible after the
determination by the CEO or Board of Directors.
	 
	   	Individuals must be employed by Thoratec at the close of the fiscal year in order to be
eligible for an award under the EIP except participants who are involuntarily terminated due
to a divestiture, plant closing, reorganization or reduction in force during the plan year
may receive an award on the prorated basis described in Section VIII, Plan
Administration, Prorated Awards, [subject to approval by the CEO]. These monies
will be paid out at the usual and customary time of payment of all bonuses. For purposes of
this plan, termination shall mean the day the employee leaves the job, which may not
necessarily be the last day on the payroll.

 

 

	 	 	 	 	 
	TO:

	 	 	 	 
	

	 	 	 	 
	 
	 	 	 	 
	

	 	2005 EXECUTIVE INCENTIVE PLAN (EIP)	 	 

	V.  	Incentive Objectives
	 
	   	Objectives will be agreed to by the CEO with the Executive Officers reporting to him and
with concurrence by the Board of Directors as necessary. Generally, there will be a minimum
of four up
to a maximum of seven objectives, which will include two or more corporate financial
objectives. Each objective will be weighted according to its importance, which weight will
determine the percentage of the bonus awarded for completion of that objective. (See
Section VI below.)
	 
	   	After approval, copies of these goals must be submitted to the Vice President of Human
Resources.
	 
	VI.  	Bonus Opportunity and Award
	 
	   	The award opportunity will be expressed as a percentage of the participant’s base salary at
the close of the fiscal year. The award will be approved by the Board of Directors or the
CEO, and will be consistent with the participant’s peers within the company.
	 
	   	The amount that a participant actually receives for the full fiscal year will be based upon
the extent to which the set objectives have been achieved. The participant will receive a
percentage of the total award opportunity corresponding to the percentage of each objective
accomplished and the weight assigned to the objective. Evaluations of performance against
management and business plan objectives are made for the full year prior to fiscal year-end
payment.
	 
	VII.  	Performance Goal and Payout
	 
	   	In addition to your individual goals, everyone will have two company-oriented financial
goals that will be achieved according to the following guidelines:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Revenue	 	 	Cash Earnings (1)	 
	 	 	 	 	 	 	Goal	 	 	Award	 	 	Goal	 	 	Award	 
	Threshold
	 	= to, or >	 	$	*	 	 	 	50	%	 	$	*	 	 	 	50	%
	Target
	 	= to, or >	 	$	*	 	 	 	100	%	 	$	*	 	 	 	100	%

	   	 Note: If revenue is less than $* (95% of target), no payment is earned for that
objective. If pre-bonus income is less than $* (85% of target), no payment is earned for
that objective. If actual results fall between threshold and target, interpolate between
them to get actual payout percentage. This percentage will be multiplied times the weight
given the objective in your individual plan to determine the achievement. Quarterly revenue
and cash earnings information may be released at the end of each quarter, after earnings
have been disclosed to the public.

	(1)	 	Cash Earnings is defined as consolidated GAAP net income before extraordinary
items and excluding the effect of amortization of goodwill and purchased intangibles, in
process research and development, merger restructuring and unusual costs, stock-based
employee compensation expense, income tax expense (benefit) and special incentive awards.
	 
	*	 	Amounts to be determined by the Compensation and Option
Committee of the Board of Directors.

 

 

	 	 	 	 	 
	TO:

	 	 	 	 
	

	 	 	 	 
	 
	 	 	 	 
	

	 	2005 EXECUTIVE INCENTIVE PLAN (EIP)	 	 

	VIII.  	Over-Achievement Award Opportunity/Performance Accelerator
	 
	   	     In addition, each EIP participant will receive a [x]**% increase for every [y]**%
increase in consolidated cash earnings over the target level.
	 
	IX.  	Plan Administration
	 
	   	Prorated Awards. Individuals who are promoted to eligible positions during the plan
year, new hires into eligible positions and eligible employees who are either on
leave or on active written warning for part of the year may be awarded partial bonuses
under this program, based on the accomplished objectives and their respective weights,
subject to the approval of the CEO.
	 
	   	Transfers. In the event of transfer of an eligible participant to another position or
department, the transferring manager will evaluate EIP results for prorated award (see
Prorated Awards above) at the end of the year, and forward copies to the Human Resources
Department. The hiring manager will be responsible for setting the key business plan
objectives for the balance of the year, if applicable, and forwarding the original to Human
Resources for approval. Awards based on these objectives will be prorated (see Prorated
Awards above) as well, for end of the year payment.
	 
	   	Authority. The Board of Directors shall have the full power and authority to construe,
interpret and administer the plan. All decisions, actions or interpretations of the Board
of Directors shall be final and conclusive and binding on all parties. This program shall
be administered by the Human Resources Department.
	 
	X.  	General Provisions

	 	•  	The Executive Incentive Plan for 2005 may be reviewed and revised at the Board’s
discretion.
	 
	 	•  	Nothing in this plan shall be construed to limit in any way the right of Thoratec
Corporation to terminate an employee’s employment at any time, with or without cause or
notice, nor shall it be evidence of any agreement or understanding, expressed or
implied, that Thoratec or any of its subsidiaries will employ an employee in any
particular position, for any particular period of time, ensure participation in any
incentive programs, or the granting of awards from such programs as they may from time
to time exist or be constituted. Thoratec reserves the right to discontinue or alter
the plan at its sole discretion at any time with or without notice.

	**	 	Percentages for [x] and [y] to be determined by the
Compensation and Option Committee of the Board of Directors.

 

 

	 	 	 	 	 
	TO:

	 	 	 	 
	

	 	 	 	 
	 
	 	 	 	 
	

	 	2005 EXECUTIVE INCENTIVE PLAN (EIP)	 	 

ACKNOWLEDGEMENT

I                                                                                  hereby acknowledge that I have received, read and
understand the 2005 Executive Incentive Plan and agree to the conditions therein.

	 	 	 
	 
	 	 
	 	 	 
	Signature
	 	Date

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