Exhibit 10.4

June 20, 2008

Kevin C. Eichler

Re: Transition Terms

Dear Casey:

This letter confirms the agreement (this “Agreement”) between you and Credence
Systems Corporation (the “Company” or “Credence”) concerning the transition
services you have agreed to perform for Credence following the Closing, as
defined in the Agreement and Plan of Merger by and among LTX Corporation, Zoo
Merger Corporation and Credence Systems Corporation signed herewith (the “Merger
Agreement”). The Company and you are parties to that Executive Employment
Agreement, dated as of January 1, 2008 (the “Original Employment Agreement”) as
amended effective June 11, 2008 by Amendment No. 1 to the Original Employment
Agreement (the Original Employment Agreement, as amended, is referred to herein
as the “Employment Agreement.”). Capitalized terms not defined in this Agreement
shall have the meaning ascribed to such terms in the Employment Agreement. This
Agreement amends the Employment Agreement and supersedes any inconsistent
portion of the Employment Agreement; in the event of any ambiguity, the terms of
this Agreement shall control. In the event there is no agreement of Merger or
such Merger is not consummated, your Employment Agreement shall remain in full
force and effect and this Agreement shall have no force and effect. Without
limiting the foregoing, this Agreement amends and supersedes all provisions of
Section II of the Employment Agreement related to compensation and benefits, all
provisions of Sections III(B) and VI(B) of the Employment Agreement related to
separation benefits, and all provisions of Section V of the Employment Agreement
related to a Change of Control; provided, however, in the event of your
“separation from service” (within the meaning of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) and its related Treasury
regulations) after the Closing but prior to December 31, 2008, all provisions of
your Employment Agreement relating to separation benefits shall remain in full
force and effect, and your entitlement to separation benefits (if any) shall be
determined exclusively by your Employment Agreement, as modified hereby.

1. Service as Senior Vice President of Finance. From the Closing (as defined in
the Merger Agreement) until the three month anniversary of the Closing (the
“Full-Time Transition Period”), you will work on a full time basis as the
Company’s Senior Vice President of Finance.

From the three month anniversary of the Closing to the six month anniversary of
the Closing (the “Part-Time Transition Period”) your employment as Senior Vice
President of Finance will continue on a part-time basis. On the six month
anniversary of the Closing, unless it is otherwise mutually agreed in writing,
you will resign from your employment with the Company; provided, that, at the
Company’s request, you shall provide such resignation anytime subsequent to the
three month anniversary of the Closing Date, subject to Section 2(h) below.

In addition to the obligations set forth in Sections I(B) and VIII(B) of the
Employment Agreement, from the Closing Date until the nine month anniversary of
the Closing Date, you agree not to compete, directly or indirectly, with the
Company in the United States or in any

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Kevin C. Eichler

June 20, 2008

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other country in the world where it maintains an office as of the Closing Date.
Except as otherwise provided herein, the terms of the Employment Agreement
(including, without limitation, Section II(D) (Expenses) shall apply to your
service during the Full-Time Transition Period and the Part-Time Transition
Period.

2. Obligations of the Company. Subject to the terms of this Agreement, Credence
agrees to provide you with each of the following:

(a) Full-Time Transition Period. As compensation for your services during the
Full-Time Transition Period ending on the three month anniversary of the Closing
Date, you will receive the following from the Company subject to applicable
withholding:

(i) base salary at a rate of $43,333 per month payable in accordance with the
Company’s normal payroll practices; and

(ii) bonus upon your completion of the Full-Time Transition Period in the amount
of $130,000;

(b) Payments Three Months Following Closing. On the earlier of (i) the date
which is three months following the Closing Date or (ii) the date on which you
terminate your employment for Good Reason or the date on which you are
terminated by the Company other than For Cause, you shall receive all of the
following:

(i) you will receive from Credence cash severance benefits of $520,000 less
applicable withholding; provided that you will not be entitled to any additional
severance benefits upon termination of your employment with Credence, whether
under your Employment Agreement or otherwise;

(ii) 120,000 of the unvested Restricted Stock Units granted to you pursuant to
the Notice of Restricted Stock Unit Award for Award Number RU000003, dated
April 25, 2008 (the “RSUs”), shall vest in full;

(iii) 50,000 of the unvested Restricted Shares granted to you pursuant to the
Notice of Restricted Stock Award for Award Number RS00060, dated January 7, 2008
(the “Restricted Shares”), shall vest in full;

(iv) 400,000 of the unvested Option Shares granted to you pursuant to the Notice
of Stand-Alone Inducement Non-Qualified Stock Option Award for Award Number
014740, dated January 7, 2008 (the “Options”), shall vest in full, and if you
continue to provide services under this agreement through the Part-Time
Transition Period (or if your employment is terminated earlier by the Company
other than For Cause or by you with Good Reason) the exercise period with
respect to the Option Shares following the time you are terminated will be
expanded to six months from the date of termination; and

 

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Kevin C. Eichler

June 20, 2008

Page 3

(v) you will receive the sum of $81,250 as your 2008 management incentive bonus.

Notwithstanding the foregoing, in no event will the amounts described in
Sections 2(b)(i) or 2(b)(v) be payable to you earlier than the later of (i) the
Closing Date; or (ii) January 1, 2009; provided, however, that notwithstanding
any provision of Sections III, IV, V, or VI of the Employment Agreement to the
contrary, in the event your employment is terminated by you or by Credence for
any reason on or after the Closing Date and before January 1, 2009, you will
receive from Credence each of the payments and acceleration benefits described
in Section (b); provided, however, that any such payment made under this
provision shall be delayed to any extent necessary to meet the requirements of
Code Section 409A, including the transition relief provided under IRS Notice
2007-86, and the provisions of 409A(a)(2)(B)(i) of the Code (relating to
payments made to certain “specified employees” of certain publicly-traded
companies) and in the case of any such delay required by Code Section 409A (the
“Delay Period”), any such amount to which you would otherwise be entitled during
the Delay Period immediately following your termination of employment will be
paid on the first business day following the expiration of such Delay Period.

(c) Part-Time Transition Period. As compensation for your services during the
Part-Time Transition Period ending on the six month anniversary of the Closing
Date, you will receive (provided your employment does not earlier terminate by
you without Good Reason or by the Company For Cause) from the Company a base
salary at a rate of $14,000 per month, payable in accordance with the Company’s
normal payroll practices.

(d) Benefit Continuation. Through the end of the Full-Time Transition Period
(provided your employment has not earlier terminated), your health, insurance,
vacation and other benefits shall continue in accordance with the Employment
Agreement.

(e) COBRA. Following completion of the Full-Time Transition Period (provided
your employment does not terminate by you without Good Reason or by the Company
For Cause prior to the end of the Part-Time Transition Period), if you elect to
continue medical coverage for yourself or your dependents then covered by the
Company’s medical plans under the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended (“COBRA”), the Company shall pay the premiums for your COBRA
coverage until the earlier of (a) the twelve month anniversary of the end of the
Full-Time Transition Period, or (b) the date you become covered under another
employer’s health plan.

(f) 280G. In the event that any benefits payable to you pursuant to this
Agreement (“Benefits”) (i) constitute “parachute payments” within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), or
any comparable successor provisions, and (ii) but for this Section would be
subject to the excise tax imposed by Section 4999 of the Code, or any comparable
successor provisions (the “Excise Tax”), then your Benefits hereunder shall be
either (a) provided to you in full, or (b) provided to you as to such lesser
extent which would result in no portion of

 

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Kevin C. Eichler

June 20, 2008

Page 4

such benefits being subject to the Excise Tax, whichever of the foregoing
amounts, when taking into account applicable federal, state, local and foreign
income and employment taxes, the Excise Tax, and any other applicable taxes,
results in your receipt, on an after-tax basis, of the greatest amount of
benefits, notwithstanding that all or some portion of such benefits may be
taxable under the Excise Tax. Unless you and the Company otherwise agree in
writing, any determination required under this Section shall be made in writing
in good faith by a nationally recognized accounting firm selected by the Company
(the “Accountants”). The Company shall bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated by this
Section.

(g) Acceleration. If prior to the six month anniversary of the Closing Date but
on or after January 1, 2009, the Company terminates your employment other than
For Cause or you terminate your employment with Good Reason (provided, that,
notwithstanding any provisions of the Employment Agreement to the contrary, the
Company requiring you to perform the Full Time Transition or Part Time
Transition services shall not be deemed Good Reason), all remaining payments and
awards described in this Section 2 shall become immediately due and payable
subject to applicable withholdings and your rights under Section 2(f) above.

3. Your Obligations. You agree to perform the services described above, abide by
your covenant not to compete set forth above and comply with the applicable
terms of the Employment Agreement including, without limitation, those
obligations that apply subsequent to the termination of your employment.

4. Successors. In addition to you and Credence, the provisions of this Agreement
will extend and inure to the benefit of, and be binding upon, your heirs,
personal representatives, legal successors and assigns and those of Credence.

5. Indemnity. This Agreement does not alter any agreement or insurance providing
you with rights of indemnity, defense or similar rights, including any with
respect to currently threatened or pending disputes, claims or litigation
involving you or the Company.

6. No Oral Modification. This Agreement may not be altered or amended except by
a written document executed by you and, on behalf of Credence, by me or any
chief executive officer other than you.

7. Section 409A.

(a) Notwithstanding any other provision of this Agreement whatsoever, the
Company shall have the right, after consulting with and securing the your
approval, to provide for the application and effects of Section 409A of the Code
(relating to deferred compensation arrangements) and any related regulatory or
administrative guidance issued by the Internal Revenue Service to minimize, to
the extent reasonably practicable, the likelihood that the payments provided
under this Agreement will trigger the additional

 

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Kevin C. Eichler

June 20, 2008

Page 5

tax, interest, and any related penalties imposed by Section 409A(l)(B) of the
Code. However, the Company makes no representation that the Agreement will
comply with Section 409A of the Code and makes no undertaking to prevent
Section 409A of the Code from applying to this Agreement or to mitigate the
effects of such provision on any payments made pursuant to it.

(b) The Company shall delay the payment of any benefits payable under this
Agreement as required to comply with Section 409A(a)(2)(B)(i) of the Code
(relating to payments made to certain “specified employees” of certain
publicly-traded companies) and in such event, any such amount to which you would
otherwise be entitled during the six (6) month period immediately following your
separation from service shall instead be accumulated through and paid or
provided on the first business day following the expiration of such six
(6) month period, or if earlier, the date of your death. As you will be
providing services to the Company on a full-time basis in the role of Senior
Vice President for Finance of the Company during the Full-Time Transition
Period, the parties agree that you shall not be considered to have experienced a
“separation from service” or “termination of employment” (within the meaning of
Code Section 409A and the Treasury Regulations thereunder) as a result of your
resignation from your position as Chief Financial Officer of the Company.

8. Boilerplate. The provisions of Sections VII (Termination Obligations), VIII
(Inventions and Proprietary Information), IX (Arbitration), X (Amendments;
Waivers; Remedies), XI (Assignment; Binding Effect), XII (Notices), XIII
(Severability), XIV (Taxes), XV (Governing Law), XVI (Interpretation), XVII
(Obligations Survive), XVIII (Counterparts) and XIX (Authority) of the
Employment Agreement are incorporated herein and are applicable to this
Agreement.

[REST OF PAGE LEFT INTENTIONALLY BLANK]

 

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Kevin C. Eichler

June 20, 2008

Page 6

If the terms outlined in this Agreement are acceptable to you, please sign the
attached copy of this letter and return them to me.

 

Sincerely, CREDENCE SYSTEMS CORPORATION By:   David House Title:   Chairman

I have read, understand and agree to the terms set forth above:

 

 

Kevin C. Eichler Date:                     

 

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