EXHIBIT 10.9
THERMA-WAVE, INC.
EXECUTIVE STOCK AGREEMENT
-------------------------
THIS EXECUTIVE STOCK AGREEMENT (this "Agreement") is made and entered
into as of May 16, 1997 by and between Therma-Wave, Inc., a Delaware corporation
(the "Company"), and Xxx X. Xxxxx ("Executive").
The Company and Executive desire to enter into this Agreement pursuant
to which (i) the Company will issue to Executive 23,427 shares of the Company's
Class A Common Stock, par value $.01 per share (the "Class A Common") and 2,603
shares of the Company's Class L Common Stock, par value $.01 per share (the
"Class L Common"), (ii) the Company will issue to Executive 127,656 shares of
the Company's Class B Common Stock, par value $.01 per share (the "Class B
Common") and (iii) pursuant to the Company's 1997 Stock Purchase and Option
Plan, a copy of which is attached hereto as Exhibit A (the "Plan"), the Company
will grant to Executive options (collectively, the "Management Options," and
each, a "Management Option") to acquire an aggregate of 127,656 shares of Class
B Common, which options will be divided into five tranches (collectively, the
"Tranches"); the first tranche ("Tranche 1") will consist of Management Options
to acquire 25,531.2 shares of Class B Common at an exercise price of $8.93 per
share; the second tranche ("Tranche 2") will consist of Management Options to
acquire 25,531.2 shares of Class B Common at an exercise price of $ 10.68 per
share; the third tranche ("Tranche 3") will consist of Management Options to
acquire 25,531.2 shares of Class B Common at an exercise price of $12.43 per
share; the fourth tranche ("Tranche 4") will consist of Management Options to
acquire 25,531.2 shares of Class B Common at an exercise price of $14.18 per
share; and the fifth tranche ("Tranche 5") will consist of Management Options to
acquire 25,531.2 shares of Class B Common at an exercise price of $ 15.89 per
share. Capitalized terms used herein and not otherwise defined are defined in
Section 12 hereof.
The parties hereto agree as follows:
STOCK AND OPTION PROVISIONS
1. Purchase and Sale of Stock.
(a) Upon execution of this Agreement, Executive will purchase, and
the Company will sell, 23,427 shares of Class A Common at a price of $0.235 per
share and 2,603 shares of Class L Common at a price of $19.085 per share
(collectively, the "Rollover Stock"), for an aggregate purchase price of
$55,183.60. The Company will deliver to Executive certificates representing the
Rollover Stock, and, upon receipt of such certificates, Executive will deliver
to the Company $55,183.60 by delivery of a certified check or wire transfer of
funds.
(b) On or prior to April 15, 1998, at the Executive's request the
Company shall loan to Executive an amount equal to all federal, state and local
taxes required to be paid by Executive as a result of payments on the date
hereof to Executive by Toray Industries, Inc. pursuant to the Agreement, dated
as of January 25, 1996, among Toray Industries, Inc., Executive and other key
employees listed therein in connection with the Company's recapitalization in
exchange for the issuance by Executive to the Company of a promissory note in
the form of Exhibit B attached hereto (the "Rollover Stock Note"). Executive's
obligations under the Rollover Stock Note will be secured by a pledge of all of
the Rollover Stock, and in connection therewith Executive will enter into a
pledge agreement in the form of Exhibit C attached hereto.
(c) Immediately after the closing of the transactions contemplated by
the Recapitalization Agreement, dated as of December 18, 1996, among the
Company, Sellers and Purchaser (each as defined therein), Executive will
purchase, and the Company will sell, 127,656 shares of Class B Common (the "Time
Vesting Stock"), at a price of $0.235 per share for an aggregate purchase price
of $29,999.16. The Company will deliver to Executive certificates representing
the Time Vesting Stock, and, upon receipt of such certificates, Executive will
deliver to the Company $1,276.56 by delivery of a check or wire transfer of
funds and a promissory note in the form of Exhibit D attached hereto in the
aggregate principal amount of $28,722.60 (the "Time Vesting Stock Note").
Executive's obligations under the Time Vesting Stock Note will be secured by a
pledge of all of the Time Vesting Stock, and in connection therewith Executive
will enter into a pledge agreement in the form of Exhibit E attached hereto.
(d) Section 83(b) Election. Within 30 days after the date hereof, the
Executive will make an effective election with the Internal Revenue Service
under Section 83(b) of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder, in the form of Exhibit F attached hereto.
(e) Vesting of Time Vesting Stock. Subject to the provisions of
subsection 1(f), on each date set forth below the Time Vesting Stock will have
become vested with respect to the cumulative percentage of Time Vesting Stock
set forth opposite such date if Executive is, and has been, continuously
employed by the Company or its Subsidiaries from the date of this Agreement
through such date:
Date Cumulative
Percentage of Time
Date Vesting Stock Vested
May 16, 1998 20%
May 16, 1999 40%
May 16, 2000 60%
May 16, 2001 80%
-2-
May 16, 2002 100%
provided that upon the occurrence of a Sale of the Company, all of the Time
Vesting Stock will immediately vest. The shares of the Time Vesting Stock which
have vested as set forth above will be hereafter referred to as "Vested Time
Vesting Stock" and the shares of the Time Vesting Stock which have not vested
will be hereafter referred to as "Unvested Time Vesting Stock."
(f) No Vesting After Termination Date. Notwithstanding any provision
of subsection 1(e) to the contrary, none of the Time Vesting Stock will become
Vested Time Vesting Stock on or after the Termination Date. All shares of the
Time Vesting Stock which have become Vested Time Vesting Stock prior to the
Termination Date will remain Vested Time Vesting Stock after the Termination
Date.
2. Management Options and Management Option Shares.
(a) Management Options Grant. The Company hereby grants to Executive,
pursuant to the Plan, Management Options to purchase an aggregate of 127,656
shares of Class B Common ("Management Option Shares"). Tranche 1 will consist of
Management Options to purchase 25,531.2 Management Option Shares at an exercise
price of $8.93 per share (the "Tranche 1 Exercise Price"); Tranche 2 will
consist of Management Options to purchase 25,531.2 Management Option Shares at
an exercise price of $10.68 per share (the "Tranche 2 Exercise Price"); Tranche
3 will consist of Management Options to purchase 25,531.2 Management Option
Shares at an exercise price of $12.43 per share (the "Tranche 3 Exercise
Price"); Tranche 4 will consist of Management Options to purchase 25,531.2
Management Option Shares at an exercise price of $14.18 per share (the "Tranche
4 Exercise Price"); and Tranche 5 will consist of Management Options to purchase
25,531.2 Management Option Shares at an exercise price of $15.89 per share (the
"Tranche 5 Exercise Price"). The Tranche 1 Exercise Price, the Tranche 2
Exercise Price, the Tranche 3 Exercise Price, the Tranche 4 Exercise Price, and
the Tranche 5 Exercise Price are collectively referred to herein as "Management
Option Prices" and individually as a "Management Option Price". With respect to
each Tranche, the Management Option Price and the number of Management Option
Shares will be equitably adjusted for any stock split, stock dividend,
reclassification or recapitalization of the Company which occurs subsequent to
the date of this Agreement. The Management Options will be immediately
exercisable and, subject to earlier expiration as provided in subsection 2(b)
below, will expire on the Expiration Date. Each Tranche may be exercised
separately; provided that each Tranche may only be exercised in whole and not in
part. The Management Options are not intended to be "incentive stock options"
within the meaning of Section 422A of the Code.
(b) Expiration Upon Termination of Employment. Any Management Options
which have not been exercised prior to the Termination Date will expire on the
earlier of (i) 90 days after the Termination Date and (ii) the Expiration Date
and may not be exercised thereafter under any circumstance.
-3-
(c) Procedure for Exercise. At any time after the earlier of (i) six
months after the date hereof and (ii) the effective date of a registration
statement with respect to the Company's debt securities under the 1933 Act and
prior to the Expiration Date, Executive may exercise all or a portion of the
Management Options which have not expired pursuant to subsection 2(b) above by
delivering written notice of exercise to the Company, together with (i) a
written acknowledgment that Executive has read and has been afforded an
opportunity to ask questions of members of the Company's management regarding
all financial and other information provided to Executive regarding the Company
and (ii) (x) a certified check or wire transfer of funds in an amount equal to
the par value of the Management Option Shares being purchased (the "Cash
Amount") and (y) a promissory note in the form of Exhibit G attached hereto (an
"Option Note") in the aggregate principal amount equal to the aggregate
Management Option Prices (calculated with respect to each Tranche based on the
number of Management Option Shares of such Tranche to be acquired by Executive
and the Management Option Price for such Tranche) for the Tranche(s) being
exercised less the Cash Amount. Executive's obligations under the Option Note
will be secured by a pledge of all of the Management Option Shares, and in
connection therewith Executive will enter into a pledge agreement in the form of
Exhibit H attached hereto. As a condition to any exercise of the Management
Options, Executive will permit the Company to deliver to him all financial and
other information regarding the Company and its Subsidiaries which it believes
necessary to enable Executive to make an informed investment decision.
(d) Non-Transferability of Management Options. The Management Options
are personal to Executive and are not transferable by Executive except pursuant
to the laws of descent or distribution. Only Executive or his legal guardian or
representative may exercise the Management Options.
(e) Vesting of Management Option Shares. The Management Option Shares
will become vested (regardless of whether the corresponding Management Options
have been exercised) on the fifth anniversary of the date hereof if Executive
is, and has been, continuously employed by the Company or its Subsidiaries from
the date of this Agreement through such date; provided that all of the
outstanding Management Option Shares will become vested upon the occurrence of a
Sale of the Company. The Management Option Shares which have vested as set
forth above will be hereafter referred to as "Vested Management Option Shares"
and the Management Option Shares which have not vested will be hereafter
referred to as "Unvested Management Option Shares."
(f) No Vesting After Termination Date. Notwithstanding any provision
of subsection 2(e) to the contrary, none of the Unvested Management Option
Shares will become Vested Management Option Shares after the Termination Date.
All Management Option Shares which have become Vested Management Option Shares
prior to the Termination Date will remain Vested Management Option Shares after
the Termination Date.
(g) Section 83(b) Election. Within 30 days after the exercise of any
Management Options, the Executive will make an effective election with the
Internal Revenue Service under Section 83(b) of the Internal Revenue Code of
1986, as amended, and the regulations promulgated thereunder, in the form of
Exhibit I attached hereto.
-4-
3. Representations and Warranties; Acknowledgments.
(a) Representations and Warranties by Executive. In connection
with the purchase and sale of Executive Stock hereunder, Executive represents
and warrants to the Company that:
(i) The shares of Executive Stock to be acquired by Executive
pursuant to this Agreement will be acquired for Executive's own account and
not with a view to, or intention of, distribution thereof in violation of
the 1933 Act or any applicable state securities laws, and the shares of
Executive Stock will not be disposed of in contravention of the 1933 Act or
any applicable state securities laws.
(ii) Executive is an executive officer of the Company or its
Subsidiaries, is sophisticated in financial matters and is able to evaluate
the risks and benefits of the investment in Executive Stock.
(iii) Executive is able to bear the economic risk of his investment
in Executive Stock for an indefinite period of time because Executive Stock
has not been registered under the 1933 Act and, therefore, cannot be sold
unless subsequently registered under the 1933 Act or an exemption from such
registration is available.
(iv) Executive has had an opportunity to ask questions and receive
answers concerning the terms and conditions of the offering of Executive
Stock and has had full access to such other information concerning the
Company and its Subsidiaries as he has requested. Executive has reviewed,
or has had an opportunity to review, a copy of the Recapitalization
Agreement and the persons listed on the signature pages thereto, and
Executive is familiar with the transactions contemplated thereby. Executive
also has reviewed, or has had an opportunity to review, the Company's
Certificate of Incorporation and the Company's Bylaws and any credit
agreements, notes and related documents to which the Company is a party.
(v) This Agreement constitutes the legal, valid and binding
obligation of Executive, enforceable in accordance with its terms, and the
execution, delivery and performance of this Agreement by Executive does not
and will not conflict with, violate or cause a breach of any agreement,
contract or instrument to which Executive is a party or any judgment, order
or decree to which Executive is subject.
(b) Acknowledgment by Executive. As an inducement to the Company to
sell the Executive Stock to Executive, and as a condition thereto,
Executive acknowledges and agrees that:
-5-
(i) the Company will have no duty or obligation to disclose to
Executive, and Executive will have no right to be advised of, any material
information regarding the Company or its Subsidiaries at any time prior to,
upon or in connection with the repurchase of Executive Stock as provided
hereunder; and
(ii) subject to any employment agreement between Executive and the
Company or applicable law, neither the issuance of Executive Stock to
Executive nor any provision contained herein will entitle Executive to
remain in the employment of the Company or its Subsidiaries or affect the
right of the Company to terminate Executive's employment at any time for
any reason.
4. Repurchase Option.
(a) Repurchase Option. If the Termination Date occurs, the Executive
Stock, whether held by Executive or one or more transferees, will be subject to
repurchase by the Company and the Xxxx Group (each of the aforementioned, solely
at their option) pursuant to the terms and conditions set forth in, and to the
extent described in, this Section 4 (the "Repurchase Option").
(b) Repurchase Price. In the event the Termination Date occurs, (i)
the outstanding Unvested Management Option Shares will be subject to the
Repurchase Option at a price per share equal to the Original Cost thereof, (ii)
the Unvested Time Vesting Stock will be subject to the Repurchase Option at a
price per share equal to the Original Cost thereof, (iii) the outstanding Vested
Management Option Shares will be subject to the Repurchase Option at a price per
share equal to the Fair Market Value thereof as of the Termination Date, (iv)
the Vested Time Vesting Stock will be subject to the Repurchase Option at a
price per share equal to the Fair Market Value thereof as of the Termination
Date and (v) the Rollover Stock will be subject to the Repurchase Option at a
price per share equal to the Fair Market Value thereof as of the Termination
Date; provided that, if the Company has consummated a Public Offering prior to
the Termination Date, none of the Rollover Stock, the Vested Management Option
Shares or the Vested Time Vesting Shares will be subject to the Repurchase
Option.
(c) Repurchase Procedures. The Repurchase Option is exercisable by
the Company delivering written notice (the "Repurchase Notice") to the holder or
holders of each Class of Executive Stock within 180 days after the Termination
Date. The Repurchase Notice will set forth the number of shares of each Class of
Executive Stock to be acquired from such holder(s), the aggregate consideration
to be paid for such holder's shares of each such Class of Executive Stock and
the time and place for the closing of the transaction. If any shares of any
Class of Executive Stock are held by any transferees of Executive, the Company
will purchase the shares of such Class elected to be purchased from such
holder(s) of Executive Stock, pro rata according to the number of shares of such
Class of Executive Stock held by such holder(s) at the time of delivery of such
Repurchase Notice (determined as nearly as practicable to the nearest share).
-6-
(d) Xxxx Group's Rights.
(i) If for any reason the Company does not elect to purchase all
of the shares of Executive Stock pursuant to the Repurchase Option prior to the
180th day following the Termination Date, the Xxxx Group will be entitled to
exercise the Repurchase Option, in the manner set forth in this Section 4, for
those shares of each Class of Executive Stock the Company has not elected to
purchase (the "Available Shares"); provided that the Xxxx Group will not be
entitled to exercise the Repurchase Option with respect to any Unvested
Management Option Shares or Unvested Time Vesting Stock unless the Company is
legally or contractually prohibited from repurchasing such stock. As soon as
practicable, but in any event within thirty (30) days after the Company
determines that there will be any Available Shares, the Company will deliver
written notice (the "Option Notice") to the Xxxx Group setting forth the number
of each Class of Available Shares and the price for each Available Share.
(ii) Each member of the Xxxx Group initially will be permitted to
purchase its pro rata share (based upon the number of shares of Common Stock
then held by such member of the Xxxx Group) of each Class of the Available
Shares. Each member of the Xxxx Group may elect to purchase any number of any
Class of the Available Shares (subject to the preceding sentence) by delivering
written notice to the Company within 30 days after receipt of the Option Notice
from the Company (such 30-day period being referred to herein as the "Election
Period").
(iii) As soon as practicable but in any event within five (5) days
after the expiration of the Election Period, the Company will, if necessary,
notify the members of the Xxxx Group electing to purchase Available Shares of
any Class of Available Shares which the members of the Xxxx Group have elected
not to purchase and each of the electing members of the Xxxx Group will be
entitled to purchase the remaining Available Shares on the same terms as
described above (the "Second Option Notice"); provided that if in the aggregate
such members of the Xxxx Group elect to purchase more than the remaining
Available Shares of any Class, such remaining Available Shares purchased by each
such member of the Xxxx Group of such Class will be reduced on a pro rata basis
based upon the number of shares of Common Stock then held by such member of the
Xxxx Group. Each member of the Xxxx Group may elect to purchase any of the
remaining Available Shares available to such member of the Xxxx Group by
delivering written notice to the Company within 10 days after the delivery of
the Second Option Notice (with such 10-day period referred to herein as the
"Second Election Period").
(iv) As soon as practicable but in any event within five (5) days
after the expiration of the Election Period or the Second Election Period (if
any) the Company will, if necessary, notify the holder(s) of Executive Stock as
to the number of shares of each Class of such Executive Stock being purchased
from the holder(s) by the members of the Xxxx Group (the "Supplemental
Repurchase Notice"). At the time the Company delivers a Supplemental Repurchase
Notice to the holder(s) of such Executive Stock, the Company will also deliver
to each electing member of the Xxxx Group written notice setting forth the
number of shares of each Class of Executive Stock the Company and each member of
the Xxxx Group will acquire, the aggregate purchase price to be paid and the
time and place of the closing of the transaction.
-7-
(e) Closing. The closing of the transactions contemplated by this
Section 4 will take place on the date designated by the Company in the
Repurchase Notice or the Supplemental Repurchase Notice, as the case may be,
which date will not be more than 90 days after the delivery of such notice. The
members of the Xxxx Group will pay for any shares of Applicable Stock to be
purchased by such members of the Xxxx Group pursuant to the Repurchase Option by
delivery of a check payable to the holder of such shares of Applicable Stock.
The Company will pay for any shares of Applicable Stock to be purchased by the
Company pursuant to the Repurchase Option (if any) first, to the extent of any
amounts owed to the Company under the Rollover Stock Note, the Time Vesting
Stock Note and/or the Option Note, as the case may be, used to purchase the
shares of Applicable Stock being repurchased, by offsetting such amounts and
second, the Company shall pay the remaining portion of the purchase price by
delivery of (i) a check payable to the holder of such shares of Applicable Stock
or (ii) a note or notes payable in three equal annual installments beginning on
the first anniversary of the closing of such purchase and bearing interest at a
rate per annum equal to 7%, or (iii) a combination of (i) and (ii) in the
aggregate amount of such remaining portion. Any notes issued by the Company
pursuant to this subsection 4(e) will be subject to any restrictive covenants to
which the Company is subject at the time of such purchase. Notwithstanding
anything to the contrary contained in this Agreement, all repurchases of shares
of Executive Stock by the Company will be subject to applicable restrictions
contained in the Delaware General Corporation Law and in the Company's and its
Subsidiaries' debt and equity financing agreements. If any such restrictions
prohibit the repurchase of shares of Executive Stock hereunder which the Company
is otherwise entitled to make, the Company may make such repurchases as soon as
it is permitted to do so under such restrictions; provided, however, that in
such circumstances any such repurchases for Fair Market Value shall be for the
greater of (i) the Fair Market Value on the date such restrictions lapse and
(ii) the Fair Market Value on the Termination Date. The Company and/or the
members of the Xxxx Group, as the case may be, will receive customary
representations and warranties from each seller regarding the sale of the shares
of Executive Stock, including, but not limited to, the representation that such
seller has good and marketable title to such shares of Executive Stock to be
transferred free and clear of all liens, claims and other encumbrances.
(f) Termination of Repurchase Option. The provisions of this Section
4 will terminate upon a Sale of the Company.
5. Restrictions on Transfer of Executive Stock.
(a) Transfer of Executive Stock. Executive will not sell, pledge,
transfer or otherwise dispose of (a "Transfer") any interest in any shares of
Executive Stock, except pursuant to the provisions of Sections 4, 5(b), 6, 7 and
8 hereof.
(b) Certain Permitted Transfers. The restrictions contained in this
Section 5 will not apply with respect to Transfers of shares of Executive Stock
(i) pursuant to applicable laws of descent and distribution, (ii) among
Executive's Family Group, or (iii) at such times as the Investors sell shares of
Common Stock in a Public Offering, but in the case of this clause (iii) only to
the extent of the lesser of (x) the number of vested shares of Executive Stock
held by Executive and (y)
-8-
the number of shares of Executive Stock held by Executive multiplied by a
fraction, the numerator of which is the number of shares of Common Stock sold by
the Investors in such Public Offering and the denominator of which is the total
number of shares of Common Stock held by the Investors immediately prior to the
initial Public Offering; provided that if any Other Executives are permitted but
do not elect to Transfer any vested shares of Other Executive Stock pursuant to
the applicable Other Executive Stock Agreement (the aggregate amount of such
shares not Transferred being "Excess Shares"), then the number of vested shares
of Executive Stock permitted to be Transferred pursuant to clause (y) above will
be increased by the result of the number of Excess Shares multiplied by a
fraction, the numerator of which is the number of vested shares of Executive
Stock held by Executive and the denominator of which is the aggregate number of
vested shares of Executive Stock and Other Executive Stock held by Executive and
all Other Executives electing to transfer additional vested shares of Other
Executive Stock pursuant to similar provisions of the applicable Other Executive
Stock Agreement; and provided, further, that the restrictions contained in this
Section 5 will continue to be applicable to the shares of Executive Stock after
any Transfer of the type referred to in clause (i) or (ii) and the transferees
of such shares of Executive Stock will agree in writing to be bound by the
provisions of this Agreement. Any transferee of Executive Stock pursuant to a
transfer in accordance with the provisions of this Section 5(b) is herein
referred to as a "Permitted Transferee." Upon the transfer of Executive Stock
pursuant to this Section 5(b), Executive will deliver a written notice (a
"Transfer Notice") to the Company. In the case of a Transfer pursuant to clause
(i) or (ii) hereof, the Transfer Notice will disclose in reasonable detail the
identity of the Permitted Transferee(s).
(c) Termination of Transfer Restrictions. The provisions of this
Section 5 will terminate upon the earlier of (i) a Sale of the Company and (ii)
the eighth anniversary of the date hereof.
6. Participation Rights.
(a) At least 30 days prior to any Transfer of Common Stock by an
Investor (other than a Transfer among the Investors, their partners or
affiliates or to an employee of the Company or its Subsidiaries), the
transferring Investor will deliver a Transfer Notice to the Company, Executive
and all other holders of such class of Common Stock that have been granted
participation rights similar to the participation rights granted herein
(Executive and such other holders of Common Stock with participation rights
collectively referred to as the "Other Stockholders"), specifying in reasonable
detail the identity of the prospective transferee(s) and the terms and
conditions of the Transfer. Notwithstanding the restrictions contained in this
Section 6, the Other Stockholders may elect to participate in the contemplated
Transfer by delivering written notice to the transferring Investor within 10
days after delivery of the Transfer Notice. If any Other Stockholders elect to
participate in such Transfer, each of the transferring Investor and such Other
Stockholders will be entitled to sell in the contemplated Transfer, at the same
price and on the same terms, a number of shares of such class of Common Stock
equal to the product of (i) the quotient determined by dividing the number of
shares of such class of Common Stock owned by such person by the aggregate
number of shares of such class of Common Stock owned by the transferring
Investor and the Other Stockholders participating in such sale and (ii) the
number of shares of such class of Common Stock
-9-
to be sold in the contemplated Transfer. Notwithstanding the foregoing, in the
event that the transferring Investor intends to Transfer shares of more than one
class of Common Stock, the Other Stockholders participating in such Transfer
will be required to sell in the contemplated Transfer a pro rata portion of
shares of all such classes of Common Stock, which portion will be determined in
the manner set forth immediately above.
For example (by way of illustration only), if the Transfer Notice
contemplated a sale of 100 shares of Class L Common by the
transferring Investor, and if the transferring Investor at such time
owns 30% of the Class L Common and if one Other Stockholder elects to
participate and owns 20% of the Class L Common, the transferring
Investor would be entitled to sell 60 shares (30% / 50% x 100 shares)
and the Other Stockholder would be entitled to sell 40 shares (20% /
50% x 100 shares).
(b) The transferring Investor will use reasonable efforts to obtain
the agreement of the prospective transferee(s) to the participation of the Other
Stockholders who have elected to participate in any contemplated Transfer, and
the transferring Investor will not Transfer any of its shares of Common Stock to
the prospective transferee unless (A) the prospective transferee agrees to allow
the participation of the Other Stockholders or (B) simultaneously with such
Transfer, the transferring Investor purchases the number of shares of such class
of Common Stock from the Other Stockholders who have elected to participate
which Other Stockholders would have been entitled to sell pursuant to this
Section 6.
(c) The provisions of this Section 6 will terminate upon the first to
occur of (i) a Sale of the Company and (ii) a Public Offering.
-10-
7. Additional Restrictions on Transfer.
(a) The certificates representing shares of Executive Stock will bear
the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
AND MAY NOT BE SOLD OR TRANS TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM
REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER,
CERTAIN REPURCHASE OPTIONS AND CERTAIN OTHER AGREEMENTS SET FORTH IN
AN EXECUTIVE STOCK AGREEMENT BETWEEN THE ISSUER (THE "COMPANY") AND AN
EMPLOYEE OF THE COMPANY DATED AS OF MAY 16, 1997, A COPY OF WHICH MAY
BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY'S PRINCIPAL PLACE OF
BUSINESS WITHOUT CHARGE."
(b) No holder of Executive Stock may Transfer any Executive Stock
(except pursuant to an effective registration statement under the 1933 Act)
without first delivering to the Company an opinion of counsel reasonably
acceptable in form and substance to the Company (which counsel will be
reasonably acceptable to the Company) that registration under the 1933 Act is
not required in connection with such Transfer.
8. Definition of Executive Stock. For all purposes of this
Agreement, Executive Stock will continue to be Executive Stock in the hands of
any holder other than Executive (except for the Company, the Investors,
purchasers pursuant to an offering registered under the 1933 Act or purchasers
pursuant to a Rule 144 transaction (other than a Rule 144(k) transaction
occurring prior to the time the Company is a Public Company) and subsequent
transferees), and each such other holder of Executive Stock will succeed to all
rights and obligations attributable to Executive as a holder of Executive Stock
hereunder. Executive Stock will also include shares of the Company's capital
stock issued with respect to shares of Executive Stock by way of a stock split,
stock dividend or other recapitalization.
9. Sale of the Company.
(a) If the holders of a majority of the shares of Common Stock held
by the Xxxx Group approve a sale of all or substantially all of the Company's
assets determined on a consolidated basis or a sale of all (or, for accounting,
tax or other reasons, substantially all) of the Company's outstanding capital
stock (whether by merger, recapitalization, consolidation, reorganization,
combination or otherwise) to an Independent Third Party or group of Independent
Third Parties (each such sale, an "Approved Sale"), each holder of Executive
Stock will vote for, consent to and raise no objections against such Approved
Sale. If the Approved Sale is structured as (i) a merger
-11-
or consolidation, each holder of Executive Stock will waive any dissenters'
rights, appraisal rights or similar rights in connection with such merger or
consolidation or (ii) sale of stock, each holder of Executive Stock will agree
to sell all of his shares of Executive Stock and rights to acquire shares of
Executive Stock on the terms and conditions approved by the Board and the
holders of a majority of the Common Stock then outstanding. Each holder of
Executive Stock will take all necessary or desirable actions in connection with
the consummation of the Approved Sale as requested by the Company.
(b) The obligations of the holders of Common Stock with respect to an
Approved Sale of the Company are subject to the satisfaction of the following
conditions: (i) upon the consummation of such Approved Sale, each holder of
Common Stock will receive the same form of consideration and the same portion of
the aggregate consideration that such holders of Common Stock would have
received if such aggregate consideration had been distributed by the Company in
complete liquidation pursuant to the rights and preferences set forth in the
Company's Certificate of Incorporation as in effect immediately prior to such
Approved Sale; (ii) if any holders of a class of Common Stock are given an
option as to the form and amount of consideration to be received, each holder of
such class of Common Stock will be given the same option; and (iii) each holder
of then currently exercisable rights to acquire shares of a class of Common
Stock will be given an opportunity to exercise such rights prior to the
consummation of such Approved Sale and participate in such Approved Sale as
holders of such class of Common Stock.
(c) If the Company or the holders of the Company's securities enter
into any negotiation or transaction for which Rule 506 (or any similar rule then
in effect) promulgated by the Securities Exchange Commission may be available
with respect to such negotiation or transaction (including a merger,
consolidation or other reorganization), the holders of Executive Stock will, at
the request of the Company, appoint a purchaser representative (as such term is
defined in Rule 501) reasonably acceptable to the Company. If any holder of
Executive Stock appoints a purchaser representative designated by the Company,
the Company will pay the fees of such purchaser representative, but if any
holder of Executive Stock declines to appoint the purchaser representative
designated by the Company, such holder will appoint another purchaser
representative, and such holder will be responsible for the fees of the
purchaser representative so appointed.
(d) Executive and the other holders of Executive Stock (if any) will
bear their pro-rata share (based upon the number of shares sold) of the costs of
any sale of Executive Stock pursuant to an Approved Sale to the extent such
costs are incurred for the benefit of all holders of Common Stock and are not
otherwise paid by the Company or the acquiring party. Costs incurred by
Executive and the other holders of Executive Stock on their own behalf will not
be considered costs of the transaction hereunder.
(e) The provisions of this Section 9 will terminate upon the
consummation of a Public Offering.
-12-
10. Preemptive Rights.
(a) Except as set forth in subsection (b) below, the Company will not
issue, sell or otherwise transfer for consideration to any Investor (an
"Issuance") at any time prior to a Public Offering, any capital stock or debt
security unless, at least 30 days and not more than 60 days prior to such
Issuance, the Company notifies Executive in writing of the Issuance (including
the price, the purchasers thereof and the other terms thereof) and grants to
Executive, the right (the "Right") to subscribe for and purchase a portion of
such additional shares or other securities so issued at the same price and on
the same terms as issued in the Issuance equal to the quotient determined by
dividing (1) the number of fully diluted shares of Executive Stock held by
Executive (other than options to acquire stock from other stockholders of the
Company) by (2) the total number of shares of Common Stock outstanding on a
fully diluted basis. Notwithstanding the foregoing, if all Persons entitled to
purchase or receive such stock or securities are required to also purchase other
securities of the Company, if Executive exercises the Right pursuant to this
Section 10 then Executive will also be required to purchase the same strip of
securities (on the same terms and conditions) that such other Persons are
required to purchase. The Right may be exercised by Executive at any time by
written notice to the Company received by the Company within 15 days after
receipt by Executive of the notice from the Company referred to above. The
closing of the purchase and sale pursuant to the exercise of the Right will
occur at least 10 days after the Company receives notice of the exercise of the
Right and concurrently with the closing of the Issuance. In the event that the
consideration received by the Company in connection with an Issuance is property
other than cash, Executive may, at his election, pay the purchase price for such
additional shares or other securities in such property or solely in cash. In the
event that Executive elects to pay cash, the amount thereof will be determined
based on the fair value of the consideration received or receivable by the
Company in connection with the Issuance.
(b) Notwithstanding the foregoing, the Right will not apply to (i)
issuances of Common Stock (or securities convertible into or exchangeable for,
or options to purchase, Common Stock), pro rata to all holders of Common Stock,
as a dividend on, subdivision of or other distribution in respect of, the Common
Stock in accordance with the Company's Certificate of Incorporation or (ii)
issuances of Common Stock upon conversion of any shares of the Company's Series
A Preferred Stock, or (iii) the issuance of Common Stock (or securities
convertible into or exchangeable for, or options to purchase, Common Stock) in
connection with the provision by the Investors or their Affiliates of debt
financing to the Company or its Subsidiaries.
(c) The provisions of this Section 10 will terminate upon the
consummation of a Public Offering.
11. Non-Compete; Non-Solicitation.
(a) Executive acknowledges that in the course of his employment with
the Company he has become familiar and will become familiar with the Company's
trade secrets and with other confidential information concerning the Company and
its Subsidiaries and that his
-13-
services have been and will be of special, unique and extraordinary value to the
Company and its Subsidiaries. Therefore, Executive agrees that upon exercise of
the Repurchase Option pursuant to Section 4 hereof, in further consideration of
the repurchase of Executive Stock in connection therewith, for a period of two
years after the Termination Date (the "Noncompete Period"), he will not Compete.
(b) Sections 6(b)-(g) of the Employment Agreement are hereby
incorporated by reference in their entirety.
DEFINITIONS
12. Definitions. The following terms are defined as
follows:
"1933 Act" means the Securities Act of 1933, as amended from time to
time.
"Affiliate" means, with respect to any Person, any other Person who is
controlling, controlled by, or under common control with such Person and, in the
case of a Person which is a partnership, any partner of such Person.
"Xxxx Group" means collectively Xxxx Capital Fund V, L.P., Xxxx
Capital Fund V-B, L.P., BCIP Associates, BCIP Trust Associates, L.P. and
Xxxxxxxx Street Partners.
"Board" means the Company's Board of Directors.
"Class" means each of the Vested Time Vesting Stock, the Unvested Time
Vesting Stock, the Vested Management Option Shares, the Unvested Management
Option Shares, and the Rollover Stock.
"Closing" means the closing of the Recapitalization.
"Common Stock" means, collectively, Class A Common, Class B Common and
Class L Common.
"Competes" or "Competing" means, without the prior written consent of
the Company directly or indirectly, providing consultive service with or without
pay, owning, managing, operating, joining, controlling, participating in, or
being connected as a stockholder, partner or otherwise with any business,
individual, partner, firm corporation or other entity that (i) is in competition
with the Company or any Subsidiary or affiliate of the Company to the extent its
products are similar or materially related to those of the Company or any
Subsidiary or affiliate of the Company (including products under development by
the Company or any Subsidiary of affiliate of the Company) or (ii) otherwise
engages in any business in which the Company or any Subsidiary or affiliate of
the Company is engaged or proposes to engage, in either case as of the
Termination Date; provided that "Compete" and "Competing" will not mean being a
passive owner of not more
-14-
than 2% of the outstanding stock of any class of a corporation which is publicly
traded, so long as Executive has no active participation in the business of such
corporation.
"Employment Agreement" means the Employment Agreement, dated as of the
date hereof, between Executive and the Company, as amended and modified from
time to time.
"Executive Stock" means all shares of Common Stock purchased pursuant
hereto and all shares of Common Stock otherwise owned or acquired by Executive,
including the Management Option Shares and the Rollover Stock but excluding the
Option Shares (as defined in the Option Agreement).
"Expiration Date" means, with respect to any Management Option, the
date which is 30 days after the tenth anniversary of the date of this Agreement.
"Fair Market Value" of each share of Common Stock means,
(i) the average of the closing prices of the sales of the Common
Stock on all securities exchanges on which Common Stock may at the time be
listed, or, if there have been no sales on any such exchange on any day, the
average of the highest bid and lowest asked prices on all such exchanges at the
end of such day, or, if on any day Common Stock is not so listed, the average of
the representative bid and asked prices quoted in the NASDAQ System as of 3:00
P.M., Chicago time, or, if on any day Common Stock is not quoted in the NASDAQ
System, the average of the highest bid and lowest asked prices on such day in
the domestic over-the-counter market as reported by the National Quotation
Bureau Incorporated, or any similar successor organization, in each such case
averaged over a period of 21 days consisting of the day as of which the Fair
Market Value is being determined and the 20 consecutive business days prior to
such day; or
(ii) if at any time Common Stock is not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-counter market, the fair
value of such security determined jointly in good faith by the Board and
Executive; provided that if, within 60 days, the Board and Executive cannot so
agree, then such value will be determined by an independent appraiser reasonably
acceptable to the Board and Executive, which appraiser will submit to the Board
and Executive a written report setting forth such determination. If the Board
and Executive are unable to so agree on an appraiser within 15 days after the
end of such 60-day period, each of the Board and Executive will promptly select
an independent appraiser and the two appraisers so selected by the Board and
Executive will promptly select a third independent appraiser to determine the
Fair Market Value based upon information provided by the Company and Executive.
The appraiser appointed hereunder will allocate its costs and expenses incurred
in determining Fair Market Value based upon the relative differences between
each the Board's and Executive's respective determinations of Fair Market Value
and such appraiser's determination of Fair Market Value.
-15-
"Family Group" means Executive's spouse and descendants (whether
natural or adopted) and any trust solely for the benefit of Executive and/or
Executive's spouse and/or descendants.
"Independent Third Party" means any Person who, immediately prior to
the contemplated transaction, does not own in excess of 5% of the Common Stock
on a fully diluted basis, who is not controlling, controlled by or under common
control with any such 5% owner of the Common Stock and who is not the spouse or
descendant (by birth or adoption) of any such 5% owner of the Common Stock;
provided that in no event will Xxxx Capital, Inc. or any of its Affiliates be an
Independent Third Party.
"Investors" means collectively the Xxxx Group Members, the Xxxxxx
Group and Antares International Partners, Inc.; and "Investor" means any of the
Investors individually.
"Option Agreement" means the Option Agreement, dated as of the date
hereof, between Executive and certain investors named therein.
"Original Cost" means, in the case of each share of Time Vesting
Stock, $0.235, and in the case of each Management Option Share, the applicable
Management Option Price (in each case as proportionally adjusted for all stock
splits, stock dividends and other recapitalizations affecting such shares
subsequent to the date hereof).
"Other Executives" means the individuals who have executed or will
execute Other Executive Stock Agreements with the Company.
"Other Executive Stock" means the "Executive Stock" as defined in all
Other Executive Stock Agreements.
"Other Executive Stock Agreements" means the Executive Stock
Agreements (other than this Agreement) by and between the Company and certain
other executives of the Company, as amended and modified from time to time.
"Person" means an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
"Plan" has the meaning set forth in the preamble.
"Public Company" means a company any of whose securities are
registered pursuant to Section 12(b) or 12(g) of the Securities Exchange Act.
"Public Offering" means an initial public offering and sale of the
Common Stock pursuant to an effective registration statement under the 1933 Act.
-16-
"Public Sale" means any sale of Common Stock to the public pursuant to
an offering registered under the Securities Act or to the public through a
broker, dealer or market maker pursuant to the provisions of Rule 144 (other
than Rule 144(k) prior to the time the Company is a Public Company) adopted
under the 1933 Act.
"Recapitalization Agreement" means the Recapitalization Agreement,
dated as of the date hereof, among the Company, the Xxxx Group and the Sellers
named therein.
"Sale of the Company" means any transaction involving the Company and
an Independent Third Party or affiliated group of Independent Third Parties
pursuant to which such party or parties acquire (i) a majority of the
outstanding shares of capital stock of the Company entitled to vote generally in
the election of the Board (whether by merger, consolidation or sale or Transfer
of the Company's capital stock) or (ii) all or substantially all of the
Company's assets determined on a consolidated basis.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time.
"Subsidiary" means any corporation of which shares of stock having a
majority of the general voting power in electing the board of directors are, at
the time as of which any determination is being made, owned by the Company
either directly or through its Subsidiaries.
"Xxxxxx Group" means collectively Xxxxxx Xxxx Ventures and certain
other investors affiliated therewith.
"Termination Date" means the date that Executive ceases to be employed
by the Company or any of its Subsidiaries for any reason.
MISCELLANEOUS
13. Notices. Any notice provided for in this Agreement must be in
writing and must be personally delivered, received by certified mail, return
receipt requested, or sent by guaranteed overnight delivery service, to the
Investors at the addresses indicated in the Company's records and to the other
recipients at the address indicated below:
-17-
To the Company:
Therma-Wave, Inc.
0000 Xxxxxxxx Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: President
With a copy to:
Xxxx Capital, Inc.
Xxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxx
Xxxxx Xxxxxxx
and
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
To Executive:
Xxx X. Xxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
or such other address or to the attention of such other person as the recipient
party will have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or mailed.
14. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
15. Complete Agreement. This Agreement embodies the complete
agreement and understanding among the parties and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to
-18-
the subject matter hereof in any way. Without limiting the foregoing, all
existing stock option agreements between the Company and/or the Company's
existing stockholders and Executive are hereby cancelled and terminated.
16. Counterparts. This Agreement may be executed in separate
counterparts, each of which will be deemed to be an original and all of which
taken together will constitute one and the same agreement.
17. Successors and Assigns; Transfer. This Agreement is intended to
bind and inure to the benefit of and be enforceable by Executive, the Company,
the Investors, and their respective successors and assigns, provided that
Executive may not assign any of his rights or obligations, except as expressly
provided by the terms of this Agreement. Prior to Transferring any shares of
Executive Stock (other than in a Public Sale or any Approved Sale) to any person
or entity, Executive will cause the prospective transferee to execute and
deliver to the Company and the Other Stockholders an agreement containing the
rights and restrictions set forth herein with respect to such shares of
Executive Stock.
18. Governing Law. The corporate law of the State of Delaware will
govern all questions concerning the relative rights of the Company and its
stockholders. All other issues concerning the enforceability, validity and
binding effect of this Agreement will be governed by and construed in accordance
with the laws of the State of California, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of California or
any other jurisdiction) that would cause the application of the law of any
jurisdiction other than the State of California.
19. Remedies. The parties hereto acknowledge and agree that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that any party hereto will have the right to injunctive relief, in
addition to all of its other rights and remedies at law or in equity, to enforce
the provisions of this Agreement.
20. Arbitration.
(a) Arbitration. In the event of disputes between the parties with
respect to the terms and conditions of this Agreement, such disputes will be
resolved by and through an arbitration proceeding to be conducted under the
auspices of the American Arbitration Association (or any like organization
successor thereto) at Los Angeles, California. Such arbitration proceeding will
be conducted in as expedited a manner as is then permitted by the commercial
arbitration rules (formal or informal) of the American Arbitration Association,
and the arbitrator or arbitrators in any such arbitration will be persons who
are expert in the subject matter of the dispute. Both the foregoing agreement of
the parties to arbitrate any and all such claims, and the results,
determination, finding, judgment and/or award rendered through such arbitration,
will be final and binding on the parties hereto and may be specifically enforced
by legal proceedings. The parties agree and acknowledge that money damages may
not be an adequate remedy for any breach of the provisions of this
-19-
Agreement and that any party may, in his or its sole discretion, ask for
specific performance and/or injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.
(b) Procedure. Such arbitration may be initiated by written notice
from either party to the other which will be a compulsory and binding proceeding
on each party. The arbitration will be conducted before a panel of arbitrators
selected in accordance with the rules of the American Arbitration Association.
The costs of said arbitrators and the arbitration will be borne equally by the
parties to the arbitration; provided that the Company will reimburse Executive
for all reasonable travel costs incurred by Executive in connection with such
arbitration. Each party will bear separately the cost of their respective
attorneys, witnesses and experts in connection with such arbitration. Time is of
the essence of this arbitration procedure, and the arbitrators will be
instructed and required to render their decision within ten (10) days following
completion of the arbitration.
21. Effect of Transfers in Violation of Agreement. The Company will
not be required (a) to transfer on its books any shares of Executive Stock which
have been sold or transferred in violation of any of the provisions set forth in
this Agreement or (b) to treat as owner of such shares of Executive Stock, to
accord the right to vote as such owner or to pay dividends to any transferee to
whom such shares of Executive Stock have been transferred in violation of this
Agreement.
22. Amendments and Waivers. Any provision of this Agreement may be
amended or waived only with the prior written consent of the Company and the
members of the Xxxx Group who hold 80% of the Common Stock held by the Xxxx
Group as of the Closing, and Executive; provided, however, that in the event
that such amendment or waiver would materially and adversely affect an Investor
or a group of Investors in a manner different than any other Investor, then such
amendment or waiver will require the consent of such Investor or a majority of
the Common Shares held by such group of Investors adversely affected.
23. Third Party Beneficiaries. The parties hereto acknowledge and
agree that the Investors are third party beneficiaries of this Agreement. This
Agreement will inure to the benefit of and be enforceable by the Investors and
their respective successors and assigns.
24. Therma-Wave, Inc. 1997 Stock Purchase and Option Plan. The grant
of Management Stock Options hereunder is pursuant to and subject to all of the
terms and conditions of the Plan.
* * * * *
-20-
Exhibit 10.9
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first above written.
THERMA-WAVE, INC.
/s/ Xxxxx Xxxxxxxxxx
------------------------------------------
By: Xxxxx Xxxxxxxxxx
Its: President and Chief Executive Officer
/s/ Xxx X. Xxxxx
------------------------------------------
Xxx X. Xxxxx
Xxx X. Xxxxx Executive Stock Agreement
EXHIBIT A
---------
THERMA-WAVE, INC.
-----------------
1997 STOCK PURCHASE AND OPTION PLAN
-----------------------------------
1. Purpose of Plan. This 1997 Stock Purchase and Option Plan (the
"Plan") of Therma-Wave, Inc. (the "Company") is designed to provide incentives
to such present and future employees, directors, consultants or advisers of the
Company or its subsidiaries ("Participants"), as may be selected in the sole
discretion of the Company's board of directors, through the grant of Options by
the Company to Participants or through the sale of Common Stock to Participants.
Only those Participants who are employees of the Company and its Subsidiaries
shall be eligible to receive incentive stock options.
2. Definitions. Certain terms used in this Plan have the meanings
set forth below:
"Board" means the Company's board of directors.
"Code" means the Internal Revenue Code of 1986, as it may be amended
from time to time.
"Class A Common" means the Company's Class A Common Stock, par value
$.01 per share.
"Class B Common" means the Company's Class B Common Stock, par value
$.01 per share.
"Class L Common" means the Company's Class L Common Stock, par value
$.01 per share.
"Common Stock" means the Class A Common, the Class B Common and the
Class L Common.
"Fair Market Value" of a share of Common Stock means the market value
as determined in good faith by the Board; provided that this definition shall
not apply to any other agreement under which Common Stock is issued or under any
Option grant if "Fair Market Value" is otherwise defined in such agreement or
Option grant.
"Option" means any option enabling the holder thereof to purchase any
class of Common Stock from the Company granted by the Board pursuant to the
provisions of this Plan. Options to be granted under this Plan may be incentive
stock options within the meaning of Section 422 of the Code ("Incentive Stock
Options") or in such other form, consistent with this Plan, as the Board may
determine.
"Option Shares" means any shares of Common Stock issued hereunder upon
exercise of Options.
"Subsidiary" means any corporation of which shares of stock having a
majority of the general voting power in electing the board of directors are, at
the time as of which any determination is being made, owned by the Company
either directly or through its Subsidiaries.
3. Grant of Options. The Board shall have the right and power to
grant to any Participant Options at any time prior to the termination of this
Plan in such quantity, at such price, on such terms and subject to such
conditions that are consistent with this Plan and established by the Board.
Options granted under this Plan shall be subject to such terms and conditions
and evidenced by agreements as shall be determined from time to time by the
Board.
4. Sale of Common Stock. The Board shall have the power and
authority to sell to any Participant any class or classes of Common Stock at any
time prior to the termination of this Plan in such quantity, at such price, on
such terms and subject to such conditions that are consistent with this Plan and
established by the Board. Common Stock sold under this Plan shall be subject to
such terms and evidenced by agreements as shall be determined from time to time
by the Board.
5. Administration of the Plan. The Board shall have the power and
authority to prescribe, amend and rescind rules and procedures governing the
administration of this Plan, including, but not limited to the full power and
authority (i) to interpret the terms of this Plan, the terms of any Options
granted under this Plan, and the rules and procedures established by the Board
governing any such Options and (ii) to determine the rights of any person under
this Plan, or the meaning of requirements imposed by the terms of this Plan or
any rule or procedure established by the Board. Each action of the Board which
shall be binding on all persons.
6. Limitation on the Aggregate Number of Shares. The number of
shares of Common Stock issued under this Plan (including the number of shares of
Common Stock with respect to which Options may be granted under this Plan (and
which may be issued upon the exercise or payment thereof)) shall not exceed, in
the aggregate, 3,000,000 shares of Class A Common and 3,000,000 shares of Class
B Common (as such numbers are equitably adjusted pursuant to paragraph 11
hereof). If any Options expire unexercised or unpaid or are canceled,
terminated or forfeited in any manner without the issuance of Common Stock or
payment thereunder, the shares with respect to which such Options were granted
shall again be available under this Plan. Similarly, if any shares of Common
Stock issued hereunder upon exercise of Options are repurchased hereunder, such
shares shall again be available under this Plan for reissuance as Options.
Shares of Common Stock to be issued upon exercise of the Options or shares of
Common Stock to be sold directly hereunder may be either authorized and unissued
shares, treasury shares, or a combination thereof, as the Board shall determine.
7. Incentive Stock Options. All Incentive Stock Options (i) shall
have an exercise price per share of Common Stock of not less than 100% of the
Fair Market Value of such share on the date of grant, (ii) shall not be
exercisable more than ten years after the date of grant, (iii)
-2-
shall not be transferable other than by will or under the laws of descent and
distribution and, during the lifetime of the Participant to whom such Incentive
Stock Options were granted, may be exercised only by such Participant (or his
guardian or legal representative), and (iv) shall be exercisable only during the
Participant's employment by the Company or a Subsidiary, provided, that the
Board may, in its discretion, provide at the time that an Incentive Stock Option
is granted that such Incentive Stock Option may be exercised for a period ending
no later than either (x) the termination of this Plan in the event of the
Participant's death while an employee of the Company or a Subsidiary, or (y) the
date which is three months after termination of the Participant's employment for
any other reason. The Board's discretion to extend the period during which an
Incentive Stock Option is exercisable shall only apply if and to the extent that
(i) the Participant was entitled to exercise such Option on the date of
termination, and (ii) such Option would not have expired had the Participant
continued to be employed by the Company or a Subsidiary. To the extent that the
aggregate Fair Market Value of stock with respect to which Incentive Stock
Options are exercisable for the first time by any individual during any calendar
year exceeds $100,000, such Options shall be treated as Options which are not
Incentive Stock Options.
8. Listing, Registration and Compliance with laws and Regulations.
Each Option shall be subject to the requirement that if at any time the Board
shall determine, in its discretion, that the listing, registration or
qualification of the shares subject to the Option upon any securities exchange
or under any state or federal securities or other law or regulation, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition to or in connection with the granting of such Option or
the issue or purchase of shares thereunder, no such Option may be exercised or
paid in Common Stock in whole or in part unless such listing, registration,
qualification, consent or approval (a "Required Listing") shall have been
effected or obtained, and the holder of the Option will supply the Company with
such certificates, representations and information as the Company shall request
which are reasonably necessary or desirable in order for the Company to obtain
such Required Listing, and shall otherwise cooperate with the Company in
obtaining such Required Listing. In the case of officers and other persons
subject to Section 16(b) of the Securities Exchange Act of 1934, as amended, the
Board may at any time impose any limitations upon the exercise of an Option
which, in the Board's discretion, are necessary or desirable in order to comply
with Section 16(b) and the rules and regulations thereunder. If the Company, as
part of an offering of securities or otherwise, finds it desirable because of
federal or state regulatory requirements to reduce the period during which any
Options may be exercised, the Board may, in its discretion and without the
consent of the holders of any such Options, so reduce such period on not less
than 15 days' written notice to the holders thereof.
9. Cash Payments Upon Exercise. Options which are not Incentive
Stock Options may, in the Board's discretion, provide that the holder thereof,
as soon as practicable after the exercise of the Options will receive, in lieu
of any issuance of Common Stock, a cash payment in such amount as the Board may
determine, but not more than the excess of the Fair Market Value of a share of
Common Stock (on the date the holder recognizes taxable income) over the
Option's exercise price multiplied by the number of shares as to which the
Option is exercised.
-3-
10. Organic Change. Except as otherwise provided in this Plan, any
recapitalization, reorganization, reclassification, consolidation, merger, sale
of all or substantially all of the Company's assets or other transaction which
is effected in such a way that holders of Common Stock are entitled to receive
(either directly or upon subsequent liquidation) stock, securities or assets
with respect to or in exchange for Common Stock is referred to herein as an
"Organic Change." Except as otherwise provided in this Plan, after the
consummation of any Organic Change, each Participant holding Options shall
thereafter have the right to acquire and receive upon exercise thereof, rather
than the Option Shares immediately theretofore acquirable and receivable upon
exercise of such Participant's Options, such shares of stock, securities or
assets as may be issued or payable with respect to or in exchange for the number
of Option Shares immediately theretofore acquirable and receivable upon exercise
of such Participant's Options had such Organic Change not taken place. Except
as otherwise provided in this Plan, in any such case, the Company shall make
appropriate provision with respect to such Participant's rights and interests to
insure that the provisions hereof (including this Section 10) shall thereafter
be applicable to the Options (including, in the case of any such Organic Change
in which the successor entity or purchasing entity is other than the Company, an
immediate adjustment of the Exercise Price to the value for the Common Stock
reflected by the terms of such Organic Change and a corresponding immediate
adjustment in the number of Option Shares acquirable and receivable upon
exercise of the Options, if the value so reflected is less than the Fair Market
Value of the Common Stock in effect immediately prior to such Organic Change).
11. Adjustment for Change in Common Stock. In the event of a
reorganization, recapitalization, stock split, stock dividend, combination of
shares, merger, consolidation or other change in the Common Stock, the Board
shall make appropriate changes in the number and type of shares authorized by
this Plan, the number and type of shares covered by outstanding Options and the
prices specified therein.
12. Taxes. The Company shall be entitled, if necessary or desirable,
to withhold (or secure payment from the Plan participant in lieu of withholding)
the amount of any withholding or other tax due from the Company with respect to
any amount payable and/or shares issuable under this Plan, and the Company may
defer such payment or issuance unless indemnified to its satisfaction.
13. Termination of Options. Unless otherwise expressly provided in
any grant of Options pursuant to this Plan, upon a Sale of the Company (as
defined below) or upon termination of the Participant's employment for any
reason, the Board may (i) terminate such Participant's Options without payment
of any kind; (ii) terminate such Participant's Options for a cash payment in
such amount as the Board may determine, but not more than the excess of the Fair
Market Value of a share of Common Stock (on the date of such Sale of the Company
or such termination) over the Option's exercise price multiplied by the number
of Options to be terminated; or (iii) immediately vest any unvested Options held
by such Participant, causing such Options to become immediately exercisable.
Notwithstanding anything to the contrary contained in this paragraph, paragraph
14 shall not apply to Incentive Stock Options.
-4-
For purposes of this paragraph, "Sale of the Company" means any
transaction involving the Company and a third party or affiliated group of third
parties pursuant to which such party or parties acquire (i) a majority of the
outstanding shares of capital stock of the Company entitled to vote generally in
the election of Company's Board (whether by merger, consolidation or sale or
transfer of the Company's capital stock) or (ii) all or substantially all of the
Company's assets determined on a consolidated basis.
For purposes of this paragraph, "Person" means an individual, a
partnership, a joint venture, a corporation, a limited liability company, a
trust, an unincorporated organization and a government or any department or
agency thereof.
14. Termination and Amendment. The Board at any time may suspend or
terminate this Plan and make such additions or amendments as it deems advisable
under this Plan, except that they may not, without further approval by the
Company's stockholders, (a) increase the maximum number of shares as to which
Options may be granted under this Plan, except pursuant to paragraph 11 above or
(b) extend the term of this Plan; provided that, subject to paragraph 8 hereof,
the Board may not change any of the terms of a written agreement with respect to
an Option between the Company and the holder of such Option without the approval
of the holder of such Option. No Options shall be granted or shares of Common
Stock issued hereunder after May 16, 2007; provided that, if the term of this
Plan is otherwise extended, no Incentive Stock Options shall be granted
hereunder after May 16, 2007.
* * * * *
-5-
Exhibit B
ROLLOVER STOCK PROMISSORY NOTE
------------------------------
$________ [Date of Issuance]
For value received, Xxx X. Xxxxx ("Executive") promises to pay to the
order of Therma-Wave, Inc., a Delaware corporation (the "Company"), at its
offices in Fremont, California, or such other place as designated in writing by
the holder hereof, the principal amount of ________________ dollars ($________).
This Note was issued in connection with and is subject to the terms of the
Executive Stock Agreement, dated as of the date hereof, between the Company and
Executive (the "Executive Agreement") pursuant to which Executive purchased (in
addition to certain other stock constituting Time Vesting Stock) 23,427 shares
of the Company's Class A Common Stock, par value $0.01 per share and 2,603
shares of the Company's Class L Common Stock, par value $0.01 per share
(collectively, the "Rollover Stock"), for an aggregate purchase price of
$55,183.60. Unless otherwise provided herein, capitalized terms shall have the
same meanings as set forth in the Executive Agreement.
Interest shall not accrue on the outstanding principal amount of this
Note.
The then outstanding principal amount of this Note is due and payable
upon the the consummation of an Approved Sale.
Executive may, at any time and from time to time without prepayment
penalty, prepay all or any portion of the outstanding principal amount of this
Note.
Executive shall prepay a portion of this Note equal to (a) as and when
received, the amount of any cash dividends or distributions from time to time
paid or distributed with respect to the Rollover Stock, for which purpose
Executive hereby authorizes and directs the Company (on Executive's own behalf
and on behalf of Executive's Permitted Transferees) to withhold such cash
dividends or distributions for application to the prepayment of this Note and
(b) as and when received, an amount equal to the proceeds from any Transfer of
Rollover Stock (other than pursuant to applicable laws of descent and
distribution or among Executive's Family Group), for which purpose Executive
hereby authorizes and directs the Company (on Executive's own behalf and on
behalf of Executive's Permitted Transferees) to withhold any such proceeds
payable by the Company for application to the prepayment of this Note.
The amounts due under this Note are secured by a pledge of the Pledged
Shares as defined in and in accordance with the Rollover Stock Pledge Agreement
(the "Rollover Stock Pledge Agreement"), dated as of the date of this Note,
between Executive and the Company. The occurrence of an Event of Default as
defined in the Rollover Stock Pledge Agreement shall constitute a default under
this Note and shall entitle the holder of this Note, at its option, to declare
the then outstanding principal balance hereof to be, and the same shall
thereupon become, immediately due and payable.
In the event Executive fails to pay any amounts when due, Executive,
subject to the following paragraph, shall pay to the holder hereof, in addition
to such amounts due, all costs of collection, including reasonable attorneys'
fees.
Notwithstanding anything to the contrary herein, holder hereby agrees
that Executive shall not have personal liability with respect to any amounts
owed under this Note, except for Executive's obligation to prepay or repay to
the Company certain amounts for application to the unpaid balance of this Note
as set forth in this Note. Nothing contained herein shall limit the rights of
the holder or the obligations of Executive pursuant to the Rollover Stock Pledge
Agreement.
Executive, or his successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
nonpayment of this Note, and expressly agrees that this Note, or any payment
hereunder, may be extended from time to time and that the holder hereof may
accept security for this Note or release security for this Note, all without in
any way affecting the liability of Executive hereunder.
This note shall be governed by the internal laws, not the laws of
conflicts, of the State of California.
* * *
IN WITNESS WHEREOF, Executive has executed this Note as of the date
first above written.
___________________________________
XXX X. XXXXX
EXHIBIT C
THERMA-WAVE, INC.
ROLLOVER STOCK PLEDGE AGREEMENT
-------------------------------
THIS ROLLOVER STOCK PLEDGE AGREEMENT is made as of May 16, 1997,
between Xxx X. Xxxxx ("Pledgor"), and Therma-Wave, Inc., a Delaware corporation
(the "Company").
The Company and Pledgor are parties to an Executive Stock Agreement,
dated May 16, 1997 (the "Executive Stock Agreement"), pursuant to which Pledgor
purchased 23,427 shares of the Company's Class A Common Stock, $.01 par value,
and 2,603 shares of the Company's Class L Common Stock, par value $.01 per
share, constituting Rollover Stock (the "Pledged Shares"). Pursuant to Section
1(b) of the Executive Stock Agreement, the Company has loaned to Executive
$_______ in exchange for a promissory note (the "Rollover Stock Note") of
Executive in the same amount. This Pledge Agreement provides the terms and
conditions upon which the Rollover Stock Note is secured by a pledge to the
Company of the Pledged Shares.
NOW, THEREFORE, in consideration of the premises contained herein and
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, and in order to induce the Company to accept the Note as
partial payment for the Pledged Shares, Pledgor and the Company hereby agree as
follows:
1. Pledge. Pledgor hereby pledges to the Company, and grants to the
Company a security interest in, the Pledged Shares as security for the prompt
and complete payment when due of the unpaid principal of and interest on the
Note and full payment and performance of the obligations and liabilities of
Pledgor hereunder.
2. Delivery of Pledged Shares. Upon the execution of this Pledge
Agreement, Pledgor shall deliver to the Company the certificate(s) representing
the Pledged Shares, together with such duly executed forms of assignment as the
Company may request and deems sufficient to transfer title thereto to the
Company.
3. Voting Rights. Notwithstanding anything to the contrary contained
herein, during the term of this Pledge Agreement and until such time as the
Company exercises one or more of its rights and remedies upon an Event of
Default (as defined in, and pursuant to, Section 5 hereof), Pledgor shall be
entitled to all voting rights with respect to the Pledged Shares. Upon the
exercise by the Company of any such right or remedy upon an Event of Default
pursuant to Section 5 hereof, Pledgor shall no longer be able to vote the
Pledged Shares.
4. Dividends; Distributions, etc. If, while this Pledge Agreement is in
effect, Pledgor receives any securities or other property in addition to, in
substitution of, or in exchange for any of the Pledged Shares (whether as a
distribution in connection with any recapitalization, reorganization or
reclassification, a stock dividend or otherwise), Pledgor shall accept such
securities or other property on behalf of and for the benefit of the Company as
additional security for Pledgor's obligations under the Note and, at the request
of the Company, shall promptly deliver such additional security to the Company
together with such duly executed forms of assignment as the Company may request
and deems sufficient to transfer title thereto to the Company, and such
additional security shall be deemed to be part of the Pledged Shares hereunder;
provided that all cash dividends and other cash distributions made on or in
respect of the Pledged Securities shall be applied to prepay the Note in the
manner set forth therein.
5. Default. If Pledgor (a) defaults in the payment of the principal or
interest under the Note when it becomes due (whether upon demand, acceleration
or otherwise) or otherwise breaches any of the terms of this Agreement and such
default or breach shall continue for 10 days or (b) becomes insolvent (as such
term may be defined or interpreted under any applicable statute), commences a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect, or consents to any such relief or
the appointment of or taking possession of its property by any official in an
involuntary case or proceeding commenced against it (each of clause (a) and
clause (b), an "Event of Default") , the Company may exercise any and all the
rights, powers and remedies of any owner of the Pledged Shares (including the
right to vote the shares and receive dividends and distributions with respect to
such shares) and shall have and may exercise without demand any and all the
rights and remedies granted to a secured party upon default under the Uniform
Commercial Code of California or otherwise available to the Company under
applicable law. Without limiting the foregoing, the Company is authorized to
sell, assign and deliver at its discretion, from time to time, all or any part
of the Pledged Shares at any private sale or public auction, on not less than
ten days written notice to Pledgor, at such price or prices and upon such terms
as the Company may deem advisable. Pledgor shall have no right to redeem the
Pledged Shares after any such sale or assignment. At any such sale or auction,
the Company may bid for, and become the purchaser of, the whole or any part of
the Pledged Shares offered for sale. In case of any such sale, after deducting
the costs, reasonable attorneys' fees and other expenses of sale and delivery,
the remaining proceeds of such sale shall be applied to the principal of and
accrued interest on the Note; provided that after payment in full of the
indebtedness evidenced by the Note, the balance of the proceeds of sale then
remaining shall be paid to Pledgor and Pledgor shall be entitled to the return
of any of the Pledged Shares remaining in the hands of the Company. To the
extent provided in the Note, Pledgor shall be liable for any deficiency if the
remaining proceeds are insufficient to pay the indebtedness under the Note in
full, including reasonable the fees of any attorneys employed by the Company to
collect such deficiency; provided, however, that at no time shall the Pledgor's
personal liability hereunder or under the Note exceed the Aggregate Recourse
Amount (as such term is defined in the Note).
6. Costs and Attorneys' Fees. All costs and expenses (including
reasonable attorneys' fees) incurred in exercising any right, power or remedy
conferred by this Pledge Agreement or in the
enforcement thereof, shall become part of the indebtedness secured hereunder and
shall be paid by Pledgor or repaid from the proceeds of the sale of the Pledged
Shares hereunder.
7. Payment of Indebtedness and Release of Pledged Shares. Upon payment in
full of the indebtedness evidenced by the Note, the Company shall surrender the
Pledged Shares to Pledgor together with all forms of assignment as Pledgor may
request and deems sufficient to reconvey title thereto to Pledgor. Simultaneous
with the consummation of an Approved Sale (as defined in the Executive Stock
Agreement, dated as of the date hereof, between Pledgor and the Company), the
Company shall surrender the Pledged Shares to Pledgor together with all forms of
assignment as Pledgor may request and deems sufficient to reconvey title thereto
to Pledgor; provided that all proceeds received with respect to the Pledged
Shares in such Approved Sale be applied to pay the Note in the manner set forth
therein.
8. No Other Liens; No Sales or Transfers. Pledgor hereby represents and
warrants that Pledgor has good and valid title to all of the Pledge Shares, free
and clear of any other liens, security interests and other encumbrances, and
Pledgor hereby covenants that, until such time as all of the outstanding
principal of and interest on the Note has been repaid, Pledgor shall not (i)
create, incur, assume or suffer to exist any pledge, security interest,
encumbrance, lien or charge of any kind against the Pledged Shares or Pledgor's
rights as a holder thereof, other than pursuant to this Agreement, or (ii) sell
or otherwise transfer any Pledged Shares or any interest therein (other than a
transfer pursuant to applicable laws of descent and distribution or among
Executive's Family Group (as defined in the Executive Stock Agreement between
Executive and the Company) and subject to the security interest granted herein).
9. Further Assurances. Pledgor agrees that at any time and from time to
time upon the written request of the Company, Pledgor shall execute and deliver
such further documents (including UCC financing statements) and do such further
acts and things as the Company may reasonably request in order to effect the
purposes of this Pledge Agreement.
10. Severability. Any provision of this Pledge Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11. No Waiver; Cumulative Remedies. The Company shall not by any act,
delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
the Company, and then only to the extent therein set forth. A waiver by the
Company of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Company would otherwise have
on any future occasion. No failure to exercise nor any delay in exercising on
the part of the Company, any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies provided by law.
12. Waivers, Amendments; Applicable Law. None of the terms or provisions
of this Pledge Agreement may be waived, altered, modified or amended except by
an instrument in writing, duly executed by the parties hereto. This Agreement
and all obligations of the Pledgor hereunder shall together with the rights and
remedies of the Company hereunder, inure to the benefit of the Company and its
successors and assigns. This Pledge Agreement shall be governed by, and be
construed and interpreted in accordance with, the laws of the State of
California.
* * * *
IN WITNESS WHEREOF, this Pledge Agreement has been executed as of the
date first above written.
THERMA-WAVE, INC.
By____________________________
Its___________________________
______________________________
XXX X. XXXXX
EXHIBIT D
TIME VESTING STOCK PROMISSORY NOTE
----------------------------------
$28,722.60 May 16, 1997
For value received, Xxx X. Xxxxx ("Executive") promises to pay to the
order of Therma-Wave, Inc., a Delaware corporation (the "Company"), at its
offices in Fremont, California, or such other place as designated in writing by
the holder hereof, the principal amount of $28,722.60. This Note was issued in
connection with and is subject to the terms of the Executive Stock Agreement,
dated as of the date hereof, between the Company and Executive (the "Executive
Agreement") pursuant to which Executive purchased (in addition to certain other
stock constituting Purchased Stock) 127,656 shares of the Company's Class B
Common Stock, par value $0.01 per share (the "Time Vesting Stock"), for an
aggregate purchase price of $29,999.16. Unless otherwise provided herein,
capitalized terms shall have the same meanings as set forth in the Executive
Agreement.
Interest shall accrue on the outstanding principal amount of this Note
at a rate equal to the lesser of (i) 7.18% or (ii) the highest rate permitted by
applicable law, and shall be payable at such time as the principal of this Note
becomes due and payable. Interest shall compound annually on each anniversary of
the date of issuance of this Note.
The then outstanding principal amount of this Note and all accrued
interest thereon is due and payable upon the consummation of an Approved Sale.
Executive may, at any time and from time to time without prepayment
penalty, prepay all or any portion of the outstanding principal amount of this
Note.
Executive shall prepay a portion of this Note equal to (i) as and when
received, the amount of any cash dividends or distributions from time to time
paid or distributed with respect to the Time Vesting Stock, for which purpose
Executive hereby authorizes and directs the Company (on Executive's own behalf
and on behalf of Executive's Permitted Transferees) to withhold such cash
dividends or distributions for application to the prepayment of this Note and
(ii) as and when received, an amount equal to the proceeds from any Transfer of
the Time Vesting Stock (other than pursuant to applicable laws of descent and
distribution or among Executive's Family Group). Payments received by the holder
hereof shall be applied towards the amount due under this Note (i) first, to the
payment of all accrued and unpaid interest on this Note at the time of such
payment and (ii) second, to the payment of principal of this Note.
The amounts due under this Note are secured by a pledge of the Pledged
Shares as defined in and in accordance with the Time Vesting Stock Pledge
Agreement (the "Time Vesting Stock Pledge Agreement"), dated as of the date of
this Note, between Executive and the Company.
The occurrence of an Event of Default as defined in the Time Vesting Stock
Pledge Agreement shall constitute a default under this Note and shall entitle
the holder of this Note, at its option, to declare the then outstanding
principal balance and accrued interest hereof to be, and the same shall
thereupon become, immediately due and payable.
In the event Executive fails to pay any amounts when due, Executive,
subject to the following paragraph shall pay to the holder hereof, in addition
to such amounts due, all costs of collection, including reasonable attorneys'
fees. To the extent permitted by law and subject to the following paragraph, if
an Event of Default under the Time Vesting Stock Pledge Agreement shall have
occurred and be continuing, holder shall have the right, in addition to all
other rights and remedies available to it, to receive for application to the
unpaid balance of this Note, and Executive hereby authorizes and directs the
Company (on Executive's own behalf and on behalf of Executive's Permitted
Transferees) without notice to Executive, to withhold for application to the
unpaid balance of this Note, any and all obligations of the Company to Executive
under the Executive Agreement, the Employment Agreement or any other agreement;
such rights shall exist whether or not the holder hereof shall have made any
demand under this Note and whether or not this Note has matured.
Notwithstanding anything to the contrary herein, holder hereby agrees
that Executive shall not have personal liability with respect to any amounts
owed under this Note, except as set forth in this paragraph and except for
Executive's obligation to prepay or repay to the Company certain amounts for
application to the unpaid balance of this Note as set forth in this Note. The
holder's claim against Executive (other than Executive's obligation to prepay or
repay, and the Company's right to be paid, certain amounts for application to
the unpaid balance of this Note as set forth in this Note) shall not at any time
exceed the Aggregate Recourse Amount determined as of such time. "Aggregate
Recourse Amount" means as of any time an amount equal to (A) 50% of the
aggregate original principal amount of this Note, minus (B) the aggregate amount
of all principal and interest payments made under this Note from the date of
issuance of this Note through such time, including payments incident to
Executive's declaring bankruptcy. Nothing contained herein shall limit the
rights of the holder or the obligations of Executive pursuant to the Time
Vesting Stock Pledge Agreement.
Executive, or his successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
nonpayment of this Note, and expressly agrees that this Note, or any payment
hereunder, may be extended from time to time and that the holder hereof may
accept security for this Note or release security for this Note, all without in
any way affecting the liability of Executive hereunder.
This note shall be governed by the internal laws, not the laws of
conflicts, of the State of California.
* * *
IN WITNESS WHEREOF, Executive has executed this Note as of the date
first above written.
___________________________________
XXX X. XXXXX
EXHIBIT E
THERMA-WAVE, INC.
TIME VESTING STOCK PLEDGE AGREEMENT
-----------------------------------
THIS TIME VESTING STOCK PLEDGE AGREEMENT is made as of May 16, 1997,
between Xxx X. Xxxxx ("Pledgor"), and Therma-Wave, Inc., a Delaware corporation
(the "Company").
The Company and Pledgor are parties to an Executive Stock Agreement,
dated May 16, 1997, pursuant to which Pledgor purchased 127,656 shares of the
Company's Class B Common Stock, $.01 par value, constituting Time Vesting Stock
(the "Pledged Shares"), for an aggregate purchase price of $29,999.16. The
Company has allowed Pledgor to purchase the Pledged Shares by delivery to the
Company of $1,276.56 in cash and a promissory note (the "Note") in the aggregate
principal amount of $28,722.60. This Pledge Agreement provides the terms and
conditions upon which the Note is secured by a pledge to the Company of the
Pledged Shares.
NOW, THEREFORE, in consideration of the premises contained herein and
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, and in order to induce the Company to accept the Note as
partial payment for the Pledged Shares, Pledgor and the Company hereby agree as
follows:
1. Pledge. Pledgor hereby pledges to the Company, and grants to the
Company a security interest in, the Pledged Shares as security for the prompt
and complete payment when due of the unpaid principal of and interest on the
Note and full payment and performance of the obligations and liabilities of
Pledgor hereunder.
2. Delivery of Pledged Shares. Upon the execution of this Pledge
Agreement, Pledgor shall deliver to the Company the certificate(s) representing
the Pledged Shares, together with such duly executed forms of assignment as the
Company may request and deems sufficient to transfer title thereto to the
Company.
3. Voting Rights. Notwithstanding anything to the contrary contained
herein, during the term of this Pledge Agreement and until such time as the
Company exercises one or more of its rights and remedies upon an Event of
Default (as defined in, and pursuant to, Section 5 hereof), Pledgor shall be
entitled to all voting rights with respect to the Pledged Shares. Upon the
exercise by the Company of any such right or remedy upon an Event of Default
pursuant to Section 5 hereof, Pledgor shall no longer be able to vote the
Pledged Shares.
4. Dividends; Distributions, etc. If, while this Pledge Agreement is in
effect, Pledgor
receives any securities or other property in addition to, in substitution of, or
in exchange for any of the Pledged Shares (whether as a distribution in
connection with any recapitalization, reorganization or reclassification, a
stock dividend or otherwise), Pledgor shall accept such securities or other
property on behalf of and for the benefit of the Company as additional security
for Pledgor's obligations under the Note and, at the request of the Company,
shall promptly deliver such additional security to the Company together with
such duly executed forms of assignment as the Company may request and deems
sufficient to transfer title thereto to the Company, and such additional
security shall be deemed to be part of the Pledged Shares hereunder; provided
that all cash dividends and other cash distributions made on or in respect of
the Pledged Securities shall be applied to prepay the Note in the manner set
forth therein.
5. Default. If Pledgor (a) defaults in the payment of the principal or
interest under the Note when it becomes due (whether upon demand, acceleration
or otherwise) or otherwise breaches any of the terms of this Agreement and such
default or breach shall continue for 10 days or (b) becomes insolvent (as such
term may be defined or interpreted under any applicable statute), commences a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect, or consents to any such relief or
the appointment of or taking possession of its property by any official in an
involuntary case or proceeding commenced against it (each of clause (a) and
clause (b), an "Event of Default"), the Company may exercise any and all the
rights, powers and remedies of any owner of the Pledged Shares (including the
right to vote the shares and receive dividends and distributions with respect to
such shares) and shall have and may exercise without demand any and all the
rights and remedies granted to a secured party upon default under the Uniform
Commercial Code of California or otherwise available to the Company under
applicable law. Without limiting the foregoing, the Company is authorized to
sell, assign and deliver at its discretion, from time to time, all or any part
of the Pledged Shares at any private sale or public auction, on not less than
ten days written notice to Pledgor, at such price or prices and upon such terms
as the Company may deem advisable. Pledgor shall have no right to redeem the
Pledged Shares after any such sale or assignment. At any such sale or auction,
the Company may bid for, and become the purchaser of, the whole or any part of
the Pledged Shares offered for sale. In case of any such sale, after deducting
the costs, reasonable attorneys' fees and other expenses of sale and delivery,
the remaining proceeds of such sale shall be applied to the principal of and
accrued interest on the Note; provided that after payment in full of the
indebtedness evidenced by the Note, the balance of the proceeds of sale then
remaining shall be paid to Pledgor and Pledgor shall be entitled to the return
of any of the Pledged Shares remaining in the hands of the Company. To the
extent provided in the Note, Pledgor shall be liable for any deficiency if the
remaining proceeds are insufficient to pay the indebtedness under the Note in
full, including reasonable the fees of any attorneys employed by the Company to
collect such deficiency; provided, however, that at no time shall the Pledgor's
personal liability hereunder or under the Note exceed the Aggregate Recourse
Amount (as such term is defined in the Note).
6. Costs and Attorneys' Fees. All costs and expenses (including
reasonable attorneys' fees) incurred in exercising any right, power or remedy
conferred by this Pledge Agreement or in the enforcement thereof, shall become
part of the indebtedness secured hereunder and shall be paid by
Pledgor or repaid from the proceeds of the sale of the Pledged Shares hereunder.
7. Payment of Indebtedness and Release of Pledged Shares. Upon payment in
full of the indebtedness evidenced by the Note, the Company shall surrender the
Pledged Shares to Pledgor together with all forms of assignment as Pledgor may
request and deems sufficient to reconvey title thereto to Pledgor. Simultaneous
with the consummation of an Approved Sale (as defined in the Executive Stock
Agreement, dated as of the date hereof, between Pledgor and the Company), the
Company shall surrender the Pledged Shares to Pledgor together with all forms of
assignment as Pledgor may request and deems sufficient to reconvey title thereto
to Pledgor; provided that all proceeds received with respect to the Pledged
Shares in such Approved Sale be applied to pay the Note in the manner set forth
therein.
8. No Other Liens; No Sales or Transfers. Pledgor hereby represents and
warrants that Pledgor has good and valid title to all of the Pledge Shares, free
and clear of any other liens, security interests and other encumbrances, and
Pledgor hereby covenants that, until such time as all of the outstanding
principal of and interest on the Note has been repaid, Pledgor shall not (i)
create, incur, assume or suffer to exist any pledge, security interest,
encumbrance, lien or charge of any kind against the Pledged Shares or Pledgor's
rights as a holder thereof, other than pursuant to this Agreement, or (ii) sell
or otherwise transfer any Pledged Shares or any interest therein (other than a
transfer pursuant to applicable laws of descent and distribution or among
Executive's Family Group (as defined in the Executive Stock Agreement between
Executive and the Company) and subject to the security interest granted herein).
9. Further Assurances. Pledgor agrees that at any time and from time to
time upon the written request of the Company, Pledgor shall execute and deliver
such further documents (including UCC financing statements) and do such further
acts and things as the Company may reasonably request in order to effect the
purposes of this Pledge Agreement.
10. Severability. Any provision of this Pledge Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11. No Waiver; Cumulative Remedies. The Company shall not by any act,
delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
the Company, and then only to the extent therein set forth. A waiver by the
Company of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Company would otherwise have
on any future occasion. No failure to exercise nor any delay in exercising on
the part of the Company, any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies provided by law.
12. Waivers, Amendments; Applicable Law. None of the terms or provisions
of this Pledge Agreement may be waived, altered, modified or amended except by
an instrument in writing, duly executed by the parties hereto. This Agreement
and all obligations of the Pledgor hereunder shall together with the rights and
remedies of the Company hereunder, inure to the benefit of the Company and its
successors and assigns. This Pledge Agreement shall be governed by, and be
construed and interpreted in accordance with, the laws of the State of
California.
* * * *
IN WITNESS WHEREOF, this Pledge Agreement has been executed as of the
date first above written.
THERMA-WAVE, INC.
By____________________________
Its___________________________
______________________________
XXX X. XXXXX
EXHIBIT F
ELECTION TO INCLUDE STOCK IN GROSS
INCOME PURSUANT TO SECTION 83(b) OF THE
INTERNAL REVENUE CODE
The undersigned purchased shares of Class B Common Stock, par value
$.01 per share (the "Shares"), of Therma-Wave, Inc. (the "Company"), on May 16,
1997. Under certain circumstances, the Company or certain stockholders of the
Company have the right to repurchase the Shares at either cost or fair market
value from the undersigned (or from the holder of the Shares, if different from
the undersigned) should the undersigned cease to be employed by the Company and
its subsidiaries. Hence, the Shares are subject to a substantial risk of
forfeiture and are nontransferable. The undersigned desires to make an election
to have the Shares taxed under the provision of Code (S)83(b) at the time he
purchased the Shares.
Therefore, pursuant to Code (S)83(b) and Treasury Regula tion
(S)1.83-2 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Shares (described below), to report as taxable income for
calendar year 1997 the excess (if any) of the Shares' fair market value on May
16, 1997 over purchase price thereof.
The following information is supplied in accordance with Treasury
Regulation (S)1.83-2(e):
1. The name, address and social security number of the undersigned:
Xxx X. Xxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
###-##-####
2. A description of the property with respect to which the election is
being made: 127,656 shares of Class B Common Stock, par value $.01 per share.
3. The date on which the property was transferred: May 16, 1997. The
taxable year for which such election is made: calendar 1997.
4. The restrictions to which the property is subject: If during the first
five years after the purchase of the Shares the undersigned ceases to be
employed by the Company or any of its subsidiaries, the unvested portion of the
Shares shall be subject to repurchase by the Company or certain stockholders of
the Company at cost, and if at any time prior to a public offering by the
Company or a sale of the Company the undersigned ceases to be employed by the
Company or any of its subsidiaries, the vested portion of the Shares shall be
subject to repurchase by the Company or certain stockholders of the Company at
the fair market value as of the date the undersigned ceases to be employed by
the Company. One-fifth of the Shares shall become vested shares on each of the
first five anniversary dates of the purchase of the Shares.
5. The fair market value on May 16, 1997 of the property with respect to
which the election is being made, determined without regard to any lapse
restrictions: $0.235 per share of Class B Common Stock.
6. The amount paid for such property: $0.235 per share of Class B Common
Stock.
A copy of this election has been furnished to the Secretary of the
Company pursuant to Treasury Regulations (S)1.83-2(e)(7).
Dated: _________________ ______________________________
Xxx X. Xxxxx
Exhibit G
PROMISSORY NOTE
---------------
[Date of Issuance]
For value received, Xxx X. Xxxxx ("Executive") promises to pay to the order
of Therma-Wave, Inc., a Delaware corporation (the "Company"), at its offices in
Fremont, California, or such other place as designated in writing by the holder
hereof, the principal amount outstanding under this Note as shown on Schedule 1
attached hereto. This Note is subject to the terms of the Executive Stock
Agreement, dated as of the date hereof, between the Company and Executive (the
"Executive Agreement") pursuant to which the Company issued to Executive five
tranches of options (the "Management Options") to purchase in the aggregate up
to 127,656 shares of the Company's Class B Common Stock, par value $0.01 per
share. The outstanding principal amount of this Note shall be increased in
connection with each exercise by Executive of Management Options to purchase
shares of the Company's Class B Common Stock (all such shares purchased upon the
exercise of the Management Options being "Management Option Shares") by the
purchase prices shown on Schedule I attached hereto. Unless otherwise provided
herein, capitalized terms shall have the same meanings as set forth in the
Executive Agreement.
Interest shall accrue on the outstanding principal amount of this Note at a
rate equal to the lesser of (i) _____% [(applicable federal rate at time)] or
(ii) the highest rate permitted by applicable law, and shall be payable at such
time as the principal of this Note becomes due and payable. Interest shall
compound annually on each anniversary of the date of issuance of this Note.
The then outstanding principal amount of this Note and all accrued interest
thereon is due and payable upon the earliest of (i) the consummation of an
Approved Sale, (ii) the later of (A) the fifth anniversary of the date hereof
and (B) the date that is two weeks after the effective date of any Management
Demand Registration (as defined in the Registration Agreement, dated as of May
16, 1997, among the Company and the other persons party thereto), (iii) the
termination of Executive's employment with the Company, (iv) the tenth
anniversary of the date hereof and (v) the Competition Date.
Executive may, at any time and from time to time without prepayment
penalty, prepay all or any portion of the outstanding principal amount of this
Note.
Executive shall prepay a portion of this Note equal to (i) as and when
received, the amount of any cash dividends or distributions from time to time
paid or distributed with respect to any Management Option Shares, (ii) as and
when received, an amount equal to the proceeds from any Transfer of any
Management Option Shares (other than pursuant to applicable laws of descent and
distribution or among Executive's Family Group), and (iii) as and when received,
any Deferred Bonus (as defined in the Employment Agreement, dated as the date
hereof, between the Company and the Executive) paid to Executive. Executive
hereby authorizes and directs the Company (on
Executive's own behalf and on behalf of Executive's Permitted Transferees) to
withhold the amounts described in clauses (i) - (iii) above for application to
the prepayment of this Note. Payments received by the holder hereof shall be
applied towards the amount due under this Note (x) first, to the payment of all
accrued and unpaid interest on this Note at the time of such payment and (y)
second, to the payment of principal of this Note.
The amounts due under this Note are secured by a pledge of the Pledged
Shares as defined in and in accordance with the Option Pledge Agreement (the
"Option Pledge Agreement"), dated as the date hereof between Executive and the
Company. The occurrence of an Event of Default as defined in the Option Pledge
Agreement shall constitute a default under this Note and shall entitle the
holder of this Note, at its option, to declare the then outstanding principal
balance and accrued interest hereof to be, and the same shall thereupon become,
immediately due and payable.
In the event Executive fails to pay any amounts when due, Executive shall
pay to the holder hereof, in addition to such amounts due, all costs of
collection, including reasonable attorneys' fees. To the extent permitted by
law, if an Event of Default under the Pledge Agreement shall have occurred and
be continuing, holder shall have the right, in addition to all other rights and
remedies available to it, to receive for application to the unpaid balance of
this Note, and Executive hereby authorizes and directs the Company (on
Executive's own behalf and on behalf of Executive's Permitted Transferees)
without notice to Executive, to withhold for application to the unpaid balance
of this Note, any and all obligations of the Company to Executive under the
Executive Agreement, the Employment Agreement or any other agreement; such
rights shall exist whether or not the holder hereof shall have made any demand
under this Note and whether or not this Note has matured.
Executive, or his successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
nonpayment of this Note, and expressly agrees that this Note, or any payment
hereunder, may be extended from time to time and that the holder hereof may
accept security for this Note or release security for this Note, all without in
any way affecting the liability of Executive hereunder.
This note shall be governed by the internal laws, not the laws of
conflicts, of the State of California.
* * *
IN WITNESS WHEREOF, Executive has executed this Note as of the date first
above written.
___________________________________
XXX X. XXXXX
Schedule 1 to
Promissory Note
Management Management
Options Option Principal Principal Notation
Date Exercised Shares Borrowed Outstanding Made by
---- ---------- ------ -------- ----------- -------
EXHIBIT H
THERMA-WAVE, INC.
MANAGEMENT OPTION SHARES STOCK PLEDGE AGREEMENT
-----------------------------------------------
THIS MANAGEMENT OPTION SHARES STOCK PLEDGE AGREEMENT is made as of
______ ___, ____, between Xxx X. Xxxxx ("Pledgor"), and Therma-Wave, Inc., a
Delaware corporation (the "Company").
The Company and Pledgor are parties to an Executive Stock Agreement,
dated May 16, 1997 (the "Executive Stock Agreement"), pursuant to which Pledgor
had the right to purchase up to 127,656 shares of the Company's Class B Common
Stock, $.01 par value, pursuant to the exercise of Management Options (as
defined in the Executive Stock Agreement). Shares received upon exercise of the
Management Options constitute Management Option Shares (the "Pledged Shares").
The Company has agreed to loan Pledgor a portion of the Exercise Price for the
Pledged Shares in exchange for a promissory note (the "Management Option Share
Note") issued by the Executive to the Company. This Pledge Agreement provides
the terms and conditions upon which the Management Option Share Note is secured
by a pledge to the Company of the Pledged Shares.
NOW, THEREFORE, in consideration of the premises contained herein and
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, and in order to induce the Company to accept the Note as
partial payment for the Pledged Shares, Pledgor and the Company hereby agree as
follows:
1. Pledge. Pledgor hereby pledges to the Company, and grants to the
Company a security interest in, the Pledged Shares as security for the prompt
and complete payment when due of the unpaid principal of and interest on the
Note and full payment and performance of the obligations and liabilities of
Pledgor hereunder.
2. Delivery of Pledged Shares. Upon the execution of this Pledge
Agreement, Pledgor shall deliver to the Company the certificate(s) representing
the Pledged Shares, together with such duly executed forms of assignment as the
Company may request and deems sufficient to transfer title thereto to the
Company.
3. Voting Rights. Notwithstanding anything to the contrary contained
herein, during the term of this Pledge Agreement and until such time as the
Company exercises one or more of its rights and remedies upon an Event of
Default (as defined in, and pursuant to, Section 5 hereof), Pledgor shall be
entitled to all voting rights with respect to the Pledged Shares. Upon the
exercise by the Company of any such right or remedy upon an Event of Default
pursuant to Section 5 hereof, Pledgor shall no longer be able to vote the
Pledged Shares.
4. Dividends; Distributions, etc. If, while this Pledge Agreement is in
effect, Pledgor receives any securities or other property in addition to, in
substitution of, or in exchange for any of the Pledged Shares (whether as a
distribution in connection with any recapitalization, reorganization or
reclassification, a stock dividend or otherwise), Pledgor shall accept such
securities or other property on behalf of and for the benefit of the Company as
additional security for Pledgor's obligations under the Note and, at the request
of the Company, shall promptly deliver such additional security to the Company
together with such duly executed forms of assignment as the Company may request
and deems sufficient to transfer title thereto to the Company, and such
additional security shall be deemed to be part of the Pledged Shares hereunder;
provided that all cash dividends and other cash distributions made on or in
respect of the Pledged Securities shall be applied to prepay the Note in the
manner set forth therein.
5. Default. If Pledgor (a) defaults in the payment of the principal or
interest under the Note when it becomes due (whether upon demand, acceleration
or otherwise) or otherwise breaches any of the terms of this Agreement and such
default or breach shall continue for 10 days or (b) becomes insolvent (as such
term may be defined or interpreted under any applicable statute), commences a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect, or consents to any such relief or
the appointment of or taking possession of its property by any official in an
involuntary case or proceeding commenced against it (each of clause (a) and
clause (b), an "Event of Default") , the Company may exercise any and all the
rights, powers and remedies of any owner of the Pledged Shares (including the
right to vote the shares and receive dividends and distributions with respect to
such shares) and shall have and may exercise without demand any and all the
rights and remedies granted to a secured party upon default under the Uniform
Commercial Code of California or otherwise available to the Company under
applicable law. Without limiting the foregoing, the Company is authorized to
sell, assign and deliver at its discretion, from time to time, all or any part
of the Pledged Shares at any private sale or public auction, on not less than
ten days written notice to Pledgor, at such price or prices and upon such terms
as the Company may deem advisable. Pledgor shall have no right to redeem the
Pledged Shares after any such sale or assignment. At any such sale or auction,
the Company may bid for, and become the purchaser of, the whole or any part of
the Pledged Shares offered for sale. In case of any such sale, after deducting
the costs, reasonable attorneys' fees and other expenses of sale and delivery,
the remaining proceeds of such sale shall be applied to the principal of and
accrued interest on the Note; provided that after payment in full of the
indebtedness evidenced by the Note, the balance of the proceeds of sale then
remaining shall be paid to Pledgor and Pledgor shall be entitled to the return
of any of the Pledged Shares remaining in the hands of the Company. To the
extent provided in the Note, Pledgor shall be liable for any deficiency if the
remaining proceeds are insufficient to pay the indebtedness under the Note in
full, including reasonable the fees of any attorneys employed by the Company to
collect such deficiency; provided, however, that at no time shall the Pledgor's
personal liability hereunder or under the Note exceed the Aggregate Recourse
Amount (as such term is defined in the Note).
6. Costs and Attorneys' Fees. All costs and expenses (including
reasonable attorneys' fees) incurred in exercising any right, power or remedy
conferred by this Pledge Agreement or in the
-2-
enforcement thereof, shall become part of the indebtedness secured hereunder and
shall be paid by Pledgor or repaid from the proceeds of the sale of the Pledged
Shares hereunder.
7. Payment of Indebtedness and Release of Pledged Shares. Upon payment in
full of the indebtedness evidenced by the Note, the Company shall surrender the
Pledged Shares to Pledgor together with all forms of assignment as Pledgor may
request and deems sufficient to reconvey title thereto to Pledgor. Simultaneous
with the consummation of an Approved Sale (as defined in the Executive Stock
Agreement, dated as of the date hereof, between Pledgor and the Company), the
Company shall surrender the Pledged Shares to Pledgor together with all forms of
assignment as Pledgor may request and deems sufficient to reconvey title thereto
to Pledgor; provided that all proceeds received with respect to the Pledged
Shares in such Approved Sale be applied to pay the Note in the manner set forth
therein.
8. No Other Liens; No Sales or Transfers. Pledgor hereby represents and
warrants that Pledgor has good and valid title to all of the Pledge Shares, free
and clear of any other liens, security interests and other encumbrances, and
Pledgor hereby covenants that, until such time as all of the outstanding
principal of and interest on the Note has been repaid, Pledgor shall not (i)
create, incur, assume or suffer to exist any pledge, security interest,
encumbrance, lien or charge of any kind against the Pledged Shares or Pledgor's
rights as a holder thereof, other than pursuant to this Agreement, or (ii) sell
or otherwise transfer any Pledged Shares or any interest therein (other than a
transfer pursuant to applicable laws of descent and distribution or among
Executive's Family Group (as defined in the Executive Stock Agreement between
Executive and the Company) and subject to the security interest granted herein).
9. Further Assurances. Pledgor agrees that at any time and from time to
time upon the written request of the Company, Pledgor shall execute and deliver
such further documents (including UCC financing statements) and do such further
acts and things as the Company may reasonably request in order to effect the
purposes of this Pledge Agreement.
10. Severability. Any provision of this Pledge Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11. No Waiver; Cumulative Remedies. The Company shall not by any act,
delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
the Company, and then only to the extent therein set forth. A waiver by the
Company of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Company would otherwise have
on any future occasion. No failure to exercise nor any delay in exercising on
the part of the Company, any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies provided by law.
-3-
12. Waivers, Amendments; Applicable Law. None of the terms or provisions
of this Pledge Agreement may be waived, altered, modified or amended except by
an instrument in writing, duly executed by the parties hereto. This Agreement
and all obligations of the Pledgor hereunder shall together with the rights and
remedies of the Company hereunder, inure to the benefit of the Company and its
successors and assigns. This Pledge Agreement shall be governed by, and be
construed and interpreted in accordance with, the laws of the State of
California.
* * * *
-4-
IN WITNESS WHEREOF, this Pledge Agreement has been executed as of the
date first above written.
THERMA-WAVE, INC.
By_____________________________
Its____________________________
_______________________________
XXX X. XXXXX
[Signature Page to Xxx X. Xxxxx
Management Option Shares Stock Pledge Agreement]
EXHIBIT I
ELECTION TO INCLUDE STOCK IN GROSS
INCOME PURSUANT TO SECTION 83(b) OF THE
INTERNAL REVENUE CODE
The undersigned purchased shares of Class B Common Stock, par value
$.01 per share (the "Shares"), of Therma-Wave, Inc. (the "Company"), on
_________. Under certain circumstances, the Company or certain stockholders of
the Company have the right to repurchase the Shares at either cost or fair
market value from the undersigned (or from the holder of the Shares, if
different from the undersigned) should the undersigned cease to be employed by
the Company and its subsidiaries. Hence, the Shares are subject to a
substantial risk of forfeiture and are nontransferable. The undersigned
desires to make an election to have the Shares taxed under the provision of Code
(S)83(b) at the time he purchased the Shares.
Therefore, pursuant to Code (S)83(b) and Treasury Regulation
(S)1.83-2 promulgated thereunder, the undersigned hereby makes an election, with
respect to the Shares (described below), to report as taxable income for
calendar year ____ the excess (if any) of the Shares' fair market value on
__________ over purchase price thereof.
The following information is supplied in accordance with Treasury
Regulation (S)1.83-2(e):
1. The name, address and social security number of the undersigned:
Xxx X. Xxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
###-##-####
2. A description of the property with respect to which the election is
being made: _______ shares of Class B Common Stock, par value $.01 per share.
3. The date on which the property was transferred: __________. The
taxable year for which such election is made: calendar _______.
4. The restrictions to which the property is subject: If during the first
five years after the purchase of the Shares the undersigned ceases to be
employed by the Company or any of its subsidiaries, the unvested portion of the
Shares shall be subject to repurchase by the Company or certain stockholders of
the Company at cost, and if at any time prior to a public offering by the
Company or a sale of the Company the undersigned ceases to be employed by the
Company or any of its subsidiaries, the vested portion of the Shares shall be
subject to repurchase by the Company or certain stockholders of the Company at
the fair market value as of the date the undersigned ceases to be employed by
the Company. The Shares shall become vested shares on May 16, 2002.
5. The fair market value on _______ of the property with respect to which
the election is being made, determined without regard to any lapse restrictions:
$____ per share of Class B Common Stock.
6. The amount paid for such property: $_____ per share of Class B Common
Stock.
A copy of this election has been furnished to the Secretary of the
Company pursuant to Treasury Regulations (S)1.83-2(e)(7).
Dated: _________________ ______________________________
Xxx X. Xxxxx
