Exhibit 10.1

CEPHEID

1997 STOCK OPTION PLAN

(as amended and restated September 24, 2002)

1. PURPOSE. The purpose of this Plan is to provide incentives to attract, retain
and motivate eligible persons whose present and potential contributions are
important to the success of the Company, its Parent and Subsidiaries, by
offering them an opportunity to participate in the Company's future performance
through awards of Options. Capitalized terms not defined in the text are defined
in Section 21.

2. SHARES SUBJECT TO THE PLAN.

2.1 Number of Shares Available. Subject to Sections 2.2 and 15, the total number
of Shares reserved and available for grant and issuance pursuant to this Plan
will be 4,675,000 Shares plus Shares covered by the portion of any grant under
the Plan which expire unexercised. In addition, on each January 1, the aggregate
number of Shares reserved and available for grant and issuance pursuant to this
Plan will be increased automatically by a number of Shares equal to the lesser
of (i) 1,000,000 Shares, (ii) 3% of the total outstanding shares of the Company
as of January 1, or (iii) an amount determined by the Board, provided that no
more than 50,000,000 shares shall be issued as ISOs (as defined in Section 5
below). At all times the Company shall reserve and keep available a sufficient
number of Shares as shall be required to satisfy the requirements of all
outstanding Options granted under this Plan and all other outstanding but
unvested Options granted under this Plan.

2.2 Adjustment of Shares. In the event that the number or type of outstanding
shares of the Company's Common Stock is changed by a stock dividend,
recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company
without consideration, then (a) the number and class of Shares reserved for
issuance under this Plan, (b) the Exercise Prices of outstanding Options, and
(c) the number of Shares subject to outstanding Options may, upon approval of
the Board in its discretion, be proportionately adjusted in compliance with
applicable securities laws; provided, however, that fractions of a Share will
not be issued.

3. ELIGIBILITY. ISOs (as defined in Section 5 below) may be granted only to
employees (including officers and directors who are also employees) of the
Company or of a Parent or Subsidiary of the Company. All other Options may be
granted to employees, officers, directors, consultants, independent contractors
and advisors of the Company or any Parent or Subsidiary of the Company; provided
such consultants, independent contractors and advisors render bona fide services
not in connection with the offer and sale of securities in a capital-raising
transaction. A person may be granted more than one Option under this Plan.

4. ADMINISTRATION.

4.1 Committee Authority. This Plan will be administered by the Committee or by
the Board acting as the Committee. Subject to the general purposes, terms and
conditions of this Plan, and to the direction of the Board, the Committee will
have full power to implement and carry out this Plan. The Committee will have
the authority to:

(a) construe and interpret this Plan, any Option Agreement and any other
agreement or document executed pursuant to this Plan;

(b) prescribe, amend and rescind rules and regulations relating to this Plan or
any Option;

(c) select persons to receive Options;

(d) determine the form and terms of Options;

(e) determine the number of Shares or other consideration subject to Options;

(f) determine whether Options will be granted singly, in combination with, in
tandem with, in replacement of, or as alternatives to, other Options under this
Plan or any other incentive or compensation plan of the Company or any Parent or
Subsidiary of the Company;

(g) grant waivers of Plan or Option conditions;

(h) determine the vesting, exercisability and payment of Options;

(i) correct any defect, supply any omission or reconcile any inconsistency in
this Plan, any Option or any Option Agreement;

(j) determine whether an award has been earned; and

(k) make all other determinations necessary or advisable for the administration
of this Plan.

4.2 Committee Discretion. Any determination made by the Committee with respect
to any Option will be made in its sole discretion at the time of grant of the
Option or, unless in contravention of any express term of this Plan or the
Option, at any later time, and such determination will be final and binding on
the Company and on all persons having an interest in any Option under this Plan.
The Committee may delegate to two or more directors of the Company the authority
to grant an Option under this Plan to Participants who are not Insiders of the
Company.

5. OPTIONS. The Committee may grant Options to eligible persons and will
determine whether such Options will be Incentive Stock Options within the
meaning of the Code ("ISOs") or Nonqualified Stock Options ("NQSOs"), the number
of Shares subject to the Option, the Exercise Price of the Option, the period
during which the Option may be exercised, and all other terms and conditions of
the Option, subject to the following:

5.1 Form of Option Grant. Each Option granted under this Plan will be evidenced
by an Option Agreement which will expressly identify the Option as an ISO or an
NQSO ("Stock Option Agreement"), and will be in such form and contain such
provisions (which need not be the same for each Participant) as the Committee
may from time to time approve, and which will comply with and be subject to the
terms and conditions of this Plan.

5.2 Date of Grant. The date of grant of an Option will be the date on which the
Committee makes the determination to grant such Option, unless otherwise
specified by the Committee. The Stock Option Agreement and a copy of this Plan
will be delivered to the Participant within a reasonable time after the granting
of the Option.

5.3 Exercise Period. Options may be exercisable within the times or upon the
events determined by the Committee as set forth in the Stock Option Agreement
governing such Option; provided, however, that no Option will be exercisable
after the expiration of ten (10) years from the date the Option is granted; and
provided further that no ISO granted to a person who directly or by attribution
owns more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any Parent or Subsidiary of the Company
("Ten Percent Stockholder") will be exercisable after the expiration of five (5)
years from the date the ISO is granted. The Committee also may provide for
Options to become exercisable at one time or from time to time, periodically or
otherwise, in such number of Shares or percentage of Shares as the Committee
determines.

5.4 Exercise Price. The Exercise Price of an Option will be determined by the
Committee when the Option is granted; provided that: (i) the Exercise Price of
an ISO will be not less than 100% of the Fair Market Value of the Shares on the
date of grant; (ii) the Exercise Price of any ISO granted to a Ten Percent
Stockholder will not be less than 110% of the Fair Market Value of the Shares on
the date of grant; and (iii) the Exercise Price of an NQSO will not be less than
85% of the Fair Market Value of the Shares on the date of grant. Payment for the
Shares purchased may be made in accordance with Section 6.

5.5 Method of Exercise. Options may be exercised only by delivery to the Company
of a written stock option exercise agreement (the "Exercise Agreement") in a
form approved by the Committee (which need not be the same for each
Participant), stating the number of Shares being purchased, the restrictions
imposed on the Shares purchased under such Exercise Agreement, if any, and such
representations and agreements regarding the Participant's investment intent and
access to information and other matters, if any, as may be required by or
desirable to the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price for the number of Shares being
purchased.

5.6 Termination. Notwithstanding the exercise periods set forth in the Stock
Option Agreement, the exercise of an Option will always be subject to the
following:

(a) If the Participant is Terminated for any reason except the Participant's
death or Disability, then the Participant may exercise such Participant's
Options only to the extent that such Options would have been exercisable by the
Participant on the Termination Date no later than three (3) months after the
Termination Date (or such shorter time period not less than thirty (30) days or
longer time period not exceeding five (5) years as may be determined by the
Committee, with any exercise beyond three (3) months after the Termination Date
deemed to be an NQSO), but in any event no later than the expiration date of the
Options.

(b) If the Participant is Terminated because of Participant's death (or the
Participant dies within three (3) months after a Termination other than for
Cause or because of the Participant's Disability), then the Participant's
Options may be exercised only to the extent that such Options would have been
exercisable by the Participant on the Termination Date and must be exercised by
the Participant (or the Participant's legal representative or authorized
assignee) no later than twelve (12) months after the Termination Date (or such
shorter time period not less than six (6) months or longer time period not
exceeding five (5) years as may be determined by the Committee, with any
exercise beyond (a) three (3) months after the Termination Date when the
Termination is for any reason other than the Participant's death or Disability,
or (b) twelve (12) months after the Termination Date when the Termination is for
the Participant's death or Disability, deemed to be an NQSO), but in any event
no later than the expiration date of the Options.

(c) If the Participant is Terminated because of Participant's Disability, then
the Participant's Options may be exercised only to the extent that such Options
would have been exercisable by the Participant on the Termination Date and must
be exercised by the Participant (or the Participant's legal representative or
authorized assignee) no later than six (6) months after the Termination Date,
with any exercise beyond (a) three (3) months after the Termination Date when
the Termination is for any reason other than the Participant's death or
Disability, or (b) twelve (12) months after the Termination Date when the
Termination is for the Participant's death or Disability, deemed to be an NQSO),
but in any event no later than the expiration date of the Options.

(d) If the Participant is terminated for Cause, then Participant's Options shall
expire on such Participant's Termination Date, or at such later time and on such
conditions as are determined by the Committee.

5.7 Limitations on Exercise. The Committee may specify a reasonable minimum
number of Shares that may be purchased on any exercise of an Option, provided
that such minimum number will not prevent any Participant from exercising the
Option for the full number of Shares for which it is then exercisable.

5.8 Limitations on ISOs. The aggregate Fair Market Value (determined as of the
date of grant) of Shares with respect to which ISOs are exercisable for the
first time by a Participant during any calendar year (under this Plan or under
any other incentive stock option plan of the Company or any Parent or Subsidiary
of the Company) will not exceed $100,000. If the Fair Market Value of Shares on
the date of grant with respect to which ISOs are exercisable for the first time
by a Participant during any calendar year exceeds $100,000, then the Options for
the first $100,000 worth of Shares to become exercisable in such calendar year
will be ISOs and the Options for the amount in excess of $100,000 that become
exercisable in such calendar year will be NQSOs. In the event that the Code or
the regulations promulgated thereunder are amended after the Effective Date to
provide for a different limit on the Fair Market Value of Shares permitted to be
subject to ISOs, such different limit will be automatically incorporated herein
and will apply to any Options granted after the effective date of such
amendment.

5.9 Modification, Extension or Renewal. The Committee may modify, extend or
renew outstanding Options and authorize the grant of new Options in substitution
therefor, provided that any such action may not, without the written consent of
a Participant, impair any of such Participant's rights under any Option
previously granted. Any outstanding ISO that is modified, extended, renewed or
otherwise altered will be treated in accordance with Section 424(h) of the Code.
The Committee may reduce the Exercise Price of outstanding Options without the
consent of Participants affected by a written notice to them; provided, however,
that the Exercise Price may not be reduced below the minimum Exercise Price that
would be permitted under Section 5.4 for Options granted on the date the action
is taken to reduce the Exercise Price.

5.10 No Disqualification. Notwithstanding any other provision in this Plan, no
term of this Plan relating to ISOs will be interpreted, amended or altered, nor
will any discretion or authority granted under this Plan be exercised, so as to
disqualify this Plan under Section 422 of the Code or, without the consent of
the Participant affected, to disqualify any ISO under Section 422 of the Code.

6. PAYMENT FOR SHARE PURCHASES.

6.1 Payment. Payment for Shares purchased pursuant to this Plan may be made in
cash (by check) or, where expressly approved for the Participant by the
Committee and where permitted by law:

(a) by cancellation of indebtedness of the Company to the Participant;

(b) by surrender of shares that either: (1) have been owned by the Participant
for more than six (6) months and have been paid for within the meaning of SEC
Rule 144 (and, if such shares were purchased from the Company by use of a
promissory note, such note has been fully paid with respect to such shares); or
(2) were obtained by the Participant in the public market;

(c) by waiver of compensation due or accrued to the Participant for services
rendered to the Company or a Parent or Subsidiary of the Company;

(d) with respect only to purchases upon exercise of an Option, and provided that
a public market for the Company's Common Stock exists:

(1) through a "same day sale" commitment from the Participant and a
broker-dealer that is a member of the National Association of Securities Dealers
(an "NASD Dealer") whereby the Participant irrevocably elects to exercise the
Option and to sell a portion of the Shares so purchased to pay for the Exercise
Price, and whereby the NASD Dealer irrevocably commits upon receipt of such
Shares to forward the Exercise Price directly to the Company; or

(2) through a "margin" commitment from the Participant and an NASD Dealer
whereby the Participant irrevocably elects to exercise the Option and to pledge
the Shares so purchased to the NASD Dealer in a margin account as security for a
loan from the NASD Dealer in the amount of the Exercise Price, and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to forward the
Exercise Price directly to the Company;

(e) by any combination of the foregoing; or

(f) by any other method approved by the Board.

7. WITHHOLDING TAXES

.

7.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of
Options granted under this Plan, the Company may require the Participant to
remit to the Company an amount sufficient to satisfy federal, state and local
withholding tax requirements prior to the delivery of any certificate or
certificates for such Shares. Whenever, under this Plan, payments in
satisfaction of Options are to be made in cash, such payment will be net of an
amount sufficient to satisfy federal, state, and local withholding tax
requirements.

7.2 Stock Withholding. When, under applicable tax laws, a Participant incurs tax
liability in connection with the exercise or vesting of any Option that is
subject to tax withholding and the Participant is obligated to pay the Company
the amount required to be withheld, the Committee may in its sole discretion
allow the Participant to satisfy the minimum withholding tax obligation by
electing to have the Company withhold from the Shares to be issued that number
of Shares having a Fair Market Value equal to the minimum amount required to be
withheld, determined on the date that the amount of tax to be withheld is to be
determined. All elections by a Participant to have Shares withheld for this
purpose will be made in accordance with the requirements established by the
Committee and be in writing in a form acceptable to the Committee.

8. TRANSFERABILITY

.

8.1 Except as otherwise provided in this Section 8, Options granted under this
Plan, and any interest therein, will not be transferable or assignable by any
Participant, and may not be made subject to execution, attachment or similar
process, otherwise than by will or by the laws of descent and distribution or as
determined by the Committee and set forth in the Option Agreement with respect
to Options that are not ISOs.

8.2 All Options other than NQSOs. All Options other than NQSOs shall be
exercisable: (i) during the Participant's lifetime only by (A) the Participant,
or (B) the Participant's guardian or legal representative; and (ii) after the
Participant's death, by the legal representative of the Participant's heirs or
legatees.

8.3 NQSOs. Unless otherwise restricted by the Committee, an NQSO shall be
exercisable: (i) during the Participant's lifetime only by (A) the Participant,
(B) the Participant's guardian or legal representative, (C) a Family Member of
the Participant who has acquired the NQSO by "permitted transfer;" and (ii)
after the Participant's death, by the legal representative of the Participant's
heirs or legatees. "Permitted transfer" means, as authorized by this Plan and
the Committee in an NQSO, any transfer effected by the Participant during the
Participant's lifetime of an interest in such NQSO but only such transfers which
are by gift or domestic relations order. A permitted transfer does not include
any transfer for value and neither of the following are transfers for value:
(a) a transfer under a domestic relations order in settlement of marital
property rights or (b) a transfer to an entity in which more than fifty percent
of the voting interests are owned by Family Members or the Participant in
exchange for an interest in that entity.

9. PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.

9.1 Voting and Dividends. No Participant will have any of the rights of a
stockholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will be
a stockholder and have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are restricted stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
restricted stock; provided, further, that the Participant will have no right to
retain such stock dividends or stock distributions with respect to Shares that
are repurchased at the Participant's Exercise Price pursuant to Section 9.2.

9.2 Restrictions on Shares. At the discretion of the Committee, the Company may
reserve to itself and/or its assignee(s) a right to repurchase (a "Right of
Repurchase") a portion of or all Unvested Shares held by a Participant following
such Participant's Termination at any time within ninety (90) days after the
later of the Participant's Termination Date and the date the Participant
purchases Shares under this Plan, for cash and/or cancellation of purchase money
indebtedness, at the Participant's Exercise Price, as the case may be.

10. CERTIFICATES. All certificates for Shares or other securities delivered
under this Plan will be subject to such stock transfer orders, legends and other
restrictions as the Committee may deem necessary or advisable, including
restrictions under any applicable federal, state or foreign securities law, or
any rules, regulations and other requirements of the SEC or any stock exchange
or automated quotation system upon which the Shares may be listed or quoted.

11. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a Participant's
Shares, the Committee may require the Participant to deposit all certificates
representing Shares, together with stock powers or other instruments of transfer
approved by the Committee, appropriately endorsed in blank, with the Company or
an agent designated by the Company to hold in escrow until such restrictions
have lapsed or terminated, and the Committee may cause a legend or legends
referencing such restrictions to be placed on the certificates. Any Participant
who is permitted to execute a promissory note as partial or full consideration
for the purchase of Shares under this Plan will be required to pledge and
deposit with the Company all or part of the Shares so purchased as collateral to
secure the payment of the Participant's obligation to the Company under the
promissory note; provided, however, that the Committee may require or accept
other or additional forms of collateral to secure the payment of such obligation
and, in any event, the Company will have full recourse against the Participant
under the promissory note notwithstanding any pledge of the Participant's Shares
or other collateral. In connection with any pledge of the Shares, the
Participant will be required to execute and deliver a written pledge agreement
in such form as the Committee will from time to time approve. The Shares
purchased with the promissory note may be released from the pledge on a pro rata
basis as the promissory note is paid.

12. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from time
to time, authorize the Company, with the consent of the respective Participants,
to issue new Options in exchange for the surrender and cancellation of any or
all outstanding Options. The Committee may at any time buy from a Participant an
Option previously granted with payment in cash, Shares (including restricted
stock) or other consideration, based on such terms and conditions as the
Committee and the Participant may agree.

13. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Option will not be
effective unless such Option is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant
of the Option and also on the date of exercise or other issuance.
Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver certificates for Shares under this Plan prior to:
(a) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and/or (b) completion of any registration
or other qualification of such Shares under any state or federal law or ruling
of any governmental body that the Company determines to be necessary or
advisable. The Company will be under no obligation to register the Shares with
the SEC or to effect compliance with the registration, qualification or listing
requirements of any state securities laws, stock exchange or automated quotation
system, and the Company will have no liability for any inability or failure to
do so.

14. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Option granted under
this Plan will confer or be deemed to confer on any Participant any right to
continue in the employ of, or to continue any other relationship with, the
Company or any Parent or Subsidiary of the Company or limit in any way the right
of the Company or any Parent or Subsidiary of the Company to terminate
Participant's employment or other relationship at any time, with or without
cause.

15. CORPORATE TRANSACTIONS.

15.1 Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Company shall notify the Participant at least
thirty (30) days prior to such proposed action. To the extent it has not been
previously exercised, all Options will terminate immediately prior to the
consummation of such proposed action.

15.2 Merger or Asset Sale. In the event of a merger of the Company with or into
another corporation, or the sale of substantially all of the assets of the
Company:

(a) Options. Each Option shall be assumed or an equivalent option substituted by
the successor corporation (including as a "successor" any purchaser of
substantially all of the assets of the Company) or a parent or subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute for the Option, the Participant shall have the right to
exercise the Option as to all of the shares of Common Stock covered by the
Option, including Shares as to which it would not otherwise be exercisable. If
an Option is exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Company shall notify the Participant that the
Option shall be fully exercisable for a period of fifteen (15) days from the
date of such notice, and the Option shall terminate upon the expiration of such
period. For the purposes of this paragraph, the Option shall be considered
assumed if, following the merger or sale of assets, the option confers the right
to purchase or receive, for each share of Common Stock subject to the Option
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each share held on the effective date of
the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding shares);
provided, however, that if such consideration received in the merger or sale of
assets was not solely common stock of the successor corporation or its parent
entity, the Company may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option, for each
Share of Common Stock subject to the Option, to be solely common stock of the
successor corporation or its parent entity equal in fair market value to the per
share consideration received by holders of Common Stock in the merger or sale of
assets.

(b) Shares Subject to Right of Repurchase. Any Shares subject to a Right of
Repurchase of the Company, as described in Section 9.2 herein, shall be
exchanged for the consideration (whether stock, cash, or other securities or
property) received in the merger or asset sale by the holders of Common Stock
for each share held on the effective date of the transaction, as described in
the preceding paragraph. If in such exchange the Participant receives shares of
stock of the successor corporation or a parent or subsidiary of such successor
corporation, and if the successor corporation has agreed to assume or substitute
for Options as provided in the preceding paragraph, such exchanged shares shall
continue to be subject to such Right of Repurchase. If, as provided in the
preceding paragraph, the Participant shall have the right to exercise an Option
as to all of the shares of Common Stock covered thereby, all Shares that are
subject to a Right of Repurchase of the Company shall be released from such
Right of Repurchase and shall be fully vested.

15.3 Assumption of Options by the Company. The Company, from time to time, also
may substitute or assume outstanding awards granted by another company, whether
in connection with an acquisition of such other company or otherwise, by either;
(a) granting an Option under this Plan in substitution of such other company's
award; or (b) assuming such award as if it had been granted under this Plan if
the terms of such assumed award could be applied to an Option granted under this
Plan. Such substitution or assumption will be permissible if the holder of the
substituted or assumed award would have been eligible to be granted an Option
under this Plan if the other company had applied the rules of this Plan to such
grant. In the event the Company assumes an award granted by another company, the
terms and conditions of such award will remain unchanged (except that the
exercise price and the number and nature of Shares issuable upon exercise of any
such option will be adjusted appropriately pursuant to Section 424(a) of the
Code). In the event the Company elects to grant a new Option rather than
assuming an existing option, such new Option may be granted with a similarly
adjusted Exercise Price.

16. ADOPTION AND STOCKHOLDER APPROVAL. This Plan will become effective on the
date on which the registration statement filed by the Company with the SEC under
the Securities Act registering the initial public offering of the Company's
Common Stock is declared effective by the SEC (the "Effective Date"). This Plan
shall be approved by the stockholders of the Company (excluding Shares issued
pursuant to this Plan), consistent with applicable laws, within twelve (12)
months before or after the date this Plan is adopted by the Board. Upon the
Effective Date, the Committee may grant Options pursuant to this Plan; provided,
however, that: (a) no Option may be exercised prior to initial stockholder
approval of this Plan; (b) no Option granted pursuant to an increase in the
number of Shares subject to this Plan approved by the Board will be exercised
prior to the time such increase has been approved by the stockholders of the
Company; (c) in the event that initial stockholder approval is not obtained
within the time period provided herein, all Options granted hereunder shall be
cancelled, any Shares issued pursuant to any Options shall be cancelled, and any
purchase of Shares issued hereunder shall be rescinded; and (d) in the event
that stockholder approval of such increase shall not be obtained within the time
period provided herein, all Options granted pursuant to such increase shall be
cancelled, any Shares issued pursuant to any Options granted pursuant to such
increase will be cancelled, and any purchase of Shares pursuant to such increase
shall be rescinded.

17. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided herein,
this Plan will terminate ten (10) years from the date this Plan is adopted by
the Board or, if earlier, the date of stockholder approval. This Plan and all
agreements thereunder shall be governed by and construed in accordance with the
laws of the State of California.

18. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate or
amend this Plan in any respect, including, without limitation, amendment of any
form of Option Agreement or instrument to be executed pursuant to this Plan;
provided, however, that the Board will not, without the approval of the
stockholders of the Company, amend this Plan in any manner that requires such
stockholder approval; provided further, that a Participant's Option shall be
governed by the version of this Plan then in effect at the time such Option was
granted.

19. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the Board,
the submission of this Plan to the stockholders of the Company for approval, nor
any provision of this Plan will be construed as creating any limitations on the
power of the Board to adopt such additional compensation arrangements as it may
deem desirable, including, without limitation, the granting of stock options and
bonuses otherwise than under this Plan, and such arrangements may be either
generally applicable or applicable only in specific cases.

20. INSIDER TRADING POLICY. Each Participant who receives an Option shall comply
with any policy adopted by the Company from time to time covering transactions
in the Company's securities by employees, officers and/or directors of the
Company.

21. DEFINITIONS. As used in this Plan, the following terms will have the
following meanings:

"Board" means the Board of Directors of the Company.

"Cause" means (a) the commission of an act of theft, embezzlement, fraud,
dishonesty, (b) a breach of fiduciary duty to the Company or a Parent or
Subsidiary of the Company, or (c) a failure to materially perform the customary
duties of employee's employment.

"Code" means the Internal Revenue Code of 1986, as amended.

"Committee" means the Compensation Committee of the Board or those persons to
whom administration of the Plan, or part of the Plan, has been delegated as
permitted by law.

"Company" means Cepheid or any successor corporation.

"Disability" means a disability, whether temporary or permanent, partial or
total, as determined by the Committee.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Exercise Price" means the price at which a holder of an Option may purchase the
Shares issuable upon exercise of the Option.

"Fair Market Value" means, as of any date, the value of a share of the Company's
Common Stock determined as follows:

(a) if such Common Stock is then quoted on the Nasdaq National Market, its
closing price on the Nasdaq National Market on the date of determination (or if
there are no sales for such date, then the last preceding business day on which
there were sales) as reported in The Wall Street Journal;

(b) if such Common Stock is publicly traded and is then listed on a national
securities exchange, its closing price on the date of determination on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading as reported in The Wall Street Journal;

(c) if such Common Stock is publicly traded but is not quoted on the Nasdaq
National Market nor listed or admitted to trading on a national securities
exchange, the average of the closing bid and asked prices on the date of
determination as reported in The Wall Street Journal;

(d) in the case of an Option made on the Effective Date, the price per share at
which shares of the Company's Common Stock are initially offered for sale to the
public by the Company's underwriters in the initial public offering of the
Company's Common Stock pursuant to a registration statement filed with the SEC
under the Securities Act; or

(e) if none of the foregoing is applicable, by the Committee in good faith.

"Family Member" includes any of the following:

(a) child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law of the Participant, including
any such person with such relationship to the Participant by adoption;

(b) any person (other than a tenant or employee) sharing the Participant's
household;

(c) a trust in which the persons in (a) and (b) have more than fifty percent of
the beneficial interest;

(d) a foundation in which the persons in (a) and (b) or the Participant control
the management of assets; or

(e) any other entity in which the persons in (a) and (b) or the Participant own
more than fifty percent of the voting interest.

"Insider" means an officer or director of the Company or any other person whose
transactions in the Company's Common Stock are subject to Section 16 of the
Exchange Act.

"Option" means an award of an option to purchase Shares pursuant to Section 5.

"Option Agreement" means, with respect to each Option, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Option.

"Parent" means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if each of such corporations other than the
Company owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.

"Participant" means a person who receives an Option under this Plan.

"Plan" means this Cepheid 1997 Stock Option Plan, as amended from time to time.

"SEC" means the Securities and Exchange Commission.

"Securities Act" means the Securities Act of 1933, as amended.

"Shares" means shares of the Company's Common Stock reserved for issuance under
this Plan, as adjusted pursuant to Sections 2 and 16, and any successor
security.

"Subsidiary" means any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company if each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

"Termination" or "Terminated" means, for purposes of this Plan with respect to a
Participant, that the Participant has for any reason ceased to provide services
as an employee, officer, director, consultant, independent contractor or advisor
to the Company or a Parent or Subsidiary of the Company. An employee will not be
deemed to have ceased to provide services in the case of (i) sick leave,
(ii) military leave, or (iii) any other leave of absence approved by the
Committee; provided, that such leave is for a period of not more than 90 days,
unless reemployment upon the expiration of such leave is guaranteed by contract
or statute or unless provided otherwise pursuant to formal policy adopted from
time to time by the Company and issued and promulgated to employees in writing.
In the case of any employee on an approved leave of absence, the Committee may
make such provisions respecting suspension of vesting of the Option while on
leave from the employ of the Company or a Parent or Subsidiary of the Company as
it may deem appropriate, except that in no event may an Option be exercised
after the expiration of the term set forth in the Stock Option Agreement. The
Committee will have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the Participant
ceased to provide services (the "Termination Date").

"Unvested Shares" means "Unvested Shares" as defined in the Option Agreement.