Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (the"***Agreement*") is entered into as of January 16, 2002 betweenTherma-Wave, Inc., a Delaware corporation with its principal offices located at1250 Reliance Way, Fremont, California 94539, and Rodney Smedt, a resident ofCalifornia (the "***Employee*").  As used herein, the term"***Company*" shall, unless the context indicates otherwise, refer toTherma-Wave, Inc. and its subsidiaries as a whole.  This Agreement shall beeffective upon the date set forth in and in accordance with Section 1.1hereof.
In consideration of the mutual covenants contained herein andother good and valuable consideration, the receipt and sufficiency of which arehereby acknowledged, the parties hereto agree as follows:
**1.	Effectiveness; Employment; ScheduledTerm.**
	1.1	**Effectiveness.**  This Agreement shall beeffective, without any further action by the parties hereto, as of January 16,2002 (the "***Effective Date*"*)*.
	1.2	**Employment; Scheduled Term.**Subjectto the terms and conditions of this Agreement, the Company agrees to employEmployee, and Employee accepts employment and agrees to be employed by theCompany during the time period commencing on the Effective Date and ending onthe third anniversary of the Effective Date (such three-year year period beinghereinafter referred to as the "***Scheduled Term*"), unlessEmployee's employment is earlier terminated in accordance with this Agreement.If Employee's employment has not been terminated prior to expiration of theScheduled Term, then Employee's employment may continue after the Scheduled Termon an "at-will" basis.  Following expiration of the Scheduled Term, Employee'semployment will cease to be governed by the terms and conditions of thisAgreement and shall be terminable by either the Company or Employee at will "at-any" time, with or without cause, for any reason or no reason.  The obligationsof Employee set forth in the Proprietary Information and Employee InventionsAgreement referred to in Section 6 below shall survive the Scheduled Term andshall survive the termination of Employee's employment, regardless of the causeof such termination.  Employee hereby represents and warrants to the Companythat Employee is free to enter into and fully perform this Agreement and theagreements referred to herein without breach or violation of any agreement orcontract to which Employee is a party or by which Employee is bound.  Employeewill provide necessary information required for the Company to perform itsnormal background verification.**2.	Duties.  Employee shall serve asVice President of Engineering of Sensys Instruments Corporation, a wholly ownedsubsidiary of the Company (***"Sensys Instruments"*), with such dutiesand responsibilities as may from time to time be assigned to Employee by theCompany, commensurate with Employee's title and position described in thissentence.  The duties and services to be performed by Employee under thisAgreement are collectively referred to herein as the "***Services*".Employee shall report directly to the President and CEO of Sensys Instrumentsduring the Scheduled Term.  Employee agrees that to the best of Employee'sability and experience Employee shall at all times conscientiously perform allof the duties and obligations assigned to him under the terms of this Agreement.At the Company's option, it will be entitled to reasonable use of Employee'sname in promotional, advertising and other materials used in the ordinary courseof its business without additional compensation unless prohibited by law.Employee's principal place of business during the term of this Agreement shallbe at the principal headquarters of Sensys Instruments, which initially shall beat the offices located at 2090 Duane Avenue, Santa Clara, California, 95054.Employee's duties will include reasonable travel, including but not limited totravel to offices of the Company, its subsidiaries and affiliates and currentand prospective customers as is reasonably necessary and appropriate to theperformance of Employee's duties hereunder.  Employee will comply with and bebound by the Company's operating policies, procedures, and practices from timeto time in effect during Employee's employment.  **3.	Exclusive Service.  Employee will devotehis full time and efforts exclusively to this employment and apply all his skilland experience to the performance of his duties and advancing Company'sinterests in accordance with Employee's experience and skills.  
***	3.1	**Anti-Moonlighting Provision.*Employee shall notengage in any outside work, business, consulting activity or render anycommercial or professional services, directly or indirectly, for or on behalf ofEmployee or any other person or organization, whether for compensation orotherwise, except with the prior written approval of the Company and Employeeshall otherwise do nothing inconsistent with the performance of Employee'sduties hereunder; *provided, *however, that Employeemay (i) provide incidental assistance to family members on matters offamily business; (ii) sit on the boards of charitable or community non-profit organizations, (iii) sit on the boards of other companies which donot, at the time of Employee's appointment or election, to Employee's knowledge,compete with the Company, and (v) manage Employee's personal investments,so long as such activities do not conflict with, impair or interfere withEmployee's performance of his obligations to the Company under this Agreement.Employee may make personal investments in non-publicly traded corporations,partnerships or other entities, which, to the knowledge of Employee, do not atthe time of such investment design, research, distribute or otherwise marketproducts similar to or competitive with the Company in the semiconductormetrology equipment market.  Employee may make personal investments in publiclytraded corporations regardless of the business they are engaged in,*provided that Employee does not at any time own in excess of 1% ofthe issued and outstanding stock of any such corporation.**	4.	[Intentionally Deleted].

5.	Compensation and Benefits.

	5.1	**Salary and Stock Options.**

		(a)	During the term of thisAgreement, the Company shall pay Employee an initial salary of $190,000 perannum.  Employee's salary shall be payable as earned at the Company's customarypayroll periods in accordance with the Company's customary payroll practices.Employee's salary shall be subject to review and adjustment in accordance withthe Company' customary practices concerning salary review for similarly situatedemployees of the Company or its subsidiaries; *provided that, thesalary described herein shall be reviewed annually by the CEO of SensysInstruments and the President and CEO of the Company and will be subject toadjustment, based upon Employee's performance and the Company's operatingresults, each as determined by the Company.  
		(b)	Subject to approval by the Board of Directorsof the Company at the initial meeting of the Board in February 2002 and July2002, , the Company shall grant stock options exercisable for [5,494 and 9,157]shares respectively, of common stock of the Company, subject to the terms andconditions of the Company's Stock Option Plan and option agreement governingsuch grant.  The exercise price for such options shall be based on the closingprice of the common stock of the Company on the trading date immediatelypreceding the date of the Board meeting granting such options.****
	5.2**	Additional Benefits.**  Employeewill be eligible to participate in the Company's employee benefit plans ofgeneral application as they may exist from time to time, including withoutlimitation those plans covering 401(k) and profit sharing, executive bonuses,stock purchases, stock options, executive deferred compensation and those planscovering life, health, vision, and dental insurance in accordance with the rulesestablished for individual participation in any such plan and applicable law.Employee will receive such other benefits, including vacation and holidays, asthe Company generally provides to its employees holding similar positions asthat of Employee.**** Employee has received a summary of the Company'sstandard employee benefits policies in effect as of the date hereof.  TheCompany reserves the right to change or otherwise modify, in its solediscretion, the benefits offered herein to conform to the Company's generalpolicies as may be changed from time to time during the term of thisAgreement.

Performance Bonus in Cash and StockOptions
.  

	(a)	Employee will be eligibleto earn a cash bonus up to an amount equal to his base salary at the time ofdetermination (the "***Bonus*") which shall in no event be less than$190,000, after successfully completing Employee's third year of employment withthe Company.  The Company and Employee will agree upon performance criteria fromthe Effective Date through the end of Therma-Wave's FY05 (March 2005) (the"***FY05 Criteria*"), which will be based on cumulative gross sales ofSensys Instruments during such period, and against which actual performance ofSensys Instruments may be measured on a percentage basis.  (The cumulative grosssales for this period is targeted to be $150 million dollars.  A minimum of 50%of this target, or $75 million dollars must be reached to generate any bonus.From 50% to 100% of this target, or from $75 million dollars to $150 milliondollars, will generate a bonus, on a prorated basis, maximized at the Bonus, ifthe target of cumulative gross sales of $150 million is reached.  From 100%+ to150% of this target, or from $150+ million to $225 million dollars, willgenerate a bonus, on a prorated basis, maximized at 150% of the Bonus if thecumulative gross sales of $225 million is reached.)
		(b)	Subject to approval by the Board of Directorsof the Company at the initial meeting of the Board during February of 2002, theCompany shall grant stock options exercisable for 15,000 shares of common stockof the Company, subject to the terms and conditions of the Company's StockOption Plan and option agreement governing such grant.  The exercise price forsuch options shall be based on the closing price of the common stock of theCompany on the trading date immediately preceding the date of the Board meetinggranting such options.  Such options will vest according to Schedule Aattached hereto.

5.4**	Stock Options.**Beginning on theEffective Date, Employee shall be eligible to participate in the Company's StockOption Plan.  Subject to approval by the Board of Directors of the Company, itis anticipated that Employee will be granted options under such plan inconnection with the initial set of grants approved by the Board subsequent tothe regularly scheduled annual meeting of the stockholders of the Company in2002, and in no event shall employee be granted any such options until aftersuch meeting.

5.5**	Expenses.  The Company will reimburseEmployee for all reasonable and necessary expenses incurred by Employee inconnection with the Company's business, *provided that suchexpenses are deductible to the Company, are in accordance with the Company'sapplicable policy and are properly documented and accounted for in accordancewith the requirements of the Internal Revenue Service.**6.	Proprietary Rights.  Employee herebyagrees to execute an Proprietary Information and Employee Inventions Agreementwith the Company in substantially the form attached hereto as Exhibit A.Furthermore, Employee acknowledges and agrees that Employee is being offeredemployment based upon personal and professional attributes attained throughexperience and education.  It is clearly understood that Employee's offer isnot, and the employment will not be, predicated on any implied or explicitunderstanding or inference that Employee will disclose or use any proprietary orconfidential information acquired or been made privy to as a result ofEmployee's prior employment or relationships.  At no time should Employeedisplay or otherwise make available to the Company, directly or indirectly(including by undisclosed incorporation in work product), any such proprietaryor confidential information.  Employee represents and warrants that theperformance of his employment duties will not place Employee in breach orviolation of any pre-existing covenant, agreement, restriction or limitationbetween Employee and any of his former or current employers.
**Termination
.

	7.1	**Events ofTermination.**  Employee's employment with the Company (or the designatedsubsidiary or affiliate) shall terminate immediately upon any one of thefollowing:

		(a)	The Company's determination made in good faiththat it is terminating Employee for "cause" as defined under Section 7.2 below("***Termination for Cause*"); or
		(b)	The effective date of a written notice sent toEmployee stating that the Company is terminating Employee's employment, withoutcause, which notice can be given by the Company at any time after the EffectiveDate at the Company's sole discretion, for any reason or for no reason("***Termination Without Cause*"); 
		(c)	The effective date of a written notice sent tothe Company from Employee stating that Employee is electing to terminate hisemployment with the Company ("***Voluntary Termination*");
		(d)	The effective date of a written notice sent tothe Company from Employee stating that Employee is electing to terminate hisemployment with the Company for "Good Reason" as defined under Section 7.3below; or

		(e)	The death of Employee.

	7.2	**"Cause" Defined.**  For purposes ofthis Agreement, "***cause*" for Employee's termination will exist atany time after the happening of one or more of the following events:
		(a)	A failure rising to the level of grossnegligence or refusal to comply in any material respect with the reasonablepolicies, standards or regulations of the Company so as to cause material loss,damage or injury to the property, reputation or employees of Company or itssubsidiaries;

		(b)	A good faith determination by the Company'sPresident and Chief Executive Officer that Employee's performance isunsatisfactory; *provided, *however, Employee shallhave sixty (60) days after receipt of written notice from the Company regardingsuch unsatisfactory performance to remedy Employee's performance;
		(c)	A failure or a refusal in any materialrespect, faithfully or diligently, to perform Employee's duties determined bythe Company in good faith in accordance with this Agreement or the customaryduties of Employee's employment (whether due to ill health, disability orotherwise; *provided, *however, that Employee shall beentitled to any benefits or reasonable accommodation required by law);*provided, *however, Employee shall have sixty (60)days after receipt of written notice from the Company regarding suchunsatisfactory performance to remedy Employee's performance;
		(d)	Unprofessional, unethical or fraudulentconduct or conduct that materially discredits the Company or is materiallydetrimental to the reputation, character or standing of the Company;

		(e)	Dishonest conduct or a deliberate attempt todo an injury to the Company;

		(f)	Employee's material breach of a term of thisAgreement or the Employee Invention Assignment and Confidentiality Agreement,including, without limitation, Employee's theft of the Company's proprietaryinformation; *provided, however, Employee shall have sixty(60) days after receipt of written notice from the Company regarding such breachto cure such breach other than such breach as a result of theft; or
		(g)	An unlawful or criminal act which wouldreflect badly on the Company in the Company's reasonable judgment.

		7.3	**"Good Reason" Defined.**For purposes of this Agreement, Employee may elect to terminate his employmentfor "Good Reason" for one or more of the following events:

			(a)	A material reduction or alteration in thenature or status of his responsibility as an executive officer;

			(b)	A relocation of the principal headquartersof Sensys Instruments outside of the counties of San Mateo, Santa Clara, Alamedaand Contra Costa; or

			(c)	A material breach by the Company of a termof this Agreement; *provided,*however,* the Companyshall have thirty (30) days after receipt of written notice from Employeeregarding such breach to cure such breach.**8.	Effect of Termination.**
8.1**	Termination for Cause, Voluntary Terminationor Death.**  In the event of any termination of this Agreement pursuant toSections 7.1(a), 7.1(c) or 7.1(e), the Company shall pay Employee thecompensation and benefits otherwise payable to Employee under Section 5 throughthe date of termination.  Employee's rights under the Company's benefit plans ofgeneral application shall be determined under the provisions of those plans,including, without limitation, Employee's rights under Section 3(b) ofEmployee's stock option agreement(s) governing Employee's stock option grant(s).All other compensation from and after such Termination For Cause, VoluntaryTermination or death (including without limitation any bonus payment) shallcease (except for those benefits that must be continued pursuant to applicablelaw or by the terms of such benefit plans), and Employee shall not be entitledto any severance pay or other payment or compensation whatsoever upon suchTermination For Cause or Voluntary Termination.  In the event of death,Employee's estate shall have 90 days to exercise any outstanding stock optionsgranted to Employee under Section 5.1(b), *provided that suchoptions had vested according to their terms at the time of death.  All Sensysoptions granted prior to the merger will immediately vest. 
8.2**	Termination Without Cause or For GoodReason.**  In the event of any termination of this Agreement pursuant toSection 7.1(b) or 7.1(d),

(a)	The Company shall pay Employee the compensation andbenefits otherwise payable to Employee under Section 5 through the date oftermination,

(b)	For six months after the effective date oftermination, the Company shall continue to pay Employee his base salary underSection 5.1 above at Employee's then-current salary, less applicable withholdingtaxes, payable on the Company's normal payroll dates during that period,*provided, *however, that if Employee secures otheremployment with a Competitor (as defined under Section 8.2(f) below) during theperiod that Section 5.1 remains in effect pursuant to this Section 8.2, theEmployee shall no longer be entitled to continue to receive his base salarypursuant to this Section  8.2(b) , and
(c)	Employee's rights under the Company's benefit plans ofgeneral application after termination shall be determined under the provisionsof those plans.  

(d)	The stock options granted pursuant to Section 5.1(b)shall continue to vest for an additional six months after the effective date oftermination and such options shall expire on the earlier of (i) three monthsafter such additional six month period and (ii) the Expiration Date (as definedin the stock option agreement governing such stock options) and may not beexercised thereafter under any circumstance.  All Sensys options granted priorto the merger will immediately vest. 

(e)	The Company's obligation to make the payments requiredby this Section 8.2 is in lieu of any damages or any other payment which theCompany might otherwise be obligated to pay Employee as a result of Employee'stermination of employment.  The Company and Employee agree that, in view of thenature of the issues likely to arise in the event of such a termination, itwould be impracticable or extremely difficult to fix the actual damagesresulting from such termination and proving actual damages, causation andforeseeability in the case of such termination would be costly, inconvenient anddifficult.  In requiring the Company to make the payments as set forth herein,it is the intent of the parties to provide, as of the date of this Agreement,for a liquidated amount of damages to be paid by the Company to Employee.  Suchliquidated amount shall be deemed full and adequate damages for such terminationand is not intended by either party to be a penalty.

(f)	For purposes of this Agreement,"***Competitor*" means any person, firm, partnership company,corporation or any other entity engaged in the business of design, research,development, marketing, sale, or licensing of semiconductor metrology equipmentthat is substantially similar to or competitive with the business of the Companyand Sensys Instruments.
8.3	**Survival.  Employee's and the Company'sobligations under Sections 5,****(as applicable by virtue of Section 8)**7, 8, and 9****of this Agreement will survive the termination ofEmployee's employment with the Company. Employee's obligations under theEmployee Invention Assignment and Confidentiality Agreement shall survive thetermination of Employee's employment with the Company.**9.	Miscellaneous.

9.1**	Dispute Resolution.
		(a)**	Arbitration of Disputes.**Any dispute under this Agreement shall be resolved by arbitration in theState of California, Santa Clara County, and, except as herein specificallystated, in accordance with the National Rules for the Resolution of EmploymentDisputes of the American Arbitration Association ("***AAA Rules*")then in effect.  However, in all events, these arbitration provisions shallgovern over any conflicting rules which may now or hereafter be contained in theAAA Rules.  Any judgment upon the award rendered by the arbitrator may beentered in any court having jurisdiction over the subject matter thereof.  Thearbitrator shall have the authority to grant any equitable and legal remediesthat would be available in any judicial proceeding instituted to resolve suchdispute; *provided, however,*that the parties retain theirright to, and shall not be prohibited, limited or in any other way restrictedfrom, seeking or obtaining equitable relief from a court having jurisdictionover the parties.
		(b)**	Compensation of Arbitrator.  Anysuch arbitration will be conducted before a single arbitrator who will becompensated for his services at a rate to be determined by the parties or by theAmerican Arbitration Association, but based upon reasonable hourly or dailyconsulting rates for the arbitrator in the event the parties are not able toagree upon his or his rate of compensation.
		(c)**	Selection of Arbitrator.**TheAmerican Arbitration Association will have the authority to select an arbitratorfrom a list of its arbitrators.
**		(d)**	Payment of Costs.  TheCompany and Employee will each pay 50% of the initial compensation to be paid tothe arbitrator in any such arbitration and 50% of the costs of transcripts andother normal and regular expenses of the arbitration proceedings unless the law provides otherwise.
		(e)**	Burden of Proof.**For anydispute submitted to arbitration, the burden of proof will be as it would be ifthe claim were litigated in a judicial proceeding.

		(f)**	Award.**Upon the conclusion ofany arbitration proceedings hereunder, the arbitrator will render findings offact and conclusions of law and a written opinion setting forth the basis andreasons for any decision reached and will deliver such documents to each partyto this Agreement along with a signed copy of the award.

		(g)**	Terms of Arbitration.**Thearbitrator chosen in accordance with these provisions will not have the power toalter, amend or otherwise affect the terms of these arbitration provisions orthe provisions of this Agreement except to the extent that the relevantprovision of this Agreement is unenforceable under California law.

(h)**	Exclusive Remedy.  Except asspecifically otherwise provided in this Agreement, arbitration will be the soleand exclusive remedy of the parties for any dispute arising out of thisAgreement.
9.2**	Severability.**  If any provision of thisAgreement shall be found by any arbitrator or court of competent jurisdiction tobe invalid or unenforceable, then the parties hereby waive such provision to theextent that it is found to be invalid or unenforceable and to the extent that todo so would not deprive one of the parties of the substantial benefit of itsbargain.  Such provision shall, to the extent allowable by law and the precedingsentence, be modified by such arbitrator or court so that it becomes enforceableand, as modified, shall be enforced as any other provision hereof, all the otherprovisions continuing in full force and effect.

9.3**	Remedies.**  The Company and Employeeacknowledge that the service to be provided by Employee is of a special, unique,unusual, extraordinary and intellectual character, which gives it peculiar valuethe loss of which cannot be reasonably or adequately compensated in damages inan action at law.  Accordingly, Employee hereby consents and agrees that for anybreach or violation by Employee of any of the provisions of this Agreementincluding, without limitation, Section 3), a restraining order and/or injunctionmay be issued against either of the parties, in addition to any other rights andremedies the parties may have, at law or equity, including without limitationthe recovery of money damages.

9.4**	No Waiver.**  The failure by either partyat any time to require performance or compliance by the other of any of itsobligations or agreements shall in no way affect the right to require suchperformance or compliance at any time thereafter.  The waiver by either party ofa breach of any provision hereof shall not be taken or held to be a waiver ofany preceding or succeeding breach of such provision or as a waiver of theprovision itself.  No waiver of any kind shall be effective or binding, unlessit is in writing and is signed by the party against whom such waiver is soughtto be enforced.

9.5**	Assignment.**  This Agreement and allrights hereunder are personal to Employee and may not be transferred or assignedby Employee at any time.  The Company may assign its rights, together with itsobligations hereunder, to any subsidiary, affiliate or successor of the Company,or in connection with any sale, transfer or other disposition of all orsubstantially all the business and assets of the Company or any of theirrespective subsidiaries or affiliates, whether by sale of stock, sale of assets,merger, consolidation or otherwise;*provided that any suchassignee assumes the Company's obligations hereunder.  This Agreement shall bebinding upon, and inure to the benefit of, the persons or entities who arepermitted, by the terms of this Agreement, to be successors, assigns andpersonal representatives of the respective parties hereto.
9.6**	Withholding.**  All sums payable toEmployee hereunder shall be reduced by all federal, state, local and otherwithholding and similar taxes and payments required by applicable law to bewithheld by the Company.

9.7	**Entire Agreement.**  This Agreement (andthe exhibit(s) hereto) constitutes the entire and only agreement andunderstanding between the parties relating to employment of Employee with theCompany and this Agreement supersedes and cancels any and all previouscontracts, arrangements or understandings with respect to Employee's employment;*exceptthat*the Employee Invention Assignment andConfidentiality Agreementshallremain as an independent contract(s) and shall remain in full force and effectaccording to its terms.
9.8**	Amendment.**  This Agreement may beamended, modified, superseded, cancelled, renewed or extended only by anagreement in writing executed by both parties hereto.

9.9**	Notices.**  All notices and othercommunications required or permitted under this Agreement shall be in writingand hand delivered, sent by telecopier, sent by certified first class mail,postage pre-paid, or sent by nationally recognized express courier service.Such notices and other communications shall be effective upon receipt if handdelivered or sent by telecopier, five (5) days after mailing if sent by mail,and one (l) day after dispatch if sent by express courier, to the followingaddresses, or such other addresses as any party shall notify the otherparties:

 If to Company:	Therma-Wave, Inc.

1250 Reliance Way

Fremont, CA  94539

Telecopier:	(510) 656-3863

Attention:	Martin M. Schwartz

            Or:       Noel Simmons

If to Employee:	Rodney Smedt

		2090 Duane Avenue

		Santa Clara, CA  95054

Telecopier:	(408) 844-0441

9.10**	Binding Nature.**  This Agreement shallbe binding upon, and inure to the benefit of, the successors and personalrepresentatives of the respective parties hereto.

9.11**	Headings.**  The headings contained inthis Agreement are for reference purposes only and shall in no way affect themeaning or interpretation of this Agreement.  In this Agreement, the singularincludes the plural, the plural included the singular, the masculine genderincludes both male and female referents, and the word "or" is used in theinclusive sense.

9.12**	Counterparts.**  This Agreement may beexecuted in two or more counterparts, each of which shall be deemed to be anoriginal but all of which, taken together, constitute one and the sameagreement.

9.13**	Governing Law.**  This Agreement and therights and obligations of the parties hereto shall be construed in accordancewith the laws of the State of California, without giving effect to theprinciples of conflict of laws.

IN WITNESS WHEREOF, the Company and Employee have executedthis Agreement as of the date first above written and shall be effective inaccordance with Section 1.1 hereof.
**"COMPANY"	"EMPLOYEE"**
By: 			
	Name:		Rodney Smedt

	Title: 
**EXHIBIT A
** 

Proprietary Information and Employee Inventions Agreement**
 
**Schedule A
**The stock options granted pursuant to Section 5.3(b) aboveshall vest at the end of the third year following such grant as follows:
no such options shall vest in the event the cumulativegross sales of Sensys Instruments during such three-year period does not exceed$75,000,000

a prorated portion of such options shall vest in theevent the cumulative gross sales of Sensys Instruments during such three-yearperiod exceed $75,000,00 as determined by dividing the amount of such excessover $75,000,000 sales by $75,000,000 (difference between $150,000,000 and$75,000,000)

Any such options that do not vest after such three-yearperiod shall vest on the date immediately preceding the end of the seventh yearfollowing such grant.***************************************************************************************