As filed with the Securities and Exchange Commission on July 14, 2009

Registration No. 333-159034

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

 

AMENDMENT NO. 2

TO

 

Form S-4

 

REGISTRATION STATEMENT
UNDER

THE SECURITIES ACT OF 1933

Thoratec Corporation

(Exact name of Registrant as specified in its charter)

 

 

6035 Stoneridge Drive
Pleasanton, California 94588
(925) 847-8600
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

 

 

David A. Lehman, Esq.
Senior Vice President and General Counsel
Thoratec Corporation
6035 Stoneridge Drive
Pleasanton, California 94588
(925) 847-8600
(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

 

 

with copies to:

 

 

Approximate date of commencement of proposed sale of the securities to the public:  As soon as practicable following the effectiveness of this Registration Statement and upon the effective time of the merger described in the enclosed document.

 

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  o

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

(Do not check if a smaller reporting company)

 

 

 

 

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

PRELIMINARY — SUBJECT TO COMPLETION — DATED JULY 14, 2009

 

MERGER PROPOSED — YOUR VOTE IS VERY IMPORTANT

 

Dear Stockholder:

 

On February 12, 2009, the board of directors of HeartWare International, Inc., or HeartWare, and the board of directors of Thoratec Corporation, or Thoratec, approved a merger of HeartWare and a wholly-owned subsidiary of Thoratec. Before the merger can be completed, the stockholders of HeartWare must vote to adopt the Agreement and Plan of Merger, which we refer to as the merger agreement, dated as of February 12, 2009, by and among HeartWare, Thoratec, Thomas Merger Sub I, Inc., a direct wholly owned subsidiary of Thoratec, which we refer to as Merger Subsidiary, and Thomas Merger Sub II, Inc., another direct wholly owned subsidiary of Thoratec, which we refer to as Merger Subsidiary Two.

 

Pursuant to the merger agreement, Merger Subsidiary will merge with and into HeartWare, with HeartWare surviving the merger as a wholly owned subsidiary of Thoratec, which we refer to as the merger. Provided that certain tax-related conditions are satisfied, HeartWare, as the surviving corporation in the merger, will merge with and into Merger Subsidiary Two with Merger Subsidiary Two surviving the merger as a subsidiary of Thoratec, which we refer to as the second merger. The merger and second merger are referred to collectively in this proxy statement/prospectus as the mergers.

 

As a result of the merger, each share of HeartWare common stock will be converted into the right to receive $14.30 in cash and 0.6054 of a share of Thoratec common stock. Holders of HeartWare CHESS Depositary Interests, which we refer to as HeartWare CDIs and are traded on the Australian Securities Exchange and which represent 1/35 of a share of HeartWare common stock, will be entitled to receive in exchange for each of their HeartWare CDIs a combination of approximately $0.4085 in cash and approximately 0.01729 of a share of Thoratec common stock. In addition, if the volume weighted average of the per share closing prices of Thoratec common stock on The NASDAQ Stock Market for the twenty (20) consecutive trading days ending on and including the fifth (5th) trading day prior to, but not including, the closing date is less than or equal to $18.38, then HeartWare will have an option to terminate the merger agreement unless, subject to certain adjustments provided for in the merger agreement, Thoratec increases the number of shares of Thoratec common stock payable in the merger such that the value of the stock portion of the merger consideration at closing is equal to 70% of the value of the aggregate Thoratec stock consideration payable in the merger (calculated using the $26.25 price per share of Thoratec common stock used to determine the stock portion of the merger consideration). If that same volume weighted average price is equal to or exceeds $34.13 (130% of the $26.25 price per share of Thoratec common stock used to determine the stock portion of the merger consideration), then Thoratec may reduce the number of shares of Thoratec common stock payable in the merger such that the value of the stock portion of the merger consideration at closing is equal to 130% of the value of the aggregate Thoratec stock consideration payable in the merger (calculated using the $26.25 price per share of Thoratec common stock used to determine the stock portion of the merger consideration). Each HeartWare CDI is exchangeable at the option of the holder of the HeartWare CDI into shares of HeartWare common stock at the ratio of one (1) share of common stock for every thirty-five (35) HeartWare CDIs held by such holder and as a result of the merger, holders of HeartWare CDIs will be entitled to receive 1/35 of the merger consideration described above for each HeartWare CDI held by such holder.

 

If certain tax-related conditions are satisfied, the transaction will be structured to qualify as a “reorganization” for U.S. federal income tax purposes, pursuant to which the amount of gain, if any, recognized by a U.S. holder of HeartWare common stock in the merger shall not exceed the cash portion of the merger consideration received. If the transaction is not structured to qualify as a “reorganization,” the transaction will be fully taxable to HeartWare stockholders for U.S. federal income tax purposes. As a result, in deciding whether to vote to adopt the merger agreement, you should consider the possibility that the transaction will be structured as a fully taxable transaction for U.S. federal income tax purposes because the stock value condition (as defined herein) is not satisfied. You will not be entitled to change your vote or vote again in the event that the stock value condition is not satisfied and the transaction is structured as a fully taxable transaction for U.S. federal income tax purposes. Other than the

U.S. federal income tax consequences described above, neither HeartWare nor Thoratec is aware of any material effects on HeartWare stockholders if the second merger does not occur. HeartWare has sought a ruling from Australian tax authorities to confirm that a holder of shares of HeartWare common stock that is a resident of Australia for Australian tax purposes may choose to apply scrip-for-scrip roll-over relief to disregard any capital gain that results to it from the cancellation of its HeartWare common stock to the extent that the capital gain is attributable to the stock portion of the merger consideration it receives under the merger contemplated by the merger agreement.

 

The market prices of Thoratec common stock, HeartWare common stock and HeartWare CDIs will fluctuate before the merger. You should obtain current stock price quotations for Thoratec common stock, HeartWare common stock and HeartWare CDIs. HeartWare common stock is quoted on The NASDAQ Global Market under the symbol “HTWR” and HeartWare CDIs are quoted on the Australian Securities Exchange or ASX under the symbol “HIN”. Thoratec common stock is quoted on The NASDAQ Global Select Market under the symbol “THOR”.

 

At a special meeting of HeartWare stockholders, HeartWare stockholders will be asked to vote on the adoption of the merger agreement and certain other matters. The adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of HeartWare common stock entitled to vote. Holders of HeartWare CDIs have a right to direct CHESS Depositary Nominees Pty Limited, the stockholder of record and which we refer to as CDN, on how it should vote its shares and are being requested to give directions to CDN to vote in accordance with the instructions set forth in this proxy statement/prospectus.

 

The HeartWare board of directors recommends that HeartWare stockholders vote “FOR” the proposal to adopt the merger agreement and “FOR” the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies.

 

This document describes the special meeting, the merger, the documents related to the merger and other related matters. Please carefully read this entire document, including all of its annexes. In particular, we encourage you to read the section entitled “Risk Factors” beginning on page 25 for a discussion of the risks relating to the proposed merger. You can also obtain information about Thoratec and HeartWare from documents that each of us has filed with the U.S. Securities and Exchange Commission, or the SEC.

 

DOUGLAS GODSHALL

President and Chief Executive Officer
HeartWare International, Inc.

 

 

 

 

This proxy statement/prospectus is dated • , 2009, and is first being mailed or otherwise delivered to HeartWare stockholders on or about • , 2009.

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On •, 2009

 

To the stockholders of HeartWare International, Inc.:

 

A special meeting of stockholders of HeartWare will be held on • , 2009, at • , U.S. Eastern time ( • , Australia Eastern Standard Time on • , 2009), at • , for the following purposes:

 

 

Only stockholders who owned shares of HeartWare common stock at the close of business, U.S. Eastern time, on June 25, 2009 (7:00 a.m., Australia Eastern Standard Time on June 26, 2009), the record date for the HeartWare special meeting, are entitled to notice of, and to attend and vote at, the HeartWare special meeting and any adjournment or postponement of the HeartWare special meeting.

 

Holders of HeartWare CDIs are entitled to receive notice of, and may attend the HeartWare special meeting, but cannot vote their HeartWare CDIs at the special meeting. Each HeartWare CDI holder has the right to direct CDN, the stockholder of record, on how it should vote on each proposal.

 

We cannot complete the merger unless the merger agreement is adopted by the affirmative vote of the holders of a majority of the outstanding shares of HeartWare common stock entitled to vote at the HeartWare special meeting. HeartWare stockholders have dissenters’ rights under Delaware law in connection with the merger. The proxy statement/prospectus accompanying this notice explains the merger, the merger agreement and HeartWare stockholders’ dissenters’ rights and provides specific information concerning the HeartWare special meeting. Please review the proxy statement/prospectus carefully.

 

The HeartWare board of directors has approved and declared the advisability of the merger agreement and has determined that the merger and the other transactions contemplated by the merger agreement are fair to and in the best interests of HeartWare and its stockholders and recommends that you vote “FOR” the proposal to adopt the merger agreement and “FOR” the proposal to adjourn the HeartWare special meeting, if necessary or appropriate, to permit further solicitation of proxies.

 

Your vote is important. Whether or not you plan to attend the HeartWare special meeting, if you are a holder of HeartWare common stock, please complete, sign and date the enclosed proxy card and return it promptly in the enclosed postage-paid return envelope as soon as possible. If you hold your shares through a bank, broker or other holder of record, you must vote your shares in accordance with the voting instruction form received from your bank, broker or other holder of record. If you are a holder of HeartWare CDIs, please complete, sign and date the enclosed CDI Voting Instruction Form and return it promptly in the enclosed postage-paid return envelope to CDN as soon as possible.

 

If you plan to attend the HeartWare special meeting in person, we ask that you notify HeartWare’s Company Secretary by sending an e-mail to enquiries@heartware.com.au.

Please do not send any HeartWare stock certificates at this time.

 

By order of the board of directors,

 

David McIntyre
Chief Financial Officer, Chief Operating Officer and Company Secretary

 

Framingham, Massachusetts

 • , 2009

REFERENCES TO ADDITIONAL INFORMATION

 

This proxy statement/prospectus incorporates by reference important business and financial information about HeartWare and Thoratec from documents filed with the SEC that are not included in or delivered with this proxy statement/prospectus. This information is available to you without charge upon your written or oral request. You may obtain the documents incorporated by reference in this proxy statement/prospectus, other than certain exhibits to those documents, by requesting them in writing or by telephone from the appropriate company at the following addresses and telephone numbers:

 

 

Investors may also consult HeartWare’s or Thoratec’s websites for more information concerning the merger described in this proxy statement/prospectus. HeartWare’s website is www.heartware.com.au. Thoratec’s website is www.thoratec.com. Information included on any of these websites is not incorporated by reference into this proxy statement/prospectus.

 

If you would like to request documents, please do so by • , 2009 in order to receive them before the HeartWare special meeting.

 

You should rely only on the information contained or incorporated by reference into this proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this proxy statement/prospectus. This proxy statement/prospectus is dated • , 2009. You should not assume that the information contained in, or incorporated by reference into, this proxy statement/prospectus is accurate as of any date other than that date, except to the extent that such information is contained in an additional document filed with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, between the date of this proxy statement/prospectus and the date of the HeartWare special meeting and is incorporated by reference herein. Neither the mailing of this proxy statement/prospectus to HeartWare stockholders nor the issuance by Thoratec of Thoratec common shares in connection with the merger will create any implication to the contrary.

 

For more information about the information incorporated by reference into this proxy statement/prospectus and where to obtain copies of documents incorporated by reference into this proxy statement/prospectus, see “Where You Can Find More Information” on page 127.

 

This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Information contained in this proxy statement/prospectus regarding Thoratec has been provided by Thoratec and information contained in this proxy statement/prospectus regarding HeartWare has been provided by HeartWare.

 

TABLE OF CONTENTS

 

 

QUESTIONS AND ANSWERS ABOUT THE MERGER

Q:		Why am I receiving this proxy statement/prospectus?

A:		Thoratec has agreed to acquire HeartWare under the terms of the merger agreement. Please see the section entitled “The Merger Agreement” beginning on page 83 of this proxy statement/prospectus for a more detailed summary of the terms and conditions contained in the merger agreement. A copy of the merger agreement is attached to this proxy statement/prospectus as Annex A.

		In order to complete the merger, HeartWare stockholders must adopt the merger agreement and all other conditions to the consummation of the merger must be satisfied or waived. HeartWare will hold a special meeting of its stockholders, which we refer to as the HeartWare special meeting, to obtain the required approval of HeartWare stockholders to adopt the merger agreement.
Q:		What are HeartWare stockholders being asked to vote on?
A:		HeartWare stockholders are being asked to consider and vote on the adoption of the merger agreement and the adjournment of the special meeting to a later date, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt the merger agreement.
Q:		What vote is required to adopt the merger agreement?

A:		The adoption of the merger agreement requires the affirmative vote of a majority of the outstanding shares of HeartWare common stock, including shares of HeartWare common stock represented by HeartWare CDIs, entitled to vote at the HeartWare special meeting. In connection with the transactions contemplated by the merger agreement, all but one of the directors on HeartWare’s board of directors and certain executive officers of HeartWare, who collectively beneficially own in the form of HeartWare CDIs (and in the case of Mr. Douglas Godshall, in the form of shares of HeartWare common stock), as of the HeartWare record date, approximately 1.6% of the total outstanding shares of HeartWare common stock, and Apple Tree Partners I, L.P., who beneficially owns in the form of HeartWare CDIs, as of the HeartWare record date, approximately 30.0% of the total outstanding shares of HeartWare common stock have entered into separate support agreements dated as of February 12, 2009, to, among other things, vote or give directions to vote their respective shares of HeartWare common stock, “FOR” the adoption of the merger agreement with Thoratec, subject to the terms and conditions of the support agreements. Please see the section entitled “The Support Agreements” beginning on page 109 of this proxy statement/prospectus for a more detailed summary of the terms and conditions contained in the support agreements. Copies of the form of support agreements are attached to this proxy statement/prospectus as Annex D and Annex E.

Q:		What vote is required to adopt the proposal to adjourn the special meeting to a later time, if necessary or appropriate, to solicit additional proxies?
A:		Assuming a quorum is present at the HeartWare special meeting, the adoption of the proposal to adjourn the special meeting to a later time, if necessary or appropriate, to solicit additional proxies requires the affirmative vote of a majority of shares of HeartWare common stock represented in person or by proxy at the special meeting and entitled to vote thereon.
Q:		What will happen in the proposed mergers?

A:		Pursuant to the terms of the merger agreement, Merger Subsidiary will merge with and into HeartWare, with HeartWare surviving the merger as a wholly owned subsidiary of Thoratec. Provided that certain tax-related conditions are met as more fully described in the section entitled “The Merger Agreement — Conditions to the Obligations of Each Party to Consummate the Second Merger” beginning on page 99 of this proxy statement/prospectus, then immediately after the merger, HeartWare, as the surviving corporation in the merger, will

		merge with and into Merger Subsidiary Two with Merger Subsidiary Two surviving the second merger as a wholly owned subsidiary of Thoratec.
Q:		What will HeartWare stockholders receive in the merger?
A:		As a result of the merger, shares owned by holders of HeartWare common stock, including shares of HeartWare common stock represented by HeartWare CDIs, will be converted into the right to receive in exchange for each full share of HeartWare common stock, $14.30 in cash and 0.6054 of a share of Thoratec common stock.
		In addition, if the volume weighted average of the per share closing prices of Thoratec common stock on The NASDAQ Stock Market for the twenty (20) consecutive trading days ending on and including the fifth (5th) trading day prior to, but not including, the closing date is equal to or less than $18.38, then HeartWare will have an option to terminate the merger agreement unless, subject to certain adjustments provided for in the merger agreement, Thoratec increases the number of shares of Thoratec common stock payable in the merger such that the value of the stock portion of the merger consideration at closing is equal to 70% of the value of the aggregate Thoratec stock consideration payable in the merger (calculated using the $26.25 price per share of Thoratec common stock used to determine the stock portion of the merger consideration). If that same volume weighted average price is equal to or exceeds $34.13 (130% of the $26.25 price per share of Thoratec common stock used to determine the stock portion of the merger consideration), then Thoratec may reduce the number of shares of Thoratec common stock payable in the merger such that the value of the stock portion of the merger consideration at closing is equal to 130% of the value of the aggregate Thoratec stock consideration payable in the merger (calculated using the $26.25 price per share of Thoratec common stock used to determine the stock portion of the merger consideration).
		Each HeartWare CDI is exchangeable at the option of the HeartWare CDI holder into shares of HeartWare common stock at the ratio of one (1) share of HeartWare common stock for every thirty-five (35) HeartWare CDIs, and, as a result of the merger, holders of HeartWare CDIs will be entitled to receive 1/35 of the merger consideration described above for each HeartWare CDI held by such holder.
Q:		What will happen if the value of the stock portion of the merger consideration payable at the effective time of the merger is equal to or less than 70% of the value of the aggregate Thoratec stock consideration as of February 12, 2009 (the date of execution of the merger agreement)?

A:		Depending on the facts and circumstances then existing, the HeartWare board of directors may or may not determine to exercise HeartWare’s right to terminate the merger agreement as described above. If the HeartWare board of directors determines not to exercise HeartWare’s right to terminate the merger agreement, the HeartWare stockholders may receive Thoratec common stock as consideration in the merger with a per share value of less than $18.38, or 70% of the value of the stock consideration used to determine the merger consideration at signing. If the HeartWare board of directors determines, based on the facts and circumstances existing at the time, not to exercise its right to terminate the merger agreement, HeartWare does not intend to resolicit the votes of its stockholders regarding their adoption of the merger agreement. After the HeartWare board of directors determines, based on the facts and circumstances existing at that time, whether to exercise its right to terminate the merger agreement, HeartWare will promptly notify its stockholders of such determination by issuing a press release announcing such determination, including the basis for the HeartWare board of directors’ determination, as well as filing such press release with the SEC on Form 8-K.

		Accordingly, in determining whether to vote to adopt the merger agreement, HeartWare stockholders should be mindful that the per share value of the Thoratec common stock they receive in the merger could, as of the effective time of the merger, be less than $18.38, with the result that the value of the aggregate merger consideration payable for each share of HeartWare common stock, as of the effective time of the merger, could be less than $25.43 per share, i.e. $18.38 multiplied by the 0.6054 shares of Thoratec common stock payable in the merger plus $14.30 in cash, (as compared to a value of $30.19 per share of HeartWare common stock as of February 12, 2009, the date of execution of the merger agreement).
Q:		What will holders of HeartWare CDIs receive in the merger?
A:		Each HeartWare CDI is exchangeable at the option of the holder of the HeartWare CDI into shares of HeartWare common stock at the ratio of one (1) share of common stock for every thirty-five (35) HeartWare CDIs held by such holder and, as a result of the merger, holders of HeartWare CDIs will be entitled to receive 1/35 of the merger consideration described above for each HeartWare CDI held by such holder. Holders of HeartWare CDIs who do not convert their CDIs into shares of HeartWare common stock prior to the closing date of the merger will

		receive their merger consideration through Computershare Investor Services Pty Ltd, which we refer to as Computershare on behalf of CDN.
Q:		Does the HeartWare board of directors support the merger?
A:		Yes. The HeartWare board of directors, by unanimous vote of those present at a meeting duly called, has approved and declared the advisability of the merger agreement and has determined that the merger and the other transactions contemplated by the merger agreement are fair to and in the best interests of HeartWare and its stockholders and recommends that you vote “FOR” the proposal to adopt the merger agreement. You should read the section entitled, “HeartWare’s Reasons for the Merger and Recommendation of the HeartWare Board of Directors” beginning on page 55. The HeartWare board of directors also recommends that you vote “FOR” the adoption of the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies to facilitate the adoption of the merger agreement.
Q:		Are there risks involved in undertaking the merger?
A:		Yes. In evaluating the merger, HeartWare stockholders should carefully consider the factors discussed in the section of this proxy statement/prospectus entitled “Risk Factors” beginning on page 25 and other information about HeartWare and Thoratec included in the documents incorporated by reference in this proxy statement/prospectus.
Q:		Where and when is the HeartWare special meeting?
A:		The HeartWare special meeting will be held on • , 2009, at • , U.S. Eastern time ( • , Australia Eastern Standard Time on • , 2009), at • .
Q:		Who can vote their shares of HeartWare common stock in connection with the HeartWare special meeting?

A:		HeartWare stockholders can vote their shares in connection with the HeartWare special meeting if they owned HeartWare shares of common stock at the close of business, U.S. Eastern time, on June 25, 2009 (7:00 a.m., Australia Eastern Standard Time on June 26, 2009), the record date for the HeartWare special meeting. As of the close of business on that day, 8,924,351 shares of HeartWare common stock were outstanding, including shares represented by HeartWare CDIs.

Q:		What do holders of shares of HeartWare common stock need to do now?
A:		If you are a HeartWare stockholder, after you have carefully read this proxy statement/prospectus, including the annexes and the other documents referred to in this proxy statement/prospectus and have decided how you wish to vote your shares, please submit a proxy to vote your shares promptly as described below. You have one (1) vote for each share of HeartWare common stock you own as of the record date and a proportionate vote for any fractional shares so held.
Q:		How do I vote if I am a holder of record of HeartWare common stock?
A:		If you are a holder of record of HeartWare common stock, after you have carefully read this document and have decided how you wish to vote your shares of common stock, please vote as soon as possible by:
		• completing, signing and dating each HeartWare proxy card you receive and returning it in the enclosed postage-prepaid envelope by mail; or
		• voting in person by appearing at the special meeting.
		Mailing in your proxy card will not prevent you from attending the special meeting. You are encouraged to submit a proxy by mail even if you plan to attend the special meeting in person to ensure that your shares of HeartWare common stock are represented at the special meeting.
		If you return your signed proxy card, but do not mark the boxes showing how you wish to vote, your shares will be voted “FOR” the proposal to adopt the merger agreement and “FOR” the adoption of the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies.
		If you would like to attend the HeartWare special meeting, see “Can I attend the HeartWare special meeting and vote my shares in person?” below.

Q:		How do I vote if my shares are held by a brokerage firm, bank, trust or other nominee?
A:		If you are a stockholder who holds shares of HeartWare common stock through a brokerage account or other nominee, such as a bank or trust, after you have carefully read this document and have decided how you wish to vote your shares, please submit a proxy for your shares promptly. If you hold your shares of HeartWare common stock through a brokerage account or another nominee, such as a bank or trust, then the brokerage firm, bank, trust or other nominee is considered to be the stockholder of record with respect to those shares of common stock. However, you are still considered to be the beneficial owner of those shares, with your shares being held in “street name”. “Street name” holders generally cannot vote their shares directly and must instead direct their brokerage firm, bank, trust or other nominee on how to vote their shares. Your brokerage firm, bank, trust or other nominee will only be permitted to vote your shares for you at the special meeting for the proposal to adopt the merger agreement if you instruct it on how to vote in accordance with the instruction form included with these materials and forwarded to you by your brokerage firm, bank, trust or other nominee. Submitting your proxy card or directing your brokerage firm, bank, trust or other nominee to vote your shares will ensure that your shares are represented and voted at the HeartWare special meeting. Without instructions, your shares will not be voted on the proposal to adopt the merger agreement, which will have the effect described below under the question, “What if I abstain from voting or fail to instruct my brokerage firm, bank, trust or other nominee on how to vote?”
		In addition, because any shares you may hold in “street name” will be deemed to be held by a different stockholder than any shares you hold of record, shares held in “street name” will not be combined for voting purposes with shares you hold of record. To be sure your shares are voted, you should instruct your brokerage firm, bank, trust or other nominee to vote your shares. Shares held by a corporation or business entity must be voted by an authorized officer of the entity.
Q:		How do I vote if my shares are held in the form of HeartWare CDIs?
A:		If you are a holder of HeartWare CDIs, you may attend the special meeting but cannot vote your HeartWare CDIs in person at the special meeting. In order to vote your shares in person, you must have converted your HeartWare CDIs into HeartWare common stock before the record date for the HeartWare special meeting. If you wish to convert your HeartWare CDIs, you should contact Computershare as soon as possible to find out how to convert your HeartWare CDIs into shares of HeartWare common stock and how long the conversion process will take.
		If you are a holder of HeartWare CDIs and you do not wish to convert your HeartWare CDIs into shares of HeartWare common stock, you have a right to direct CDN, the stockholder of record, on how it should vote the shares of HeartWare common stock underlying your HeartWare CDIs in relation to each proposal. After you have carefully read this document and have decided how you wish to direct CDN to cast proxy votes with respect to the shares of HeartWare common stock underlying your HeartWare CDIs, please submit your voting instructions as soon as possible by submitting instructions to CDN to vote the underlying shares on your behalf at the meeting on each proposal according to your directions by:
		• returning by mail the enclosed CDI Voting Instruction Form (instructions on how to fill out the form are set out on the back of the form or on Computershare’s website at www.computershare.com.au) to Computershare, using the enclosed postage-prepaid envelope or by mailing it to Computershare Investor Services Pty Ltd, GPO Box 242 Melbourne Victoria 3001 Australia or by faxing it to Computershare to (within Australia) 1800 783 447 or (outside Australia) +61 3 9473 2555; or
		• submitting your voting instructions via Computershare’s website at www.computershare.com.au. You will need your Holder Identification Number or Security Holder Reference Number, which is shown on the enclosed CDI Voting Instruction Form. You will be taken to have signed the CDI Voting Instruction Form if you submit your instructions in accordance with the directions on the website.
		If you are a holder of HeartWare CDIs, CDN cannot vote your HeartWare CDIs without instructions from you. You should instruct CDN how to vote your shares by following the directions on the CDI Voting Instruction Form. Without instructions, your HeartWare CDIs will not be voted, which will have the effect described below under the question “What if I abstain from voting or fail to instruct CDN on how to vote my HeartWare CDIs?” below.

Q:		What is the last day for holders of HeartWare CDIs to submit voting instructions to Computershare?
A:		If you are a holder of HeartWare CDIs directing CDN to vote the underlying shares of HeartWare common stock on your behalf, the latest time for receipt of CDI Voting Instruction Forms (and any necessary supporting documents) via mail and voting instructions via Internet is • , U.S. Eastern time on • , 2009 ( • , Australia Eastern Standard Time on • , 2009).
Q:		Why is my vote as a HeartWare stockholder important?
A:		If you do not vote by proxy or vote in person at the HeartWare special meeting, it will be more difficult for HeartWare to obtain the necessary quorum to hold its special meeting. In addition, your failure to vote, whether by proxy or in person, will have the same effect as a vote “AGAINST” adoption of the merger agreement. The merger agreement must be adopted by the affirmative vote of the holders of a majority of the outstanding shares of HeartWare common stock (including shares represented by HeartWare CDIs) entitled to vote at the special meeting. The HeartWare board of directors recommends that you vote “FOR” the proposal to adopt the merger agreement.
Q:		What constitutes a quorum for the special meeting?
A:		The presence, in person or by proxy, of stockholders representing a majority of the shares of HeartWare common stock entitled to vote at the special meeting, including shares represented by HeartWare CDIs, will constitute a quorum for the special meeting. If you are a stockholder of record and you submit a properly executed proxy card or vote in person at the special meeting, then your shares will be counted as part of the quorum. Abstentions and broker non-votes will be treated as present at the HeartWare special meeting for purposes of determining the presence or absence of a quorum. All shares of HeartWare common stock held by stockholders (including shares represented by HeartWare CDIs) that are present in person or represented by proxy and entitled to vote at the special meeting, regardless of how such shares are voted or whether such stockholders abstain from voting, will be counted in determining the presence of a quorum.
		If CDN has received directions to vote shares of HeartWare common stock underlying HeartWare CDIs in accordance with the procedures set out in this proxy statement/prospectus and on the CDI Voting Instruction Form, regardless of whether the directions are to vote the shares “FOR”, “AGAINST” or to abstain from voting, those shares of HeartWare common stock will be counted in determining the presence of a quorum. If you fail to instruct CDN to vote the shares of HeartWare common stock underlying your HeartWare CDIs, the shares of HeartWare common stock underlying your HeartWare CDIs will not be treated as present at the HeartWare special meeting for purposes of determining the presence or absence of a quorum.
Q:		What if I abstain from voting or fail to instruct my brokerage firm, bank, trust or other nominee on how to vote my shares of HeartWare common stock?
A:		If you fail to instruct your brokerage firm, bank, trust or other nominee to vote your shares, the nominee will not be able to vote your shares on the proposal to adopt the merger agreement. Because the adoption of the merger agreement requires an affirmative vote of a majority of the outstanding shares of HeartWare common stock for approval, your abstention from voting or your failure to provide your nominee with voting instructions will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement. Because your brokerage firm, bank, trust or other nominee does have discretionary authority to vote on the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies, your broker or other nominee may vote your shares in its discretion on this proposal. If your broker or other nominee affirmatively abstains from voting your shares in its discretion on this proposal, it will have the same effect as a vote “AGAINST” the proposal to adjourn the special meeting.
Q:		What if I abstain from voting or fail to instruct CDN on how to vote my HeartWare CDIs?
A:		If you are a holder of HeartWare CDIs, CDN cannot vote the shares of HeartWare common stock underlying your HeartWare CDIs on your behalf without instructions from you. You should instruct CDN as to how to vote the underlying shares, following the directions CDN provides to you. Please check the CDI Voting Instruction Form used by CDN. Without instructions, CDN cannot vote on your behalf. If you instruct CDN to abstain from voting the shares of HeartWare common stock underlying your HeartWare CDIs, or you fail to instruct CDN to vote the underlying shares of HeartWare common stock with respect to the proposal to adopt the merger agreement, your direction to abstain from voting on the proposal or failure to instruct CDN will have the same effect as a vote

		“AGAINST” the proposal to adopt the merger agreement. In addition, if you instruct CDN to abstain from voting on the proposal to adjourn the HeartWare special meeting, if necessary or appropriate, in order to solicit additional proxies, or you fail to instruct CDN to vote on this proposal, your instruction to CDN to abstain from voting or your failure to instruct CDN will have the same effect as a vote “AGAINST” the proposal to adjourn the HeartWare special meeting, if necessary or appropriate, in order to solicit additional proxies.
Q:		How are votes counted?
A:		Votes will be counted by the inspector of election appointed for the special meeting, who will separately count “FOR” and “AGAINST” votes and abstentions. Because the adoption of the merger agreement requires the affirmative vote of a majority of the outstanding shares of HeartWare common stock, your failure to vote, your failure to provide voting instructions to your broker or nominee or your abstention from voting will have the same effect as a vote against the adoption of the merger agreement. Because the adoption of the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies, requires the affirmative vote of a majority of the shares of HeartWare common stock represented in person or by proxy at the special meeting, abstentions will count as a vote against the proposal and the failure to vote your shares will not affect the outcome of the proposal.
		CDN, on behalf of the holders of HeartWare CDIs, will vote the underlying shares of HeartWare common stock represented by the HeartWare CDIs on an aggregate basis by (i) determining the total number of HeartWare CDIs “FOR” each proposal, (ii) determining the total number of HeartWare CDIs “AGAINST” each proposal, (iii) determining the total number of HeartWare CDIs abstaining from voting on each proposal, (iv) applying the ratio of one (1) share of HeartWare common stock for every thirty-five (35) HeartWare CDIs and (v) submitting the resultant number of shares of HeartWare common stock “FOR” each proposal and “AGAINST” each proposal and the number of shares abstaining from voting on each proposal, as appropriate.
Q:		Can I attend the HeartWare special meeting and vote my shares in person?
A:		All holders of HeartWare common stock, including stockholders of record and stockholders who hold their shares through brokerage firms, banks, trusts or other nominees or any other holder of record, and holders of HeartWare CDIs are invited to attend the HeartWare special meeting. If you are not a stockholder of record, you must obtain a proxy, executed in your favor, from the record holder of your shares, such as a brokerage firm, bank, trust or other nominee, to be able to vote in person at the HeartWare special meeting. If you plan to attend the HeartWare special meeting, you must hold your shares in your own name or have a letter from the record holder of your shares confirming your ownership and you must bring a form of personal photo identification with you in order to be admitted. HeartWare reserves the right to refuse admittance to anyone without proper proof of share ownership or without proper photo identification.
		Holders of HeartWare CDIs are entitled to attend the HeartWare special meeting but cannot vote their HeartWare CDIs in person at the HeartWare special meeting. In order to vote their shares in person, holders of HeartWare CDIs must have converted their HeartWare CDIs into HeartWare common stock before the record date for the HeartWare special meeting. If you wish to convert your HeartWare CDIs into HeartWare common stock you should contact Computershare as soon as possible to find out how to convert your HeartWare CDIs into shares of HeartWare common stock and how long the conversion process will take and follow the instructions under the question, “How do I vote if my shares are held in the form of HeartWare CDIs?” above.
Q:		Will HeartWare be required to submit the merger agreement to its stockholders even if the HeartWare board of directors has withdrawn, modified or qualified its recommendation?
A:		Yes. Unless the merger agreement is terminated before the HeartWare special meeting, HeartWare is required to submit the merger agreement to its stockholders even if the HeartWare board of directors has withdrawn, modified or qualified its recommendation, consistent with the terms of the merger agreement.
Q:		What is the purpose of the second merger, if it occurs?
A:		As described below, if certain tax-related conditions are satisfied, the transactions contemplated by the merger agreement will be structured to qualify as a “reorganization” for U.S. federal income tax purposes. If the transactions are intended to qualify as a “reorganization” for U.S. federal income tax purposes, the merger of Merger Subsidiary into HeartWare will be followed by a second merger of HeartWare into Merger Subsidiary Two, with Merger Subsidiary Two surviving this second merger as a wholly owned subsidiary of Thoratec. The

		purpose of employing this two-merger structure is to follow the approach of applicable IRS pronouncements to provide protection against the risk of corporate-level tax to Thoratec and HeartWare in the event the mergers do not qualify as a “reorganization”.
Q:		Will I be subject to U.S. federal income tax on the Thoratec common stock and cash that I receive?
A:		For HeartWare stockholders that are U.S. persons (as defined in the section entitled, “The Merger — Material U.S. Federal Income Tax Consequences” beginning on page 71), if certain tax-related conditions (described later in this document) are satisfied, the transactions contemplated by the merger agreement will be structured to qualify as a “reorganization” for U.S. federal income tax purposes. If such transactions qualify as a “reorganization,” you will recognize gain, but not loss, equal to the lesser of (i) the amount of cash you received in the merger and (ii) an amount equal to the excess, if any, of (x) the sum of the amount of cash and the fair market value of the Thoratec common stock you received in the merger over (y) the aggregate tax basis in your HeartWare common stock surrendered.
		If the applicable conditions (described later in this document) are not satisfied, or the Internal Revenue Service, which we refer to as the IRS, successfully challenges the treatment of the mergers as a “reorganization,” the transactions contemplated by the merger agreement will be fully taxable to you for U.S. federal income tax purposes. In this case, you will recognize all of your gain or loss from the exchange of your HeartWare common stock for cash and Thoratec common stock in the merger.

		Based on the number of shares of HeartWare common stock outstanding as of the HeartWare record date and assuming that no HeartWare stockholder exercises dissenters’ rights, the stock value condition, as described in “The Merger — Material U.S. Federal Income Tax Consequences — Transaction Structure” beginning on page 72 and subject to the discussion therein, will be satisfied if the mean between the high and low selling prices of a share of Thoratec common stock as reported on The NASDAQ Stock Market for the last trading session closing prior to the effective time of the merger, which we refer to as the effective stock price, is at least $16.74, in which case the second merger will occur and (i) Thoratec and HeartWare will treat the merger and the second merger, taken together, as a single integrated transaction for U.S. federal income tax purposes that qualifies as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code, and (ii) as a condition to the completion of the acquisition of HeartWare pursuant to the merger agreement (which condition is not waivable after the receipt of stockholder approval for the merger unless further stockholder approval is obtained with appropriate disclosure), Shearman & Sterling LLP, which we refer to as Shearman, will deliver a tax opinion to HeartWare, and Latham & Watkins LLP, which we refer to as Latham, will deliver a tax opinion to Thoratec, in each case, to the effect that the merger and the second merger, taken together, will constitute a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code. The tax opinions, if delivered, will be based on certain assumptions and on representation letters provided by HeartWare and Thoratec. Thus, if the stock value condition is satisfied but the tax opinions are not delivered, the merger will not occur unless further HeartWare stockholder approval is obtained with appropriate disclosure.

		Whether the stock value condition is satisfied will depend on the effective stock price, as described above. Other relevant factors will include (i) whether there has been any adjustment to the merger consideration as a result of either (x) HeartWare electing to terminate the merger agreement and Thoratec electing to increase the number of shares of Thoratec common stock payable in the merger or (y) Thoratec electing to reduce the number of shares of Thoratec common stock payable in the merger, as described in “The Merger Agreement — Merger Consideration” beginning on page 83 and (ii) the number of outstanding shares of HeartWare common stock with respect to which HeartWare stockholders exercise dissenters’ rights. See “The Merger — Material U.S. Federal Income Tax Consequences” beginning on page 71.

		No assurance, however, can be given that the stock value condition will be met because its satisfaction is dependent, in part, on factors that HeartWare and Thoratec do not control. As a result, in deciding whether to vote to adopt the merger agreement, you should consider the possibility that the transaction will be structured as a fully taxable transaction for U.S. federal income tax purposes because the stock value condition is not satisfied. You will not be entitled to change your vote or to vote again in the event that the stock value condition is not satisfied and the transaction is structured as a fully taxable transaction for U.S. federal income tax purposes. Other than the U.S. federal income tax consequences described above, neither HeartWare nor Thoratec is aware of any material effects on HeartWare stockholders if the second merger does not occur.

		Assuming an effective stock price of $26.46 of Thoratec common stock, which was the per share closing price on July 2, 2009, and subject to the discussion under “The Merger — Material U.S. Federal Income Tax Consequences” beginning on page 71, the transactions contemplated by the merger agreement would be structured to qualify as a “reorganization” for U.S. federal income tax purposes.

		We will notify you via a press release announcing the consummation of the merger as to whether or not the acquisition of HeartWare by Thoratec has been structured to qualify as a “reorganization”.
		You are urged to carefully read the discussion under “The Merger — Material U.S. Federal Income Tax Consequences” beginning on page 71, and to consult your tax advisor on the consequences of participation in the transactions contemplated by the merger agreement.
Q:		If I am a HeartWare stockholder, can I change or revoke my vote?

A:		Yes. Regardless of the method you used to cast your vote, if you are a holder of record of shares, you may change your vote by signing and returning a new proxy card with a later date by 11:59 p.m., U.S. Eastern time on • , 2009 ( • , Australia Eastern Standard Time on • , 2009) or by attending the HeartWare special meeting and voting by ballot at the special meeting.

		If you are a HeartWare stockholder of record of shares and wish to revoke rather than change your vote, you must send a written, signed revocation to HeartWare International, Inc., 205 Newbury Street, Framingham, Massachusetts 01701, which must be received by 11:59 p.m., U.S. Eastern time on • , 2009 ( • , Australia Eastern Standard Time on • , 2009). You must include your control number.
		If you hold your shares in “street name” and wish to change or revoke your vote, please refer to the information on the voting instruction form included with these materials and forwarded to you by your brokerage firm, bank, trust or other nominee to see your voting options.
		Any holder of HeartWare common stock entitled to vote in person at the HeartWare special meeting may vote in person regardless of whether a proxy has been previously given, but the mere presence of a stockholder at the special meeting will not constitute revocation of a previously given proxy.
Q:		If I am a HeartWare CDI holder, can I change or revoke my direction to vote?
A:		If you are a holder of HeartWare CDIs and have completed and returned your CDI Voting Instruction Form, you may change or revoke the directions contained therein by a written notice of change or revocation to Computershare by no later than • , U.S. Eastern time on • , 2009 ( • , Australia Eastern Standard Time on • , 2009).
Q:		If I am a HeartWare stockholder with shares represented by stock certificates, should I send in my HeartWare stock certificates now?
A:		No. You should not send in your HeartWare stock certificates at this time. After the merger, Thoratec will send you instructions for exchanging your shares of HeartWare common stock for the merger consideration. If your shares are held in “street name” by your brokerage firm, bank, trust or other nominee, you will receive instructions from your brokerage firm, bank, trust or other nominee as to how to affect the surrender of your “street name” shares in exchange for the merger consideration. Please do not send in your stock certificates with your proxy card. Similarly, if you are a holder of HeartWare CDIs, you should not send your holding statement(s) with your CDI Voting Instruction Form. After the merger, Thoratec will send CDN instructions for exchanging its shares of HeartWare common stock for the merger consideration and Computershare will arrange for the merger consideration to be sent to HeartWare CDI holders on behalf of CDN.
Q:		When do you expect to complete the merger?

A:		HeartWare and Thoratec are working to complete the merger as promptly as practicable. If HeartWare stockholders adopt the merger agreement and we receive the required regulatory approvals described below in “The Merger — Regulatory Matters” beginning on page 78, HeartWare currently expects that the merger will be completed during the second half of 2009. However, it is possible that factors outside our control, including the review of the merger by the Federal Trade Commission, which we refer to as the FTC, or under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which we refer to as the HSR Act, could require us to complete the merger at a later time or may result in us not completing the merger at all.

		For a description of certain matters that could delay or prevent the completion of the merger, please refer to “Risk Factors,” beginning on page 25.
Q:		Will the shares of Thoratec common stock to be issued as part of the merger consideration be listed on The NASDAQ Stock Market and ASX?
A:		Pursuant to the terms of the merger agreement, Thoratec will use its reasonable best efforts to cause the shares of Thoratec common stock to be issued in connection with the merger to be approved for listing on The NASDAQ Stock Market upon the occurrence of the effective time of the merger, subject to official notice of issuance.
		The shares of Thoratec common stock will not be listed on ASX.
Q:		What happens if I sell my shares of HeartWare common stock or HeartWare CDIs before the special meeting?
A:		The record date for stockholders entitled to vote at the special meeting is earlier than the date of the special meeting and the expected closing date of the merger. If you hold shares of HeartWare common stock or HeartWare CDIs on the record date for the special meeting but you transfer your shares of HeartWare common stock or your HeartWare CDIs after the record date but before the special meeting, you will, unless special arrangements are made, retain your right to vote, or in the case of HeartWare CDIs, your right to give directions to vote, at the special meeting but will transfer the right to receive the merger consideration to the person to whom you transfer your shares or HeartWare CDIs. In addition, if you sell your shares prior to the special meeting or prior to the effective time of the merger, you will not be eligible to exercise your dissenters’ rights in respect of the merger.
Q:		Can I dissent and require appraisal of my shares?
A:		Yes. HeartWare stockholders are entitled to dissenters’ rights under Section 262 of the General Corporation Law of the State of Delaware, which we refer to as the Delaware General Corporation Law, provided that they satisfy the special criteria and conditions set forth in Section 262 of the Delaware General Corporation Law. You must have been a holder of HeartWare common stock as of the record date for the HeartWare special meeting in order to have dissenters’ rights in connection with the merger.
		Holders of HeartWare CDIs are not entitled to exercise dissenters’ rights in connection with the merger. Accordingly, holders of HeartWare CDIs must have converted their HeartWare CDIs into shares of HeartWare common stock prior to the record date for the HeartWare special meeting in order to have dissenters’ rights in connection with the merger.

		For more information regarding dissenters’ rights, see “The Merger — Dissenters’ Rights” beginning on page 79. In addition, a copy of Section 262 of the Delaware General Corporation Law is attached as Annex G to this proxy statement/prospectus.

Q:		Where can I find more information about HeartWare?

A:		You can obtain more information about HeartWare from the various sources described under “Where You Can Find More Information” beginning on page 127.

Q:		Whom should I call with questions?
A:		For additional questions about the merger, assistance in submitting proxies or voting shares of HeartWare common stock, or additional copies of this proxy statement/prospectus or the enclosed proxy card, HeartWare stockholders should contact HeartWare’s Company Secretary, Mr. David McIntyre, at (305) 818-4123 or send an e-mail to enquiries@heartware.com.au.
		If your brokerage firm, bank, trust or other nominee holds your shares in “street name”, you should also call your brokerage firm, bank, trust or other nominee for additional information.
		Holders of HeartWare CDIs with questions regarding voting procedures should contact Computershare at (within Australia) 1300 850 505 or (outside Australia) +61 3 9415 4000.

 

SUMMARY

 

General

	•	at the effective time of the merger, each then outstanding vested HeartWare incentive option and each outstanding option to purchase shares of HeartWare common stock issued under the HeartWare employee stock option plan, whether vested or unvested, will be cancelled and will convert into a right to receive the cash payment described above under the section entitled, “Treatment of Options and other Equity-Based Awards” and on page 87. Based upon the number of unvested options to purchase shares of HeartWare common stock issued under the HeartWare employee stock option plan outstanding as of the HeartWare record date, such unvested options held by the HeartWare non-employee directors and executive officers relating to 203,445 shares of HeartWare common stock will be cancelled and will be converted into aggregate cash payments of $2.4 million;

	•	at the effective time of the merger, each then outstanding unvested HeartWare incentive option will be converted into an option to acquire, on the same terms and conditions, an equivalent number of shares of Thoratec common stock as converted as described above under the section entitled, “Treatment of Options and other Equity-Based Awards” and on page 87. As of the HeartWare record date, there were no outstanding unvested HeartWare incentive options held by the HeartWare non-employee directors and executive officers.

	•	each HeartWare stock-based award (other than options granted or issued under (i) incentive option agreements or similar arrangements with directors and executive officers and (ii) the HeartWare employee stock option plan) will be cancelled and will convert into the right to receive the cash payment described above under the section entitled, “Treatment of Options and other Equity-Based Awards” and on page 87. Based upon the number of such restricted stock units as of the HeartWare record date, such units held by the HeartWare executive officers and non-employee directors relating to 82,138 shares will be cancelled and will be converted into aggregate cash payments of $2.5 million;

	•	three (3) of HeartWare’s executive officers have each entered into a retention bonus agreement that requires Thoratec to make certain payments to them upon the occurrence of certain events;
	•	two (2) of HeartWare’s executive officers have accepted offer letters with Thoratec that will be effective at the effective time of the merger. Additionally, these executive officers have each entered into a separation benefits agreement with Thoratec that becomes effective on the effective time of the merger, which supersedes such executive officer’s employment agreement with HeartWare. This agreement requires Thoratec to make certain payments and provide certain benefits if the executive officer’s employment is involuntarily terminated by Thoratec without “cause” or by the executive for “good reason” as defined in the agreement; and
	•	subject to certain conditions, HeartWare will also be permitted to award additional cash retention bonuses to other HeartWare employees, payable on or following the effective time of the merger. The maximum aggregate amount payable (inclusive of any and all payments, reimbursements and tax gross ups) pursuant to such bonuses and the three (3) retention bonus agreements described above will be $8.0 million.

The HeartWare Special Meeting

 

Comparative Market Prices

	•	February 12, 2009, the last full trading day prior to the public announcement of the merger agreement; and
	•	• , 2009, the last full trading day prior to the date of this proxy statement/prospectus.

Equivalent Value of One

HeartWare

Thoratec

Share of HeartWare

Common Stock

HeartWare CDIs

Common Stock

Common Stock

February 12, 2009

$N/A(1

)

AUD$0.665

$26.37

$30.26

• , 2009

$•

AUD$•

$•

$•

(1)		Shares of HeartWare common stock commenced trading on The NASDAQ Global Market on February 24, 2009.

 

Comparative Per Share Information

		Thoratec				HeartWare
		Fiscal Year				Fiscal Year								Pro Forma
		Ended				Ended								Combined
		January 3,				December 31,				Combined				Equivalent
		2009(1)				2008				Pro Forma(2)				Data
Net income (loss) per share:
Basic		$	0.33			$	(3.00	)		$	(0.12	)		$	(0.07	)
Diluted		$	0.33			$	(3.00	)		$	(0.12	)		$	(0.07	)
Cash dividends declared per share		$	0.00			$	0.00			$	0.00			$	0.00

(1)		Adjusted for the retrospective adoption of Financial Accounting Standards Board (“FASB”) Staff Position (“FSP”) No. APB 14-1, Accounting for Convertible Debt Instruments that May be Settled in Cash Upon Conversion.

(2)		Because of different fiscal period ends, the unaudited pro forma condensed combined statement of operations data combines Thoratec’s historical consolidated statement of operations for the fiscal year ended January 3, 2009 and HeartWare’s historical consolidated statement of operations for the fiscal year ended December 31, 2008.

		Thoratec				HeartWare
		Three Months				Three Months								Pro Forma
		Ended				Ended								Combined
		April 4,				March 31,				Combined				Equivalent
		2009(1)				2009(1)				Pro Forma(1)(2)				Data
Net income (loss) per share:
Basic		$	0.10			$	(0.70	)		$	(0.02	)		$	(0.01	)
Diluted		$	0.10			$	(0.70	)		$	(0.02	)		$	(0.01	)
Book value per share at period end		$	8.43			$	2.28			$	9.82			$	5.95
Cash dividends declared per share		$	0.00			$	0.00			$	0.00			$	0.00

(1)		Historical book value per share is computed by dividing shareholders’ equity by the number of Thoratec or HeartWare common shares outstanding. Pro forma book value per share is computed by dividing pro forma shareholders’ equity by the pro forma number of Thoratec common shares outstanding.
(2)		Because of different quarter period ends, the unaudited pro forma condensed combined statement of operations data combines Thoratec’s historical condensed consolidated statement of operations for the three months ended April 4, 2009 and HeartWare’s historical condensed consolidated statement of operations for the three months ended March 31, 2009.

 

Selected Historical Consolidated Financial Data of Thoratec

		Three Months Ended
		April 4,				March 29,				Fiscal Year Ended
		2009				2008(3)				2008(1)(3)				2007(1)(3)				2006(1)(3)				2005(3)				2004(3)
										(In thousands, except per share amounts)
Statement of Operations:
Product sales		$	89,466			$	64,427			$	313,564			$	234,780			$	214,133			$	201,712			$	172,341
Gross profit			54,027				35,837				185,998				136,264				125,485				123,340				100,222
Amortization of goodwill and purchased intangible assets			2,931				3,296				13,183				12,582				12,055				11,204				11,724
In-process research and development			—				—				—				—				1,120				—				—
Litigation, merger, restructuring and other costs			—				—				—				—				447				95				733
Net income (loss)		$	5,627			$	(678	)		$	18,331			$	(603	)		$	470			$	9,994			$	1,427
Basic net income (loss) per share		$	0.10			$	(0.01	)		$	0.33			$	(0.01	)		$	0.01			$	0.20			$	0.03
Diluted net income (loss) per share		$	0.10			$	(0.01	)		$	0.33			$	(0.01	)		$	0.01			$	0.20			$	0.03
Balance Sheet Data:
Cash and cash equivalents, including short term available-for-sale investments		$	224,879							$	248,651			$	218,350			$	194,478			$	210,936			$	145,859
Working capital			343,246								332,378				301,736				265,691				269,293				206,250
Total assets			688,603								684,085				613,009				590,215				572,792				516,708
Subordinated convertible debentures			126,025								124,115				116,959				110,407				104,406				98,912
Long-term deferred tax liability(2)			37,127								38,842				46,254				59,226				63,862				79,204
Total shareholders’ equity(2)		$	475,158							$	466,279			$	413,809			$	384,691			$	371,268			$	318,432

(1)		On January 1, 2006, Thoratec adopted Statement of Financial Accounting Standards (“SFAS”) No. 123 (R) and included share-based compensation for employee stock-based awards in Thoratec’s results of operations.
(2)		On December 31, 2006, Thoratec adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes, an interpretation of SFAS No. 109, and as a result Thoratec reported a cumulative effect adjustment of $0.5 million, which increased Thoratec’s December 31, 2006 “Accumulated deficit” balance offset by a “Long-term deferred tax liability” balance.

(3)		Adjusted for the retrospective adoption of Financial Accounting Standards Board (“FASB”) Staff Position (“FSP”) No. APB 14-1, Accounting for Convertible Debt Instruments that May be Settled in Cash Upon Conversion.

 

Selected Unaudited Pro Forma Condensed Combined Financial Information

		As of and for the				For the Fiscal
		Three Months				Year Ended
		Ended April 4, 2009				January 3, 2009
Pro Forma Condensed Combined Statements of Operations:
Product sales		$	90,944			$	313,896
Gross profit			54,814				186,359
Amortization of purchased intangible assets			5,439				23,213
Net loss			(1,088	)			(7,070	)
Basic net loss per share			(0.02	)			(0.12	)
Diluted net loss per share			(0.02	)			(0.12	)
Pro Forma Condensed Combined Balance Sheet Data:
Cash and cash equivalents and short-term available-for-sale investments		$	96,471
Working capital			194,900
Total assets			882,879
Subordinated convertible debentures			126,025
Long-term deferred tax liability			69,964
Total shareholders’ equity			606,780

 

Cautionary Statement Regarding Forward-Looking Statements

	•	those discussed and identified in public filings with the SEC made by HeartWare or Thoratec from time to time;
	•	completion of the mergers is dependent on, among other things, receipt of HeartWare stockholder and regulatory approvals, the timing of which cannot be predicted with precision and which may not be received at all;
	•	the mergers may be more expensive to complete than anticipated, including as a result of unexpected factors or events;
	•	the integration of HeartWare’s business and operations with those of Thoratec may take longer than anticipated, may be more costly than anticipated and may have unanticipated adverse results relating to HeartWare’s or Thoratec’s existing businesses;
	•	the anticipated cost savings and other synergies of the mergers may take longer to be realized or may not be achieved in their entirety, and attrition in key customer and other relationships as a result of the mergers may be greater than expected;
	•	the ability to attract and retain qualified personnel;
	•	responses by competitors of HeartWare and Thoratec to the mergers;
	•	decisions to restructure, divest or eliminate business units or otherwise change the business mix of either company;
	•	the risk of new and changing regulations and/or regulatory actions in the U.S. and internationally;
	•	adverse general domestic and international economic conditions;
	•	the extent and duration of continued and new economic and market disruptions as well as the effect of governmental regulatory proposals to address these disruptions;
	•	the ability to obtain and maintain regulatory approval of Thoratec and HeartWare products for sale in the U.S. and internationally;
	•	the results and timing of clinical trials by Thoratec and HeartWare;
	•	reimbursement policies and decisions by government agencies and third-party payors;
	•	competing therapies that may currently, or in the future, be available to heart failure patients;
	•	plans to develop and market new products and the rate of market penetration of new products;
	•	risks relating to the protection of, and challenges to, intellectual property rights; and
	•	the exposure to litigation, including the possibility that litigation relating to the merger agreement and transactions contemplated thereby could delay or impede the completion of the merger.

 

In deciding whether to vote in favor of the adoption of the merger agreement, you should consider the matters described below, as well as all of the information that we have included in this proxy statement/prospectus and its annexes and all of the information included in the documents we have incorporated into this proxy statement/prospectus by reference, especially the other risks described in Thoratec’s report on Form 10-K filed with the SEC on February 27, 2009, and in HeartWare’s report on Form 10-K filed with the SEC on February 26, 2009. See the section entitled “Where You Can Find More Information” beginning on page 127 of this proxy statement/prospectus and the matters addressed in “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 23 of this proxy statement/prospectus.

 

The risks and uncertainties described below and in Thoratec’s and HeartWare’s Form 10-K reports referred to above are not the only risks that Thoratec and HeartWare face. Additional risks and uncertainties not currently known to Thoratec or HeartWare or that Thoratec or HeartWare currently deem immaterial also may impair the business operations of Thoratec, HeartWare or the combined company.

 

 

Because the market price of Thoratec common stock will fluctuate, HeartWare stockholders cannot be sure of the market value of the shares of Thoratec common stock that they will receive.

 

The market price of both Thoratec and HeartWare common stock will fluctuate after the date of this proxy statement/prospectus and the market price of Thoratec common stock will likely vary at the closing of the merger from the $26.25 per share price used to determine the number of shares of Thoratec common stock that holders of HeartWare common stock will receive in the merger, the price of Thoratec common stock as of the date of this proxy statement/prospectus and the price of Thoratec common stock as of the date of the HeartWare special meeting. The specific dollar value of Thoratec common stock that HeartWare stockholders will receive upon completion of the merger will depend on the market value of Thoratec common stock at that time.

 

Fluctuations in the market price of Thoratec and HeartWare common stock may be the result of general market and economic conditions, changes in the business, operations or prospects of Thoratec or HeartWare, market assessments of the likelihood that the merger will be completed and the timing of closing of the merger, regulatory considerations and other factors independent of the merger. In addition to the adoption of the merger agreement by HeartWare stockholders at the special meeting, completion of the merger is subject to the expiration or termination of the waiting period under the HSR Act as such waiting period has been extended by the FTC’s request for additional information received on March 26, 2009, and the satisfaction of other conditions that may not occur until some time after the special meeting. See “The Merger Agreement — Conditions to the Obligations of Each Party to Consummate the Merger,” “— Conditions to the Obligations of Thoratec and Merger Subsidiary to Consummate the Merger,” “— Conditions to the Obligations of HeartWare to Consummate the Merger” and “— Conditions to the Obligations of Each Party to Consummate the Second Merger” beginning on page 98 of this proxy statement/prospectus. As a result, at the time of the HeartWare special meeting, HeartWare stockholders will not know the precise dollar value of the stock portion of the merger consideration they will be entitled to receive upon completion of the merger.

 

The merger consideration is valued in U.S. dollars and fluctuations in exchange rates between the U.S. dollar and the Australian dollar could affect the value, in Australian dollars, of the merger consideration to be received by HeartWare stockholders and holders of HeartWare CDIs in the merger.

 

The cash portion of the merger consideration payable to HeartWare stockholders in the merger will be paid by Thoratec in U.S. dollars. Also, the shares of Thoratec common stock payable to HeartWare stockholders in the merger have been valued using a market price calculated in U.S. dollars, and the value of the cash portion of the merger consideration payable to HeartWare CDI holders has been calculated in U.S. dollars. In addition, the shares of Thoratec common stock received by HeartWare CDI holders as merger consideration will not be listed in Australia with ASX or otherwise, and the market price of such shares on The NASDAQ Global Select Market will be denominated in U.S. dollars. As a result, fluctuations in exchange rates between the U.S. dollar and the

Australian dollar may materially and adversely affect the value, in Australian dollars, of any cash and Thoratec common stock received by Australian holders of HeartWare common stock or HeartWare CDIs in the merger.

 

While the market price of Thoratec common stock will fluctuate, the market price of Thoratec common stock payable to HeartWare stockholders in the merger is subject to specified maximum and minimum values. If the market price exceeds the maximum value, the stock portion of the merger consideration payable to HeartWare stockholders may be reduced. If the market price falls below the minimum value, HeartWare may terminate the merger agreement or Thoratec may elect to increase the number of shares of Thoratec stock payable to HeartWare stockholders.

 

The number of shares of Thoratec common stock to be received by holders of HeartWare common stock in the merger as part of the merger consideration has been fixed at 0.6054 of a share of Thoratec common stock for each share of HeartWare common stock. However, if the volume weighted average of the per share closing prices of Thoratec common stock on NASDAQ for the twenty (20) consecutive trading days ending on and including the fifth (5th) trading day prior to, but not including, the closing date is equal to or exceeds 130% of $26.25, the Thoratec per share price used to determine the merger consideration, then Thoratec may reduce the number of shares of Thoratec common stock payable in the merger such that the value of the stock portion of the merger consideration at closing is equal to 130% of the value of the stock consideration at the signing of the merger agreement. If the value of the stock portion of the merger consideration at closing is reduced to equal 130% of the value of the stock consideration used to determine the merger consideration, the maximum value of the Thoratec common stock consideration that you would be entitled to receive as consideration in the merger would be 130% of the value of the stock consideration used to determine the merger consideration at signing, regardless of the actual value of Thoratec common stock at the closing.

 

In addition, if the same volume weighted average price described above is equal to or less than 70% of $26.25, then HeartWare will have an option to terminate the merger agreement unless Thoratec elects to increase the number of shares of Thoratec common stock payable in the merger such that the value of the stock portion of the merger consideration at closing is equal to 70% of the value of the stock consideration used to determine the merger consideration at signing. Thoratec’s ability to increase the stock portion of the merger consideration is subject to a requirement that, if an increase in the stock portion of the consideration would require Thoratec to issue more than 19.9% of its outstanding shares of common stock and would therefore require the approval of Thoratec’s shareholders under The NASDAQ Stock Market Marketplace Rule 5635 (formerly The NASDAQ Stock Market Marketplace Rule 4350), Thoratec shall increase the cash portion of the consideration payable to HeartWare stockholders instead with respect to any increase above the 19.9% threshold.

 

In determining whether to exercise HeartWare’s right to terminate the merger agreement, the HeartWare directors will take into account the facts and circumstances existing at that time with a view to determining whether they continue to believe that the merger remains advisable and in the best interests of HeartWare’s stockholders. In making its determination, the HeartWare directors will consult with HeartWare’s management team, as well as its outside legal and financial advisors, and expects to consider, among other things (i) the extent of the decline in Thoratec’s average stock price during the measurement period below $18.38 per share, (ii) the perceived reasons for the decline, including whether the reasons are particular to Thoratec or apply to the medical device industry generally (including taking into account whether the shares of similarly situated companies to Thoratec have suffered a similar decline) and (iii) whether the price decline is likely to be short-term or long-term in nature. In connection with its determination, the HeartWare directors also expect to consider whether, following HeartWare’s election to exercise its right to terminate the merger agreement, Thoratec is likely to elect to increase the number of shares of Thoratec common stock payable in the merger such that the per share value of the Thoratec common stock payable in the merger, as of the effective time of the merger, is equal to $18.38 (70% of the value of the aggregate Thoratec stock consideration payable in the merger, calculated using the $26.25 price per share of Thoratec common stock used to determine the stock portion of the merger consideration), and to review the factors described under the heading “The Merger — HeartWare’s Reasons for the Merger and Recommendation of the HeartWare Board of Directors” beginning on page 55, particularly the factors described under “Strategic Advantages,” “HeartWare’s Business Conditions and Prospects,” “Thoratec’s Business Conditions and Prospects,” and “Tax Treatment”. The HeartWare directors are cognizant of their fiduciary duties to the HeartWare stockholders in connection with the foregoing determination, and intend to inform themselves of all material information reasonably available to them at that time and to exercise due care in their deliberations before determining

whether to exercise their right to terminate the merger agreement in these circumstances. After the HeartWare board of directors determines, based on the facts and circumstances existing at that time, whether to exercise its right to terminate the merger agreement, HeartWare will promptly notify its stockholders of such determination by issuing a press release announcing such determination, including the basis for the HeartWare board of directors’ determination, as well as filing such press release with the SEC on Form 8-K.

 

Because this determination may be made by HeartWare directors after the HeartWare special meeting has occurred, in determining whether to vote to adopt the merger agreement, HeartWare stockholders should be mindful that the per share value of the Thoratec common stock they receive in the merger could, as of the effective time of the merger, be less than $18.38, with the result that the value of the aggregate merger consideration payable for each share of HeartWare common stock, as of the effective time of the merger, could be less than $25.43 per share, i.e. $18.38 multiplied by the 0.6054 shares of Thoratec common stock payable in the merger plus $14.30 in cash, (as compared to a value of $30.19 per share of HeartWare common stock as of February 12, 2009, the date of execution of the merger agreement).

 

The mergers may be fully taxable to HeartWare stockholders for U.S. federal income tax purposes.

 

If the second merger is not completed, either in accordance with the terms of the merger agreement or otherwise, or if the mergers fail to qualify as a reorganization for U.S. federal income tax purposes (including if the IRS successfully challenges the treatment of the mergers as a reorganization), the receipt of shares of HeartWare common stock and cash for shares of Thoratec common stock in the merger will be fully taxable to HeartWare stockholders for U.S. federal income tax purposes.

 

Pursuant to the merger agreement, the second merger will not be completed, and the merger will be structured as a fully taxable transaction to HeartWare stockholders for U.S. federal income tax purposes, if the condition described in the first paragraph under the section entitled “The Merger — Material U.S. Federal Income Tax Consequences — Transaction Structure” beginning on page 72 of this proxy statement/prospectus is not satisfied. Whether that condition is met will depend on the trading values of Thoratec common stock during the last trading session closing before the effective time of merger. The trading value of Thoratec common stock will fluctuate prior to the merger. Accordingly, we cannot assure you that the second merger will occur or that the transaction will not be fully taxable to you. As a result, in deciding whether to vote to adopt the merger agreement, you should consider the possibility that the transaction will be structured as a fully taxable transaction for U.S. federal income tax purposes because the condition described in the first paragraph under the section entitled “The Merger — Material U.S. Federal Income Tax Consequences — Transaction Structure” beginning on page 72 of this proxy statement/prospectus is not satisfied. You will not be entitled to change your vote or to vote again in the event that the stock value condition is not satisfied and the transaction is structured as a fully taxable transaction for U.S. federal income tax purposes.

 

Assuming an effective stock price of $26.46 of Thoratec common stock, which was the per share closing price on July 2, 2009, and subject to the discussion under “The Merger — Material U.S. Federal Income Tax Consequences” beginning on page 71, the transactions contemplated by the merger agreement would be structured to qualify as a “reorganization” for U.S. federal income tax purposes.

 

HeartWare stockholders are strongly urged to consult their tax advisors to determine the specific tax consequences to them of the merger and the second merger, including any U.S. federal, state or local, or non-U.S. or other tax consequences. For more information, see “The Merger — Material U.S. Federal Income Tax Consequences” beginning on page 71 of this proxy statement/prospectus.

 

The merger may result in a gain that may be fully taxable to Australian resident holders of shares of HeartWare common stock to the extent that scrip-for-scrip roll-over relief is not available.

 

A gain on receipt of replacement Thoratec common stock under the merger contemplated by the merger agreement may be subject to Australian income tax to HeartWare shareholders that are resident of Australia for Australian tax purposes to the extent scrip-for-scrip roll-over relief is not available.

 

HeartWare has sought a ruling from the Australian tax authorities to confirm the Australian tax consequences for HeartWare shareholders that are resident of Australia, hold their HeartWare common stock on capital account and have their shares of HeartWare common stock cancelled under the merger contemplated in the merger agreement.

HeartWare stockholders that are resident of Australia for Australian tax purposes are strongly urged to consult their tax advisors to determine the specific Australian tax consequences to them of the merger contemplated by the merger agreement.

 

Thoratec and HeartWare may not be able to obtain required governmental and regulatory approvals for completing the merger in a timely manner or at all.

 

Under the HSR Act, the merger may not be consummated unless certain regulatory filings have been submitted to the FTC and the Antitrust Division of the Department of Justice, which we refer to as the Antitrust Division, and certain waiting period requirements have been satisfied. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions like the merger. At any time before the completion of the merger, the FTC or the Antitrust Division could take any action under the antitrust laws it deems necessary or desirable in the public interest, including seeking to enjoin the completion of the merger, seeking the divestiture of substantial assets of Thoratec or HeartWare or seeking operating restrictions on the business of Thoratec or HeartWare or the combined company following the closing. Neither Thoratec nor HeartWare is required to agree to any divestiture of assets or restrictions on its business in order to secure approval of the merger by antitrust authorities. In addition, certain private parties as well as state attorneys general and other antitrust authorities may challenge or delay the transaction under antitrust laws under certain circumstances. On March 26, 2009, HeartWare and Thoratec each received a request for additional information from the FTC. The effect of the second request is to extend the waiting period imposed by the HSR Act until thirty (30) days after HeartWare and Thoratec have substantially complied with the second request, unless that period is extended voluntarily by the parties or terminated sooner by the FTC. The parties have substantially complied with the second request and are waiting for a final determination from the FTC. We cannot assure you that the merger will not be delayed as a result of antitrust review or that a challenge to the merger on antitrust grounds will not be made, or, if such a challenge is made, what the result will be. The review of the merger by the FTC or the Antitrust Division and any such challenge could significantly delay or prevent the consummation of the merger and, in the event that Thoratec and HeartWare agree to any divestiture or operating restrictions, could have an adverse impact on the financial condition and results of operations of the combined company following the closing.

 

The pro forma condensed combined financial statements and other pro forma information included in the proxy statement/prospectus are presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the transaction.

 

The pro forma condensed combined financial statements and other pro forma information contained in this proxy statement/prospectus are presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the merger. The pro forma condensed combined financial statements have been derived from the historical consolidated financial statements of Thoratec and HeartWare and adjustments and assumptions have been made regarding the combined company after giving effect to the merger. The information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments and assumptions are difficult to make with accuracy. Moreover, the pro forma condensed combined financial statements and other pro forma information do not reflect all costs that are expected to be incurred by the combined company in connection with the merger. For example, the impact of any incremental costs incurred in integrating the two companies is not reflected in the pro forma condensed combined financial statements and other pro forma information. As a result, the actual financial condition and results of operations of the combined company following the merger may not be consistent with, or evident from, the pro forma condensed combined financial statements and other pro forma information.

 

The assumptions used in preparing the pro forma condensed combined financial information may not prove to be accurate, and other factors may affect the combined company’s financial condition or results of operations following the transaction.

 

Any decline or potential decline in the combined company’s financial condition or results of operations may cause significant variations in the stock price of the combined company. See “Selected Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 22 and “Comparative Per Share Information” beginning on page 20 of this proxy statement/prospectus.

Thoratec and HeartWare may not realize the benefits they expect from the merger because of risks associated with integration and other challenges.

 

Thoratec’s failure to meet the challenges involved in successfully integrating the operations of HeartWare with those of Thoratec, or to otherwise realize any of the anticipated benefits of the merger, could harm the results of operations of Thoratec following the closing. The benefits of the merger anticipated by Thoratec and HeartWare are based on projections and assumptions, not actual experience, and assume a successful integration. Thoratec’s realization of the benefits of the merger will depend, in part, on the timely and successful integration of technology, operations and personnel. The integration of the companies is a complex, time-consuming and expensive process that could disrupt the businesses of Thoratec and HeartWare, even with proper planning and implementation, and will require significant management attention and resources. Some of the challenges involved in integrating the businesses of Thoratec and HeartWare include:

 

 

Thoratec may not successfully integrate the operations of Thoratec and HeartWare in a timely manner, or at all, and the combined company may not realize the anticipated benefits of the merger to the extent, or in the timeframe, anticipated. In addition to the integration risks discussed above, Thoratec’s ability to realize the benefits of the merger could be adversely impacted by practical or legal constraints on its ability to combine operations or by unknown liabilities associated with the merger and the combined operations. A failure by Thoratec to successfully integrate the operations of Thoratec and HeartWare or otherwise to realize any of the anticipated benefits of the merger could cause an interruption of, or a loss of momentum in, the activities of the combined company and could seriously harm Thoratec’s financial position and results of operations. In addition, the overall integration of the two companies may result in unanticipated problems, expenses, liabilities, competitive responses, loss of important third-party relationships and diversion of management’s attention, and may cause Thoratec’s stock price to decline significantly.

 

Whether or not the merger is completed, the pendency of the merger may cause disruptions in the business of HeartWare or Thoratec which could have material adverse effects on each company’s or the combined company’s business and operations.

 

Whether or not the merger is completed, Thoratec’s and HeartWare’s customers, in response to the announcement of the merger, may delay or defer purchase decisions, which could have a material adverse effect on the business of either company or, if the merger is completed, the combined company. Additionally, HeartWare may lose certain key suppliers as a result of the merger, which, if the merger is completed, could adversely affect the business of the combined company. Current and prospective HeartWare employees may experience uncertainty about their future roles with the combined company. Any failure by HeartWare to attract, retain and motivate executives and key management, sales, marketing and technical personnel during the period prior to the completion of the merger could seriously harm its business, as well as the business of the combined company.

 

Failure to complete the merger could negatively impact the stock price and the future business and financial results of Thoratec and HeartWare.

 

Completion of the merger is subject to a number of closing conditions, including the expiration or termination of any applicable waiting period under the HSR Act and adoption of the merger agreement by HeartWare’s stockholders and those closing conditions may not be satisfied on a timely basis or at all. If the merger is not

completed, the price of HeartWare and Thoratec common stock may decline. In addition, if the merger is not completed, Thoratec and HeartWare may be subject to a number of material risks, including the following:

 

 

 

 

Some directors and executive officers of HeartWare have interests in the merger that differ from the interests of HeartWare stockholders that may influence these directors and executive officers to support the mergers.

 

Certain of HeartWare’s directors and executive officers have financial interests in the merger that are different from, or in addition to, the interests of HeartWare stockholders. The members of the HeartWare board of directors were aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, and in recommending to HeartWare stockholders that the merger agreement be adopted. Please see “The Merger — Interests of HeartWare Directors and Executive Officers in the Mergers,” beginning on page 65.

 

The merger agreement limits HeartWare’s ability to pursue alternatives to the merger.

 

The merger agreement contains “no shop” provisions that, subject to limited exceptions, limit HeartWare’s ability to discuss, facilitate or commit to competing third-party proposals to acquire all or a significant part of the company. These provisions might discourage a potential competing acquiror that might have an interest in acquiring all or a significant part of HeartWare from considering or proposing that acquisition even if it were prepared to pay consideration with a higher per share market price than that proposed in the merger, or might result in a potential competing acquiror’s proposing to pay a lower per share price to acquire HeartWare than it might otherwise have proposed to pay. HeartWare can consider and participate in discussions and negotiations with respect to an alternative proposal so long as the HeartWare board of directors determines in good faith (after consultation with outside legal counsel) that failure to take such action would reasonably be expected to be inconsistent with its fiduciary duties to HeartWare stockholders under applicable law.

 

The market price for Thoratec common stock may be affected by factors different from those affecting the market price of HeartWare common stock. In addition, holders of Thoratec common stock have different rights as shareholders than holders of HeartWare common stock.

 

If the merger is completed, holders of HeartWare common stock will become holders of Thoratec common stock. Thoratec’s business differs from HeartWare’s business, and Thoratec’s results of operations and the market price of Thoratec common stock may be affected by factors different from those currently affecting the results of operations of HeartWare and the market price of HeartWare common stock. In addition, the results of operations of the combined company and the market price of the combined company’s common stock may be affected by factors different from those currently affecting either Thoratec or HeartWare. For a discussion of the businesses of Thoratec and HeartWare and of certain factors to consider in connection with those businesses, see the documents incorporated by reference in this proxy statement/prospectus and referred to under “Where You Can Find More Information” beginning on page 127.

 

In addition, holders of shares of Thoratec common stock will have different rights as Thoratec shareholders than the rights they had as HeartWare stockholders before the merger. For a detailed comparison of the rights of Thoratec shareholders compared to the rights of HeartWare stockholders, see “Comparison of Rights of Shareholders of Thoratec and Stockholders of HeartWare” beginning on page 112 of this proxy statement/prospectus.

 

HeartWare stockholders, as a group, will have reduced ownership and voting interests after the merger and will exercise less influence over management of Thoratec than they currently exercise over management of HeartWare.

 

After the effective time of the merger, HeartWare stockholders will own, as a group, in the aggregate a significantly smaller percentage of Thoratec than they currently own of HeartWare. Immediately following the merger, former stockholders of HeartWare are expected to own approximately 9.6% of the outstanding shares of Thoratec common stock, based on the number of shares of HeartWare common stock and Thoratec common stock outstanding on the record date. Consequently, as a general matter, HeartWare stockholders, as a group, will have reduced ownership and voting interests in Thoratec following the merger than they owned of HeartWare prior to the merger and, as a result, they will have less influence over the management and policies of Thoratec than they currently exercise over the management and policies of HeartWare.

 

Thoratec will incur significant transaction, integration and restructuring costs in connection with the merger.

 

Thoratec and HeartWare expect to incur significant costs associated with transaction fees and other costs related to the merger. Specifically, as disclosed in prior public filings, Thoratec expects to incur total non-recurring charges associated with the transaction of approximately $15.0 million to $20.0 million. In addition, Thoratec will incur integration and restructuring costs following the completion of the merger as it integrates the business of HeartWare with Thoratec. Although Thoratec expects that the realization of efficiencies related to the integration of the businesses will offset incremental transaction, integration and restructuring costs over time, we cannot assure you that this net benefit will be achieved in the near term or at all.

 

 

HeartWare is furnishing this proxy statement/prospectus to HeartWare stockholders as of the HeartWare record date as part of the solicitation of proxies by the HeartWare board of directors for use at the HeartWare special meeting, including any postponement or adjournment of the meeting. Together with this document, HeartWare is also sending its stockholders a notice of the special meeting and a form of proxy that is solicited by the HeartWare board of directors.

 

 

The HeartWare special meeting will be held on • , 2009, at • , U.S. Eastern time ( • , Australia Eastern Standard Time on • , 2009), at • .

 

 

At the HeartWare special meeting, HeartWare stockholders will be asked to:

 

1. consider and vote upon a proposal to adopt the merger agreement; and

 

2. consider and vote upon a proposal to adjourn the HeartWare special meeting, if necessary or appropriate, to permit further solicitation of proxies if there are not sufficient votes at the time of the HeartWare special meeting to adopt the merger agreement.

 

The HeartWare board of directors has approved and declared the advisability of the merger agreement and has determined that the merger and the other transactions contemplated by the merger agreement are fair to and in the best interests of HeartWare and its stockholders and recommends that HeartWare stockholders vote “FOR” the adoption of the merger agreement and “FOR” the proposal to adjourn the HeartWare special meeting, if necessary or appropriate, to permit further solicitation of proxies.

 

Only holders of record of HeartWare common stock at the close of business, U.S. Eastern time on June 25, 2009 (7:00 a.m., Australia Eastern Standard Time on June 26, 2009), the HeartWare record date for the HeartWare special meeting, are entitled to notice of, and to vote at, the HeartWare special meeting and any adjournment or postponement of it. On the HeartWare record date, 8,924,351 shares of HeartWare common stock, including shares represented by HeartWare CDIs, were issued and outstanding and held by approximately 1,021 holders of record. Stockholders who hold shares in the form of HeartWare CDIs or in “street name” should follow the procedures set forth under the heading “The HeartWare Special Meeting — Voting of Proxies” beginning on page 33.

 

Holders of HeartWare CDIs at the close of business, U.S. Eastern time on June 25, 2009 (7:00 a.m., Australia Eastern Standard Time on June 26, 2009), the HeartWare record date for the HeartWare special meeting, are entitled to notice of, and to direct CDN to vote the underlying shares of HeartWare common stock on their behalf in connection with the HeartWare special meeting and any adjournment or postponement of it by following the procedures set forth under the heading “The HeartWare Special Meeting — Voting of Proxies” beginning on page 33. Holders of HeartWare CDIs cannot vote their CDIs in person at the special meeting unless such HeartWare CDI holders have completed the conversion of their HeartWare CDIs into shares of HeartWare common stock prior to the record date for the HeartWare special meeting set forth above. CDN, on behalf of the holders of HeartWare CDIs, will vote the underlying shares of HeartWare common stock represented by the HeartWare CDIs on an aggregate basis by (i) determining the total number of HeartWare CDIs “FOR” each proposal, (ii) determining the total number of HeartWare CDIs “AGAINST” each proposal, (iii) determining the total number of HeartWare CDIs abstaining from voting on each proposal, (iv) applying the ratio of one (1) share of HeartWare common stock for every thirty-five (35) HeartWare CDIs and (v) submitting the resultant number of shares of HeartWare common stock “FOR” each proposal and “AGAINST” each proposal and the number of shares abstaining from voting on each proposal, as appropriate.

 

A quorum will be present at the HeartWare special meeting if a majority of the shares of HeartWare common stock issued and outstanding, including shares represented by HeartWare CDIs, on the HeartWare record date and entitled to vote at the HeartWare special meeting are represented at the HeartWare special meeting in person or by proxy. Abstentions and broker “non-votes” (described under the heading, “The HeartWare Special Meeting — Voting of Proxies” beginning on page 33) will be treated as present at the HeartWare special meeting for purposes of determining the presence or absence of a quorum for the transaction of all business. In the event that a quorum is not present at the HeartWare special meeting, it is expected that the special meeting will be adjourned to solicit additional proxies, provided that the proposal to adjourn the special meeting has been adopted by the affirmative vote of a majority of shares of HeartWare common stock represented in person or by proxy at the special meeting and entitled to vote thereon, although less than a quorum. Holders of record of HeartWare common stock on the HeartWare record date are entitled to one vote per share on each matter submitted to a vote at the HeartWare special meeting.

 

 

The adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of HeartWare common stock entitled to vote at the HeartWare special meeting. Because the required vote of HeartWare stockholders is based upon the number of outstanding shares of HeartWare common stock entitled to vote, rather than upon the shares actually voted, the failure by a HeartWare stockholder to appoint a proxy or to vote in person at the HeartWare special meeting, abstentions and any failure by “street name” holders to provide their brokerage firm, bank, trust or other nominee with instructions on how to vote their shares will have the same effect as a vote against the adoption of the merger agreement. If holders of HeartWare CDIs instruct CDN to abstain from voting on their behalf, the shares of HeartWare common stock underlying such HeartWare CDIs will be counted toward a quorum at the HeartWare special meeting. If holders of HeartWare CDIs fail to instruct CDN to vote the shares of HeartWare common stock underlying their HeartWare CDIs on their behalf, the shares of HeartWare common stock underlying such HeartWare CDIs will not be counted toward a quorum at the HeartWare special meeting. Instructions to CDN to abstain from voting or failure to instruct CDN to vote the underlying shares will, however, have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.

The approval of the proposal to adjourn the HeartWare special meeting, if necessary or appropriate, to permit further solicitation of proxies if there are not sufficient votes at the time of the HeartWare special meeting to adopt the merger agreement requires the affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the HeartWare special meeting. Because approval of such proposal requires the affirmative vote of a majority of shares present or represented, holders of HeartWare common stock who abstain from voting will have the same effect as a vote against the adoption of the proposal to adjourn the special meeting and failure to vote will have no effect on the outcome of the proposal. Brokers or other nominees holding shares of HeartWare common stock in “street name” who have not received specific instructions from beneficial owners will have the authority to vote the shares in their discretion on the proposal. If any such broker or nominee abstains from voting, such abstention will have the same effect as a vote “AGAINST” the proposal to adjourn the HeartWare special meeting, if necessary or appropriate, in order to solicit additional proxies. CDN cannot vote the underlying shares on behalf of holders of HeartWare CDIs without instructions from such holders. An instruction to CDN to abstain will have the same effect as a vote “AGAINST” the proposal to adjourn the HeartWare special meeting, if necessary or appropriate, in order to solicit additional proxies.

 

 

As of the HeartWare record date, the directors and executive officers of HeartWare were entitled to give directions to vote 98,591,115 HeartWare CDIs and, in the case of Mr. Godshall, to vote 2,866 shares of HeartWare common stock, which collectively represented approximately 31.6% of the outstanding shares of HeartWare common stock at that date.

 

In connection with the transactions contemplated by the merger agreement, all but one of the directors on HeartWare’s board of directors and certain executive officers of HeartWare, who collectively beneficially own in the form of HeartWare CDIs (and in the case of Mr. Godshall, in the form of shares of HeartWare common stock), as of the HeartWare record date, approximately 1.6% of the total outstanding shares of HeartWare common stock, and Apple Tree Partners I, L.P., who beneficially owns in the form of HeartWare CDIs, as of the HeartWare record date, approximately 30.0% of the total outstanding shares of HeartWare common stock have entered into separate support agreements dated as of February 12, 2009, to, among other things, vote or give directions to vote their respective shares of HeartWare common stock in favor of the adoption of the merger agreement with Thoratec, subject to the terms and conditions of the support agreements and, subject to certain exceptions, not to dispose of their shares prior to the date of the HeartWare special meeting. See the section entitled “The Support Agreements” beginning on page 109.

 

 

Stockholders of record of shares may vote such shares by attending the HeartWare special meeting and voting their shares in person at the meeting, or by completing the enclosed proxy card, signing and dating it and mailing it in the enclosed postage-prepaid envelope. If a proxy card is signed by a stockholder of record and returned without specific voting instructions, the shares represented by the proxy will be voted “FOR” the proposals presented at the HeartWare special meeting. No proxy voted against the proposal to adopt the merger agreement will be voted in favor of any adjournment.

 

Stockholders whose shares are held in “street name” must follow the instructions they receive from their broker, bank, trust or other nominee in order to have their shares voted. Stockholders who have not received such voting instructions or require further information regarding such voting instructions should contact their broker. Brokers who hold shares of HeartWare common stock in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not allowed to exercise their voting discretion with respect to the approval of matters that are “non-routine,” such as adoption of the merger agreement, without specific instructions from the beneficial owner. Broker non-votes are shares held by a broker or other nominee that are represented at the meeting, but with respect to which the broker or other nominee is not instructed by the beneficial owner of such shares to vote on the particular proposal and the broker does not have discretionary voting power on such proposal. Brokers or other nominees holding shares of HeartWare common stock in “street name” will vote shares held by stockholders in “street name” with respect to the proposal to adopt the merger agreement only if such

stockholders provide instructions on how to vote by filling out the voter instruction form sent to them by their broker with this proxy statement/prospectus. Brokers or other nominees holding shares of HeartWare common stock in “street name” who have not received specific instructions from beneficial owners will have the authority to vote the shares in their discretion on the proposal to adjourn the HeartWare special meeting, if necessary or appropriate, to permit further solicitation of proxies.

 

Holders of HeartWare CDIs may give directions to vote the underlying shares of HeartWare common stock by submitting instructions for CDN to vote on behalf of such HeartWare CDI holder at the meeting on each proposal and according to the directions of such HeartWare CDI holder. Holders of HeartWare CDIs can submit voting instructions by completing and mailing the enclosed CDI Voting Instruction Form or by Internet at the website of Computershare, which is www.computershare.com.au. To submit voting instructions by mail, holders of HeartWare CDIs can send the CDI Voting Instruction Form to Computershare, using the enclosed postage-prepaid envelope or by mailing it to Computershare. To submit voting instructions via Computershare’s website, holders of HeartWare CDIs will need their Holder Identification Number or Security Holder Reference Number, which is shown on the enclosed CDI Voting Instruction Form. Instructions on how to fill out the form are set out on the back of the form or on Computershare’s website at www.computershare.com.au. Holders of HeartWare CDIs will be taken to have signed the CDI Voting Instruction Form if instructions are submitted in accordance with the directions on the website www.computershare.com.au. If a holder of HeartWare CDIs is directing CDN to vote on its behalf, the latest time for receipt of CDI Voting Instruction Forms (and any necessary supporting documents) via mail and voting instructions via Internet is • , U.S. Eastern time on • , 2009 ( • , Australia Eastern Standard Time on • , 2009).

 

 

Stockholders of record may revoke their proxy relating to such shares at any time prior to the time it is voted at the meeting. Such stockholders of record may revoke their proxy by:

 

 

Any written revocation or subsequent proxy card must be delivered to HeartWare International, Inc., 205 Newbury Street, Framingham, Massachusetts 01701, Attention: Company Secretary, or hand delivered to HeartWare’s Company Secretary or his representative before the taking of the vote at the HeartWare special meeting.

 

Stockholders who hold shares of HeartWare common stock in “street name” may change their vote by submitting new voting instructions to their brokerage firm, bank, trust or other nominee. Such stockholders must contact their nominee to obtain instructions as to how to change or revoke their vote.

 

Holders of HeartWare CDIs who have completed and returned a CDI Voting Instruction Form (in the manner described in the section entitled “The HeartWare Special Meeting — Voting of Proxies” beginning on page 33) may revoke or change their directions to CDN relating to such HeartWare CDIs at any time prior to • , U.S. Eastern time on • , 2009 ( • , Australia Eastern Standard Time on • , 2009) by providing written notice of revocation or change to Computershare bearing a later date than the CDI Voting Instruction Form previously sent. Any written revocation or change should be delivered to Computershare Investor Services Pty Ltd, Level 3, 60 Carrington Street, Sydney, New South Wales 2000 Australia or mailed to Computershare Investor Services Pty Ltd, GPO Box 242 Melbourne Victoria 3001 Australia or faxed to Computershare (within Australia) to 1800 783 447 or (outside Australia) +61 3 9473 2555 before the submission of an additional CDI Voting Instruction Form. Any additional CDI Voting Instruction Forms must be submitted via mail or Internet by • , U.S. Eastern time on • , 2009 ( • , Australia Eastern Standard Time on • , 2009).

 

Proxies received by HeartWare at any time prior to • , U.S. Eastern time on • , 2009 ( • , Australia Eastern Standard Time on • , 2009), which have not been validly revoked prior to being voted, will be voted at the special meeting.

 

Matters other than the proposals to adopt the merger agreement and to approve the adjournment of the HeartWare special meeting, if necessary or appropriate, to permit further solicitation of proxies will not be brought before the HeartWare special meeting.

 

 

HeartWare is soliciting proxies for the HeartWare special meeting and will bear all expenses in connection with its solicitation of proxies. HeartWare will pay brokerage firms and other persons representing beneficial owners of shares held in “street name” certain fees associated with forwarding the notice or availability to beneficial owners, forwarding paper proxy materials by mail to beneficial owners, and obtaining beneficial owners’ voting instructions. In addition to soliciting proxies by the Internet and mail, HeartWare’s directors, officers and employees may solicit proxies on HeartWare’s behalf personally, by e-mail, telephone, facsimile, mail or other means of communication. No additional compensation will be paid to directors, officers and employees of HeartWare in connection with this solicitation.

 

HeartWare stockholders who receive more than one proxy card or voting instruction form have shares registered in different forms or in more than one account. Please complete, sign, date and return all proxy cards and provide instructions for all voting instruction forms received to ensure that all of your shares are voted.

 

HeartWare stockholders should not send stock certificates with their proxies. A transmittal form with instructions for the surrender of HeartWare common stock certificates will be mailed to HeartWare stockholders shortly after completion of the merger. Similarly, holders of HeartWare CDIs should not send their holding statement(s) with their CDI Voting Instruction Form. Thoratec will send CDN instructions for exchanging its shares of HeartWare common stock for the merger consideration and Computershare will arrange for the merger consideration to be sent to holders of HeartWare CDIs on behalf of CDN.

 

 

If you have questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card or voting instructions, please call HeartWare’s Company Secretary, Mr. David McIntyre, at (305) 818-4123 or send an e-mail to enquiries@heartware.com.au.

 

Thoratec Corporation

6035 Stoneridge Drive

Pleasanton, California 94588

(925) 897-8600

 

Thoratec Corporation, a California corporation, is a world leader in therapies to address advanced heart failure and point-of-care diagnostics, and its business is comprised of two operating divisions: Cardiovascular and International Technidyne Corporation, or ITC, a wholly owned subsidiary. For advanced heart failure, Thoratec’s Cardiovascular division develops, manufactures and markets proprietary medical devices used for mechanical circulatory support. Thoratec’s ITC division develops, manufactures and markets point-of-care diagnostic test systems for hospital point-of-care and alternate site point-of-care markets and incision products.

 

Thoratec was incorporated in California in March 1976 under the former name of Thoratec Laboratories Corporation. On February 14, 2001, Thoratec changed its name to Thoratec Corporation. Thoratec common stock is traded on The NASDAQ Global Select Market under the symbol “THOR”. Additional information about Thoratec and its subsidiaries is included in documents incorporated by reference in this document. See “Where You Can Find More Information” beginning on page 127.

 

Thomas Merger Sub I, Inc. and Thomas Merger Sub II, Inc.

6035 Stoneridge Drive

Pleasanton, California 94588

(925) 897-8600

 

Thomas Merger Sub I, Inc., which we refer to as Merger Subsidiary, and Thomas Merger Sub II, Inc., which we refer to as Merger Subsidiary Two, are each wholly owned subsidiaries of Thoratec and were each incorporated in Delaware in February 2009 solely for the purpose of facilitating the mergers. Neither Merger Subsidiary nor Merger Subsidiary Two has carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the transactions contemplated by the merger agreement.

 

HeartWare International, Inc.

205 Newbury Street

Framingham, Massachusetts 01701

(508) 739-0950

 

HeartWare International, Inc., a Delaware corporation, is a medical device company that develops and manufactures miniaturized implantable heart pumps to treat patients suffering from advanced heart failure. Its first product, the HeartWare Ventricular Assist System, or the HVAS, is designed to provide circulatory support for patients with advanced heart failure. The HVAS has received regulatory approval for commercial sales in Europe and it is the subject of an ongoing clinical trial investigation by the FDA.

 

HeartWare’s operating subsidiary, HeartWare, Inc., is a Delaware corporation which was incorporated on April 8, 2003 under the name Perpetual Medical, Inc. HeartWare common stock is traded on The NASDAQ Global Market under the symbol “HTWR” and HeartWare CDIs are traded on ASX under the symbol “HIN”. Additional information about HeartWare and its subsidiaries is included in documents incorporated by reference in this document. See “Where You Can Find More Information” beginning on page 127.

 

The following unaudited pro forma condensed combined financial information combines the historical consolidated financial position and results of operations of Thoratec and of HeartWare, after giving effect to the proposed merger. The merger is expected to be accounted for using the acquisition method of accounting. Under the acquisition method of accounting, Thoratec will record all assets acquired and liabilities assumed at their respective acquisition-date fair values. The unaudited pro forma condensed combined balance sheet information gives effect to the merger as if it had occurred on April 4, 2009. The unaudited pro forma condensed combined statement of operations data for the three months ended April 4, 2009 and for the fiscal year ended January 3, 2009, give effect to the merger as if the merger had occurred on December 30, 2007. Because of different fiscal period ends, the unaudited pro forma condensed combined statement of operations data for fiscal year 2008 combines Thoratec’s historical consolidated statement of operations for the fiscal year ended January 3, 2009 and HeartWare’s historical consolidated statement of operations for the fiscal year ended December 31, 2008. Because of different three month period ends, the unaudited pro forma condensed combined balance sheet information and statement of operations data as of and for the first quarter of 2009 combines Thoratec’s historical consolidated balance sheet and statement of operations as of and for the three months ended April 4, 2009 and HeartWare’s historical consolidated balance sheet and statement of operations as of and for the three months ended March 31, 2009.

 

On February 12, 2009, Thoratec and HeartWare entered into the merger agreement. Under the merger agreement, at the effective time of the merger, each share of HeartWare common stock, including shares of common stock represented by HeartWare CDIs, will be converted into the right to receive $14.30 in cash, without interest, and 0.6054 of a share of Thoratec common stock, subject to adjustment as described in “The Merger Agreement — Merger Consideration” beginning on page 83 of this proxy statement/prospectus. Based on the number of shares of HeartWare common stock and shares issuable upon exercise of stock options and other stock-based awards outstanding as of February 12, 2009, and a price of $26.25 per Thoratec common share (the volume weighted average closing price of Thoratec common shares on The NASDAQ Stock Market for the four (4) trading days preceding the execution of the merger agreement), HeartWare stockholders would receive Thoratec common shares having a market value of approximately $141.0 million in the merger and an aggregate of approximately $141.0 million in cash, reflecting a price of $30.19 per share of HeartWare common stock or $0.86 for each HeartWare CDI (based upon the assumed US/AUS exchange rate of 1.5265 provided in the merger agreement). HeartWare common stock is quoted on The NASDAQ Global Market under the symbol “HTWR” and HeartWare CDIs are quoted on ASX under the symbol “HIN”. Thoratec common stock is quoted on The NASDAQ Global Select Market under the symbol “THOR”.

 

The HeartWare board of directors and the Thoratec board of directors have approved the merger agreement. The completion of the merger depends on a number of conditions being satisfied or, where legally permissible, waived. These conditions include, among others, receipt of the requisite approval of HeartWare stockholders, the expiration or termination of the required waiting period under the HSR Act and the absence of legal impediments to the consummation of the merger. We cannot be certain when, or if, the conditions to the mergers will be satisfied or waived, or that the mergers will be completed. For a more complete description of the approval of the merger agreement and the conditions to completion of the mergers, see “The Merger — Background of the Merger,” “The Merger — HeartWare’s Reasons for the Merger and Recommendation of the HeartWare Board of Directors,” “The Merger — Thoratec’s Reasons for the Merger,” “The Merger Agreement — Conditions to the Obligations of Each Party to Consummate the Merger,” “The Merger Agreement — Conditions to the Obligations of Thoratec and Merger Subsidiary to Consummate the Merger,” “The Merger Agreement — Conditions to the Obligations of HeartWare to Consummate the Merger” and “The Merger Agreement — Conditions to the Obligations of Each Party to Consummate the Second Merger”.

 

The unaudited pro forma condensed combined financial statements reflect the estimated merger consideration expected to be transferred, which does not purport to represent what the actual merger consideration transferred will be at the effective time of the merger. In accordance with SFAS No. 141R, as amended, the fair value of equity securities issued as part of the consideration transferred will be measured on the closing date of the merger at the then-current market price. This requirement will likely result in a per share equity component different from the $26.46 assumed in these unaudited pro forma condensed combined financial statements and that difference may be

material. For illustrative purposes only, assuming a then-current market price of Thoratec common stock on the closing date of the merger of between $8.79 (the highest volume weighted average price of Thoratec common stock, subject to adjustments depending on the number of shares of Thoratec common stock reserved for issuance to holders of unvested and outstanding HeartWare incentive options pursuant to the merger agreement as described in “The Merger Agreement — Treatment of Options and Other Equity-Based Awards” beginning on page 87, at which the aggregate amount of stock consideration payable in the merger will be fixed at 19.9% of the already outstanding shares of Thoratec common stock) and $18.38 per share, and assuming that HeartWare elects to terminate the merger agreement as described in “The Merger Agreement — Merger Consideration” beginning on page 83 of this proxy statement/prospectus and Thoratec elects to increase the number of shares of Thoratec common stock payable in the merger such that the per share value of Thoratec common stock payable in the merger, at the effective time, is equal to $18.38 (70% of $26.25, the price per share of Thoratec common stock used to determine the stock portion of the merger consideration), the estimated aggregate merger consideration (including amounts payable to holders of HeartWare restricted stock, options or other equity based awards at the effective time of the merger pursuant to the merger agreement) will be approximately $239.7 million and the related goodwill balance will be approximately $91.2 million. Assuming a then-current market price of Thoratec common stock on the closing date of the merger of $34.13 per share, the estimated aggregate merger consideration (including amounts payable to holders of HeartWare restricted stock, options or other equity based awards at the effective time of the merger) will be approximately $324.3 million and the related goodwill balance will be approximately $175.8 million. A table illustrating the value of the consideration that would be payable, at the effective time of the merger, to holders of HeartWare common stock issued and outstanding immediately prior to the effective time of the merger, including shares of common stock underlying HeartWare CDIs, based on a range of values of Thoratec common stock is described further in “The Merger Agreement — Merger Consideration” beginning on page 83 of this proxy statement/prospectus.

 

The unaudited pro forma condensed combined financial statements and adjustments are based upon available information and assumptions that the management of Thoratec believes reasonably reflect the merger. The merger is dependent upon certain valuations for identifiable purchased intangibles and in-process research and development that have yet to progress to a stage where there is sufficient information for a definitive measurement. The fair value of identifiable intangible assets is determined using the income approach, which starts with a forecast of all the expected future net cash flows. Under the HSR Act and other relevant laws and regulations, there are significant limitations regarding what Thoratec can learn about the specifics of the HeartWare intangible assets prior to the effective time of the merger and any such process will take several months to complete. The estimated intangible asset values and their useful lives could also be impacted by a variety of factors that may become known to Thoratec only upon access to additional information and/or by changes in such factors that may occur prior to the effective time of the merger. These factors include but are not limited to the regulatory, legislative, legal, technological and competitive environments. Accordingly, increased knowledge about these and/or other elements will likely result in a change to the estimated fair value of the HeartWare intangible assets and/or to the estimated weighted-average useful lives from what Thoratec has assumed in the unaudited pro forma condensed combined financial statements and such differences may be material. The combined effect of any such changes could then also result in a significant increase or decrease to Thoratec’s estimate of associated amortization expense. Accordingly, there will be differences between such preliminary estimates and the final acquisition method of accounting for the merger, and these differences could have a material impact on the accompanying unaudited pro forma condensed combined financial statements and the combined company’s future results of operations and financial position.

 

As of the date of this proxy statement/prospectus, Thoratec does not have sufficient information as to the amount, timing and risk of cash flows of all of the HeartWare intangible assets, particularly those assets still in the research and development phase, to calculate the fair value of such intangible assets. Some of the more significant assumptions inherent in the development of intangible asset values, from the perspective of a market participant, include the amount and timing of projected future cash flows (including revenue, cost of sales, research and development costs, sales and marketing expenses and working capital/contributory asset charges), the discount rate selected to measure the risks inherent in the future cash flows and the assessment of the asset’s life cycle and the competitive trends impacting the asset, as well as other factors.

 

Acquired in-process research and development assets are initially recognized at fair value and are classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. Accordingly, during the development period after the acquisition date, these assets will not be amortized; instead these assets will be subject to periodic impairment testing that may result in the write-off of all or a portion of the carrying value of these assets. Upon successful completion of the development process for an acquired in-process research and development project, determination as to the useful life of the asset will be made. At that point in time the remaining carrying value of the asset would then be considered a finite-lived intangible asset and Thoratec would begin to amortize the asset.

 

The unaudited pro forma condensed combined financial statements do not include the effects of the costs associated with any restructuring or integration activities resulting from the merger. In addition, the unaudited pro forma condensed combined financial statements do not include the potential realization of any cost savings from operating efficiencies or synergies resulting from the merger, nor do they include any potential incremental revenues and earnings that may be achieved with the combined capabilities of Thoratec and HeartWare.

 

Thoratec shareholders and HeartWare stockholders should read the unaudited pro forma condensed combined financial information in conjunction with Thoratec’s and HeartWare’s audited historical consolidated financial statements, accompanying notes to the consolidated financial statements and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Thoratec’s Form 8-K filed with the SEC on June 11, 2009 and Thoratec’s and HeartWare’s Annual Report on Form 10-K for the fiscal years ended January 3, 2009 and December 31, 2008, respectively, each of which is incorporated by reference into this proxy statement/prospectus. Thoratec shareholders and HeartWare stockholders should also read the unaudited pro forma condensed combined financial information in conjunction with Thoratec’s and HeartWare’s unaudited historical condensed consolidated financial statements, accompanying notes to the condensed consolidated financial statements and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Thoratec’s and HeartWare’s Quarterly Report on Form 10-Q for the quarterly period ended April 4, 2009 and March 31, 2009, respectively, each of which is incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 127 of this proxy statement/prospectus.

 

THORATEC CORPORATION

Unaudited Pro Forma Condensed Combined Balance Sheet
As of April 4, 2009
(In thousands)

 

 

 

 

See “Notes to Unaudited Pro Forma Condensed Combined Financial Statements” beginning on page 43.

THORATEC CORPORATION

Unaudited Pro Forma Condensed Combined Statement of Operations
For The Three Months Ended April 4, 2009
(In thousands, except per share amounts)

 

 

 

 

See “Notes to Unaudited Pro Forma Condensed Combined Financial Statements” beginning on page 43.

THORATEC CORPORATION

Unaudited Pro Forma Condensed Combined Statement of Operations
For The Year Ended January 3, 2009
(In thousands, except per share amounts)

 

 

 

 

 

See “Notes to Unaudited Pro Forma Condensed Combined Financial Statements”beginning on page 43.

THORATEC CORPORATION

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

 

 

The unaudited pro forma condensed combined financial statements of Thoratec have been prepared giving effect to the merger between Merger Subsidiary and HeartWare on a historical basis. The unaudited pro forma condensed combined balance sheet information gives effect to the merger as if the merger had occurred on April 4, 2009. The unaudited pro forma condensed combined statement of operations data for the three months ended April 4, 2009 and for the fiscal year ended January 3, 2009, gives effect to the merger as if the merger had occurred on December 30, 2007. The merger has been accounted for in the unaudited pro forma condensed combined financial statements using the acquisition method of accounting in accordance with SFAS No. 141R, Business Combinations, which Thoratec adopted on January 1, 2009, and using the fair value concepts defined in SFAS No. 157, Fair Value Measurements.

 

SFAS No. 141R requires, among other things, that most assets acquired and liabilities assumed be recognized at their fair values as of the acquisition-date and that the fair value of in-process research and development be recorded on the balance sheet regardless of the likelihood of success as of the acquisition-date. In April 2009, the FASB issued FSP SFAS No. 141R-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies, which amends the guidance in SFAS No. 141R to require contingent assets acquired and liabilities assumed in a business combination to be recognized at fair value on the acquisition date if fair value can be reasonably estimated during the measurement period. This guidance is effective for all business acquisitions occurring on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.

 

SFAS No. 157 defines the term “fair value” and sets forth the valuation requirements for any asset or liability measured at fair value, expands related disclosure requirements and specifies a hierarchy of valuation techniques based on the nature of the inputs used to develop the fair value measures. Fair value is defined in SFAS No. 157 as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” This is an exit price concept for the valuation of the asset or liability. In addition, market participants are assumed to be buyers and sellers in the principal (or the most advantageous) market for the asset or liability. Fair value measurement for an asset assumes the highest and best use by these market participants. As a result of these standards, Thoratec may be required to record assets which are not intended to be used or sold and/or to value assets at fair value measures that do not reflect Thoratec’s intended use of those assets. Many of these fair value measurements can be highly subjective and it is also possible that other professionals, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts.

 

Under SFAS No. 141R, acquisition-related transaction costs (i.e., advisory, legal, valuation and other professional fees) and certain acquisition-related restructuring charges are not included as a component of consideration transferred but are accounted for as expenses in the periods in which the costs are incurred. As of April 4, 2009, total remaining transaction costs are estimated to be $14.5 million, with approximately $8.8 million allocable to Thoratec, and approximately $5.5 million allocable to HeartWare. The estimated transaction costs also include $0.2 million related to the issuance of Thoratec shares as stock consideration in the merger.

 

For purposes of these unaudited pro forma condensed combined financial statements, Thoratec has assumed the total preliminary consideration issued and paid in the merger to be approximately $283.0 million, consisting of $141.0 million paid in cash and approximately 5.4 million issued shares of Thoratec common stock valued at the July 2, 2009 share price of $26.46 per share, or $142.0 million.

 

THORATEC CORPORATION

 

Notes to Unaudited Pro Forma Condensed Combined Financial Statements — (Continued)

 

The following table summarizes the components of the preliminary estimated merger consideration:

 

 

Under the acquisition method of accounting, the total preliminary estimated merger consideration is shown in the table above, and is allocated in the table below to Thoratec’s net tangible and intangible assets and liabilities based on their estimated fair value. For the unaudited pro forma condensed combined financial statements, the preliminary estimated merger consideration is allocated as follows: