Exhibit 10.3

 

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July 15, 2013

Via Hand Delivery

Humberto Reyes

 

  Re: Terms of Separation

Dear Humberto:

This letter confirms the agreement (this “Agreement”) between you and Cepheid, a
California corporation (the “Company”), concerning the terms of your separation
from employment and offers you certain benefits in exchange for a general
release of claims and covenant not to sue, as provided in further detail below.
If you agree to abide by the terms outlined in this Agreement, please sign and
return this Agreement to me in the timeframe provided below but, in all events,
no earlier than July 16, 2013.

1. Separation: Officer Resignation: As we have discussed, your employment will
conclude on July 16, 2013 (the “Separation Date”). By your signature below, you
confirm and acknowledge that you are resigning as the Company’s Executive Vice
President, Chief Operating Officer and from any other officer positions that you
held with the Company or any of its subsidiaries as of the Separation Date.

2. Acknowledgement of Payment of Final Wages: By your signature below, you
confirm and acknowledge that, on the Separation Date, the Company has paid you
for all wages, salary, bonuses, commissions, 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. Separation Benefits: In exchange for your agreement to the general release
and waiver of claims and covenant not to sue set forth in Sections 9 and 10
hereof and your other promises herein, the Company agrees to provide you the
following benefits following the Effective Date (as defined below) of this
Agreement:

(a) Severance: The Company agrees to provide you with a lump sum severance
payment in the amount of $400,000, less applicable federal and state payroll
deductions, which equals one year of your annual base salary. This payment shall
be paid within sixty (60) days following the Separation Date, provided this
Agreement is effective as of that time.

(b) COBRA Payment: Subject to your timely election to continue your existing
health benefits under COBRA, and consistent with the terms of COBRA and the
Company’s health insurance plan, the Company will provide you a taxable lump sum
payment in an amount equal to pay the employer portion of the insurance premiums
to continue your existing health benefits under COBRA for twelve (12) months
following the Separation Date, as such premiums would be measured on the

 

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Separation Date, less applicable federal and state payroll deductions (the
“COBRA Payment”). The COBRA Payment shall be made within sixty (60) days
following the Separation Date, provided this Agreement is effective as of that
date. You will remain responsible for, and must continue to pay, the portion of
premiums, co-payments, etc. that you would have paid had your employment
continued.

(c) Acceleration of Certain Equity Awards: Effective on the Separation Date, the
Company agrees to accelerate the vesting of the 2010 and 2011 Unvested Options
and the 2010 and 2011 Unvested RSUs (each as defined below), such that the 2010
and 2011 Unvested Options and the 2010 and 2011 Unvested RSUs shall be deemed
vested pursuant to the terms set forth in Sections 6(a) and 6(b) hereof.

(d) Extension of Exercise Period: The Company agrees to extend the
post-termination period for you to exercise the Option Vested Shares (as defined
below), pursuant to the terms set forth in Section 6(a) hereof.

(e) Mutual Non-Disparagement: The Company agrees to enter into a mutual
non-disparagement provision with you as provided in Section 11 hereof

For the avoidance of doubt, under all circumstances, all payments under Sections
3(a) and 3(b) hereof will be made before March 15, 2014.

By signing below, you acknowledge that (i) this offer of benefits supersedes and
replaces any prior commitments to or agreements with you regarding compensation
or benefits to be offered or paid to you in connection with your separation,
including pursuant to Section 2 of that certain Amended and Restated Change of
Control Retention and Severance Agreement, dated as of December 15, 2008,
between you and the Company, as amended on April 29, 2010 (together, the “Change
of Control Agreement”), and (ii) you will be receiving the benefits outlined in
this Section 3 in consideration for (and expressly conditioned upon you) waiving
your rights to claims referred to in this Agreement and would not otherwise be
entitled to such benefits.

4. Return of Company Property: As a condition precedent of the provision of
separation benefits described in Section 3 above, 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, custody or
control.

5. Proprietary Information: You hereby acknowledge that you are bound by the
Employee Invention Assignment and Confidentiality Agreement attached hereto as
Exhibit A (the “IAACA”) and that as a result of your employment with the Company
you have had access to the Company’s Proprietary Information (as defined in the
IAACA), that you will hold all Proprietary Information in strictest confidence
and that you will not make use of such Proprietary Information on behalf of
anyone. You further confirm that you will deliver to the Company on or before
the Separation Date all documents and data of any nature containing or
pertaining to such Proprietary Information and that you will not take with you
any such documents or data or any reproduction thereof.

6. Equity Awards:

(a) Stock Options: Pursuant to your stock option grant agreements with the
Company dated November 30, 2004, April 27, 2005, April 26, 2006, October 31,
2006, April 25, 2007, April 24, 2008, April 28, 2009, April 29, 2010, April 25,
2011 and April 24, 2012 (collectively, the

 

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“Option Grant Agreements”) and the Company’s 1997 Stock Option Plan and 2006
Equity Incentive Plan, each as amended and restated from time to time (together,
the “Plans,” and collectively with the Option Grant Agreements, the “Stock
Option Agreements”), you have been granted options to purchase an aggregate of
632,500 shares of the Company’s common stock (the “Options”). As of the
Separation Date, the Options will have vested and remain unexercised as to
83,229 shares (the “Vested Options”) and will remain unvested as to 65,314
shares (the “Unvested Options”). Because your employment is ending on the
Separation Date, none of the Unvested Options would vest in the usual course.
The Stock Option Agreements generally provide that you will have ninety
(90) days following the Separation Date to exercise any Vested Options. After
such date, you will no longer have a right to exercise the Options as to any
shares. However, if you execute this Agreement and it becomes effective on its
terms, (i) the Company will accelerate the vesting of the Unvested Options that
are subject to the Stock Option Agreement dated April 29, 2010 and the Stock
Option Agreement dated April 25, 2011 (the “2010 and 2011 Unvested Options”)
such that the 2010 and 2011 Unvested Options (a total of 30,782 shares) will
become vested and will become exercisable by you (the “Accelerated Options”) and
(ii) the post-termination period to exercise the Vested Options and Accelerated
Options shall be extended to the one-year anniversary of the Separation Date,
but no in event will you be entitled to exercise any of the Options following
their original expiration date as set forth in their respective Option Grant
Agreements (and your options granted on November 30, 2004 and April 25, 2007
will expire during 2014). Your rights concerning the Options will continue to be
governed by the Stock Option Agreements, as amended consistent with the terms
herein.

(b) Restricted Stock Units: Pursuant to your restricted stock unit agreements
with the Company dated April 29, 2010, April 25, 2011, April 24, 2012 and
April 29, 2013 and the Plans (collectively, the “RSU Agreements”), you have been
granted restricted stock units settleable for 20,834 shares of the Company’s
Common Stock (“RSUs”). As of the Separation Date (provided you remained
continuously employed through that date), you will remain unvested as to 12,916
shares (the “Unvested RSUs”). Because your employment is ending on the
Separation Date, none of the Unvested RSUs would vest in the usual course.
However, if you execute this Agreement and it becomes effective on its terms,
the Company will accelerate the vesting of the Unvested RSUs that are subject to
the RSU Agreement dated April 29, 2010 and the RSU Agreement dated April 25,
2011 (the “2010 and 2011 Unvested RSUs”) such that the 2010 and 2011 Unvested
RSUs (a total of 3,854 RSUs) will become vested and will be settled by the
Company for shares of the Company’s common stock pursuant to the terms of the
RSU Agreements. Your rights concerning the RSUs will continue to be governed by
the RSU Agreements, as amended consistent with the terms herein.

(c) Other Equity Awards: You acknowledge and agree that you have no rights in or
to the Company’s capital stock, equity grants to acquire shares of the Company’s
capital stock or other ownership interest in the Company except as set forth
herein.

7. Code Section 280G: In the event that the benefits provided for in this
Agreement or otherwise payable to you (a) constitute “parachute payments” within
the meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the “Code”) and (b) but for this Section 7, would be subject to the excise tax
imposed by Section 4999 of the Code, then, at your discretion, your benefits
under this Agreement shall be payable either (i) in full, or (ii) as to such
lesser amount which would result in no portion of such benefits being subject to
the excise tax under Section 4999 of the Code, whichever of the foregoing
amounts, taking into account the applicable federal, state and local income
taxes and the excise tax imposed by Section 4999, results in the receipt by you
on an after-tax basis, of the greatest amount of benefits under this Agreement,
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under Section 4999 of the Code. Any reduction shall be made in the following
manner: (A) first a pro- rata reduction of (1) cash payments subject to
Section 409A of the Code as deferred compensation and (2) cash payments not
subject to Section 409A of the Code, and (B) second a pro rata cancellation of
(1) equity-based compensation subject to Section 409A of the Code as deferred
compensation and (2) equity- based compensation not subject to Section 409A of
the Code. Reduction in either cash payments or equity compensation benefits
shall be made pro-rata between and among benefits which are subject to
Section 409A of the Code and benefits which are exempt from Section 409A of the
Code. Unless the Company and you otherwise agree in writing, any determination
required under this Section 7 shall be made in writing by the Company’s
independent public accountants (the “Accountants”), whose determination shall be
conclusive and binding upon you and the Company for all purposes. For purposes
of making the calculations required by this Section 7, the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code. The Company and you shall furnish to the
Accountants with such information and documents as the Accountants may
reasonably request in order to make a determination under this Section 7. The
Company shall bear all costs the Accountants may reasonably incur in connection
with any calculations contemplated by this Section 7.

8. Code Section 409A: To the extent (a) any payments or benefits to which you
become entitled under this Agreement, or under any other agreement or Company
plan, in connection with your termination of employment with the Company
constitute deferred compensation subject to Section 409A of the Code and (b) you
are deemed at the time of such retirement or termination of employment to be a
“specified employee” under Section 409A of the Code, then such payments shall
not be made or commence until the earliest of (i) the expiration of the six
(6)-month period measured from the date of your “separation from service” (as
such term is at the time defined in Treasury Regulations under Section 409A of
the Code) from the Company; or (ii) the date of your death following such
separation from service; provided, however, that such deferral shall only be
effected to the extent required to avoid adverse tax treatment to you, including
(without limitation) the additional twenty percent (20%) tax for which you would
otherwise be liable under Section 409A(a)(1)(B) of the Code in the absence of
such deferral. Upon the expiration of the applicable deferral period, any
payments which would have otherwise been made during that period (whether in a
single sum or in installments) in the absence of this Section 8 shall be paid to
you or your beneficiary in one lump sum (without interest). Any retirement or
termination of your employment is intended to constitute a “separation from
service” and will be determined consistent with the rules relating to a
“separation from service” as such term is defined in Treasury Regulation
Section 1.409A-1. This Agreement shall be interpreted and administered in a
manner so that any amount or benefit payable hereunder shall be paid or provided
in a manner that is either exempt from or compliant with the requirements of
Section 409A of the Code and applicable regulations thereunder. It is intended
that each installment of the payments provided hereunder constitute separate
“payments” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i). It is
further intended that payments hereunder satisfy, to the greatest extent
possible, the exemptions from the application of Section 409A of the Code (and
any state law of similar effect) provided under Treasury Regulations
Section 1.409A-1(b)(4) (as a “short-term deferral”) and Section 1.409A-1 (b)(9)
(as a “separation pay due to involuntary separation”). To the extent any payment
hereunder may be classified as a “short-term deferral” within the meaning of
Section 409A, such payment shall be deemed a short- term deferral, even if it
may also qualify for an exemption from Section 409A of the Code under another
provision of Section 409A of the Code. To the extent that any payment under this
Agreement is subject to Section 409A of the Code and ambiguous as to its
compliance with Section 409A of the Code, the provision will be read in such a
manner so that all payments hereunder comply with Section 409A of the Code.
Except as otherwise expressly provided herein, to the extent any expense
reimbursement or the

 

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provision of any in-kind benefit under this Agreement is determined to be
subject to Section 409A of the Code, the amount of any such expenses eligible
for reimbursement, or the provision of any in-kind benefit, in one calendar year
shall not affect the expenses eligible for reimbursement in any other taxable
year (except for any lifetime or other aggregate limitation applicable to
medical expenses), in no event shall any expenses be reimbursed after the last
day of the calendar year following the calendar year in which you incurred such
expenses, and in no event shall any right to reimbursement or the provision of
any in-kind benefit be subject to liquidation or exchange for another benefit.

9. General Release and Waiver of Claims:

(a) The payments and promises set forth in this Agreement are in full
satisfaction of all accrued salary, vacation pay, bonus and commission pay,
profit-sharing, stock, stock options, RSUs or other ownership interest in the
Company, 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, including the Change of Control Agreement. To the fullest extent
permitted by law, you hereby release and waive any other 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 his 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, and/or claims based on disability or under the Americans
with Disabilities Act.

(b) 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 OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

(c) You and the Company do not intend to release claims that you may not release
as a matter of law, including but not limited to claims for indemnity under
California Labor Code Section 2802, or any claims for enforcement of this
Agreement. To the fullest extent permitted by law, any dispute regarding the
scope of this general release shall be determined by an arbitrator under the
procedures set forth in Section 12 hereof.

10. Covenant Not to Sue:

(a) To the fullest extent permitted by law, at no time subsequent to the
execution of this Agreement will you pursue, or cause or knowingly permit the
prosecution, in any state, federal or foreign court, or before any local, state,
federal or foreign administrative agency, or any other tribunal, of any charge,
claim or action of any kind, nature and character whatsoever, known or unknown,
which you may now have, have ever had, or may in the future have against
Releasees, which is based in whole or in part on any matter released by this
Agreement.

 

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(b) Nothing in this Section 10 shall prohibit you from filing a charge or
complaint with a government agency where, as a matter of law, the parties may
not restrict his ability to file such administrative complaints. However, you
understand and agree that, by entering into this Agreement, you are releasing
any and all individual claims for relief, and that any and all subsequent
disputes between you and the Company shall be resolved through arbitration as
provided in Section 12 hereof.

(c) Nothing in this Section 10 shall prohibit or impair you or the Company from
complying with all applicable laws, nor shall this Agreement be construed to
obligate either party to commit (or aid or abet in the commission of) any
unlawful act.

11. 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 current officers and directors will
not disparage you with any written or oral statement. Nothing in this Section 11
shall prohibit you or the Company from providing truthful information in
response to a subpoena or other legal process or the Company from making public
disclosures consistent with applicable law, rules and regulations, including,
without limitation, the Securities Exchange Act of 1934, as amended.

12. Arbitration: Except for any claim for injunctive relief arising out of a
breach of a party’s obligations to protect the other’s proprietary information,
the parties agree to arbitrate, in Santa Clara County, California through JAMS,
pursuant to JAMS rules for arbitration of employment disputes, any and all
disputes or claims arising out of or related to the validity, enforceability,
interpretation, performance or breach of this Agreement, whether sounding in
tort, contract, statutory violation or otherwise, or involving the construction
or application or any of the terms, provisions, or conditions of this Agreement.
Any arbitration may be initiated by a written demand to the other party. The
arbitrator’s decision shall be final, binding, and conclusive. The parties
further agree that this Agreement is intended to be strictly construed to
provide for arbitration as the sole and exclusive means for resolution of all
disputes hereunder to the fullest extent permitted by law. The parties expressly
waive any entitlement to have such controversies decided by a court or a jury.

13. 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.

14. 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.

15. Complete and Voluntary Agreement: This Agreement, together with Exhibit A
hereto, the Stock Option Agreements and the RSU Agreements, constitute the
entire agreement between you and Releasees with respect to the subject matter
hereof and supersede all prior negotiations and agreements, whether written or
oral, relating to such subject matter, including the Change of Control
Agreement.

 

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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, and that you are executing this Agreement
voluntarily, free of any duress or coercion.

16. 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. Specifically, should a court, arbitrator, or
government agency conclude that a particular claim may not be released as a
matter of law, it is the intention of the parties that the general release, the
waiver of unknown claims and the covenant not to sue above shall otherwise
remain effective to release any and all other claims.

17. Modification: Counterparts: Facsimile/PDF Signatures: 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. This Agreement may be executed in any number of counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same instrument. Execution of a facsimile or PDF copy
shall have the same force and effect as execution of an original, and a copy of
a signature will be equally admissible in any legal proceeding as if an
original.

18. Review of this 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 that you may revoke this Agreement within seven (7) days of signing
this document and that the benefits to be provided to you pursuant to Section 3
hereof will be provided only at the end of that seven (7) day revocation period.

19. Effective Date: This Agreement is effective on the eighth (8th) day after it
is signed by you and the Company, without revocation by you.

20. Governing Law: This Agreement shall be governed by and construed in
accordance with the laws of the State of California.

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We appreciate your contributions to the Company and wish you the best in any
future endeavors.

 

    Sincerely,     Cepheid     By:  

/s/ John L. Bishop

 

    Name:  

John L. Bishop

    Title:  

Chairman and Chief Executive Officer

READ, UNDERSTOOD AND AGREED      

/s/ Humberto Reyes

    Date:  

7/12/13

Humberto Reyes       7/16/13      

 

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EXHIBIT A

EMPLOYEE INVENTION ASSIGNMENT AND CONFIDENTIALITY AGREEMENT

 

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CEPHEID MULTISTATE EMPLOYEE INVENTION ASSIGNMENT AND

CONFIDENTIALITY AGREEMENT

In consideration of, and as a condition of my employment with Cepheid, a
California corporation (the “Company”), I hereby represent to, and agree with
the Company as follows:

1. Purpose of Agreement. I understand that the Company is engaged in a
continuous program of research, development, production and marketing in
connection with its business and that it is critical for the Company to preserve
and protect its “Proprietary Information” (as defined in Section 7 below), its
rights in “Inventions” (as defined in Section 2 below) and in all related
intellectual property rights. Accordingly, I am entering into this Employee
Invention Assignment and Confidentiality Agreement (this “Agreement”) as a
condition of my employment with the Company, whether or not I am expected to
create inventions of value for the Company.

2. Disclosure of Inventions. I will promptly disclose in confidence to the
Company all inventions, improvements, designs, original works of authorship,
formulas, processes, compositions of matter, computer software programs,
databases, mask works, chemical formulations, nucleic acid sequences, assay
methods and protocols, manufacturing methods and protocols, and trade secrets
that I make or conceive or first reduce to practice or create, either alone or
jointly with others, during the period of my employment, whether or not in the
course of my employment, and whether or not patentable, copyrightable or
protectable as trade secrets (the “Inventions”).

3. Work for Hire; Assignment of Inventions. I acknowledge and agree that any
copyrightable works prepared by me within the scope of my employment are “works
for hire” under the Copyright Act and that the Company will be considered the
author and owner of such copyrightable works. I agree that all Inventions that
(i) are developed using equipment, supplies, facilities or trade secrets of the
Company, (ii) result from work performed by me for the Company, or (iii) relate
to the Company’s business or current or anticipated research and development
(the “Assigned Inventions”), will be the sole and exclusive property of the
Company and are hereby irrevocably assigned by me to the Company. Attached
hereto as Exhibit A is a list describing all inventions, original works of
authorship, developments and trade secrets which were made by me prior to the
date of this Agreement, which belong to me and which are not assigned to the
Company (“Prior Inventions”). I acknowledge and agree that if I use any of my
Prior Inventions in the scope of my employment, or include them in any product
or service of the Company, I hereby grant to the Company a perpetual,
irrevocable, nonexclusive, world-wide, royalty-free license to use, disclose,
make, sell, copy, distribute, modify and create works based on, perform or
display such Prior Inventions and to sublicense third parties with the same
rights.]

 

Revised 5/1/08

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CEPHEID Employee Invention Assignment

and Confidentiality Agreement

Page 2 of 6

 

4. Employee’s Rights to Inventions.

(a) California Employees: I have been notified and understand that the
provisions of Sections 3 and 5 of this Agreement do not apply to any Assigned
Invention that qualifies fully under the provisions of Section 2870 of the
California Labor Code, which states as follows:

ANY PROVISION IN AN EMPLOYMENT AGREEMENT WHICH PROVIDES THAT AN EMPLOYEE SHALL
ASSIGN, OR OFFER TO ASSIGN, ANY OF HIS OR HER RIGHTS IN AN INVENTION TO HIS OR
HER EMPLOYER SHALL NOT APPLY TO AN INVENTION THAT THE EMPLOYEE DEVELOPED
ENTIRELY ON HIS OR HER OWN TIME WITHOUT USING THE EMPLOYER’S EQUIPMENT,
SUPPLIES, FACILITIES, OR TRADE SECRET INFORMATION EXCEPT FOR THOSE INVENTIONS
THAT EITHER: (1) RELATE AT THE TIME OF CONCEPTION OR REDUCTION TO PRACTICE OF
THE INVENTION TO THE EMPLOYER’S BUSINESS, OR ACTUAL OR DEMONSTRABLY ANTICIPATED
RESEARCH OR DEVELOPMENT OF THE EMPLOYER; OR (2) RESULT FROM ANY WORK PERFORMED
BY THE EMPLOYEE FOR THE EMPLOYER. TO THE EXTENT A PROVISION IN AN EMPLOYMENT
AGREEMENT PURPORTS TO REQUIRE AN EMPLOYEE TO ASSIGN AN INVENTION OTHERWISE
EXCLUDED FROM BEING REQUIRED TO BE ASSIGNED UNDER CALIFORNIA LABOR CODE
SECTION 2870(a), THE PROVISION IS AGAINST THE PUBLIC POLICY OF THIS STATE AND IS
UNENFORCEABLE.

(b) Certain Employees Outside California:1 I have been notified and understand
that the provisions of Sections 3 and 5 of this Agreement do not apply to any
Assigned Invention that qualifies fully under the provisions of the following:
19 Delaware Code §8; Kansas Statute Annotated §44-130; §765 of the Illinois
Compiled Statute 1060/2; Minnesota Statute §181.78; North Carolina General
Statute §66-57.1; Revised Code of Washington §49.44.140; and Utah Code Annotated
§34-39-3; which provide that any provision in an employment agreement requiring
the employee to assign any of the employee’s rights in any invention to the
employer does not apply to an invention for which no equipment, supplies,
facility, or trade secret information of the employer was used and which was
developed entirely on the employee’s own time, unless the invention relates to
the business of the employer or actual or demonstrably anticipated research or
development, or the invention results from any work performed by the employee
for the employer.

 

 

1 

This section is applicable to employees in Delaware, Kansas, Illinois,
Minnesota, North Carolina, Washington, and Utah.

Revised 5/1/08

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CEPHEID Employee Invention Assignment

and Confidentiality Agreement

Page 3 of 6

 

5. Assignment of Other Rights. In addition to the foregoing assignment of
Assigned Inventions to the Company, I hereby irrevocably transfer and assign to
the Company: (i) all worldwide patents, patent applications, copyrights, mask
works, trade secrets and other intellectual property rights, including but not
limited to rights in databases, in any Assigned Inventions, along with any
registrations of or applications to register such rights; and (ii) any and all
“Moral Rights” (as defined below) that I may have in or with respect to any
Assigned Inventions. I also hereby forever waive and agree never to assert any
and all Moral Rights I may have in or with respect to any Assigned Inventions,
even after termination of my work on behalf of the Company. “Moral Rights” mean
any rights to claim authorship of or credit on an Assigned Inventions, to object
to or prevent the modification or destruction of any Assigned Inventions [or
Prior Inventions licensed to Company under Section 3], or to withdraw from
circulation or control the publication or distribution of any Assigned
Inventions [or Prior Inventions licensed to Company under Section 3], and any
similar right, existing under judicial or statutory law of any country or
subdivision thereof in the world, or under any treaty, regardless of whether or
not such right is denominated or generally referred to as a “moral right.”
Notwithstanding the foregoing, I will have the right to claim participation in
the development, creation, or modification of the Assigned Inventions on my
resume or in my curriculum vita; provided that I obtain Company’s approval for
such disclosures before providing the disclosure to any third-party.

6. Assistance. I agree to assist the Company in every proper way to obtain for
the Company and enforce patents, copyrights, mask work rights, trade secret
rights and other legal protections for the Company’s Assigned Inventions in any
and all countries. I will execute any documents that the Company may reasonably
request for use in obtaining or enforcing such patents, copyrights, mask work
rights, trade secrets and other legal protections. My obligations under this
paragraph will continue beyond the termination of my employment with the
Company, provided that the Company will compensate me at a reasonable rate after
such termination for time or expenses actually spent by me at the Company’s
request on such assistance. I appoint the Secretary of the Company as my
attorney-in-fact to execute documents on my behalf for this purpose.

7. Proprietary Information. I understand that my employment by the Company
creates a relationship of confidence and trust with respect to any information
of a confidential or secret nature that may be disclosed to me by the Company or
a third party that relates to the business of the Company or to the business of
any parent, subsidiary, affiliate, customer or supplier of the Company or any
other party with whom the Company agrees to hold information of such party in
confidence (the “Proprietary Information”). Such Proprietary Information
includes, but is not limited to, Assigned Inventions, marketing plans, product
plans, business strategies, financial information, forecasts, personnel
information, customer lists and data, and domain names.

 

Revised 5/1/08

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CEPHEID Employee Invention Assignment

and Confidentiality Agreement

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8. Confidentiality. At all times, both during my employment and after its
termination, I will keep and hold all such Proprietary Information in strict
confidence and trust. I will not use or disclose any Proprietary Information
without the prior written consent of the Company, except as may be necessary to
perform my duties as an employee of the Company for the benefit of the Company.
Upon termination of my employment with the Company, I will promptly deliver to
the Company all documents and materials of any nature pertaining to my work with
the Company and, upon Company request, will execute a document confirming my
agreement to honor my responsibilities contained in this Agreement. I will not
take with me or retain any documents or materials or copies thereof containing
any Proprietary Information.

9. No Breach of Prior Agreement. I represent that my performance of all the
terms of this Agreement and my duties as an employee of the Company will not
breach any invention assignment, proprietary information, confidentiality or
similar agreement with any former employer or other party. I represent that I
will not bring with me to the Company or use in the performance of my duties for
the Company any documents or materials or intangibles of a former employer or
third party that are not generally available to the public or have not been
legally transferred to the Company.

10. Efforts; Duty Not to Compete. I understand that my employment with the
Company requires my undivided attention and effort during normal business hours.
While I am employed by the Company, I will not, without the Company’s express
prior written consent, provide services to, or assist in any manner, any
business or third party if such services or assistance would be in direct
conflict with the Company’s business interests.

11. Notification. I hereby authorize the Company to notify third parties,
including, without limitation, customers and actual or potential employers, of
the terms of this Agreement and my responsibilities hereunder.

12. Non-Solicitation of Employees/Consultants. During my employment with the
Company and for a period of one (1) year thereafter, I will not directly or
indirectly solicit away employees or consultants of the Company for my own
benefit or for the benefit of any other person or entity.

13. Non-Solicitation of Suppliers/Customers. During my employment with the
Company and after termination of my employment, I will not directly or
indirectly solicit or take away suppliers or customers of the Company if, in so
doing, I use or disclose any trade secrets or proprietary or confidential
information of the Company. I agree that the non-public names and addresses of
the Company’s customers, and all other confidential information related to them,
including their buying and selling habits, special needs and satisfaction,
created or obtained by me during my employment, constitute trade secrets or
proprietary or confidential information of the Company.

 

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CEPHEID Employee Invention Assignment

and Confidentiality Agreement

Page 5 of 6

 

14. Injunctive Relief. I understand that in the event of a breach or threatened
breach of this Agreement by me the Company may suffer irreparable harm and will
therefore be entitled to injunctive relief to enforce this Agreement.

15. Severability. Except as specifically provided herein, this Agreement will be
governed by and construed in accordance with the laws of the State of
California, without giving effect to its laws pertaining to conflict of laws. If
any provision of this Agreement is determined by any court or arbitrator of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
such provision will be enforced to the maximum extent possible given the intent
of the parties hereto. If such clause or provision cannot be so enforced, such
provision shall be stricken from this Agreement and the remainder of this
Agreement shall be enforced as if such invalid, illegal or unenforceable clause
or provision had (to the extent not enforceable) never been contained in this
Agreement.

16. Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered will be deemed an original, and all
of which together shall constitute one and the same agreement.

17. Entire Agreement. This Agreement and the documents referred to herein
constitute the entire agreement and understanding of the parties with respect to
the subject matter of this Agreement, and supersede all prior understandings and
agreements, whether oral or written, between or among the parties hereto with
respect to the specific subject matter hereof.

18. Amendment and Waivers. This Agreement may be amended only by a written
agreement executed by each of the parties hereto. No amendment of or waiver of,
or modification of any obligation under this Agreement will be enforceable
unless set forth in a writing signed by the party against which enforcement is
sought. Any amendment effected in accordance with this section will be binding
upon all parties hereto and each of their respective successors and assigns. No
delay or failure to require performance of any provision of this Agreement shall
constitute a waiver of that provision as to that or any other instance. No
waiver granted under this Agreement as to any one provision herein shall
constitute a subsequent waiver of such provision or of any other provision
herein, nor shall it constitute the waiver of any performance other than the
actual performance specifically waived.

19. Successors and Assigns; Assignment. Except as otherwise provided in this
Agreement, this Agreement, and the rights and obligations of the parties
hereunder, will be binding upon and inure to the benefit of their respective
successors, assigns, heirs, executors, administrators and legal representatives.
The Company may assign any of its rights and obligations under this Agreement.
No other party to this Agreement may assign, whether voluntarily or by operation
of law, any of its rights and obligations under this Agreement, except with the
prior written consent of the Company.

 

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CEPHEID Employee Invention Assignment

and Confidentiality Agreement

Page 6 of 6

 

20. Further Assurances. The parties agree to execute such further documents and
instruments and to take such further actions as may be reasonably necessary to
carry out the purposes and intent of this Agreement.

21. “At Will” Employment. I understand that this Agreement does not constitute a
contract of employment or obligate the Company to employ me for any stated
period of time. I understand that I am an “at will” employee of the Company and
that my employment can be terminated at any time, with or without notice and
with or without cause, for any reason or for no reason, by either the Company or
myself. I acknowledge that any statements or representations to the contrary are
ineffective, unless put into a writing signed by the Company. I further
acknowledge that my participation in any stock option or benefit program is not
to be construed as any assurance of continuing employment for any particular
period of time. This Agreement shall be effective as of the first day of my
employment by the Company, which is November 30, 04.

 

CEPHEID:       Employee:

By:

  

/s/ Kari Vaatveit

     

/s/ Humberto V. Reyes

         Signature

Name:

   Kari Vaatveit      

Humberto V. Reyes

         Name (Please Print)

Title:

   Dir, HR      

 

Revised 5/1/08