Exhibit 10.1
June 7, 2006
William A. McMillan
Re: Terms of Separation
Dear Bill:
     This revised letter confirms the agreement between you and Cepheid (“the
Company”) concerning the terms of your separation and offers you the separation
compensation we discussed in exchange for a release of claims.
     1. Separation Date: June 9, 2006 is your last day of employment with the
Company (the “Separation Date”).
     2. Acknowledgment of Payment of Wages: By your signature below, you
acknowledge that on June 9, 2006, we provided you a final paycheck in the gross
amount of $41,784.61 for all wages, salary, bonuses, reimbursable expenses,
accrued vacation and any similar payments due you from the Company as of the
Separation Date. By signing below, you acknowledge that the Company does not owe
you any other amounts.
     3. Outplacement Services: To further assist you in your effort to
transition to a new job, the Company will make the necessary payments for you to
enroll to receive six months of executive level outplacement services from Lee,
Hecht, Harrison.
     4. Separation Compensation: In exchange for your agreement to the waiver of
claims set forth in paragraph 7, below, the Company agrees to provide you with
the following:

 

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          a. Severance: The Company will pay you, within five (5) business days
following the expiration of the revocation period described in paragraph 15,
below, a total of $112,000.00 less applicable state and federal payroll
deductions, which constitutes six months of your base salary;
          b. Partial Acceleration of Stock Vesting: You currently hold options
to purchase 255,800 shares of the Company’s Common Stock (the “Option”). As of
the Separation Date, 107,474 of the 255,800 shares subject to the Option are
vested. However, in exchange for your release of claims, the Company will agree
to accelerate by nine months the vesting of four grants under the Option: Grant
Numbers 00000827, 00000996, 0000652 and 0000729 (referenced in the attached
Personnel Grant Status chart). As a result, at the Separation Date, a total of
132,612 shares subject to the Option will be vested. You shall have a period of
three months from the Separation Date within which to exercise all unexercised,
vested shares. All other terms and conditions of your Stock Option Agreement,
and the Company’s Stock Option Plan shall remain in full force and effect.
          By signing below, you acknowledge that you are receiving the
separation compensation outlined in this paragraph in consideration for waiving
your rights to claims referred to in this agreement and that you would not
otherwise be entitled to the separation compensation.
     5. Return of Company Property: You hereby warrant to the Company that you
have returned to the Company all property or data of the Company of any type
whatsoever that has been in your possession or control.
     6. Confidential Information: You hereby acknowledge that you are bound by
the attached agreement dated March 28, 1997, and that as a result of your
employment with the Company you have had access to the Company’s Confidential
Information (as defined in the agreement), that you will hold all Confidential
Information in strictest confidence and that you will not make use of such
Confidential Information on behalf of anyone. You further confirm that you have
delivered to the Company all documents and data of any nature containing or
pertaining to such Confidential Information and that you have not taken with you
any such documents or data or any reproduction thereof.
     7. Waiver of Claims: The payments and promises set forth in this agreement
are in full satisfaction of all accrued salary, vacation pay, bonus pay,
profit-sharing, stock options, termination benefits or other compensation to
which you may be entitled by virtue of your employment with the Company or your
separation from the Company. You hereby release and

 

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waive any and all claims you may have against the Company and its owners,
agents, officers, shareholders, employees, directors, attorneys, subscribers,
subsidiaries, affiliates, successors and assigns (collectively “Releasees”),
whether known or not known, including, without limitation, claims under any
employment laws, including, but not limited to, claims of unlawful discharge,
breach of contract, breach of the covenant of good faith and fair dealing,
fraud, violation of public policy, defamation, physical injury, emotional
distress, claims for additional compensation or benefits arising out of your
employment or your separation of employment, claims under Title VII of the 1964
Civil Rights Act, as amended, the California Fair Employment and Housing Act and
any other laws and/or regulations relating to employment or employment
discrimination, including, without limitation, claims based on age or under the
Age Discrimination in Employment Act or Older Workers Benefit Protection Act. By
signing below, you expressly waive any benefits of Section 1542 of the Civil
Code of the State of California, which provides as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.””
     8. Nondisparagement: You agree that you will not disparage Releasees or
their products, services, agents, representatives, directors, officers,
shareholders, attorneys, employees, vendors, affiliates, successors or assigns,
or any person acting by, through, under or in concert with any of them, with any
written or oral statement. The Company agrees that its management will not
disparage you with any written or oral statement.
     9. Legal and Equitable Remedies: You agree that Releasees have the right to
enforce this agreement and any of its provisions by injunction, specific
performance or other equitable relief without prejudice to any other rights or
remedies Releasees may have at law or in equity for breach of this agreement.
     10. Attorneys’ Fees: If any action is brought to enforce the terms of this
agreement, the prevailing party will be entitled to recover its reasonable
attorneys’ fees, costs and expenses from the other party, in addition to any
other relief to which the prevailing party may be entitled.
     11. Confidentiality: The contents, terms and conditions of this agreement
must be kept confidential by you and may not be disclosed except to your
accountant or attorneys or pursuant to subpoena or court order. You agree that
if you are asked for information concerning this settlement, you will state only
that you and the Company reached an amicable resolution of any disputes
concerning your separation from the Company. Any breach of this confidentiality
provision shall be deemed a material breach of this agreement.

 

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     12. No Admission of Liability: This agreement is not and shall not be
construed or contended by you to be an admission or evidence of any wrongdoing
or liability on the part of Releasees, their representatives, heirs, executors,
attorneys, agents, partners, officers, shareholders, directors, employees,
subsidiaries, affiliates, divisions, successors or assigns. This agreement shall
be afforded the maximum protection allowable under California Evidence Code
Section 1152 and/or any other state or Federal provisions of similar effect.
     13. Entire Agreement: This agreement constitutes the entire agreement
between you and Releasees with respect to the subject matter hereof and
supersedes all prior negotiations and agreements, whether written or oral,
relating to such subject matter other than the confidentiality agreement
referred to in paragraph 6, above. You acknowledge that neither Releasees nor
their agents or attorneys have made any promise, representation or warranty
whatsoever, either express or implied, written or oral, which is not contained
in this agreement for the purpose of inducing you to execute the agreement, and
you acknowledge that you have executed this agreement in reliance only upon such
promises, representations and warranties as are contained herein.
     14. Severability: The provisions of this agreement are severable, and if
any part of it is found to be invalid or unenforceable, the other parts shall
remain fully valid and enforceable.
     15. Modification: It is expressly agreed that this agreement may not be
altered, amended, modified, or otherwise changed in any respect except by
another written agreement that specifically refers to this agreement, executed
by authorized representatives of each of the parties to this agreement.
     16. Review of Separation Agreement: You understand that you may take up to
twenty-one (21) days to consider this agreement and, by signing below, affirm
that you were advised to consult with an attorney prior to signing this
agreement. You also understand you may revoke this agreement within seven
(7) days of signing this document and that the separation compensation to be
provided to you pursuant to Paragraph 4 will be provided only following the
seven (7) day revocation period.
     If you agree to abide by the terms outlined in this letter, please sign
this letter below and also sign the attached copy and return it to me. I wish
you the best in your future endeavors.

 

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            Sincerely,

Cepheid
      By:   /s/ Laurie King         Laurie King        Vice President, Human
Resources     

     
READ, UNDERSTOOD AND AGREED
   
 
   
/s/ William McMillan
  Date: 6/14/06      
William A. McMillan