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): May 16, 2006

Solexa, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware
(State or Other Jurisdiction of Incorporation)

0-22570	94-3161073
(Commission File No.)	(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 10.37.2

EXHIBIT 10.44

EXHIBIT 10.45

EXHIBIT 10.46

Item 1.01. Entry into a Material Definitive Agreement.

Executive Employment Amendment

On May 19, 2006, Solexa, Inc. (“Solexa”) entered into an amendment of the bonus provisions of its executive employment agreement with John S. West, Solexa’s Chief Executive Officer (the “Executive Employment Amendment”). The Executive Employment Amendment amends Section (d) of Exhibit B to Mr. West’s existing executive employment agreement with Solexa, dated June 23, 2005 (the “Employment Agreement”), to provide that he is eligible to receive one of two alternative one-time bonuses, subject to the terms and conditions described therein and summarized below, in lieu of the potential change of control bonus previously set forth in that section.

     Market Capitalization Bonus

In the event that the closing price of Solexa’s common stock equals or exceeds twenty-seven dollars and sixty cents ($27.60) per share (as presently constituted) for each of twenty-five (25) consecutive public trading days (the “Trading Period”), Mr. West will be entitled to receive a one-time bonus of three hundred eight thousand six hundred and five (308,605) shares of Solexa common stock (as adjusted for stock splits, stock dividends or the like) pursuant to Solexa’s 2005 Equity Incentive Plan (the “Plan”) (the “Market Capitalization Bonus”). If it is reasonably determined by Solexa that it would be inadvisable or impractical for Mr. West to sell or otherwise dispose of a portion of the common stock constituting the Market Capitalization Bonus for the purposes of paying applicable taxes, Solexa may at its election provide cash compensation to Mr. West in lieu of a portion of the common stock sufficient to pay, valued based on the average of the per share closing prices during the Trading Period, the taxes applicable to the Market Capitalization Bonus, with the remaining portion of the Market Capitalization Bonus to be provided as Solexa common stock pursuant to the Plan.

     Change in Control Bonus

In the event of a Change in Control (as defined in the Employment Agreement), Mr. West shall be eligible to receive a bonus equivalent to one percent (1%) of the amount by which the consideration received by Solexa’s stockholders as a direct result of the Change in Control exceeds the sum of one hundred fifty million dollars ($150,000,000) plus the aggregate gross proceeds received by Solexa through sales of equity securities after the effective date of the Executive Employment Amendment (the “Change in Control Bonus”). The Change in Control Bonus will be provided to Mr. West in the same form as the consideration received by Solexa’s stockholders as a direct result of the Change in Control, provided that, Solexa may in its sole discretion elect to substitute cash for all or any portion of the securities or other non-cash consideration that would otherwise be payable based on the value thereof established in the Change in Control.

The alternative one-time Market Capitalization Bonus and Change of Control Bonus replace the potential bonus described in Section (d) of Exhibit B to the Employment Agreement.

The Compensation Committee of Solexa’s Board of Directors approved the Executive Employment Amendment at a meeting held on May 16, 2006. The Compensation Committee also approved an increase in Mr. West’s annualized base salary to $367,500 per year retroactive to January 1, 2006.

A copy of the Executive Employment Amendment is attached hereto as Exhibit 10.37.2 and is incorporated herein by reference.

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Alternative One-Time Bonus Arrangements for Executive Officers

On May 19, 2006, Solexa entered into letter agreements with Linda Rubinstein, Vice President and Chief Financial Officer and Peter Lundberg, Vice President and Chief Technical Officer, and on May 22, 2006, Solexa Limited, a company registered in England and Wales and a subsidiary of Solexa, entered into a letter agreement with Tony Smith, Vice President and Chief Scientific Officer, providing that each such executive officer is entitled to receive one-time alternative bonuses on substantially the same terms and conditions as the Market Capitalization Bonus and Change in Control Bonus provided to Mr. West, provided that each such executive officer would be entitled to receive seventy seven thousand one hundred fifty one (77,151) shares of Solexa common stock under the Market Capitalization Bonus or one quarter of one percent (0.25%) of the amount by which the consideration received by Solexa’s stockholders as a direct result of the Change in Control exceeds the sum of one hundred fifty million dollars ($150,000,000) plus the aggregate gross proceeds received by Solexa through sales of equity securities after the effective date of the letter agreements under the Change in Control Bonus.

Solexa’s Board of Directors approved the letter agreements with Ms. Rubinstein, Mr. Lundberg and Dr. Smith at a meeting held on May 16, 2006.

The Board of Directors also approved increases in the annualized base salaries of Ms. Rubinstein, Mr. Lundberg and Dr. Smith to $261,700, $249,720 and £148,400 per year, respectively, retroactive to January 1, 2006.

Copies of the letter agreements with Ms. Rubinstein, Mr. Lundberg and Dr. Smith are attached hereto as Exhibits 10.44, 10.45 and 10.46, respectively, and are incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

     (d) Exhibits:

Exhibit
Number	Description
10.37.2	Amendment To Executive Employment Agreement, dated May 19, 2006, by and between Solexa, Inc. and John West.
10.44	Letter Agreement regarding New Alternative One-Time Bonus Arrangement, dated May 19, 2006, by and between Solexa, Inc. and Linda Rubinstein.
10.45	Letter Agreement regarding New Alternative One-Time Bonus Arrangement, dated May 19, 2006, by and between Solexa, Inc. and Peter Lundberg.
10.46	Letter Agreement regarding New Alternative One-Time Bonus Arrangement, dated May 19, 2006, by and between Solexa Limited and Tony Smith.

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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: May 22, 2006	By:	/s/ Linda Rubinstein
		Name:	Linda Rubinstein
		Title:	Vice President and Chief Financial Officer
			(Principal Financial and Accounting Officer)

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INDEX TO EXHIBITS

EXHIBITS

Exhibit
Number	Description
10.37.2	Amendment To Executive Employment Agreement, dated May 19, 2006, by and between Solexa, Inc. and John West.
10.44	Letter Agreement regarding New Alternative One-Time Bonus Arrangement, dated May 19, 2006, by and between Solexa, Inc. and Linda Rubinstein.
10.45	Letter Agreement regarding New Alternative One-Time Bonus Arrangement, dated May 19, 2006, by and between Solexa, Inc. and Peter Lundberg.
10.46	Letter Agreement regarding New Alternative One-Time Bonus Arrangement, dated May 19, 2006, by and between Solexa Limited and Tony Smith.

EX-10.37.2

Exhibit 10.37.2

Amendment To

Executive Employment Agreement for John S. West

     This Amendment To Executive Employment Agreement for John S. West (the “Amendment”) is made and entered into, as of May 19, 2006 (the “Effective Date”), by and between Solexa, Inc., a Delaware corporation (“Company”), and John S. West (“Executive”). Effective as of the Effective Date, the Company and Executive hereby amend that certain Executive Employment Agreement for John S. West between them entered into as of June 23, 2005 (the “Employment Agreement”), a copy of which is attached hereto as Exhibit A, as follows:

     1. Amendment of Section 2.1 of Employment Agreement. Section 2.1 of the Employment Agreement is amended to state that Executive’s annual base salary is increased to Three Hundred Sixty-Seven Thousand, Five Hundred Dollars ($367,500), retroactive to January 1, 2006.

     2. Amendment of Section (d) of Exhibit B. Section (d) of Exhibit B to the Employment Agreement is superseded and replaced with the following new Section (d) of Exhibit B:

          (d) Alternative One-Time Bonuses. Executive will be eligible for one of the following two alternative one-time bonuses, subject to the terms and conditions set forth herein. If the terms and conditions are met for one of these bonuses at any time, Executive will not earn or be eligible to receive any additional such bonus, and will not earn or be eligible to receive the other one-time bonus, even if the applicable terms and conditions subsequently are met. In addition, because the alternative one-time bonuses are intended to incentivize Executive with respect to his employment services and continued employment with the Company, in order to earn and be eligible to receive either of the below alternative one-time bonuses, Executive must remain an employee in good standing of the Company (or a successor entity) as of the date that such bonus is earned. The alternative one-time bonuses are as follows:

               (i) One-Time Market Capitalization Bonus. In the event that the closing price of the Company’s common stock equals or exceeds twenty-seven dollars and sixty cents ($27.60) per share (as presently constituted) for each of twenty-five (25) consecutive public trading days (the “Trading Period”), Executive will be entitled to receive a one-time bonus of three hundred eight thousand, six hundred and five (308,605) shares of the Company’s common stock (as adjusted for stock splits, stock dividends or the like) pursuant to the Company’s 2005 Equity Incentive Plan (the “Plan”) (the “Market Capitalization Bonus”). If it is reasonably determined by the Company that it would be inadvisable or impractical for Executive to sell or otherwise dispose of a portion of the common stock constituting the Market Capitalization Bonus for the purposes of paying applicable taxes, the Company may at its election provide cash compensation to Executive in lieu of a portion of the common stock sufficient to pay, valued based on the average of the per share closing prices during the Trading Period, the taxes applicable to the Market Capitalization Bonus, with the remaining portion of the Market Capitalization Bonus to be provided as Company common stock pursuant to the Plan. The Market Capitalization Bonus shall be provided to Executive within forty-five (45) days after the Trading Period. Notwithstanding the preceding sentence, at Executive’s written election, delivery of all or a portion of the Market Capitalization Bonus will be delayed until January 15 of the tax year following the year in which the bonus is earned, without any interest or additional consideration being owed to Executive. The Company shall make all determinations and calculations regarding whether and when the Market Period Capitalization Bonus has been earned and the amount of the Market Capitalization Bonus.

               (ii) One-Time Change in Control Bonus. In the event of a Change in Control (as defined in Section 6), Executive shall be eligible to receive a bonus equivalent to one percent (1%) of the amount by which the consideration received by the Company’s stockholders as a direct result of the Change in Control exceeds the sum of One Hundred Fifty Million Dollars ($150,000,000) plus the aggregate gross proceeds received by Solexa through sales of equity securities after the Effective Date (the “Change in Control Bonus”). The Change in Control Bonus will be provided to Executive in the same form as the consideration received by the Company’s stockholders as a direct result of the Change in Control. For example, if cash is the consideration provided to the Company’s stockholders as a direct result of the Change in Control, Executive shall be provided a cash Change in Control Bonus; and if the consideration provided to the Company’s stockholders as a direct result of the Change in Control consists of securities or other non-cash consideration, Executive’s Change in Control Bonus shall be paid in such form and determined based on the value thereof established in the Change in Control, provided that, notwithstanding the preceding, the Company may in its sole discretion elect to substitute cash for all or any portion of the securities or other non-cash consideration that would otherwise be payable based on the value thereof established in the Change in Control. The Company shall make all determinations and calculations regarding whether the Change in Control Bonus has been earned and the amount of the Change in Control Bonus.

     3. Miscellaneous. This Amendment constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and Executive with regard to amendment of the Employment Agreement. It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations. Any provisions of the Employment Agreement contrary to this Amendment are hereby superseded and replaced, and the remaining portions of the Employment Agreement remain in full force and effect. This Amendment may not be modified or amended except in a writing signed by Executive and a duly authorized officer of the Company. This Amendment will bind the heirs, personal representatives, successors and assigns of both Executive and the Company, and inure to the benefit of both Executive and the Company, their heirs, successors and assigns. If any provision of this Amendment is determined to be invalid or unenforceable, in whole or in part, this determination shall not affect any other provision of this Amendment and the provision in question shall be modified so as to be rendered enforceable in a manner consistent with the intent of the parties insofar as possible under applicable law. This Amendment shall be construed and enforced in accordance with the laws of the State of California without regard to conflicts of law principles. Any ambiguity in this Amendment shall not be construed against either party as the drafter. Any waiver of a breach of this Amendment, or rights hereunder, shall be in writing and shall not be deemed to be a waiver of any successive breach or rights hereunder. This Amendment may be executed in counterparts which shall be deemed to be part of one original, and facsimile signatures shall be equivalent to original signatures.

     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.

Solexa, Inc.		John S. West
A Delaware Corporation		An Individual
By:	/s/ Craig C. Taylor	/s/ John West
Name:	Craig C. Taylor
Title:	Chairman of the Board

Exhibit A

EXECUTIVE EMPLOYMENT AGREEMENT

FOR

JOHN S. WEST

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 montly 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

7

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.

8

     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

9

EXHIBIT A

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

10

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).

11

EXHIBIT C

INDEMNIFICATION AGREEMENT

12

EX-10.44

Exhibit 10.44

[SOLEXA LETTERHEAD]

May 19, 2006

VIA HAND DELIVERY

Linda M. Rubinstein
Solexa, Inc.
25861 Industrial Boulevard
Hayward, CA 94545

Re: Salary Increase and New Alternative One-Time Bonus Arrangement

Dear Linda:

This letter confirms your recent salary increase and contains the terms and conditions of the new alternative one-time bonus arrangement that Solexa, Inc. (“Solexa” or the “Company”) is offering you, subject to the terms and conditions set forth in this letter. This new bonus arrangement will be a supplemental bonus arrangement and it does not replace or cancel any other current bonus program of the Company.

A. Salary Increase:

We are pleased to confirm that your annual base salary was increased to $261,700, retroactive to January 1, 2006.

B. New Bonus Overview:

The two below potential bonuses are alternative one-time bonuses. Accordingly, if the terms and conditions are met for one of these bonuses at any time, you will not earn or be eligible to receive any additional such bonus, and you will not earn or be eligible to receive the other one-time bonus (even if the applicable terms and conditions subsequently are met). In addition, because the alternative one-time bonuses are intended to incentivize you with respect to your employment services and your continued employment with the Company, in order to earn and be eligible to receive either of the below alternative one-time bonuses, you must remain an employee in good standing of the Company (or a successor entity) as of the date that such bonus is earned.

Additional specific terms and conditions of each alternative one-time bonus are set forth below.

1. One-Time Market Capitalization Bonus:

In the event that the closing price of the Company’s common stock equals or exceeds twenty-seven dollars and sixty cents ($27.60) per share (as presently constituted) for each of twenty-five (25) consecutive public trading days (the “Trading Period”), you will be entitled to receive a one-time bonus of seventy-seven thousand, one hundred fifty-one (77,151) shares of the Company’s common stock (as adjusted for stock splits, stock dividends or the like) pursuant to the Company’s 2005 Equity Incentive Plan (the “Plan”) (the “Market Capitalization Bonus”). If it is reasonably determined by the Company that it would be inadvisable or impractical for you to sell or otherwise dispose of a portion of the common stock constituting the Market Capitalization Bonus for the purposes of paying applicable taxes, the Company may at its election provide you with cash compensation in lieu of a portion of the common stock sufficient to pay, valued based on the average of the per share closing prices during the Trading

Linda M. Rubinstein
May 19, 2006
Page 2 of 3

Period, the taxes applicable to the Market Capitalization Bonus, with the remaining portion of the Market Capitalization Bonus to be provided as Company common stock pursuant to the Plan.

If earned, the Market Capitalization Bonus will be provided to you within forty-five (45) days after the Trading Period. Notwithstanding the preceding sentence, at your written election, delivery of all or a portion of the Market Capitalization Bonus will be delayed until January 15 of the tax year following the year in which the bonus is earned, without any interest or additional consideration being owed to you. The Company shall make all determinations and calculations regarding whether and when the Market Period Capitalization Bonus has been earned and the amount of the Market Capitalization Bonus.

2. One-Time Change in Control Bonus:

In the event of a Change in Control (as defined below), you shall be eligible to receive a bonus equivalent to one quarter of one percent (.25%) of the amount by which the consideration received by the Company’s stockholders as a direct result of the Change in Control exceeds the sum of One Hundred Fifty Million Dollars ($150,000,000) plus the aggregate gross proceeds received by the Company through sales of equity securities occurring after the date of this letter (the “Change in Control Bonus”).

The Change in Control Bonus will be provided to you in the same form as the consideration received by the Company’s stockholders as a direct result of the Change in Control. For example, if cash is the consideration provided to the Company’s stockholders as a direct result of the Change in Control, you will be provided a cash Change in Control Bonus; and if the consideration provided to the Company’s stockholders as a direct result of the Change in Control consists of securities or other non-cash consideration, your Change in Control Bonus (if earned) will be paid in such form and determined based on the value thereof established in the Change in Control, provided that, notwithstanding the preceding, the Company may in its sole discretion elect to substitute cash for all or any portion of the securities or other non-cash consideration that would otherwise be payable based on the value thereof established in the Change in Control. The Company shall make all determinations and calculations regarding whether the Change in Control Bonus has been earned and the amount of the Change in Control Bonus.

For purposes of the Change in Control Bonus, a “Change of Control” means the happening of any of the following events: (a) a dissolution or liquidation of Solexa; (b) a sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of Solexa; (c) a consolidation or merger of Solexa in which Solexa is not the continuing or surviving corporation or pursuant to which the stock of Solexa would be converted into cash, securities or other property, other than a merger or consolidation of Solexa in which the holders of such entity’s stock immediately prior to the merger or consolidation hold more than fifty percent (50%) of the stock or other forms of equity of the surviving corporation immediately after the merger in substantially the same proportions of ownership of shares of Solexa immediately prior to the merger or consolidation; or (d) a sale or exchange by the shareholders of Solexa, in a single transaction or series of related transactions, of more than fifty percent (50%) of the voting stock of such entity, after which the shareholders of such entity immediately before such transaction do not retain immediately after such transaction, in substantially the same proportions of their ownership of shares of Solexa immediately before the transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the combined voting power of such entity.

C. Miscellaneous:

Nothing in this letter is intended to alter the at-will nature of your employment with the Company. In addition, this letter does not alter any existing agreement between you and the Company (including but not limited to your offer letter agreement dated March 23, 2005), except to the extent such other existing

Linda M. Rubinstein
May 19, 2006
Page 3 of 3

agreement contains any terms inconsistent with this letter, which inconsistent terms are hereby superseded. This letter constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and you with regard to this subject matter. It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations. This letter agreement may not be modified or amended except in a writing signed by you and a duly authorized officer of the Company. This letter agreement will bind the heirs, personal representatives, successors and assigns of both you and the Company, and inure to the benefit of both you and the Company, their heirs, successors and assigns. If any provision of this letter agreement is determined to be invalid or unenforceable, in whole or in part, this determination shall not affect any other provision of this letter agreement and the provision in question shall be modified so as to be rendered enforceable in a manner consistent with the intent of the parties insofar as possible under applicable law. This letter agreement shall be construed and enforced in accordance with the laws of the State of California without regard to conflicts of law principles. Any ambiguity in this letter agreement shall not be construed against either party as the drafter. Any waiver of a breach of this letter agreement, or rights hereunder, shall be in writing and shall not be deemed to be a waiver of any successive breach or rights hereunder. This letter agreement may be executed in counterparts which shall be deemed to be part of one original, and facsimile signatures shall be equivalent to original signatures.

To indicate your understanding and acceptance of your salary increase and new bonus arrangement, please sign and date this letter below, and return this letter to me within five (5) business days. You may retain the enclosed additional copy of this letter for your files.

We are very pleased to offer these new employment terms, and look forward to a continued productive employment relationship.

Sincerely,
Solexa, Inc.

/s/ John West

John West

Chief Executive Officer

UNDERSTOOD AND AGREED:

/s/ Linda M. Rubsinstein

Linda M. Rubinstein

5/19/06

Date

EX-10.45

Exhibit 10.45

[SOLEXA LETTERHEAD]

May 19, 2006

VIA HAND DELIVERY

Peter Lundberg
Solexa, Inc.
25861 Industrial Boulevard
Hayward, CA 94545

Re: Salary Increase and New Alternative One-Time Bonus Arrangement

Dear Peter:

This letter confirms your recent salary increase and contains the terms and conditions of the new alternative one-time bonus arrangement that Solexa, Inc. (“Solexa” or the “Company”) is offering you, subject to the terms and conditions set forth in this letter. This new bonus arrangement will be a supplemental bonus arrangement and it does not replace or cancel any other current bonus program of the Company.

A. Salary Increase:

We are pleased to confirm that your annual base salary was increased to $249,720, retroactive to January 1, 2006.

B. New Bonus Overview:

The two below potential bonuses are alternative one-time bonuses. Accordingly, if the terms and conditions are met for one of these bonuses at any time, you will not earn or be eligible to receive any additional such bonus, and you will not earn or be eligible to receive the other one-time bonus (even if the applicable terms and conditions subsequently are met). In addition, because the alternative one-time bonuses are intended to incentivize you with respect to your employment services and your continued employment with the Company, in order to earn and be eligible to receive either of the below alternative one-time bonuses, you must remain an employee in good standing of the Company (or a successor entity) as of the date that such bonus is earned.

Additional specific terms and conditions of each alternative one-time bonus are set forth below.

1. One-Time Market Capitalization Bonus:

In the event that the closing price of the Company’s common stock equals or exceeds twenty-seven dollars and sixty cents ($27.60) per share (as presently constituted) for each of twenty-five (25) consecutive public trading days (the “Trading Period”), you will be entitled to receive a one-time bonus of seventy-seven thousand, one hundred fifty-one (77,151) shares of the Company’s common stock (as adjusted for stock splits, stock dividends or the like) pursuant to the Company’s 2005 Equity Incentive Plan (the “Plan”) (the “Market Capitalization Bonus”). If it is reasonably determined by the Company that it would be inadvisable or impractical for you to sell or otherwise dispose of a portion of the common stock constituting the Market Capitalization Bonus for the purposes of paying applicable taxes, the Company may at its election provide you with cash compensation in lieu of a portion of the common stock sufficient to pay, valued based on the average of the per share closing prices during the Trading

Peter Lundberg
May 19, 2006
Page 2 of 3

Period, the taxes applicable to the Market Capitalization Bonus, with the remaining portion of the Market Capitalization Bonus to be provided as Company common stock pursuant to the Plan.

If earned, the Market Capitalization Bonus will be provided to you within forty-five (45) days after the Trading Period. Notwithstanding the preceding sentence, at your written election, delivery of all or a portion of the Market Capitalization Bonus will be delayed until January 15 of the tax year following the year in which the bonus is earned, without any interest or additional consideration being owed to you. The Company shall make all determinations and calculations regarding whether and when the Market Period Capitalization Bonus has been earned and the amount of the Market Capitalization Bonus.

2. One-Time Change in Control Bonus:

In the event of a Change in Control (as defined below), you shall be eligible to receive a bonus equivalent to one quarter of one percent (.25%) of the amount by which the consideration received by the Company’s stockholders as a direct result of the Change in Control exceeds the sum of One Hundred Fifty Million Dollars ($150,000,000) plus the aggregate gross proceeds received by the Company through sales of equity securities occurring after the date of this letter (the “Change in Control Bonus”).

The Change in Control Bonus will be provided to you in the same form as the consideration received by the Company’s stockholders as a direct result of the Change in Control. For example, if cash is the consideration provided to the Company’s stockholders as a direct result of the Change in Control, you will be provided a cash Change in Control Bonus; and if the consideration provided to the Company’s stockholders as a direct result of the Change in Control consists of securities or other non-cash consideration, your Change in Control Bonus (if earned) will be paid in such form and determined based on the value thereof established in the Change in Control, provided that, notwithstanding the preceding, the Company may in its sole discretion elect to substitute cash for all or any portion of the securities or other non-cash consideration that would otherwise be payable based on the value thereof established in the Change in Control. The Company shall make all determinations and calculations regarding whether the Change in Control Bonus has been earned and the amount of the Change in Control Bonus.

For purposes of the Change in Control Bonus, a “Change of Control” means the happening of any of the following events: (a) a dissolution or liquidation of Solexa; (b) a sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of Solexa; (c) a consolidation or merger of Solexa in which Solexa is not the continuing or surviving corporation or pursuant to which the stock of Solexa would be converted into cash, securities or other property, other than a merger or consolidation of Solexa in which the holders of such entity’s stock immediately prior to the merger or consolidation hold more than fifty percent (50%) of the stock or other forms of equity of the surviving corporation immediately after the merger in substantially the same proportions of ownership of shares of Solexa immediately prior to the merger or consolidation; or (d) a sale or exchange by the shareholders of Solexa, in a single transaction or series of related transactions, of more than fifty percent (50%) of the voting stock of such entity, after which the shareholders of such entity immediately before such transaction do not retain immediately after such transaction, in substantially the same proportions of their ownership of shares of Solexa immediately before the transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the combined voting power of such entity.

C. Miscellaneous:

Nothing in this letter is intended to alter the at-will nature of your employment with the Company. In addition, this letter does not alter any existing agreement between you and the Company (including but not limited to your offer letter agreement dated March 23, 2005), except to the extent such other existing

Peter Lundberg
May 19, 2006
Page 3 of 3

agreement contains any terms inconsistent with this letter, which inconsistent terms are hereby superseded. This letter constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and you with regard to this subject matter. It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations. This letter agreement may not be modified or amended except in a writing signed by you and a duly authorized officer of the Company. This letter agreement will bind the heirs, personal representatives, successors and assigns of both you and the Company, and inure to the benefit of both you and the Company, their heirs, successors and assigns. If any provision of this letter agreement is determined to be invalid or unenforceable, in whole or in part, this determination shall not affect any other provision of this letter agreement and the provision in question shall be modified so as to be rendered enforceable in a manner consistent with the intent of the parties insofar as possible under applicable law. This letter agreement shall be construed and enforced in accordance with the laws of the State of California without regard to conflicts of law principles. Any ambiguity in this letter agreement shall not be construed against either party as the drafter. Any waiver of a breach of this letter agreement, or rights hereunder, shall be in writing and shall not be deemed to be a waiver of any successive breach or rights hereunder. This letter agreement may be executed in counterparts which shall be deemed to be part of one original, and facsimile signatures shall be equivalent to original signatures.

To indicate your understanding and acceptance of your salary increase and new bonus arrangement, please sign and date this letter below, and return this letter to me within five (5) business days. You may retain the enclosed additional copy of this letter for your files.

We are very pleased to offer these new employment terms, and look forward to a continued productive employment relationship.

Sincerely,
Solexa, Inc.

/s/ John West

John West

Chief Executive Officer

UNDERSTOOD AND AGREED:

/s/ Peter Lundberg

Peter Lundberg

5/19/06

Date

EX-10.46

Exhibit 10.46

[SOLEXA LTD LETTERHEAD]

May 19, 2006

Dr. Anthony Smith
Solexa Limited
Chesterford Research Park
Little Chesterford, Saffron Walden
Essex, CB10 1XL

Re: Salary Increase and New Alternative One-Time Bonus Arrangement

Dear Tony:

This letter confirms your 2006 salary increase and contains the terms and conditions of the new alternative one-time bonus arrangement that Solexa Limited (“Solexa Limited”) is offering you, subject to the terms and conditions set forth in this letter. This new bonus arrangement will be a supplemental bonus arrangement and it does not replace or cancel any other current bonus program of Solexa Limited. For the purposes of this letter, Solexa, Inc., Solexa Limited’s parent corporation, shall be referred to as the “Company.”

A. Salary Increase:

We are pleased to confirm that, pursuant to Paragraph 4.2 of your Service Agreement with Solexa Limited issued to you on 28 January 2002, as amended pursuant to the variance letter dated 4 August 2005 (collectively, the “Service Agreement”), your annual basic salary was increased to £148,400 effective 1 January 2006. Paragraph 4.1 of the Service Agreement is modified accordingly.

B. New Bonus Overview:

The two below potential bonuses are alternative one-time bonuses. Accordingly, if the terms and conditions are met for one of these bonuses at any time, you will not earn or be eligible to receive any additional such bonus, and you will not earn or be eligible to receive the other one-time bonus (even if the applicable terms and conditions subsequently are met). In addition, because the alternative one-time bonuses are intended to incentivize you with respect to your employment services and your continued employment with Solexa Limited, in order to earn and be eligible to receive either of the below alternative one-time bonuses, you must remain an employee in good standing of Solexa Limited or the Company (or a successor entity) and you must not have given notice of termination of employment, or been given notice of termination, as of the date that such bonus is triggered.

Additional specific terms and conditions of each alternative one-time bonus are set forth below.

1. One-Time Market Capitalization Bonus:

In the event that the closing price of the Company’s common stock equals or exceeds twenty-seven dollars and sixty cents ($27.60) per share (as presently constituted) for each of twenty-five (25) consecutive public trading days (the “Trading Period”), Solexa Limited will procure the Company to provide you a one-time bonus of seventy-seven thousand, one hundred fifty-one (77,151) shares of the Company’s common stock (as adjusted for stock splits, stock dividends or the like) pursuant to the Company’s 2005 Equity Incentive Plan (the “Plan”) (the “Market Capitalization Bonus”). If it is reasonably determined by the Company that it would be inadvisable or impractical for you to sell or

Dr. Anthony Smith
May 19, 2006
Page 2 of 4

otherwise dispose of a portion of the common stock constituting the Market Capitalization Bonus for the purposes of paying applicable taxes, the Company may at its election provide you with cash compensation in lieu of a portion of the common stock sufficient to pay, valued based on the average of the per share closing prices during the Trading Period, the taxes applicable to the Market Capitalization Bonus, with the remaining portion of the Market Capitalization Bonus to be provided as Company common stock pursuant to the Plan.

If payable, the Market Capitalization Bonus will be provided to you within forty-five (45) days after the Trading Period. The Company shall make all determinations and calculations regarding whether and when the Market Period Capitalization Bonus has been earned and the amount of the Market Capitalization Bonus.

2. One-Time Change in Control Bonus:

In the event of a Change in Control (as defined below), Solexa Limited will procure the Company to provide you a bonus equivalent to one quarter of one percent (.25%) of the amount by which the consideration received by the Company’s stockholders as a direct result of the Change in Control exceeds the sum of One Hundred Fifty Million Dollars ($150,000,000) plus the aggregate gross proceeds received by the Company through sales of equity securities occurring after the date of this letter (the “Change in Control Bonus”).

The Change in Control Bonus will be provided to you in the same form as the consideration received by the Company’s stockholders as a direct result of the Change in Control. For example, if cash is the consideration provided to the Company’s stockholders as a direct result of the Change in Control, you will be provided a cash Change in Control Bonus; and if the consideration provided to the Company’s stockholders as a direct result of the Change in Control consists of securities or other non-cash consideration, your Change in Control Bonus (if earned) will be paid in such form and determined based on the value thereof established in the Change in Control, provided that, notwithstanding the preceding, the Company may in its sole discretion elect to substitute cash for all or any portion of the securities or other non-cash consideration that would otherwise be payable based on the value thereof established in the Change in Control. The Company shall make all determinations and calculations regarding whether the Change in Control Bonus has been earned and the amount of the Change in Control Bonus.

For purposes of the Change in Control Bonus, a “Change of Control” means the happening of any of the following events: (a) a dissolution or liquidation of the Company; (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 the Company; (c) a consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which the stock of the Company would be converted into cash, securities or other property, other than a merger or consolidation of the Company 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 the Company immediately prior to the merger or consolidation; or (d) a sale or exchange by the shareholders of the Company, 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 the Company immediately before the transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the combined voting power of such entity.

Dr. Anthony Smith
May 19, 2006
Page 3 of 3

C. Miscellaneous:

Solexa Limited and the Company reserve the right to withhold tax and any other amounts payable by it or any employing or other company.

Nothing in this letter is intended to alter the nature of your employment with Solexa Limited. In addition, this letter does not alter any existing agreement between you and Solexa Limited or the Company (including but not limited to the Service Agreement), except as specifically stated herein or to the extent such other existing agreement contains any terms inconsistent with this letter, which inconsistent terms are hereby superseded. There shall be no right to receive a payment of shares of stock or cash under this letter agreement or in respect of rights conferred by it other than as expressly permitted hereunder. Because of the incentivization element of this opportunity, you agree that any forfeited or reduced rights to receive payment of cash or shares of stock shall not be taken into account for the purposes of determining any compensation or notice pay if your employment is ended (for whatever reason, whether at your request or Solexa Limited’s request) prior to a bonus being triggered. No entitlement under this letter agreement shall affect any entitlement to pension payments or pension contributions made by Solexa Limited.

This letter constitutes the complete, final and exclusive embodiment of the entire agreement between Solexa Limited and you with regard to this subject matter. It is entered into without reliance on any promise or representation from Solexa Limited or the Company, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations. This letter agreement may not be modified or amended except in a writing signed by you and a duly authorized officer of Solexa Limited. This letter agreement will bind the heirs, personal representatives, successors and assigns of both you and Solexa Limited, and inure to the benefit of both you and Solexa Limited, their heirs, successors and assigns. If any provision of this letter agreement is determined to be invalid or unenforceable, in whole or in part, this determination shall not affect any other provision of this letter agreement and the provision in question shall be modified so as to be rendered enforceable in a manner consistent with the intent of the parties insofar as possible under applicable law. This letter agreement shall be construed and enforced in accordance with the laws of England and shall be subject to the jurisdiction of the courts of England without regard to conflicts of law principles. Any ambiguity in this letter agreement shall not be construed against either party as the drafter. Any waiver of a breach of this letter agreement, or rights hereunder, shall be in writing and shall not be deemed to be a waiver of any successive breach or rights hereunder. This letter agreement may be executed in counterparts which shall be deemed to be part of one original, and facsimile signatures shall be equivalent to original signatures.

To indicate your understanding and acceptance of your salary increase and new bonus arrangement, please sign and date this letter below, and return this letter to me within five (5) business days. You may retain the enclosed additional copy of this letter for your files.

Dr. Anthony Smith
May 19, 2006
Page 4 of 4

We are very pleased to offer these new employment terms, and look forward to a continued productive employment relationship.

Sincerely,
Solexa Limited

/s/ John West

John West

Director

Board of Directors

UNDERSTOOD AND AGREED:

/s/ Dr. Anthony Smith

Dr. Anthony Smith

22nd May 2006

Date