exv10w3



 






Exhibit 10.3




Grant No. [GrantNumber]




CEPHEID STOCK OPTION GRANT AGREEMENT

UNDER THE CEPHEID 1997 STOCK OPTION PLAN



Cepheid, a California corporation (the “Company”), hereby grants you a stock option (“Option”),
pursuant to the Company’s 1997 Stock Option Plan, as amended (the “Plan”), to purchase shares of
the Company’s Common Stock (“Common Stock”), as described below. This Option is subject to all of
the terms and conditions of the Plan, which is incorporated into this Agreement by reference. All
capitalized terms in this Agreement that are not defined in the Agreement have the meanings given
to them in the Plan.




	 	 	 	 	 
	      Name of Participant:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	     Social Security Number:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	      Address:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	     Number of Shares:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	     Type of Option:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	     Exercise Price Per Share:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	     Date of Grant:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	     First Vesting Date:

	 	January 1, 2007	 	 
	 
	 	 	 	 
	     Expiration Date:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	      Vesting Schedule:	 	So long as you are providing services to the Company, 2.0833% of the
Shares will vest and become exercisable on the First Vesting Date; then 2.0833% of the
Shares will vest and become exercisable on each monthly anniversary of the First
Vesting Date until 100% vested. If application of the vesting percentage causes a
fractional share, such share shall be rounded down to the nearest whole share for each
month except for the last month in such vesting period, at the end of which last month
the Option shall become completely vested. Options that are vested pursuant to this
Vesting Schedule are “Vested Shares.” Options that are not vested pursuant to this
Vesting Schedule are “Unvested Shares.” Optionee acknowledges that Optionee’s only
interest in the Option is for Vested Shares. Notwithstanding the foregoing, all
Unvested Shares shall become Vested Shares (“Vesting Acceleration”) upon the Board’s
determination in its discretion that the Company has achieved profitability as measured
solely by the Company’s net income, excluding equity compensation expense (the
“Performance Goal”) in each of two consecutive fiscal quarters prior to the 2006 fiscal
year end (the “Performance Period”). In the event of a Corporate Transaction, as
described in Section 16 of the Plan, which impacts the Company’s profitability during
the Performance Period, the Board shall have the sole discretion to determine whether
the Performance Goal has been achieved.
	 
	 	 	 	 
	 	 	On your Termination, the Option will cease to vest and will
not become exercisable as to any additional shares. If you
are Terminated prior to the achievement of the Performance
Goal, you will not be eligible for Vesting Acceleration.
	 
	 	 	 	 
	 	 	Upon a Change of Control, as such term is defined in the
Change of Control Retention and Severance Agreement entered
into between you
and the Company, the Option will be subject to vesting
acceleration as provided by such change of control agreement.






 









 





To exercise this Option, you must follow the exercise procedures established by the Company, as
described in Section 5.5 of the Plan. This Option may be exercised only with respect to vested
shares. Payment of the Exercise Price for the Shares may be made in cash (by check) and/or, if a
public market exists for the Company’s Common Stock, by means of a Same-Day-Sale Commitment or
Margin Commitment from you and an NASD Dealer (as described in Section 7 .1 of the Plan).
Upon exercise of this Option, you understand that the Company may be required to withhold taxes.



This Agreement (including the Plan, which is incorporated by reference) constitutes the entire
agreement between you and the Company with respect to this Option, and supersedes all prior
agreements or promises with respect to the Option. Except as provided in the Plan, this Agreement
may be amended only by a written document signed by the Company and you. Subject to the terms of
the Plan, the Company may assign any of its rights and obligations under this Agreement, and this
Agreement shall be binding on, and inure to the benefit of, the successors and assigns of the
Company. Subject to the restrictions on transfer of the Option described in Section 9 of the Plan,
this Agreement shall be binding on your permitted successors and assigns (including heirs,
executors, administrators and legal representatives). All notices required under this Agreement or
the Plan must be mailed or hand-delivered to the Company or to you at its or your respective
addresses set forth in this Agreement, or at such other address designated in writing by either of
the parties to the other.



Additional information about the Plan and this Option (including certain tax consequences of
exercising the Option and disposing of the Shares) is contained in the Prospectus for the Plan. A
copy of the Prospectus is available at the Human Resources/Benefits page of the Company’s internal
website, or upon request from the Company’s Stock Administrator at (408) 541-4191.



The Company has signed this Option Agreement effective as the Date of Grant.




CEPHEID

904 Caribbean Drive

Sunnyvale, California 94089-1189



By:                                                             




                                        , [TITLE]




PARTICIPANT’S ACCEPTANCE



I accept this Agreement and agree to the terms and conditions in this Agreement and the Plan. I
acknowledge that I have received a copy of the Company’s 1997 Stock Option Plan, and I understand
and agree that this Agreement is not meant to interpret, extend, or change the Plan in any way, or
to represent the full terms of the Plan. If there is any discrepancy, conflict or omission between
this Agreement and the provisions of the Plan as interpreted by the Company, the provisions of the
Plan shall apply.




By: