Document:

2005 Non-Employee Director Option Program

 EXHIBIT 10.3 
  
 CREDENCE SYSTEMS CORPORATION 
  

2005 NON-EMPLOYEE DIRECTOR OPTION PROGRAM 
  
 ARTICLE I 
 ESTABLISHMENT AND PURPOSE
OF THE PROGRAM 
  
 1.01 Establishment of Program 
  
 The Credence Systems Corporation 2005 Non-Employee Director Option Program (the
“Program”) is adopted pursuant to the Credence Systems Corporation 2005 Stock Incentive Plan (the “Plan”) and, in addition to the terms and conditions set forth below, is subject to the provisions of the Plan. 
  
 1.02 Purpose of Program 
  
 The purpose of the Program is to enhance the ability of the Company to attract and retain directors who are not Employees
(“Non-Employee Directors”) through a program of automatic Option grants. 
  
 1.03 Effective Date of the Program 
  
 The Program is effective
as of the date the Plan is approved by the shareholders of the Company. 
  
 ARTICLE II 
 DEFINITIONS 
  
 Capitalized terms in this Program, unless otherwise defined herein, have the meaning given to them in the Plan. 
  
 ARTICLE III 
 OPTION TERMS 
  
 3.01 Date of Grant and Number of Shares 
  
 (a)
Initial Grant. A Non-Qualified Stock Option to purchase 20,000 shares of Common Stock shall be granted (the “Initial Grant”) to each Non-Employee Director, such Initial Grant to be made to Non-Employee Directors elected or appointed
to the Board on the first business day after each such Non-Employee Director first becomes a Non-Employee Director. 
  
 (b) Subsequent Grants. Beginning in the year 2005, each Non-Employee Director shall be granted a Non-Qualified Stock Option to purchase 4,000
shares of Common Stock (a “Subsequent Grant”) on April 1st, July 1st, October 1st and
January 1st of the following calendar year; provided that the Non-Employee Director is a director on the date of
grant of such Subsequent Grant and provided further that no Subsequent Grant shall be made to any Non-Employee 

 Director who has not served as a director of the Company, as of the date of grant of such Subsequent Grant, for at least
six (6) months. In the event any April 1st, July 1st, October 1st or January
1st is not a business day, the corresponding Subsequent Grant shall be made on the first business day after such
date. 
  
 3.02 Vesting 
  
 (a) Initial Grant. Each Initial Grant under the Program shall vest
and become exercisable as to one-eighth (1/8th) of the shares of Common Stock subject to the Option six (6) months
after the date of grant and shall vest and become exercisable as to one-sixteenth (1/16th) of the shares of Common
Stock subject to the Option on each three-month anniversary of the date of grant thereafter, such that the Option will be fully vested and exercisable four (4) years after its date of grant. 
  
 (b) Subsequent Grant. Each Subsequent Grant under the Program shall
vest and become exercisable as to one-fourth (1/4th) of the shares of Common Stock subject to the Option on each
yearly anniversary of the April 1st grant date for the first in the series of four Subsequent Grants awarded to each
Non-Employee Director, such that each Subsequent Grant will be fully vested and exercisable four (4) years after the April 1st grant date for the first in the series of four Subsequent Grants awarded to each Non-Employee Director. For initial Subsequent Grants awarded to a Non-Employee Director who was ineligible to receive a Subsequent Grant on April
1st of any year, the Vesting Commencement Date (as set forth in the applicable option agreement) for such Subsequent
Grants to be made to such Non-Employee Director shall be the grant date of the initial Subsequent Grant in such series of three or fewer Subsequent Grants. 
  
 3.03 Exercise Price 
  
 The exercise price per share of Common Stock of each Initial Grant and Subsequent Grant shall be one hundred percent (100%) of the Fair Market Value per Share on the date of grant. 
  
 3.04 Termination of Continuous Service 
  
 Subject to Sections 3.05 and 3.06 of this Program, in the event a Non-Employee
Director’s Continuous Service terminates, a Non-Employee Director may exercise the portion of each of his or her Options that was vested at the date of such termination at any time within six (6) months after the date of the Non-Employee
Director’s termination of Continuous Service. Notwithstanding the foregoing, in the event a Non-Employee Director dies within six (6) months after his or her Continuous Service terminates, the portion of each of his or her Options that was
vested at the date of such termination of Continuous Service may be exercised at any time within twelve (12) months after the date of death. 
  
 3.05 Termination as a Result of Death or Disability 
  
 In the event a Non-Employee Director’s Continuous Service terminates as a result of his or her death or Disability, each of the Non-Employee Director’s Options
which is at the time outstanding under the Program automatically shall become fully vested and exercisable immediately prior to the date of such termination. In addition, a Non-Employee Director’s Options outstanding under the Program may be
exercised at any time within twelve (12) months after the date of the Non-Employee Director’s termination of Continuous Service as a result of his or her death or Disability. 

 3.06 Termination as a Result of Retirement 
  
 In the event of a Non-Employee Director’s Qualifying Retirement, each of the Non-Employee Director’s Options which is at the time
outstanding under the Program automatically shall become fully vested and exercisable immediately prior to the date of such Qualifying Retirement. In addition, a Non-Employee Director may exercise each of his or her Options outstanding under the
Program at any time within twelve (12) months after the date of the Qualifying Retirement (but in no event later than the expiration date of the Option). 
  
 “Qualifying Retirement” is defined as a Non-Employee Director’s termination of Continuous Service after attaining the age of sixty five (65) years and the
completion of nine (9) or more years of service as a Non-Employee Director. 
  
 3.07 Corporate Transaction/Change in Control 
  
 (a) Corporate Transaction. In the event of a Corporate Transaction, each Option which is at the time outstanding under the Program automatically shall become fully vested and exercisable immediately prior to the effective date of
such Corporate Transaction. Effective upon the consummation of the Corporate Transaction, all outstanding Options under the Program shall terminate. However, all such Options shall not terminate to the extent they are Assumed in connection with the
Corporate Transaction. 
  
 (b) Change in Control. In the
event of a Change in Control (other than a Change in Control which also is a Corporate Transaction), each Option which is at the time outstanding under the Program automatically shall become fully vested and exercisable, immediately prior to the
specified effective date of such Change in Control. 
  
 3.08 Other Terms

  
 The Administrator shall determine the remaining terms and conditions of
the Options awarded under the Program. 
  
 3.09 Amendment, Suspension or
Termination of the Program 
  
 The Board may at any time amend, suspend or
terminate the Program without the approval of the Company’s stockholders.Form of Notice of Non-Qualified Stock Option Award

 EXHIBIT 10.4 
  
 CREDENCE SYSTEMS CORPORATION 2005 STOCK INCENTIVE PLAN 
  
 2005 NON-EMPLOYEE DIRECTOR OPTION PROGRAM 
  
 NOTICE OF NON-QUALIFIED STOCK OPTION AWARD 
  

			
	Grantee’s Name and Address:	 	                                      
                          
		
	 	 	                                      
                          
		
	 	 	                                      
                          

  
 You (the
“Grantee”) have been granted an option to purchase shares of Common Stock, subject to the terms and conditions of this Notice of Non-Qualified Stock Option Award (the “Notice”), the Credence Systems Corporation 2005 Stock
Incentive Plan (the “Plan”), and the Credence Systems Corporation 2005 Non-Employee Director Option Program (the “Program”), as amended from time to time, and the Non-Qualified Stock Option Award Agreement (the “Option
Agreement”) attached hereto, as follows. Unless otherwise defined herein, the terms defined in the Plan and the Program shall have the same defined meanings in this Notice. 
  

			
	 Award Number
	 	                                      
                          
		
	 Date of Award
	 	                                      
                          
		
	 Vesting Commencement Date
	 	                                      
                          
		
	 Exercise Price per Share
	 	$                                      
                        
		
	 Total Number of Shares subject
 to the Option (the
“Shares”)
	 	                                      
                          
		
	 Total Exercise Price
	 	$                                      
                        
		
	 Type of Option:
	 	Non-Qualified Stock Option
		
	 Expiration Date:
	 	                                      
                          
		
	 Post-Termination Exercise Period:
	 	Six (6) Months

  
 Vesting Schedule: 

 
 Subject to the Grantee’s Continuous Service and other limitations
set forth in this Notice, the Plan, the Program and the Option Agreement, the Option may be exercised, in whole or in part, in accordance with the following schedule: 
  
 [to be determined] 
  
 In the event the Grantee’s Continuous Service terminates as a result of his or her death, Disability or a Qualifying Retirement (as defined in the
Program), the Option automatically shall become fully vested and exercisable immediately prior to the date of such termination of Continuous Service. 
  

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 IN WITNESS WHEREOF, the Company and the Grantee have executed this Notice and agree that the Option is to
be governed by the terms and conditions of this Notice, the Plan, the Program and the Option Agreement. 
  

			
	Credence Systems Corporation,
	a Delaware corporation
		
	By:	 	  

	Title:	 	  

  
 THE GRANTEE ACKNOWLEDGES AND
AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE (NOT THROUGH THE ACT OF BEING GRANTED THE OPTION OR ACQUIRING SHARES HEREUNDER). 
  
 The Grantee acknowledges receipt of a copy of the Plan, the Program and the
Option Agreement, and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the Option subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed this Notice, the Plan, the
Program and the Option Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Notice, and fully understands all provisions of this Notice, the Plan, the Program and the Option Agreement. The
Grantee hereby agrees that all questions of interpretation and administration relating to this Notice, the Plan, the Program and the Option Agreement shall be resolved by the Administrator in accordance with Section 14 of the Option Agreement. The
Grantee further agrees to the venue selection and waiver of a jury trial in accordance with Section 15 of the Option Agreement. The Grantee further agrees to notify the Company upon any change in the residence address indicated in this Notice.

  

							
	Dated:	 	  

	 	Signed:	 	  

	 	 	 	 	 	 	                                Grantee

  

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 Award Number:             

  
 CREDENCE SYSTEMS CORPORATION 2005 STOCK INCENTIVE PLAN

  
 2005 NON-EMPLOYEE DIRECTOR OPTION PROGRAM

  
 NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

  
 1. Grant of Option. Credence Systems
Corporation, a Delaware corporation (the “Company”), hereby grants to the Grantee (the “Grantee”) named in the Notice of Non-Qualified Stock Option Award (the “Notice”), an option (the “Option”) to purchase
the Total Number of Shares of Common Stock subject to the Option (the “Shares”) set forth in the Notice, at the Exercise Price per Share set forth in the Notice (the “Exercise Price”) subject to the terms and provisions of the
Notice, this Non-Qualified Stock Option Award Agreement (the “Option Agreement”), the Company’s 2005 Stock Incentive Plan (the “Plan”), and the Company’s 2005 Non-Employee Director Option Program (the
“Program”), as amended from time to time, which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan and the Program shall have the same defined meanings in this Option Agreement. 

 
 The Option is intended to qualify as a Non-Qualified Stock Option and not
as an Incentive Stock Option as defined in Section 422 of the Code. 
  
 2. Exercise of Option. 
  
 (a) Right to
Exercise. The Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice and with the applicable provisions of the Plan, the Program and this Option Agreement. The Option shall be subject to the
provisions of Section 3.07 of the Program relating to the exercisability or termination of the Option in the event of a Corporate Transaction or a Change in Control. The Grantee shall be subject to reasonable limitations on the number of requested
exercises during any monthly or weekly period as determined by the Administrator. In no event shall the Company issue fractional Shares. 
  
 (b) Method of Exercise. The Option shall be exercisable by delivery of an Exercise Notice (a form of which is attached as Exhibit A) or by such
other procedure as specified from time to time by the Administrator which shall state the election to exercise the Option, the whole number of Shares in respect of which the Option is being exercised, and such other provisions as may be required by
the Administrator. The exercise notice shall be delivered in person, by certified mail, or by such other method (including electronic transmission) as determined from time to time by the Administrator to the Company accompanied by payment of the
Exercise Price. The Option shall be deemed to be exercised upon receipt by the Company of such notice accompanied by the Exercise Price, which, to the extent selected, shall be deemed to be satisfied by use of the broker-dealer sale and remittance
procedure to pay the Exercise Price provided in Section 3(d), below. 
  
 (c) Taxes. No Shares will be delivered to the Grantee or other person pursuant to the exercise of the Option until the Grantee or other person has made arrangements 
  

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 acceptable to the Administrator for the satisfaction of applicable income tax and employment tax withholding obligations,
including, without limitation, such other tax obligations of the Grantee incident to the receipt of Shares. Upon exercise of the Option, the Company or the Grantee’s employer may offset or withhold (from any amount owed by the Company or the
Grantee’s employer to the Grantee) or collect from the Grantee or other person an amount sufficient to satisfy such tax withholding obligations. 
  
 3. Method of Payment. Payment of the Exercise Price shall be made by any of the following, or a combination thereof, at the election of the
Grantee; provided, however, that such exercise method does not then violate any Applicable Law and, provided further, that the portion of the Exercise Price equal to the par value of the Shares must be paid in cash or other legal consideration
permitted by the Delaware General Corporation Law: 
  
 (a) cash;

  
 (b) check; 
  
 (c) surrender of Shares or delivery of a properly executed form of
attestation of ownership of Shares as the Administrator may require which have a Fair Market Value on the date of surrender or attestation equal to the aggregate Exercise Price of the Shares as to which the Option is being exercised, provided,
however, that Shares acquired under the Plan or any other equity compensation plan or agreement of the Company must have been held by the Grantee for a period of more than six (6) months (and not used for another Award exercise by attestation during
such period); or 
  
 (d) payment through a broker-dealer sale and
remittance procedure pursuant to which the Grantee (i) shall provide written instructions to a Company-designated brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the Company sufficient funds to cover
the aggregate exercise price payable for the purchased Shares and (ii) shall provide written directives to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale transaction.

  
 4. Restrictions on Exercise. The Option may not be
exercised if the issuance of the Shares subject to the Option upon such exercise would constitute a violation of any Applicable Laws. If the exercise of the Option within the applicable time periods set forth in Section 5, 6, 7 and 8 of this Option
Agreement is prevented by the provisions of this Section 4, the Option shall remain exercisable until one (1) month after the date the Grantee is notified by the Company that the Option is exercisable, but in any event no later than the Expiration
Date set forth in the Notice. 
  
 5. Termination or Change of
Continuous Service. In the event the Grantee’s Continuous Service terminates, the Grantee may, but only during the Post-Termination Exercise Period, exercise the portion of the Option that was vested at the date of such termination (the
“Termination Date”). The Post-Termination Exercise Period shall commence on the Termination Date. In no event, however, shall the Option be exercised later than the Expiration Date set forth in the Notice. In the event of the
Grantee’s change in status from Employee, Director or Consultant to any other status of Employee, Director or Consultant, the Option shall 
  

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 remain in effect and the Option shall continue to vest in accordance with the Vesting Schedule set forth in the Notice.
Except as provided in Sections 6, 7 and 8 below, to the extent that the Option was unvested on the Termination Date, or if the Grantee does not exercise the vested portion of the Option within the Post-Termination Exercise Period, the Option shall
terminate. 
  
 6. Qualifying Retirement of Grantee. In the
event the Grantee’s Continuous Service terminates as a result of his or her Qualifying Retirement (as defined in the Program), the Grantee may, but only within twelve (12) months commencing on the Termination Date (but in no event later than
the Expiration Date), exercise the Option. If the Grantee does not exercise the Option within the time specified herein, the Option shall terminate. 
  
 7. Disability of Grantee. In the event the Grantee’s Continuous Service terminates as a result of his or her Disability, the Grantee may, but
only within twelve (12) months commencing on the Termination Date (but in no event later than the Expiration Date), exercise the Option. If the Grantee does not exercise the Option within the time specified herein, the Option shall terminate.

  
 8. Death of Grantee. In the event of the termination of
the Grantee’s Continuous Service as a result of his or her death, or in the event of the Grantee’s death during the Post-Termination Exercise Period or during the twelve (12) month period following the Grantee’s termination of
Continuous Service as a result of his or her Qualifying Retirement or Disability, the person who acquired the right to exercise the Option pursuant to Section 9 may exercise the portion of the Option that was vested at the date of termination within
twelve (12) months commencing on the date of death (but in no event later than the Expiration Date). If the vested portion of the Option is not exercised within the time specified herein, the Option shall terminate. 
  
 9. Transferability of Option. The Option may not be transferred in any
manner other than by will or by the laws of descent and distribution, provided, however, that the Option may be transferred during the lifetime of the Grantee to the extent and in the manner authorized by the Administrator. Notwithstanding the
foregoing, the Grantee may designate one or more beneficiaries of the Grantee’s Option in the event of the Grantee’s death on a beneficiary designation form provided by the Administrator. Following the death of the Grantee, the Option, to
the extent provided in Section 8, may be exercised (a) by the person or persons designated under the deceased Grantee’s beneficiary designation or (b) in the absence of an effectively designated beneficiary, by the Grantee’s legal
representative or by any person empowered to do so under the deceased Grantee’s will or under the then applicable laws of descent and distribution. The terms of the Option shall be binding upon the executors, administrators, heirs, successors
and transferees of the Grantee. 
  
 10. Term of Option. The
Option must be exercised no later than the Expiration Date set forth in the Notice or such earlier date as otherwise provided herein. After the Expiration Date or such earlier date, the Option shall be of no further force or effect and may not be
exercised. 
  
 11. Tax Consequences. Set forth below is a
brief summary as of the date of this Option Agreement of some of the federal tax consequences of exercise of the Option and 
  

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 disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE. THE GRANTEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. 
  
 (a) Exercise of Non-Qualified Stock Option. On exercise of a Non-Qualified Stock Option, the Grantee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If the Grantee is an Employee or a former Employee, the Company will be
required to withhold from the Grantee’s compensation or collect from the Grantee and pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor
the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise. 
  
 (b) Disposition of Shares. In the case of a Non-Qualified Stock Option, if Shares are held for more than one year, any gain realized on disposition
of the Shares will be treated as long-term capital gain for federal income tax purposes. 
  
 12. Entire Agreement: Governing Law. The Notice, the Plan, the Program and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the Grantee with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Company and the
Grantee. Nothing in the Notice, the Plan, the Program and this Option Agreement (except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the parties. The Notice, the Plan, the Program and this
Option Agreement are to be construed in accordance with and governed by the internal laws of the State of California without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the
internal laws of the State of California to the rights and duties of the parties. Should any provision of the Notice, the Plan, the Program or this Option Agreement be determined to be illegal or unenforceable, such provision shall be enforced to
the fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable. 
  
 13. Construction. The captions used in the Notice and this Option Agreement are inserted for convenience and shall not be deemed a part of the
Option for construction or interpretation. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the
context clearly requires otherwise. 
  
 14. Administration and
Interpretation. Any question or dispute regarding the administration or interpretation of the Notice, the Plan, the Program or this Option Agreement shall be submitted by the Grantee or by the Company to the Administrator. The resolution of such
question or dispute by the Administrator shall be final and binding on all persons. 
  

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 15. Venue and Waiver of Jury Trial. The Company, the Grantee, and the Grantee’s assignees
pursuant to Section 9 (the “parties”) agree that any suit, action, or proceeding arising out of or relating to the Notice, the Plan, the Program or this Option Agreement shall be brought in the United States District Court for the Northern
District of California (or should such court lack jurisdiction to hear such action, suit or proceeding, in a California state court in the County of Santa Clara) and that the parties shall submit to the jurisdiction of such court. The parties
irrevocably waive, to the fullest extent permitted by law, any objection the party may have to the laying of venue for any such suit, action or proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A
JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this Section 15 shall for any reason be held invalid or unenforceable, it is the specific intent of the parties that such provisions shall be modified to the minimum
extent necessary to make it or its application valid and enforceable. 
  
 16. Notices. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery, upon deposit for delivery by an internationally recognized express mail courier service
or upon deposit in the United States mail by certified mail (if the parties are within the United States), with postage and fees prepaid, addressed to the other party at its address as shown in these instruments, or to such other address as such
party may designate in writing from time to time to the other part. 
  
 END OF AGREEMENT 
  

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 EXHIBIT A 
  
 CREDENCE SYSTEMS CORPORATION 2005 STOCK INCENTIVE PLAN 
  
 EXERCISE NOTICE 
  
 Credence Systems Corporation 
 1421 California Circle 
 Milpitas, California 95035 
 Attention: Secretary 
  
 1. Exercise of Option. Effective as of today,
                    ,          the undersigned (the “Grantee”) hereby elects to
exercise the Grantee’s option to purchase                      shares of the Common Stock (the “Shares”) of Credence Systems
Corporation (the “Company”) under and pursuant to the Company’s 2005 Stock Incentive Plan, the Company’s 2005 Non-Employee Director Option Program (the “Program”), as amended from time to time, and the Non-Qualified
Stock Option Award Agreement (the “Option Agreement”) and Notice of Non-Qualified Stock Option Award (the “Notice”) dated
                    ,             . Unless otherwise defined herein, the
terms defined in the Plan and the Program shall have the same defined meanings in this Exercise Notice. 
  
 2. Representations of the Grantee. The Grantee acknowledges that the Grantee has received, read and understood the Notice, the Plan, the Program
and the Option Agreement and agrees to abide by and be bound by their terms and conditions. 
  
 3. Rights as Stockholder. Until the stock certificate evidencing such Shares is issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company),
no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such stock certificate promptly after the
Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 10 of the Plan. 
  
 4. Delivery of Payment. The Grantee herewith delivers to the Company
the full Exercise Price for the Shares, which, to the extent selected, shall be deemed to be satisfied by use of the broker-dealer sale and remittance procedure to pay the Exercise Price provided in Section 3(d) of the Option Agreement. 

 
 5. Tax Consultation. The Grantee understands that the Grantee may
suffer adverse tax consequences as a result of the Grantee’s purchase or disposition of the Shares. The Grantee represents that the Grantee has consulted with any tax consultants the Grantee deems advisable in connection with the purchase or
disposition of the Shares and that the Grantee is not relying on the Company for any tax advice. 
  
 6. Taxes. The Grantee agrees to satisfy all applicable non-U.S., federal, state and local income and employment tax withholding obligations and
herewith delivers to the Company the full amount of such obligations or has made arrangements acceptable to the Company to satisfy such obligations. 
  

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 7. Successors and Assigns. The Company may assign any of its rights under this Exercise Notice to
single or multiple assignees, and this agreement shall inure to the benefit of the successors and assigns of the Company. This Exercise Notice shall be binding upon the Grantee and his or her heirs, executors, administrators, successors and assigns.

  
 8. Construction. The captions used in this Exercise
Notice are inserted for convenience and shall not be deemed a part of this agreement for construction or interpretation. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular.
Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise. 
  
 9. Administration and Interpretation. The Grantee hereby agrees that any question or dispute regarding the administration or interpretation of this
Exercise Notice shall be submitted by the Grantee or by the Company to the Administrator. The resolution of such question or dispute by the Administrator shall be final and binding on all persons. 
  
 10. Governing Law; Severability. This Exercise Notice is to be
construed in accordance with and governed by the internal laws of the State of California without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of
California to the rights and duties of the parties. Should any provision of this Exercise Notice be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other
provisions shall nevertheless remain effective and shall remain enforceable. 
  
 11. Notices. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery, upon deposit for delivery by an internationally recognized express
mail courier service or upon deposit in the United States mail by certified mail (if the parties are within the United States), with postage and fees prepaid, addressed to the other party at its address as shown below beneath its signature, or to
such other address as such party may designate in writing from time to time to the other party. 
  
 12. Further Instruments. The parties agree to execute such further instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this agreement. 
  
 13.
Entire Agreement. The Notice, the Plan, the Program, and the Option Agreement are incorporated herein by reference, and together with this Exercise Notice constitute the entire agreement of the parties with respect to the subject matter
hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Grantee with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing
signed by the Company and the Grantee. Nothing in the Notice, the Plan, the Program, the Option Agreement and this Exercise Notice (except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the
parties. 
  

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	Submitted by:	 	Accepted by:
		
	GRANTEE:	 	CREDENCE SYSTEMS CORPORATION
			
	 	 	By:	 	  

	  

	 	Title:	 	  

	                            (Signature)	 	 	 	 
		
	Address:	 	Address:
		
	  

	 	 
	  

	 	 1421 California Circle
 Milpitas,
California 95035

  

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