8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 23, 2005

SOLEXA, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

000-22570
(Commission File No.) 94-3161073
(IRS Employer Identification No.)

25861 Industrial Blvd.
Hayward, California 94545
(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (510) 670-9300

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 (see General Instruction A.2. below):

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

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

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

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

TABLE OF CONTENTS

EXHIBIT 10.66

EXHIBIT 10.67

Item 1.01 Entry into a Material Definitive Agreement.

On June 23, 2005, Solexa, Inc., or Solexa, entered into an executive employment agreement, or the Employment Agreement, with John S. West, Solexa’s Chief Executive Officer. Under the terms of the Employment Agreement, Mr. West will receive (i) an annualized base salary of $350,000 per year, (ii) an annual bonus with a target of up to 40% of the base salary subject to the achievement of milestones, and (iii) a stock option grant to purchase 600,000 shares of Solexa common stock which vests and becomes exercisable in 48 equal installments over 4 years beginning August 9, 2004, which stock option was granted on May 9, 2005 with an exercise price of $6.39 per share. Furthermore, if Solexa enters into a collaboration or other strategic alliance or partnership, on or before August 9, 2006, which provides for at least $4 million of committed cash investment in or payment to Solexa other than for goods or services, Mr. West shall be entitled to an aggregate lump sum bonus equal to the greater of (i) 1% of the aggregate committed amount to be paid in such transaction or (ii) $100,000.

Under the terms of the Employment Agreement, in the event of a Change of Control (as defined in the Employment Agreement), Mr. West will be entitled to receive (a) two years acceleration of the vesting and exercisability of any outstanding stock options granted to him and (b) an aggregate lump sum bonus equal to the greater of (i) 2% of the amount by which the value received by Solexa stockholders in connection with the Change of Control exceeds the sum of $50 million plus the aggregate gross proceeds received by Solexa through sales of equity securities after the Closing (as defined in the Employment Agreement) or (ii) $100,000. In addition, if (i) Mr. West’s employment is terminated without Cause (as defined in the Employment Agreement) by Solexa or (ii) Mr. West resigns with Good Reason (as defined in the Employment Agreement), he will be entitled to receive a lump sum severance payment equal to 12 months of his final base salary, reimbursement of the cost of continued health insurance coverage for himself and his eligible dependents for 12 months, and one year acceleration of the vesting and exercisability of any outstanding stock options granted to him (except to the extent such options are accelerated in connection with a Change of Control). If Mr. West’s employment is terminated without Cause or he resigns for Good Reason within 6 months prior to or 12 months following a Change of Control, he will be entitled to receive a lump sum severance payment equal to 12 months of his final base salary and reimbursement of the cost of continued health insurance coverage for himself and his eligible dependents for 12 months.

A copy of the Employment Agreement is attached hereto as Exhibit 10.66 and is incorporated herein by reference.

On June 23, 2005, Solexa also entered into an indemnity agreement with Mr. West, or the Indemnity Agreement, which provides, among other things, that Solexa will indemnify Mr. West under the circumstances and to the extend provided for therein, for certain expenses he may be required to pay in connection with certain claims which he may be made a party by reason of his position as chief executive officer of Solexa, and otherwise to the fullest extent permitted under Delaware law and Solexa’s Bylaws.

A copy of the Indemnity Agreement is attached hereto as Exhibit 10.67 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits:

Exhibit
Number		Description
	10.66	Executive Employment Agreement, dated June 23, 2005, by and between John S. West and Solexa, Inc.
	10.67	Indemnity Agreement, dated June 23, 2005, by and between John West and Solexa, Inc.

SIGNATURE

     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, thereunto duly authorized.

	SOLEXA,INC.
Dated: June 28, 2005	By:	/s/ Linda Rubinstein
	Name: Linda Rubinstein
	Title: Vice President and Chief Financial Officer

EXHIBITS

Exhibit
Number	Description
10.66	Executive Employment Agreement, dated June 23, 2005, by and between John S. West and Solexa, Inc.
10.67	Indemnity Agreement, dated June 23, 2005, by and between John West and Solexa, Inc.

EX-10.66

Exhibit 10.66

EXECUTIVE EMPLOYMENT AGREEMENT

FOR

John S. West

This Executive Employment Agreement (the “Agreement”) is entered into as of June 23, 2005 and effective as of the Closing (as defined below), by and between John S. West (“Executive”) and Solexa, Inc., a Delaware corporation (“Solexa”).

WHEREAS, Solexa has employed Executive effective upon the First Closing Date (as defined in the Acquisition Agreement) (“Closing”) of the business combination transaction between Solexa and Solexa Limited, a company registered in England and Wales (“Solexa UK”) pursuant to that certain Acquisition Agreement dated September 28, 2004 (“Acquisition Agreement”), in accordance with which Executive’s Solexa UK stock options have been exchanged for Solexa stock options and in which the acquisition of Solexa UK’s goodwill is a key asset motivating the participation of Solexa in the Acquisition Agreement.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, it is hereby agreed by and among the parties as follows:

1. EMPLOYMENT BY SOLEXA .

     1.1 Title and Responsibilities. Subject to the terms set forth herein, Solexa agrees to employ Executive effective on Closing in the position of Chief Executive Officer, and Executive hereby accepts such employment and office. It is also anticipated that Executive will be nominated with the support Solexa management for election by Solexa’s stockholders to serve on the board of directors of Solexa (the “Board”). During his employment with Solexa, Executive will devote substantially all of his business time and attention (except for vacation periods and reasonable periods of illness or other incapacity permitted by the Solexa’s general employment policies) to the business of Solexa and its affiliated entities (“Affiliates”). In addition to any additional reasonable duties and responsibilities delegated to Executive from time to time by the Board, Executive shall be responsible for the general supervision, direction, and authority over the business, affairs, and officers of Solexa and its Affiliates, and shall perform all the duties commonly incident to the office of a chief executive. Unless otherwise requested by the Board, Executive shall continue to serve as a director of Solexa so long as Executive is elected to the Board by Solexa’s stockholders.

     1.2 Budgetary Authority. So long as Executive is employed as Chief Executive Officer of Solexa, Executive shall have responsbility over the budgetary and financial affairs of Solexa subject to procedures and limitations established by the Board from time to time or contained in the Solexa’s bylaws or certificate of incorporation or subject to the Executive’s general fiduciary duties.

     1.3 Solexa Employment Policies. The employment relationship between Executive and Solexa shall be governed by the general employment policies and procedures of Solexa ,

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including those relating to protection of confidential information and assignment of inventions, except that when the terms of this Agreement differ from or are in conflict with such general employment policies or procedures, this Agreement shall control. Executive agrees to execute Solexa ’s standard Proprietary Information and Inventions Agreement (“Inventions Agreement”) attached hereto as Exhibit A.

     1.4 Board Reporting. Executive shall keep the Board reasonably informed (in writing, if so requested) of his conduct of the business or affairs of Solexa and provide such explanations of his conduct as the Board may reasonably require.

     1.5 Prior Employment. From and after Closing, this Agreement shall govern Executive’s employment and services provided with regard to Solexa and its Affiliates, including Solexa UK, and the Executive Employment Agreement dated July 28, 2004, by and among Executive, Abingworth Management Inc., a California corporation (“Abingworth”) and Solexa UK (the “Prior Agreement”) will be terminated and shall have no further force or effect except with respect to obligations that have accrued thereunder upon or prior to Closing or which by their terms continue to apply in regard to services provided prior to Closing.

2. COMPENSATION AND BENEFITS.

     2.1 Salary; Housing Allowance; Taxes. For services rendered hereunder as Chief Executive Officer of Solexa , Executive shall receive an annualized base salary of Three Hundred and Fifty Thousand Dollars ($350,000.00), less required withholdings and deductions, payable in accordance with Solexa ’s standard payroll procedures. All elements of Executive’s compensation will be considered for annual changes upon the review and approval by the Board.

     2.2 Performance Bonuses. Executive shall be eligible for the annual and special bonuses set forth on Exhibit B attached hereto so long as Executive is employed by Solexa. All bonuses paid to Executive shall be paid out in accordance with Solexa’s standard payroll policies.

     2.3 Benefits. Executive shall be entitled to all rights and benefits for which he is eligible under the terms and conditions of the standard benefits and compensation plans which may be in effect from time to time and provided by Solexa to its executive level employees generally. In addition, at a minimum, Solexa shall provide the following benefits to Executive:

     (a) US-based company-paid health insurance for Executive and Executive’s dependents which is substantially the same as that provided to senior executives of Solexa;

     (b) Such monthly contributions, if any to a 401(k) as provided to other senior executives of Solexa;

     (c) Long-term and short-term disability insurance coverage to the extent of fifty percent (50%) of Executive’s starting base salary; and

     (d) Executive shall be entitled to twenty (20) paid days of vacation per year, to begin accruing upon Closing, which unused vacation accruals shall carry over from year to year, up to

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a maximum of twenty (20) days, after which no further vacation shall accrue until Executive has reduced his vacation accrual balance below twenty (20) days.

     2.4 Issuance of Options to Purchase Solexa Stock.

As soon as practicable after Closing, Solexa shall issue to Executive an option (“Option”) under Solexa’s 1992 Stock Option Plan (the “Plan”) to purchase 600,000 shares of common stock of Solexa at an exercise price equal to the fair market value of Solexa’s common stock on the last market trading day prior to the effective date of such Option as set forth in the Plan. The shares underlying the Option shall vest in substantially equal monthly installments over the 48 months beginning with effect from August 9, 2004.

     2.5 Business Expense Reimbursement. Solexa shall reimburse Executive for all reasonable travel (airfare, hotels, meals, fees, etc.), entertainment or other business expenses he incurs in furtherance of or in connection with the performance of his duties hereunder, in accordance with Solexa ’s expense reimbursement policies as in effect from time to time. To the extent reasonably practicable, upon the request of Executive, Solexa shall pay all such expenses in advance.

     2.6 Liability and Indemnification. Solexa shall indemnify Executive as a corporate officer of Solexa and its affiliates to the maximum extent extended to the other officers and directors of each such entity and as required by law (such indemnification is set forth in the agreement attached as Exhibit C) and for claims relating to Executive’s duties for Solexa but arising out of his previous employment. In addition, for so long as Executive is employed as an executive officer or director Solexa or its Affiliates, Solexa shall use commercially reasonable efforts to maintain an insurance policy or policies providing liability insurance for directors, officers and employees of Solexa and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person serves at the request of Solexa, and Executive shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies.

3. OUTSIDE ACTIVITIES; NON-COMPETE.

     3.1 Activities. Executive may (a) engage in civic and not-for-profit activities so long as such activities do not materially interfere with the performance of his duties hereunder and (b) serve as a member of the board of directors of any entity so long as such service does not, in the sole discretion of the Board, materially interfere with the performance of his duties hereunder or violate Section 3.2 hereof. Executive agrees to consult the Board at the first appropriate opportunity and in any case prior to the commencement of any such board service.

     3.2 Non-Competition During Employment. During his employment by Solexa, Executive will not directly or indirectly, whether as an officer, director, stockholder, partner, proprietor, associate, representative, consultant, or in any capacity whatsoever engage in, become financially interested in, be employed by or have any business connection with any other person, corporation, firm, partnership or other entity anywhere in the world with major businesses or

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business units making instrument systems for high speed sequencing of DNA (other than companies making systems primarily for genotyping or gene expression); provided, however, that anything above to the contrary notwithstanding, Executive may own, as a passive investor, securities of any competitor corporation, so long as Executive’s direct holdings in any one such corporation shall not in the aggregate constitute more than five percent (5%) of the voting stock of such corporation.

     3.3 Non-Competition Post Employment. As the acquisition of goodwill is a key asset motivating the participation of Solexa in the Acquisition Agreement, for a period of one year after the termination of the Executive’s employment hereunder howsoever arising, Executive will not directly, whether as an officer, director, stockholder holding more than 5% of the voting stock of the relevant corporation, or partner be employed or engaged anywhere in the world in either a company whose main business is the making of instrument systems for high speed sequencing of DNA, or be employed in direct operational control of the business unit of a larger company which business unit has as its main business the making of instrument systems for high speed sequencing of DNA (other than companies or business units, as applicable, making systems primarily for genotyping or gene expression).

     3.4 Non-solicitation of staff. During his employment under this Agreement and for a period of one year after the termination of the Executive’s employment hereunder howsoever arising, Executive shall not without the prior written consent of the Board directly or indirectly employ, engage or endeavour to entice away from Solexa any key personnel.

     3.5 Non-solicitation of customers. During his employment under this Agreement and for a period of one year after the termination of the Executive’s employment hereunder howsoever arising, Executive shall not induce or seek to induce, by any means involving the disclosure or use of confidential information, any customer or corporate partner of Solexa to cease dealing with Solexa or to restrict or vary the terms upon which it deals with Solexa.

     3.6 Enforceability. If any part of this entire Section 3 is found to be unenforceable by a competent court with jurisdiction over this Agreement, notwithstanding any other provision in this Agreement to the contrary, nothing shall be paid to Executive under this Agreement and no other benefits shall accrue under this Agreement except for the payment of wages and benefits accrued immediately as of Executive’s termination of employment with Solexa.

4. OTHER AGREEMENTS.

Executive represents and warrants that his employment by Solexa will not conflict with and will not be constrained by any prior agreement or relationship with any third party which has not been disclosed to Solexa . During Executive’s employment by Solexa , Executive may use, in the performance of his duties, all information generally known and used by persons with training and experience comparable to his own and all information which is common knowledge in the industry or otherwise legally in the public domain.

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5. TERMINATION OF EMPLOYMENT.

     5.1 At-Will Employment. Executive’s relationship with Solexa is at will. Both Executive, on the one hand, and Solexa on the other, shall have the right to terminate Executive’s employment with Solexa at any time with or without Cause (as defined below). In the event of such termination, Executive agrees to resign from the Board and any committees of the Board on which he may be serving, effective as of the date of termination. Notwithstanding any other provision of the Agreement, the Board shall be under no obligation to vest in or assign to Executive any powers or duties or provide any work for Executive, and the Board may at any time prior to termination and from time to time suspend the Executive from the performance of his duties or exclude him from any premises of Solexa and its Affiliates, in which case the other provisions of this Agreement shall continue to have full force and effect.

     5.2 Termination for Cause. If Solexa terminates Executive’s employment at any time for Cause (as defined below), Executive’s salary shall cease on the date of termination and Executive shall not be entitled to severance pay, pay in lieu of notice or any other such compensation other than payment of accrued salary and vacation and such other benefits as expressly required in such event by applicable law or the terms of applicable benefit plans.

     (a) Definition of “Cause”. For purposes of this Agreement, “Cause” shall mean the occurrence of one or more of the following: (i) Executive’s knowing and willful action which is or is likely to be seriously injurious to Solexa ; (ii) any intentional act by Executive in connection with his responsibilities as an employee constituting fraud or a felony crime; (iii) Executive’s consistent failure to report for work; (iv) persistent or repeated material breach of this Agreement; or (v) Executive becoming disqualified from holding office through his own act or omission; provided that in any such event, there has been delivered to Executive a written demand for performance from the Board which describes the basis for the Board’s belief that Executive has committed one of the acts set forth in clauses (i)-(v) above and provides Executive with thirty (30) days to take corrective action (which may include any suspension period). Notwithstanding the foregoing, Cause shall not include Executive’s physical or mental disability or death, poor operating results of Solexa, litigation filed against Solexa or Executive, or general incompetence.

     5.3 Termination Without Cause. Except as provided in Section 6 below under “Change of Control” “Change of Control Acceleration Benefit” if Executive’s employment is terminated at any time without Cause, Executive shall be entitled to the following severance benefits:

     (a) a lump sum payment in an amount equal to twelve (12) months of Executive’s base salary as of his termination date, less required withholdings and deductions;

     (b) reimbursement of the cost of continued health insurance coverage for Executive and Executive’s eligible dependents, regardless of whether Executive elects continued coverage under federal COBRA or any state equivalent or elects to procure reasonably equivalent private coverage, for a period of twelve (12) months from the termination date; and

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     (c) shares subject to the outstanding options to purchase Solexa stock then held by Executive which, but for such termination, would have become vested over the succeeding twelve (12) months following such termination shall immediately vest and become exercisable.

     5.4 Executive’s Voluntary Resignation. Executive may voluntarily terminate his employment hereunder at any time with a minimum of one month notice, and with or without Good Reason (as defined below). If Executive voluntarily terminates his employment other than for Good Reason, he will not be entitled to severance pay, pay in lieu of notice or any other such compensation other than payment of accrued salary and vacation and such other benefits as expressly required in such event by applicable law or the terms of applicable benefit plans.

     5.5 Termination for Death or Disability. Executive’s employment will be terminated in the event of Executive’s death, or, subject to applicable law, any illness, disability or other incapacity that renders Executive physically or mentally unable to perform his duties hereunder for a period in excess of ninety (90) consecutive days or more than one hundred twenty (120) days in any consecutive twelve (12) month period. The determination regarding whether Executive is physically or mentally unable to perform his duties shall be based on the opinion of Executive’s physician(s) and/or mental health professional(s). Executive’s inability to be physically present on Solexa’s premises shall not constitute a presumption that Executive is unable to perform such duties. If Executive’s employment is terminated for death or disability as described in this Section, Executive or Executive’s heirs, successors, and assigns shall not receive any compensation or benefits other than payment of accrued salary and vacation and such other benefits as expressly required in such event by applicable law or the terms of applicable benefits plans.

     5.6 Executive’s Resignation for Good Reason. Executive may resign his employment for Good Reason so long as Executive tenders his resignation to Solexa within one hundred and twenty (120) days after Executive learns of the occurrence of the event which forms the basis for his termination for Good Reason. Except as provided under Section 6.2 of this Agreement, if Executive terminates his employment for Good Reason, Executive shall be entitled to the same severance benefits as set forth in Section 5.3 above. In the event of Executive’s termination/resignation for Good Reason, severance benefits under Section 5.3(a) or Section 6.2(a)(i), shall be based on Executive’s base salary immediately prior to any reduction that constitutes Good Reason under Section 5.6(a)(ii).

     (a) Definition of “Good Reason”.

          For purposes of this Agreement, “Good Reason” shall mean any one of the following events without Executive’s express written consent: (i) a substantial reduction of Executive’s duties, title, authority, status, or responsibilities; (ii) a reduction of Executive’s then current base salary; (iii) the relocation of Executive, without Executive’s consent, to a facility or location more than 50 miles from his current home at the date of this Agreement; (iv) a material breach by Solexa of any of its obligations under this Agreement.

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6. CHANGE OF CONTROL.

     6.1 Definition. For purposes of this Agreement, 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.

     (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.

     6.2 Change of Control Termination. If, within six (6) months prior to or twelve (12) months following a Change of Control, Executive’s employment is terminated without Cause or Executive resigns from employment for Good Reason (a “Change of Control Termination”), Executive shall be eligible to receive the severance benefits described in Section 6.2(a).

     (a) Severance Benefits. In the event of a Change of Control Termination, Executive shall receive the following severance benefits in lieu of those set forth in Section 5 above:

     (i) a lump sum payment in an amount equal to twelve (12) months of Executive’s base salary as of his termination date, less required withholdings and deductions; and

     (ii) reimbursement of the cost of continued health insurance coverage for Executive and Executive’s eligible dependents, regardless of whether Executive elects continued coverage under federal COBRA or any state equivalent or elects to procure reasonably equivalent private coverage, for a period of twelve (12) months from the termination date.

     6.3 Change of Control Acceleration Benefit. If, at any time during Executive’s term of employment, there is a Change of Control, shares subject to the outstanding options to purchase Solexa stock then held by Executive which are scheduled to vest over the succeeding twenty-four (24) months following the Change of Control shall immediately vest and become

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exercisable. In the event Executive becomes entitled to this benefit, he shall no longer be entitled to any vesting acceleration benefit pursuant to Section 5.3 or 5.6.

     GENERAL PROVISIONS.

     7.1 Notices. Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of personal delivery (including, personal delivery by facsimile transmission or the third day after mailing by first class mail) to each party hereto at his or its address as listed on the signature page hereto (which address may be changed by written notice).

     7.2 Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but such invalid, illegal or unenforceable provision will be reformed, construed and enforced in such jurisdiction so as to render it valid, legal, and enforceable consistent with the intent of the parties insofar as possible.

     7.3 Waiver. If either party should waive any breach of any provisions of this Agreement, he or it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

     7.4 Entire Agreement. This Agreement and its Exhibits together constitute the entire agreement among Executive and Solexa and supersede any prior agreement, promise, representation, or statement written or otherwise among such parties with regard to this subject matter. This Agreement is entered into without reliance on any promise, representation, statement or agreement other than those expressly contained or incorporated herein, and it cannot be modified or amended except in a writing signed by Executive and a duly authorized officer of Solexa.

     7.5 Counterparts. This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement.

     7.6 Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

     7.7 Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive, Solexa and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of his duties hereunder and he may not assign any of his rights hereunder without the written consent of the other parties hereto, which shall not be withheld unreasonably.

     7.8 Remedies. Executive’s duties under Section 3 shall survive termination of Executive’s employment. Executive acknowledges that a remedy at law for any breach or threatened breach by Executive of the Inventions Agreement would be inadequate, and Executive therefore agrees that Solexa shall be entitled to injunctive relief in case of any such breach or threatened breach.

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     7.9 Governing Law. All questions concerning the construction, validity and interpretation of this Agreement will be governed by the law of the State of California, without regard to conflicts of laws principles thereof, as applied to contracts made and to be performed entirely within California.

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first above written.
SOLEXA, INC.
By:	/s/ Craig C. Taylor
Name: Craig C. Taylor
Title: Chairman of the Board
Address:
John S. West
/s/ John West

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EXHIBIT A

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

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EXHIBIT B

ANNUAL AND SPECIAL PERFORMANCE BONUSES

In addition to the base compensation payable to Executive as provided in Section 2.1, Solexa shall pay to Executive, as compensation for his continued services to Solexa, the following:

          (a) In respect of fiscal year 2005, Solexa shall pay to the Executive an aggregate lump sum bonus of up to forty per cent (40%) of Executive’s annual salary (subject to adjustment pursuant to good faith negotiations between Executive and Solexa ) proportionately upon achievement of the milestones set forth in the business plan as approved by the Board.

          (b) Thereafter, Executive shall be paid an annual bonus on a similar basis as (a) above as determined pursuant to good faith negotiations between Executive and Solexa based on the achievement of milestones set forth in the annual operating plan developed by Solexa’s management team and approved by the compensation committee of the Board.

          (c) Until August 9, 2006, upon the initial closing of any collaboration or other strategic alliance or partnership the terms of which provide for at least Four Million Dollars ($4,000,000) of committed cash investment in or payment to Solexa other than for goods or services, Solexa shall, unless such investments or payments fall within Section (d) below, pay to Executive, when received by Solexa, an aggregate lump sum bonus equal to the greater of: (i) one percent (1%) of the aggregate committed amount to be paid in such transaction (without regard to any commissions or other transaction expenses paid by Solexa), such amount to include upfront payments, payments in respect of intellectual property and the premium for any equity investment above the market price of Solexa stock; or (ii) One Hundred Thousand Dollars ($100,000).

          (d) In the event of a Change of Control (as defined in Section 6) Solexa shall pay to Executive an aggregate lump sum bonus equal to the greater of (i) two percent (2%) of the amount by which the value received by Solexa’s stockholders in connection with the Change of Control exceeds the sum of Fifty Million Dollars ($50,000,000) plus the aggregate gross proceeds received by Solexa through sales of equity securities after the Closing; or (ii) One Hundred Thousand Dollars ($100,000).

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EXHIBIT C

INDEMNIFICATION AGREEMENT

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EX-10.67

Exhibit 10.67

INDEMNITY AGREEMENT

     THIS AGREEMENT is made and entered into as of the 23 day of June 2005 by and between SOLEXA, INC., a Delaware corporation (the “Corporation”), and JOHN WEST (the “Agent”).

RECITALS

     WHEREAS, Agent will perform a valuable service to the Corporation in her capacity as Chief Executive Officer of the Corporation;

     WHEREAS, the stockholders of the Corporation have adopted bylaws (the “Bylaws”) providing for the indemnification of the directors, officers, employees and other agents of the Corporation, including persons serving at the request of the Corporation in such capacities with other corporations or enterprises, as authorized by the Delaware General Corporation Law, as amended (the “Code”);

     WHEREAS, the Bylaws and the Code, by their non-exclusive nature, permit contracts between the Corporation and its agents, officers, employees and other agents with respect to indemnification of such persons; and

     WHEREAS, in order to induce Agent to serve as Vice President and, effective once the Corporation’s annual report on Form 10-K for the year ended December 31, 2004 has been filed with Securities and Exchange Commission, Chief Executive Officer of the Corporation and in any event no later than April 30, 2005, and as a precondition for Agent’s service in such capacity, the Corporation has determined and agreed to enter into this Agreement with Agent;

     NOW, THEREFORE, in consideration of Agent’s service as an officer of the Corporation after the date hereof, the parties hereto agree as follows:

AGREEMENT

     1. Services to the Corporation. Agent will serve, at the will of the Corporation or under separate contract, if any such contract exists, as Chief Executive Officer of the Corporation; provided, however, that Agent may at any time and for any reason resign from such position or any other position (subject to any contractual obligation that Agent may have assumed apart from this Agreement) and that the Corporation shall have no obligation under this Agreement to continue Agent in such position or any other position.

     2. Indemnity of Agent. The Corporation hereby agrees to hold harmless and indemnify Agent to the fullest extent authorized or permitted by the provisions of the Bylaws and the Code, as the same may be amended from time to time (but, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than the Bylaws or the Code permitted prior to adoption of such amendment).

     3. Additional Indemnity. In addition to and not in limitation of the indemnification otherwise provided for herein, and subject only to the exclusions set forth in Section 4 hereof, the Corporation hereby further agrees to hold harmless and indemnify Agent:

          (a) from and against any and all Expenses (as defined below) paid or payable by Agent in connection with or in respect of a Claim (as defined below). “Claim” means any threatened, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any inquiry, hearing or investigation, whether instituted by the Corporation or any other party, that Agent in good faith believes might lead to the institution of any such action, suit, proceeding or alternative dispute resolution

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whether civil, criminal, administrative, investigative or otherwise, each of the foregoing by reason of the fact that Agent is, was or at any time becomes a director, officer, employee or other agent of Corporation, or is or was serving or at any time serves at the written request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. “Expense” means any and all expenses (including attorneys’ fees), witness fees, damages, judgments, fines and amounts paid in settlement and any other amounts paid or incurred by Agent in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in any Claim; any and all judgments, fines, losses, liabilities, penalties, and amounts paid in settlement of any such claim; and

          (b) otherwise to the fullest extent as may be provided to Agent by the Corporation under the non-exclusivity provisions of the Code and Section 42 of the Bylaws.

     4. Limitations on Additional Indemnity.

          (a) No indemnity pursuant to Section 3 hereof shall be paid by the Corporation:

               (i) on account of any claim against Agent for an accounting of profits made from the purchase or sale by Agent of securities of the Corporation pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto (the “Exchange Act”) or similar provisions of any federal, state or local statutory law;

               (ii) on account of Agent’s conduct that was knowingly fraudulent or deliberately dishonest or that constituted willful misconduct;

               (iii) on account of Agent’s conduct that constituted a breach of Agent’s duty of loyalty to the Corporation or resulted in any personal profit or advantage to which Agent was not legally entitled;

               (iv) for which payment actually has been made to Agent under a valid and collectible insurance policy or under a valid and enforceable indemnity clause, bylaw or agreement, except in respect of any excess beyond payment under such insurance, clause, bylaw or agreement;

               (v) if indemnification is not lawful (and, in this respect, both the Corporation and Agent have been advised that the Securities and Exchange Commission believes that indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication); or

               (vi) in connection with any proceeding (or part thereof) initiated by Agent, or any proceeding by Agent against the Corporation or its directors, officers, employees or other agents, unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the Corporation, (iii) such indemnification is provided by the Corporation, in its sole discretion, pursuant to the powers vested in the Corporation under the Code, or (iv) the proceeding is initiated pursuant to Section 9 hereof.

          (b) Within thirty (30) days of receipt of a notice pursuant to Section 7, the Corporation (or the Independent Legal Counsel, if applicable) shall make an initial good faith determination of Agent’s entitlement to indemnification pursuant to this Agreement and shall notify Agent (and the Corporation, if Independent Legal Counsel is making such determination) promptly of such determination. If at any time thereafter the Corporation (or the Independent Legal Counsel, as

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applicable) in good faith determines that any indemnification requested pursuant to this Agreement is prohibited pursuant to Section 4(a), the Corporation shall promptly provide notice of such determination to Agent (and the Corporation, if applicable). Any determination by the Corporation pursuant to this Section 4(b) shall be made by the Corporation’s Board of Directors.

     5. Continuation of Indemnity. All agreements and obligations of the Corporation contained herein shall continue during the period Agent is a director, officer, employee or other agent of the Corporation (or is or was serving at the written request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise) and shall continue thereafter so long as Agent shall be subject to any possible Claim.

     6. Partial Indemnification. Agent shall be entitled under this Agreement to indemnification by the Corporation for a portion of the Expenses that Agent pays or incurs in connection with Claim even if Agent is not entitled hereunder to indemnification for the total amount thereof, and the Corporation shall indemnify Agent for the portion thereof to which Agent is entitled.

     7. Notification and Defense of Claim. Not later than thirty (30) days after receipt by Agent of notice of any Claim, Agent will, if a claim in respect thereof is to be made against the Corporation under this Agreement, notify the Corporation of the commencement of such Claim; provided, however, that no failure to provide such notice shall be deemed to reduce or limit the obligations of the Corporation under this Agreement unless (and only to the extent that) such failure materially prejudices the Corporation. The omission so to notify the Corporation will not relieve it from any liability which it may have to Agent otherwise than under this Agreement. With respect to any Claim as to which Agent notifies the Corporation of the commencement thereof:

          (a) The Corporation will be entitled to participate therein at its own expense;

          (b) Except as otherwise provided below, the Corporation may, at its option and jointly with any other indemnifying party similarly notified and electing to assume such defense, assume the defense thereof, with counsel reasonably satisfactory to Agent. After notice from the Corporation to Agent of its election to assume the defense thereof, the Corporation will not be liable to Agent under this Agreement for any legal fees and expenses subsequently incurred by Agent in connection with the defense thereof except for reasonable costs of investigation or otherwise as provided below. Agent shall have the right to employ separate counsel in such action, suit or proceeding but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of Agent unless (i) the employment of counsel by Agent has been authorized by the Corporation, (ii) Agent shall have reasonably concluded that there may be a conflict of interest between the Corporation and Agent in the conduct of the defense of such action (which conclusion may be made at any time during the pendency of the proceeding) or (iii) the Corporation shall not in fact have employed or continue to employ counsel to assume the defense of such action, in each of which cases the fees and expenses of Agent’s separate counsel shall be at the expense of the Corporation. The Corporation shall not be entitled to assume the defense of any Claim brought by or on behalf of the Corporation (except for a shareholders’ derivative suit brought nominally in the name of the Corporation) or as to which Agent shall have made the conclusion provided for in clause (ii) above;

          (c) The Corporation shall not be liable to indemnify Agent under this Agreement for any amounts paid in settlement of any Claim effected without its written consent, which shall not be unreasonably withheld. The Corporation shall be permitted to settle any Claim except that it shall not settle any Claim without Agent’s prior written consent (which may be given or withheld in Agent’s sole discretion) in any manner which (a) would impose any penalty or limitation on Agent or (b) would admit any liability or, misconduct by Agent;

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          (d) If there is a Change in Control (as defined below) of the Corporation, then with respect to all matters thereafter arising concerning the rights of Agent to indemnity expense payments and/or advances under this Agreement or any other agreement or Corporation Bylaw now or hereafter in effect, the Corporation shall seek legal advice only from Independent Legal Counsel (defined below) selected by Agent and approved by the Corporation (which approval shall not be unreasonably withheld). Such counsel, among other things, shall render its written opinion to the Corporation and Agent as to whether and to what extent Agent would be permitted to be indemnified under applicable law. The Corporation shall pay the reasonable fees of such Independent Legal Counsel and fully indemnify such counsel against any and all expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto;

          (e) For purposes of this Section, a “Change in Control” shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or a corporation owned directly or indirectly by the stockholders of the Corporation in substantially the same proportions as their ownership of the stock of the Corporation, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing 20% or more of the total voting power represented by the Corporation’s then outstanding voting securities, (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Corporation and any new director whose election by the Board of Directors or nomination for election by the Corporation’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, (iii) the stockholders of the Corporation approve a merger or consolidation of the Corporation with any other corporation, other than a merger or consolidation that would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 80% of the total voting power represented by the voting securities of the Corporation or such surviving entity outstanding immediately after such merger or consolidation, or (iv) the stockholders or the Corporation approve a plan of complete liquidation of the Corporation or an agreement for the sale or disposition by the Company of (in one transaction or a series of transactions) all or substantially all of the Corporation’s assets; and

          (f) For purposes of this Section, “Independent Legal Counsel” shall be defined as an attorney or firm of attorneys, selected in accordance with this Section, who have not otherwise performed services for the Corporation or Agent within the last five years (other than as Independent Legal Counsel under this Agreement or of other agents of the Corporation under similar indemnity agreements).

     8. Expenses. The Corporation shall advance, promptly following request therefore, all expenses incurred by Agent in connection with a Claim (an “Expense Advancement”). Notwithstanding the foregoing, (i) the obligations of Corporation under this Section 8 shall be subject to the condition that the Corporation (or Independent Legal Counsel, if applicable) shall not have determined in good faith (in a written opinion, in the case of Independent Legal Counsel) pursuant to Section 4(b) that Agent would not be permitted to be indemnified under this Agreement, and (ii) the obligation of the Corporation to make an Expense Advancement shall be subject to the condition that if, when and to the extent that the Corporation (or Independent Legal Counsel, if applicable) determines that Agent would not be permitted to be indemnified under this Agreement, the Corporation shall be entitled to be reimbursed by Agent for all such amounts theretofore paid, and (iii) the corporation shall have received an undertaking by or on behalf of Agent to repay said amounts if it shall be determined ultimately that Agent is not entitled to be indemnified under the provisions of this Agreement, the Bylaws, the Code or otherwise; provided,

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however, that if Agent has commenced or thereafter commences a legal proceeding in a court of competent jurisdiction to secure a determination that Agent should be indemnified under this Agreement, any determination made by the Corporation (or Independent Legal Counsel, if applicable) that Agent should not be indemnified under this Agreement shall not be binding, the Corporation shall pay the Expenses or Expense Advancement for which Agent seeks payment in such legal proceeding (subject to potential reimbursement by Agent) and Agent shall not be required to reimburse the Corporation for any Expenses or Expense Advancement until a final judicial determination is made with respect thereto. Agent’s obligation to reimburse the Corporation for any Expense Advancement shall be unsecured and no interest shall be charged thereon.

     9. Enforcement. Any right to indemnification or advances granted by this Agreement to Agent shall be enforceable by or on behalf of Agent in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within ninety (90) days of request therefore. It shall be a defense to any action for which a claim for indemnification is made under Section 3 hereof (other than an action brought to enforce a claim for expenses pursuant to Section 8 hereof, provided that the required undertaking has been tendered to the Corporation) that Agent is not entitled to indemnification because of the limitations set forth in Section 4 hereof. Neither the failure of the Corporation (including its Board of Directors or its stockholders) to have made a determination prior to the commencement of such enforcement action that indemnification of Agent is proper in the circumstances, nor an actual determination by the Corporation (including its Board of Directors or its stockholders) that such indemnification is improper shall be a defense to the action or create a presumption that Agent is not entitled to indemnification under this Agreement or otherwise. For purposes of this Agreement, the termination of any Claim, by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Agent did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law.

     10. Subrogation. In the event of payment under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of Agent, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Corporation effectively to bring suit to enforce such rights.

     11. Indemnification for Additional Expenses. In the event that any action is instituted (i) by Agent pursuant to Section 9; (ii) by the Corporation for recovery of any Expense Advancement by the Corporation to Agent, or (iii) by or in the name of the Corporation under this Agreement to enforce or interpret any of the terms of this Agreement, Agent shall be entitled to be paid all expenses (including, without limitation, attorneys’ and expert witness’ fees and all other costs, expenses and obligations paid or incurred in connection with such matter) incurred by Agent with respect to such action and Agent shall be entitled to the advancement of expenses with respect to such action. Agent hereby undertakes to repay such amounts advanced if, and to the extent that, it shall ultimately be determined that Agent is not entitled to be indemnified by the Company as authorized by this Agreement, consistent with the terms of Sections 6 and 8.

     12. Non-Exclusivity of Rights. The rights conferred on Agent by this Agreement shall not be exclusive of any other right which Agent may have or hereafter acquire under any statute, provision of the Corporation’s Certificate of Incorporation or Bylaws, agreement, vote of stockholders or directors, or otherwise, both as to action in her official capacity and as to action in another capacity while holding office. To the extent that a change in the applicable law (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded currently under any applicable Bylaws or this Agreement, it is the intent of the parties hereto that Agent shall enjoy by this Agreement the greater benefits so afforded by such change.

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     13. Survival of Rights.

          (a) The rights conferred on Agent by this Agreement shall continue after Agent has ceased to be a director, officer, employee or other agent of the Corporation or to serve at the request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise and shall inure to the benefit of Agent’s heirs, executors and administrators.

          (b) The Corporation shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.

     14. Separability. Each of the provisions of this Agreement is a separate and distinct agreement and independent of the others, so that if any provision hereof shall be held to be invalid for any reason, such invalidity or unenforceability shall not affect the validity or enforceability of the other provisions hereof. Furthermore, if this Agreement shall be invalidated in its entirety on any ground, then the Corporation shall nevertheless indemnify Agent to the fullest extent provided by the Bylaws, the Code or any other applicable law.

     15. Governing Law. This Agreement shall be interpreted and enforced in accordance with the laws of the State of Delaware.

     16. Amendment and Termination. No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by both parties hereto.

     17. Entire Agreement; Identical Counterparts. This Agreement constitutes the entire Agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute but one and the same Agreement. Only a counterpart signed by Agent need be produced to evidence the existence of this Agreement.

     18. Headings. The headings of the sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction hereof.

     19. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given (i) upon delivery if delivered by hand to the party to whom such communication was directed; (ii) upon the third business day after the date on which such communication was mailed if mailed by certified or registered mail with postage prepaid; (ii) the following business day if sent by overnight delivery using a nationally recognized courier service, such as Federal Express or UPS :

     (a) If to Agent, at the address indicated on the signature page hereof.

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     (b) If to the Corporation, to:

Solexa Inc.
25861 Industrial Blvd.
Hayward, CA 94545

or to such other address as a party may have been given notice by the other party in accordance with this Section 19, but no such notice shall have been deemed given until actually received by the party sought to be charged with the contents.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written.

SOLEXA INC.
By:	/s/ Craig C. Taylor
	Craig C. Taylor
Title:	Chairman of the Board
	(Title)
AGENT:
By:	/s/ John West
	John West
Address:

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