Exhibit 10.39
	**THERMA-WAVE, INC.**
	**STOCK OPTION AGREEMENT
	(Nonqualified Stock Option)

 
**THIS STOCK OPTION AGREEMENT (this "Agreement") is made andentered into as of ____________, 2002 by and between Therma-Wave, Inc., aDelaware corporation (the "Company"), and the employee of the Companylisted on the signature page hereto ("Optionee").

Pursuant to the Company's 2000 Equity Incentive Plan (the "Plan"), theCompany and the Optionee desire to enter into an agreement to evidence the grantby the Company to the Optionee of an option (the "Option") to acquirethat number of shares of the Company's common stock, par value $0.01 per share(the "Common Stock") listed on the signature page hereto (the "OptionShares").  Capitalized terms used herein and not otherwise defined aredefined in Section 6 hereof.

The parties hereto agree as follows:
Option Grant
.  The Company hereby grants to the Optionee, pursuant tothe Plan, an Option to purchase the Option Shares at a price per share equal tothat amount listed on the signature page hereto (the "
Exercise Price
").The Exercise Price and the number of Option Shares will be equitably adjustedfor any stock split, stock dividend, reclassification or recapitalization of theCompany which occurs subsequent to the date of this Agreement.  The Option isnot intended to be an "incentive stock option" within the meaning of Section422A of the Code.
Exercise of Option
.
Normal Vesting.
  The Option granted hereunder may be exercised onlyto the extent it has become vested.  The Option shall vest and becomeexercisable with respect to the following number of Option Shares (set forth ona cumulative basis):  (i) 25% of the Option Shares on the first yearanniversary of the Grant Date; (ii) 2.083% of the Option Shares each monthon the thirteenth (13
th
) through the forty eighth (48
th
)monthly anniversary of the Grant Date (each a "
Vesting Date
"), 
if andonly if
 the Optionee is, and has been, continuously employed by the Companyfrom the Grant Date through the applicable Vesting Date.
No Vesting After Termination Date
.  The Option shall cease to vestafter the Termination Date.  Any portion of the Option which has vested andbecome exercisable prior to the Termination Date shall remain exercisable forthe period set forth in Section 3.
Procedure for Exercise
.  At any time prior to the Expiration Date,Optionee may exercise all or a portion of the Option (to the extent vested),which has not expired pursuant to subsection 3(b) below by deliveringwritten notice of exercise to the Company, together with (i) a writtenacknowledgment that Optionee has read and has been afforded an opportunity toask questions of members of the Company's management regarding all financial andother information provided to Optionee regarding the Company and (ii) fullpayment for the Shares with respect to which the Option is exercised. Fullpayment may consist of payment in cash, check, other shares of capital stock ofthe Company or any combination of the foregoing.  As a condition to any exerciseof the Option, Optionee will permit the Company to deliver to him all financialand other information regarding the Company and its Subsidiaries which itbelieves necessary to enable Optionee to make an informed investment decision.Shares issued upon exercise of an Option shall be issued in the name of theOptionee or, if requested by the Optionee, in the name of the Optionee and hisor her spouse.
Expiration of Option
.
Normal Expiration
.  In no event shall any part of the Option beexercisable after the Expiration Date.
Expiration Upon Termination of Employment
. Any portion of the Optionthat was not vested and exercisable on the Termination Date shall expire on suchdate and may not be exercised thereafter under any circumstance.  Any portion ofthe Option that was vested and exercisable on the Termination Date shall expireon the earlier of (i) three months after the Termination Date (or 12 monthsafter the Termination Date if the termination was caused by Optionee's death,disability or retirement) and (ii) the Expiration Date and may not beexercised thereafter under any circumstance.
Non-Transferability of Option
.  The Option is personal to Optioneeand is not transferable by Optionee except pursuant to the laws of descent ordistribution and may be exercised, during the lifetime of the Optionee, only bythe Optionee.
Adjustments upon Dissolution, Merger or Asset Sale.
Dissolution or Liquidation
.  In the event of the proposed dissolutionor liquidation of the Company, the Board shall notify each Optionee as soon aspracticable prior to the effective date of such proposed transaction.  To theextent it has not been previously exercised, an Option will terminateimmediately prior to the consummation of such proposed action.
Merger or Asset Sale
. In the event of a merger of the Company with orinto another corporation, or the sale of substantially all of the assets of theCompany, each outstanding Option and shall be assumed or an equivalent option orright substituted by the successor corporation or a Parent or Subsidiary of thesuccessor corporation. In the event that the successor corporation refuses toassume or substitute for the Option, the Optionee shall fully vest in and havethe right to exercise the Option as to all of the Option Shares, includingShares as to which it would not otherwise be vested or exercisable.
Definition of Option Shares
.  For all purposes of this Agreement,Option Shares will continue to be Option Shares in the hands of any holder otherthan Optionee (except for the Company, purchasers pursuant to an offeringregistered under the 1933 Act and subsequent transferees), and each such otherholder of Option Shares will succeed to all rights and obligations attributableto Optionee as a holder of Option Shares hereunder.  Option Shares will alsoinclude shares of the Company's capital stock issued with respect to OptionShares by way of a stock split, stock dividend or other recapitalization.
Definitions
.	The following terms are defined as follows:

"1933 Act" means the Securities Act of 1933, as amended from time totime.

"Affiliate" means, with respect to any Person, any other Person who iscontrolling, controlled by, or under common control with such Person and, in thecase of a Person which is a partnership, any partner of such Person.

"Board" means the Company's Board of Directors.

"Code" means the Internal Revenue Code of 1986, as amended from timeto time.

"Common Stock" means, collectively, the Company's common stock, parvalue $0.01 per share.

"Expiration Date" means, with respect to any Option, the date which isthe tenth anniversary of the date hereof.

"Grant Date" means the date the Board approves the grant by theCompany to the Optionee of the Option governed by this Agreement.

"Option Shares" means (i) all shares of Common Stock purchasedpursuant to the Options granted pursuant to this Agreement and (ii) allshares of Common Stock issued with respect to Common Stock referred to inclause (i) by way of stock dividend or stock split or in connection with arecapitalization or other reorganization affecting the Common Stock.

"Person" means an individual, a partnership, a joint venture, acorporation, a trust, an unincorporated organization and a government or anydepartment or agency thereof.

"Plan" has the meaning set forth in the preamble.

"Subsidiary" means any corporation of which shares of stock having amajority of the general voting power in electing the board of directors are, atthe time as of which any determination is being made, owned by the Companyeither directly or through its Subsidiaries.

"Termination Date" means the date that Optionee ceases to be employedby the Company or any of its Subsidiaries for any reason.
Notices.
  Any notice provided for in this Agreement must be inwriting and must be personally delivered, received by certified mail, returnreceipt requested, or sent by guaranteed overnight delivery service, to theOptionee at the address appearing on the signature page hereto and to the otherrecipients at the address indicated below:

To the Company:	

Therma-Wave, Inc.

1250 Reliance Way

Fremont, California 94539

Attn:  President

and

Kirkland & Ellis

777 South Figueroa Street

Los Angeles, CA  90017

Attn:   Eva Davis

 

or such other address or to the attention of such other person as therecipient party will have specified by prior written notice to the sendingparty.  Any notice under this Agreement will be deemed to have been given whenso delivered or mailed.
Severability
.  Whenever possible, each provision of this Agreementwill be interpreted in such manner as to be effective and valid under applicablelaw, but if any provision of this Agreement is held to be invalid, illegal orunenforceable in any respect under any applicable law or rule in anyjurisdiction, such invalidity, illegality or unenforceability will not affectany other provision or the effectiveness or validity of any provision in anyother jurisdiction, and this Agreement will be reformed, construed and enforcedin such jurisdiction as if such invalid, illegal or unenforceable provision hadnever been contained herein.
Complete Agreement
.  This Agreement and the Plan embody the completeagreement and understanding among the parties and supersedes and preempts anyprior understandings, agreements or representations by or among the parties,written or oral, which may have related to the subject matter hereof in any way.Without limiting the foregoing, all existing stock option agreements between theCompany and/or the Company's existing stockholders and Optionee are herebycancelled and terminated.
Counterparts
.  This Agreement may be executed in separatecounterparts, each of which will be deemed to be an original and all of whichtaken together will constitute one and the same agreement.
Successors and Assigns; Transfer
.  This Agreement is intended to bindand inure to the benefit of and be enforceable by Optionee, the Company, andtheir respective successors and assigns, provided that Optionee may not assignany of his or her rights or obligations, except as expressly provided by theterms of this Agreement. 
Governing Law
.  The corporate law of the State of Delaware willgovern all questions concerning the relative rights of the Company and itsstockholders.  All other issues concerning the enforceability, validity andbinding effect of this Agreement will be governed by and construed in accordancewith the laws of the State of California, without giving effect to any choice oflaw or conflict of law provision or rule (whether of the State of California orany other jurisdiction) that would cause the application of the law of anyjurisdiction other than the State of California.
Remedies
.  The parties hereto acknowledge and agree that moneydamages may not be an adequate remedy for any breach of the provisions of thisAgreement and that any party hereto will have the right to injunctive relief, inaddition to all of its other rights and remedies at law or in equity, to enforcethe provisions of this Agreement.
Effect of Transfers in Violation of Agreement
.  The Company will notbe required (a) to transfer on its books any Option Shares which have been soldor transferred in violation of any of the provisions set forth in this Agreementor (b) to treat as owner of such Option Shares, to accord the right to vote assuch owner or to pay dividends to any transferee to whom such Option Shares havebeen transferred in violation of this Agreement.
Amendments and Waivers
.  The Board may at any time amend, alter,suspend or terminate the Plan without the consent of any Optionee; provided,however, that no  amendment, alteration, suspension or termination of the Planshall impair the rights of any Optionee.
Therma-Wave, Inc. 2000 Equity Incentive Plan
.  The grant of anyOption hereunder is pursuant to and subject to all of the terms and conditionsof the Plan.

IN WITNESS WHEREOF, the parties have executed this Stock Option Agreement onthe day and year first above written.

 
** 

 

THERMA-WAVE, INC.

 

___________________________________

By: L. RAY CHRISTIE

Its:  Vice President Finance & CFO

 
**OPTIONEE:**
 

___________________________________

Name: 

Address (please print):

___________________________________

___________________________________

 

Number of Option Shares: 

Exercise Price:******