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EXHIBIT 99.2
CEPHEID
2000 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. This Plan is intended to provide Employees of the Company
and its Designated Subsidiaries an opportunity to purchase Common Stock through
accumulated payroll deductions.
2. Definitions.
(a) "Administrator" means the Board or the persons appointed by
the Board to administer this Plan pursuant to Section 13.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Common Stock" means the Common Stock of the Company.
(e) "Company" means Cepheid, a California corporation.
(f) "Compensation" means all regular, straight-time gross
earnings of a Participant, including commissions but exclusive of payments for
overtime, shift premium, incentive compensation, incentive payments, bonuses and
other compensation.
(g) "Continuous Employment" means the absence of any interruption
or termination of service as an Employee. Continuous Employment shall not be
considered interrupted in the case of a leave of absence agreed to in writing by
the Company, provided that either (i) the leave does not exceed 90 days or (ii)
re-employment upon expiration of the leave is guaranteed by contract or statute.
(h) "Designated Subsidiaries" means the Subsidiaries that have
been designated by the Board from time to time in its sole discretion to
participate in this Plan.
(i) "Employee" means any person, including an officer, who is
employed for at least 20 hours per week by the Company or one of its Designated
Subsidiaries during at least 22 weeks in any calendar year. Whether an
individual qualifies as an Employee shall be determined by the Administrator, in
its sole discretion, by reference to Section 3401(c) of the Code and the
regulations promulgated thereunder; unless the Administrator makes a contrary
determination, the Employees of the Company shall, for all purposes of this
Plan, be those individuals who satisfy the customary employment criteria set
forth above and are carried as employees by the Company or a Designated
Subsidiary for regular payroll purposes.
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(j) "Purchase Date" means such business days during each Offering
Period of this Plan as may be identified by the Administrator pursuant to
Section 8.
(k) "Interim Offering Date" means the first business day
following a Purchase Date other than the last Purchase Date of an Offering
Period.
(l) "Offering Date" means the first business day of an Offering
Period.
(m) "Offering Period" means a period established by the
Administrator pursuant to Section 4 during which payroll deductions are
accumulated from one or more Participants and applied to the purchase of Common
Stock.
(n) "Participant" means an Employee who has elected to
participate in this Plan pursuant to Section 5.
(o) "Plan" means this Cepheid 2000 Employee Stock Purchase Plan.
(p) "Purchase Right" means a right to purchase Common Stock
granted pursuant to Section 7.
(q) "Subsidiary" means, from time to time, any corporation,
domestic or foreign, of which not less than 50% of the voting shares are held by
the Company or another Subsidiary of the Company.
3. Eligibility.
(a) Regular Participation. Any person who is, or will be, an
Employee on an Offering Date shall be eligible to participate in this Plan
during the corresponding Offering Period, subject to the requirements of Section
5(a).
(b) Interim Participation. Any person who becomes an Employee
after an Offering Date shall be eligible to participate in this Plan during the
corresponding Offering Period, but only on and beginning with the first Interim
Offering Date.
(c) No Participation by Five-Percent Shareholders.
Notwithstanding paragraphs (a) and (b) of this Section 3, an Employee shall not
participate in this Plan during an Offering Period if immediately after the
grant of a Purchase Right on the Offering Date or Interim Offering Date, the
Employee (or any other person whose stock would be attributed to the Employee
under Section 424(d) of the Code) would own stock possessing five percent or
more of the total combined voting power or value of all classes of stock of the
Company or of any Subsidiary. For this purpose, an Employee is treated as owning
stock that he or she could purchase by exercise of Purchase Rights or other
options.
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4. Offering Periods.
Unless otherwise determined by the Administrator:
(a) the first Offering Period under this Plan shall begin on the
first business day before the effective date of a firmly underwritten initial
public offering of Common Stock and shall end on the last business day of June
2002;
(b) the duration of each Offering Period (other than the first
Offering Period) shall be 24 months (measured from the first business day of the
first month to the last business day of the 12th month);
(c) a new Offering Period shall begin on the first business day
after the last Purchase Date of an Offering Period; and
(d) an Offering Period shall terminate on the first date that no
Participants are enrolled in it.
5. Participation.
(a) An Employee may become a Participant in this Plan by
completing a subscription agreement, in such form or forms as the Administrator
may approve from time to time, and delivering it to the Administrator within 15
days before the applicable Offering Date or Interim Offering Date, unless
another time for filing the subscription agreement is set by the Administrator
for all Employees with respect to a given Offering Period. The subscription
agreement shall authorize payroll deductions pursuant to this Plan and shall
have such other terms as the Administrator may specify from time to time.
(b) At the end of an Offering Period, each Participant in the
Offering Period who remains an Employee shall be automatically enrolled in the
next succeeding Offering Period (a "Re-enrollment") unless, in a manner and at a
time specified by the Administrator, but in no event later than the day before
the Offering Date of such succeeding Offering Period, the Participant notifies
the Administrator in writing that the Participant does not wish to be
re-enrolled. Re-enrollment shall be at the withholding percentage specified in
the Participant's most recent subscription agreement unless the Participant
changes that percentage by timely written notice. No Participant shall be
automatically re-enrolled whose participation has terminated by operation of
Section 10.
6. Payroll Deductions.
(a) Each Participant shall have withheld a percentage of his or
her Compensation received during an Offering Period. Withholding shall be in
whole percentages of such Compensation, up to a maximum (not to exceed 15%)
established by the Administrator from time to time, as specified by the
Participant in his or her subscription agreement. Payroll deductions for a
Participant during an Offering Period shall begin with the first payroll
following
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the Offering Date or Interim Offering Date and shall end on the last Purchase
Date of the Offering Period, unless sooner terminated by the Participant as
provided in Section 10.
(b) All payroll deductions made by a Participant shall be
credited to the Participant's account under this Plan. A Participant may not
make any additional payments into such account.
(c) A Participant may reduce the rate of his or her payroll
deductions to 0% at any time during an Offering Period, effective 15 days after
the Participant files with the Administrator a new subscription agreement
authorizing the change. A Participant may make other changes to the rate of his
or her payroll deductions during an Offering Period effective the day after the
first Purchase Date that is at least 15 days after the Administrator's receipt
of a new subscription agreement authorizing the change.
7. Purchase Rights.
(a) Grant of Purchase Rights. On the Offering Date, or (if
applicable) Interim Offering Date of each Offering Period, the Participant shall
be granted a Purchase Right to purchase during the Offering Period the number of
shares of Common Stock determined by dividing (i) $25,000 multiplied by the
number of (whole or part) calendar years in the Offering Period by (ii) the fair
market value of a share of Common Stock on the Offering Date or Interim Offering
Date.
(b) Terms of Purchase Rights. Except as otherwise determined by
the Administrator, each Purchase Right shall have the following terms:
(i) The per-share price of the shares subject to a Purchase
Right shall be 85% of the lower of the fair market
values of a share of Common Stock on (a) the Offering
Date, or Interim Offering Date, on which the Purchase
Right was granted and (b) the Purchase Date. The fair
market value of the Common Stock on a given date shall
be the closing price as reported in the Wall Street
Journal; provided, however, that if there is no public
trading of the Common Stock on that date, then fair
market value shall be determined by the Administrator in
its discretion.
(ii) Payment for shares purchased by exercise of Purchase
Rights shall be made only through payroll deductions
under Section 6.
(iii) Upon purchase or disposition of shares acquired by
exercise of a Purchase Right, the Participant shall pay,
or make provision adequate to the Administrator for
payment of, all tax (and similar) withholdings that the
Administrator determines, in its discretion, are
required due to the acquisition or disposition,
including without limitation any such withholding that
the Administrator determines
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in its discretion is necessary to allow the Company and
its Subsidiaries to claim tax deductions or other
benefits in connection with the acquisition or
disposition.
(iv) During his or her lifetime, a Participant's Purchase
Right is exercisable only by the Participant.
(v) The Purchase Rights will in all respects be subject to
the terms and conditions of this Plan, as interpreted by
the Administrator from time to time.
8. Purchase Dates; Purchase of Shares; Refund of Excess Cash.
(a) The Administrator shall establish one or more Purchase Dates
for each Offering Period. Unless otherwise determined by the Administrator,
(i) the last business days of December 2000, June 2001,
December 2001 and June 2002 shall be the Purchase Dates
of the initial Offering Period under this Plan, and
(ii) the last trading day of each December and June during a
subsequent Offering Period shall be a Purchase Date.
(b) Each Participant's Purchase Right shall be exercised
automatically on each Purchase Date during the Offering Period, to purchase the
maximum number of full shares at the applicable price using the Participant's
accumulated payroll deductions.
(c) The shares purchased upon exercise of a Purchase Right shall
be deemed to be transferred to the Participant on the Purchase Date.
(d) Any cash remaining in a Participant's payroll deduction
account after the purchase of shares on a Purchase Date shall be carried forward
in that account for application on the next Purchase Date; provided that upon
termination of an Offering Period, any such cash shall be promptly refunded to
the Participant.
9. Registration and Delivery of Share Certificates.
(a) Shares purchased by a Participant under this Plan will be
registered in the name of the Participant, or in the name of the Participant and
his or her spouse, or in the name of the Participant and joint tenant(s) (with
right of survivorship), as designated by the Participant.
(b) As soon as administratively feasible after each Purchase
Date, the Company shall deliver to the Participant a certificate representing
the shares purchased upon exercise of a Purchase Right. If approved by the
Administrator in its discretion, the Company may instead (i) deliver a
certificate (or equivalent) to a broker for crediting to the Participant's
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account or (ii) make a notation in the Participant's favor of non-certificated
shares on the Company's stock records.
10. Withdrawal; Termination of Employment.
(a) A Participant may withdraw all, but not less than all, the
payroll deductions credited to his account under this Plan at any time before a
Purchase Date by giving written notice to the Administrator in a form the
Administrator prescribes from time to time. The Participant's Purchase Right
will automatically terminate on the date of receipt of the notice, all payroll
deductions credited to the Participant's account will be refunded promptly
thereafter, and no further payroll deductions will be made during the Offering
Period.
(b) Upon termination of a Participant's Continuous Employment for
any reason, including retirement or death, the payroll deductions credited to
the Participant's account will be promptly refunded to the Participant or, in
the case of death, to the person or persons entitled thereto under Section 14 of
this Plan, and the Participant's Purchase Right will automatically terminate.
(c) A Participant's withdrawal from an offering will not affect
the Participant's eligibility to participate in a succeeding offering or in any
similar plan that may be adopted by the Company.
11. Use of Funds; No Interest.
Amounts withheld from Participants' Compensation under this Plan
shall constitute general funds of the Company, may be used for any corporate
purpose, and need not be segregated from other funds. No interest shall accrue
on a Participant's payroll deductions.
12. Number of Shares Reserved.
(a) The following number of shares of Common Stock are reserved
for issuance under this Plan, and such number may be issued at any time before
termination of this Plan:
(i) Beginning the date of approval of this Plan by the
shareholders of the Company, 200,000 shares of Common
Stock; and
(ii) Beginning the first business day of each calendar year
starting January 1, 2001, the lesser of an additional
(i) 200,000 shares of Common Stock, (ii) 0.75% of the
outstanding shares of capital stock on such date or
(iii) an amount determined by the Board.
(b) If the total number of shares that would otherwise be subject
to Purchase Rights granted on an Offering Date exceeds the number of shares then
available under this Plan (after deduction of all shares for which Purchase
Rights have been exercised or are then
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outstanding), the Administrator shall make a pro-rata allocation of the
available shares in a manner that it determines to be as uniform and equitable
as practicable. In such event, the Administrator shall give written notice of
the reduction and allocation to each Participant.
(c) The Administrator may, in its discretion, transfer shares
reserved for issuance under this Plan into a plan or plans of similar terms, as
approved by the Board, providing for the purchase of shares of Common Stock to
employees of Subsidiaries designated by the Board that do not (or do not
thereafter) participate in this Plan. Such additional plans may, without
limitation, provide for variances from the terms of this Plan to take into
account special circumstances (such as foreign legal restrictions) affecting the
employees of the designated Subsidiaries.
13. Administration.
This Plan shall be administered by the Board or by such
directors, officers, and employees of the Company as the Board may select from
time to time (the "Administrator"). All costs and expenses incurred in
administering this Plan shall be paid by the Company, provided that any taxes
applicable to an Employee's participation in this Plan may be charged to the
Employee by the Company. The Administrator may make such rules and reg ulations
as it deems necessary to administer this Plan and to interpret any provision of
this Plan. Any determination, decision, or action of the Administrator in
connection with the construction, interpretation, administration, or application
of this Plan or any right granted under this Plan shall be final, conclusive,
and binding upon all persons, and no member of the Administrator shall be liable
for any such determination, decision, or action.
14. Designation of Beneficiary.
(a) A Participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the Participant's account
under this Plan in the event of the Participant's death.
(b) A designation of beneficiary may be changed by the
Participant at any time by written notice. In the event of the death of a
Participant, and in the absence of a beneficiary validly designated under this
Plan who is living at the time of the Participant's death, the Administrator
shall deliver such shares and/or cash to the executor or administrator of the
Participant's estate, or if no such executor or administrator has been appointed
(to the Administrator's knowledge), the Administrator, in its discretion, may
deliver such shares and/or cash to the spouse or to any one or more dependents
or relatives of the Participant or, if no spouse, dependent, or relative is
known to the Administrator, then to such other person as the Administrator may
designate.
15. Transferability.
Neither payroll deductions credited to a Participant's account
nor any rights with regard to the exercise of a Purchase Right or to receive
shares under this Plan may be assigned,
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transferred, pledged, or otherwise disposed of in any way (other than by will,
the laws of descent and distribution or as provided in Section 14) by the
Participant. Any such attempt at assignment, transfer, pledge, or other
disposition shall be without effect, except that the Administrator may treat
such act as an election to withdraw funds in accordance with Section 10.
16. Reports.
Individual accounts will be maintained for each Participant in
this Plan. Statements of account will be given to Participants promptly
following each Purchase Date, setting forth the amounts of payroll deductions,
per-share purchase price, number of shares purchased, and the remaining cash
balance, if any.
17. Adjustments upon Changes in Capitalization.
(a) Subject to any required action by the shareholders of the
Company, the number of shares of Common Stock covered by each Purchase Right
that has not yet been exercised and the number of shares of Common Stock that
have been authorized for issuance under this Plan but have not yet been placed
under a Purchase Right (collectively, the "Reserves"), as well as the price per
share of Common Stock covered by each Purchase Right that has not yet been
exercised, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such adjustment shall
be made by the Administrator, whose determination shall be final, binding, and
conclusive. Except as expressly provided herein, no issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to a Purchase
Right.
(b) In the event of the proposed dissolution or liquidation of
the Company, the then-current Offering Period will terminate immediately before
the consummation of such proposed action, unless otherwise provided by the Board
or the Administrator (if the Administrator is not the Board). In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation (if shareholders of the
Company own less than 50% of the total outstanding voting power in the surviving
entity or a parent of the surviving entity after the merger), each Purchase
Right shall be assumed or an equivalent purchase right shall be substituted by
the successor corporation or a parent or subsidiary of the successor
corporation, unless the successor corporation does not agree to assume the
Purchase Right or to substitute an equivalent purchase right, in which case the
Administrator may, in lieu of such assumption or substitution, accelerate the
exercisability of Purchase Rights and allow Purchase Rights to be exercisable
(if the Board approves) as to shares as to which the Purchase Right would not
otherwise be exercisable, on terms and for a period that the Administrator
determines in its discretion. To the extent that the Administrator accelerates
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exercisability of Purchase Rights as described above, it shall promptly so
notify all Participants in writing.
(c) The Administrator may, in its discretion, also make provision
for adjusting the Reserves, as well as the price per share of Common Stock
covered by each outstanding Purchase Right, if the Company effects one or more
reorganizations, recapitalizations, rights offerings, or other increases or
reductions of shares of its outstanding Common Stock, or if the Company
consolidates with or merges into any other corporation.
18. Amendment or Termination.
(a) The Board may at any time terminate or amend this Plan. No
amendment may be made without prior approval of the shareholders of the Company
(obtained in the manner described in paragraph 20) if it would:
(i) Increase the number of shares that may be issued under
this Plan; or
(ii) Change the designation of the employees (or class of
employees) eligible for participation in this Plan.
(b) The Board may elect to terminate any or all outstanding
Purchase Rights at any time, except to the extent that exercisability of such
Purchase Rights has been accelerated pursuant to Section 17(b). If this Plan is
terminated, the Board may also elect to terminate Purchase Rights upon
completion of the next purchase of shares on the next Purchase Date or to permit
Purchase Rights to expire in accordance with their terms (with participation to
continue through such expiration dates). If Purchase Rights are terminated
before expiration, any funds contributed to this Plan that have not been used to
purchase shares shall be refunded to Participants as soon as administratively
feasible.
19. Notices.
All notices or other communications by a Participant to the
Company or the Administrator under or in connection with this Plan shall be
deemed to have been duly given when received in the form specified by the
Administrator at the location, or by the person, designated by the Administrator
for that purpose.
20. Shareholder Approval.
This Plan shall be submitted to the shareholders of the Company
for their approval within 12 months after the date this Plan is adopted by the
Board.
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21. Conditions upon Issuance of Shares.
(a) Shares shall not be issued with respect to a Purchase Right
unless the exercise of such Purchase Right and the issuance and delivery of such
shares pursuant thereto shall comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
(b) As a condition to the exercise of a Purchase Right, the
Company may require the person exercising such Purchase Right to represent and
warrant at the time of any such exercise that the shares are being purchased
only for investment and without any present intention to sell or distribute such
shares if, in the opinion of counsel for the Company, such a representation is
required by any of the aforementioned applicable provisions of law.
22. Term of Plan.
This Plan shall become effective upon the earlier to occur of its
adoption by the Board of Directors or its approval by the shareholders of the
Company as described in Section 20. It shall continue in effect for a term of 20
years unless sooner terminated under Section 19.
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This Plan was adopted by the Board of Directors on April 3, 2000.
This Plan was adopted by the Shareholders on May 10, 2000.
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