Document:

Amended and Restated Executive Employment Agrreement between Brett L. Hooper

 Exhibit 10.5 
 Amended and Restated Executive Employment Agreement 
 This Amended and Restated Executive Employment
Agreement (the “Agreement”), dated March 11, 2006, is between CREDENCE SYSTEMS CORPORATION (the “Company”) and BRETT L. HOOPER
(“Executive”). 
  

	I.	POSITION AND RESPONSIBILITIES 

 A. Position.
Executive is employed by the Company to render services to the Company in the position of Senior Vice President, Human Resources. Executive shall perform such duties and responsibilities as are normally related to such position in accordance with
the standards of the industry and any additional duties now or hereafter assigned to Executive by the Company. Executive shall abide by the rules, regulations, and practices as adopted or modified from time to time in the Company’s sole
discretion. 
 B. Other Activities. Except upon the prior written consent of the Company, Executive will not, during the term of this
Agreement, (i) accept any other employment, or (ii) engage, directly or indirectly, in any other business activity (whether or not pursued for pecuniary advantage) that might interfere with Executive’s duties and responsibilities
hereunder or create a conflict of interest with the Company. 
 C. No Conflict. Executive represents and warrants that his execution
of this Agreement, his employment with the Company, and the performance of his proposed duties under this Agreement shall not violate any obligations he may have to any other employer, person or entity, including any obligations with respect to
proprietary or confidential information of any other person or entity. 
  

	II.	COMPENSATION AND BENEFITS 

 A. Base Salary.
In consideration of the services to be rendered under this Agreement, the Company shall pay Executive an annual base salary of Two Hundred Thousand Dollars ($200,000) (“Base Salary”). The Base Salary shall be paid in accordance with the
Company’s regularly established payroll practice. Executive’s Base Salary will be reviewed from time to time in accordance with the established procedures of the Company for adjusting salaries for similarly situated employees and may be
adjusted in the sole discretion of the Company. 
 B. Bonus. Executive shall be eligible for an annual target incentive bonus equal to
Fifty Percent (50%) of his then-current Base Salary (“Target Bonus”), based on Executive’s achievement of performance objectives determined by the Company. 
 C. Benefits. Executive shall be eligible to participate in the benefits made generally available by the Company to similarly-situated executives,
in accordance with the benefit plans established by the Company, and as may be amended from time to time in the Company’s sole discretion. 

 D. Expenses. The Company shall reimburse Executive for reasonable business expenses incurred in
the performance of Executive’s duties hereunder in accordance with the Company’s expense reimbursement guidelines. 
  

	III.	AT-WILL EMPLOYMENT; TERMINATION BY COMPANY 

 A.
At-Will Termination by Company. Executive’s employment with the Company shall be “at-will” at all times. The Company may terminate Executive’s employment with the Company at any time, without any advance notice, for any
reason or no reason at all, notwithstanding anything to the contrary contained in or arising from any statements, policies or practices of the Company relating to the employment, discipline or termination of its employees. Upon and after such
termination, all obligations of the Company under this Agreement shall cease, except as otherwise provided herein. 
 B. Separation
Benefits. Except in situations where the employment of Executive is terminated For Cause, By Death or By Disability (as defined in Section IV below), in the event that the Company terminates Executive’s employment at any time,
Executive will be eligible to receive the following benefits (collectively, “Separation Benefits”): 
 1. an
amount equal to (1) One Hundred Percent (100%) of Executive’s then-current Base Salary, plus (2) One Hundred Percent (100%) of Executive’s annual Target Bonus, payable in equal monthly installments over the twelve
(12) month period following the date of such termination (“Salary Continuation Period”); 
 2. continued
vesting of Executive’s stock options until the earlier of (a) the end of the Salary Continuation Period or (b) the date Executive begins other employment, and a period of twelve (12) months thereafter to exercise such vested
options; 
 3. if Executive elects to continue his medical coverage under the Consolidated Omnibus Reconciliation Act
(“COBRA”), the Company shall pay the premiums for Executive’s COBRA coverage until the earlier of (a) the end of the Salary Continuation Period or (b) the date Executive becomes covered under another employer’s health
plan; and 
 4. continued payment of the premiums required to maintain Executive’s coverage under his
Company-provided life insurance policy during the Salary Continuation Period. 
 Notwithstanding the foregoing, if Executive begins other employment during
the Salary Continuation Period, all vesting of Executive’s stock options shall cease and Executive shall receive an accelerated lump-sum payment of the remaining payments for the Salary Continuation Period, in lieu of salary continuation.
Executive shall not be eligible to participate in the Company’s deferred compensation, 401K, or employee stock purchase plans during the Salary Continuation Period. 
 Executive’s eligibility for the foregoing Separation Benefits is conditioned on (a) Executive remaining available during the Salary Continuation Period to consult with the Company regarding matters for which
he previously had responsibility as a Company executive; 

  

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(b) Executive having first signed a release agreement in the form attached as Exhibit A, and (c) Executive’s agreement not to compete
with the Company, or its successors or assigns, during the Salary Continuation Period. If Executive engages in any business activity competitive with the Company or its successors or assigns during the Salary Continuation Period, all Separation
Benefits immediately shall cease. 
  

	IV.	OTHER TERMINATIONS BY COMPANY 

 A. Termination
for Cause. For purposes of this Agreement, “For Cause” shall mean: (i) Executive commits a crime involving dishonesty, breach of trust, or physical harm to any person; (ii) Executive willfully engages in conduct that is in
bad faith and materially injurious to the Company, including but not limited to, misappropriation of trade secrets, fraud or embezzlement; (iii) Executive commits a material breach of this Agreement, which breach is not cured within twenty days
after written notice to Executive from the Company; (iv) Executive willfully refuses to implement or follow a lawful policy or directive of the Company, which breach is not cured within twenty days after written notice to Executive from the
Company; or (v) Executive engages in misfeasance or malfeasance demonstrated by a pattern of failure to perform job duties diligently and professionally. The Company may terminate Executive’s employment For Cause at any time, without any
advance notice. The Company shall pay to Executive all compensation to which Executive is entitled up through the date of termination, subject to any other rights or remedies of the Company under law; and thereafter all obligations of the Company
under this Agreement shall cease. 
 B. By Death. Executive’s employment shall terminate automatically upon Executive’s
death. The Company shall pay to Executive’s beneficiaries or estate, as appropriate, any compensation then due and owing. Thereafter all obligations of the Company under this Agreement shall cease. Nothing in this Section shall affect any
entitlement of Executive’s heirs or devisees to the benefits of any life insurance plan or other applicable benefits. 
 C. By
Disability. If Executive becomes eligible for the Company’s long term disability benefits or if, in the sole opinion of the Company, Executive is unable to carry out the responsibilities and functions of the position held by Executive by
reason of any physical or mental impairment for more than ninety consecutive days or more than one hundred and twenty days in any twelve-month period, then, to the extent permitted by law, the Company may terminate Executive’s employment. The
Company shall pay to Executive all compensation to which Executive is entitled up through the date of termination, and thereafter all obligations of the Company under this Agreement shall cease. Nothing in this Section shall affect Executive’s
rights under any disability plan in which Executive is a participant. 
  

	V.	CHANGE OF CONTROL 

 A. “Change of
Control.” For purposes of this Agreement, “Change of Control” shall mean a change in ownership or control of the Company effected through a merger, consolidation or acquisition by any person or related group of persons (other than
an acquisition by the Company or by a Company-sponsored employee benefit plan or by a person or persons that directly or indirectly controls, is controlled by, or is under common control with, the 

  

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Company) of beneficial ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934) of securities possessing more than fifty
percent of the total combined voting power of the outstanding securities of the Company. 
 B. Termination Following a Change of
Control. If the Company terminates Executive’s employment in the absence of Cause, Death, or Disability, Executive will be eligible to receive the Separation Benefits provided in Section III(B) above. 
  

	VI.	TERMINATION BY EXECUTIVE 

 A. At-Will Termination
By Executive. Executive may terminate his employment with the Company at any time for any reason or no reason at all, upon four (4) weeks’ advance written notice. During such notice period Executive shall continue to diligently perform
all of Executive’s duties hereunder. The Company shall have the option, in its sole discretion, to make Executive’s termination effective at any time prior to the end of such notice period as long as the Company pays Executive all
compensation to which Executive is entitled up through the last day of the four (4) week notice period. Thereafter all obligations of the Company shall cease. 
 B. Termination for Good Reason After Change of Control. Executive’s termination shall be for “Good Reason” if Executive provides written notice to the Company of the Good Reason within six
(6) months of the event constituting Good Reason and provides the Company with a period of twenty (20) days to cure the Good Reason and the Company fails to cure the Good Reason within that period. For purposes of this Agreement,
“Good Reason” shall mean any of the following events if (i) the event is effected by the Company without the consent of Executive, and (ii) such event occurs after a Change in Control: (A) a change in Executive’s
position with Employer which materially reduces Executive’s level of responsibility; (B) a material reduction in Executive’s Base Salary, except for reductions that are comparable to reductions generally applicable to similarly
situated executives of the Company; or (C) a relocation of Executive’s principal place of employment by more than fifty miles. In such event Executive may terminate his employment for Good Reason, in which case Executive will be eligible
to receive the Separation Benefits provided in Section III(B) above, subject to the conditions set forth therein. 
  

	VII.	TERMINATION OBLIGATIONS 

 A. Return of
Property. Executive agrees that all property (including without limitation all equipment, tangible proprietary information, documents, records, notes, contracts and computer-generated materials) furnished to or created or prepared by Executive
incident to Executive’s employment belongs to the Company and shall be promptly returned to the Company upon termination of Executive’s employment. 
 B. Resignation and Cooperation. Upon termination of Executive’s employment, Executive shall be deemed to have resigned from all offices and directorships then held with the Company. Following any
termination of employment, Executive shall cooperate with the Company in the winding up of pending work on behalf of the Company and the orderly transfer of work to other employees. Executive shall also cooperate with the Company in the defense of

  

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any action brought by any third party against the Company that relates to Executive’s employment by the Company. 
  

	VIII.	 INVENTIONS AND PROPRIETARY INFORMATION; PROHIBITION ON THIRD PARTY INFORMATION 

 A. Proprietary Information Agreement. Executive acknowledges that he has signed and remains bound by the terms of the Company’s Proprietary
Information and Inventions Agreement, which Executive previously signed. 
 B. Non-Solicitation. Executive acknowledges that because
of Executive’s position in the Company, Executive will have access to material intellectual property and confidential information. During the term of Executive’s employment and for one year thereafter, in addition to Executive’s other
obligations hereunder or under the Proprietary Information Agreement, Executive shall not, for Executive or any third party, directly or indirectly (a) divert or attempt to divert from the Company any business of any kind, including without
limitation the solicitation of or interference with any of its customers, clients, members, business partners or suppliers, or (b) solicit or otherwise induce any person employed by the Company to terminate his employment. 
 C. Non-Disclosure of Third Party Information. Executive represents and warrants and covenants that Executive shall not disclose to the Company, or
use, or induce the Company to use, any proprietary information or trade secrets of others at any time, including but not limited to any proprietary information or trade secrets of any former employer, if any; and Executive acknowledges and agrees
that any violation of this provision shall be grounds for Executive’s immediate termination and could subject Executive to substantial civil liabilities and criminal penalties. Executive further specifically and expressly acknowledges that no
officer or other employee or representative of the Company has requested or instructed Executive to disclose or use any such third party proprietary information or trade secrets. 
  

	IX.	ARBITRATION 

 Executive agrees to sign and be bound
by the terms of the Company’s Arbitration Agreement, which is attached as Exhibit B. 
  

	X.	AMENDMENTS; WAIVERS; REMEDIES 

 This Agreement may
not be amended or waived except by a writing signed by Executive and by a duly authorized representative of the Company other than Executive. Failure to exercise any right under this Agreement shall not constitute a waiver of such right. Any waiver
of any breach of this Agreement shall not operate as a waiver of any subsequent breaches. All rights or remedies specified for a party herein shall be cumulative and in addition to all other rights and remedies of the party hereunder or under
applicable law. 
  

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	XI.	ASSIGNMENT; BINDING EFFECT 

 A. Assignment.
The performance of Executive is personal hereunder, and Executive agrees that Executive shall have no right to assign and shall not assign or purport to assign any rights or obligations under this Agreement. This Agreement may be assigned or
transferred by the Company; and nothing in this Agreement shall prevent the consolidation, merger or sale of the Company or a sale of any or all or substantially all of its assets. 
 B. Binding Effect. Subject to the foregoing restriction on assignment by Executive, this Agreement shall inure to the benefit of and be binding
upon each of the parties; the affiliates, officers, directors, agents, successors and assigns of the Company; and the heirs, devisees, spouses, legal representatives and successors of Executive. 
  

	XII.	NOTICES 

 All notices or other communications
required or permitted hereunder shall be made in writing and shall be deemed to have been duly given if delivered: (a) by hand; (b) by a nationally recognized overnight courier service; or (c) by United States first class registered
or certified mail, return receipt requested, to the principal address of the other party, as set forth below. The date of notice shall be deemed to be the earlier of (i) actual receipt of notice by any permitted means, or (ii) five
business days following dispatch by overnight delivery service or the United States Mail. Executive shall be obligated to notify the Company in writing of any change in Executive’s address. Notice of change of address shall be effective only
when done in accordance with this paragraph. 
 Company’s Notice Address: 
 Credence Systems Corporation 
 1421 California Circle 
 Milpitas, CA 95035 
 Executive’s Notice Address: 
  

	XIII.	 SEVERABILITY 

 If any provision of this
Agreement shall be held by a court or arbitrator to be invalid, unenforceable, or void, such provision shall be enforced to the fullest extent permitted by law, and the remainder of this Agreement shall remain in full force and effect. In the event
that the time period or scope of any provision is declared by a court or arbitrator of competent jurisdiction to exceed the maximum time period or scope that such court or arbitrator deems enforceable, then such court or arbitrator shall reduce the
time period or scope to the maximum time period or scope permitted by law. 
  

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	XIV.	TAXES 

 All amounts paid under this Agreement
(including without limitation Base Salary, Bonus, or Separation Benefits) shall be paid less all applicable state and federal tax withholdings and any other withholdings required by any applicable jurisdiction. 
  

	XV.	GOVERNING LAW 

 This Agreement shall be governed by
and construed in accordance with the laws of the State of California. 
  

	XVI.	INTERPRETATION 

 This Agreement shall be construed
as a whole, according to its fair meaning, and not in favor of or against any party. Sections and section headings contained in this Agreement are for reference purposes only, and shall not affect in any manner the meaning or interpretation of this
Agreement. Whenever the context requires, references to the singular shall include the plural and the plural the singular. 
  

	XVII.	OBLIGATIONS SURVIVE TERMINATION OF EMPLOYMENT 

 Executive agrees that any and all of Executive’s obligations under this agreement, including but not limited to Exhibit B, shall survive the termination of employment and the termination of this Agreement. 
  

	XVIII.	COUNTERPARTS 

 This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original of this Agreement, but all of which together shall constitute one and the same instrument. 
  

	XIX.	AUTHORITY 

 Each party represents and warrants that
such party has the right, power and authority to enter into and execute this Agreement and to perform and discharge all of the obligations hereunder; and that this Agreement constitutes the valid and legally binding agreement and obligation of such
party and is enforceable in accordance with its terms. 
  

	XX.	ENTIRE AGREEMENT 

 This Agreement is intended to be
the final, complete, and exclusive statement of the terms of Executive’s employment by the Company and may not be contradicted by evidence of any prior or contemporaneous statements or agreements, except for agreements specifically referenced
herein (including the Executive Proprietary Information and Inventions Agreement attached as Exhibit B, the Arbitration Agreement attached as Exhibit C, and the Stock Plan and Stock Option Agreement of the Company). To the extent that the practices,
policies or procedures of the Company, now or in the future, apply to Executive and are inconsistent with 

  

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the terms of this Agreement, the provisions of this Agreement shall control. Any subsequent change in Executive’s duties, position, or compensation will
not affect the validity or scope of this Agreement. 
  

	XXI.	EXECUTIVE ACKNOWLEDGEMENT 

 EXECUTIVE ACKNOWLEDGES
EXECUTIVE HAS HAD THE OPPORTUNITY TO CONSULT LEGAL COUNSEL CONCERNING THIS AGREEMENT, THAT EXECUTIVE HAS READ AND UNDERSTANDS THE AGREEMENT, THAT EXECUTIVE IS FULLY AWARE OF ITS LEGAL EFFECT, AND THAT EXECUTIVE HAS ENTERED INTO IT FREELY BASED ON
EXECUTIVE’S OWN JUDGMENT AND NOT ON ANY REPRESENTATIONS OR PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT. 
 IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above. 
  

					
	CREDENCE SYSTEMS CORPORATION	 		 	BRETT L. HOOPER
			
	 /S/    DAVID A.
RANHOFF
	 		 	 /S/    BRETT L.
HOOPER

	Signature	 		 	Signature
			
	 President and Chief Executive Officer
	 		 	 
	Title	 		 	

  
  

 8Form of Supplemental Employee Grantor Trust Enrollment Agreement

 Exhibit 10.4 
  
 FORM OF SUPPLEMENTAL EMPLOYEE GRANTOR TRUST ENROLLMENT AGREEMENT 
  
 This agreement (“Agreement”) is made the
             day of                     , 2005, between
                                        
                     (the “Employee”), the person, if any, to whom the Employee is legally married (the “Employee’s
Spouse”), Altria Corporate Services, Inc. (“ALCS”) and those affiliates of ALCS set forth on Exhibit B (the “Company”) by whom the Employee is or has been employed. 
  
 Introduction 
  
 The Company has established and maintained the Benefit Equalization Plan and the Supplemental Management
Employees’ Retirement Plan (the “Supplemental Plans” or the “Plans”). 
  
 Previously the Employee, the Employee’s Spouse and the Company entered into one or more Employee Grantor Trust Enrollment Agreements (the most recent of which, including any amendments thereto, is
hereinafter referred to as the “Original Enrollment Agreement”) providing for payments to or on behalf of the Employee by the relevant participating employer or employers in discharge of their respective obligations under the Supplemental
Plans, such payments to be made to an Employee Grantor Trust established by the Employee (the “Trust”). The parties wish to acknowledge that the Original Enrollment Agreement will apply to those accrued benefits under the Supplemental
Plans attributable to service rendered before January 1, 2005, to provide in this Agreement for the payment of additional current compensation to the Employee for services rendered in each year after 2004 in the amount specified below in
consideration for the Employee’s agreement to waive participation in the Supplemental Plans with respect to service attributable to periods after December 31, 2004, and to provide for the payment of such additional compensation into the
Employee Grantor Trust established by the Employee pursuant to the Original Enrollment Agreement in accordance with the terms specified below. 
  
 In consideration of their mutual undertakings, the Company, the Employee, and the Employee’s Spouse agree as follows: 
  
 I. Waiver of Right to Accrue Further Benefits in Supplemental Plans and Continued

 Maintenance of Grantor Trust 
  
 1.1 In consideration of the Company’s agreement to make the Target Payments as provided for in Article II, the Employee hereby waives the right
to accrue any benefits under the Supplemental Plans with respect to service performed after December 31, 2004 and agrees to cease active participation in the Supplemental Plans effective as of that date. 
  
 1.2 The Employee agrees to continue to maintain the Trust for the
purpose of 
  

 -1- 

 Exhibit 10.4 
  
 receiving and holding (a) the cash deposits made pursuant to the Original Enrollment Agreement and (b) any additional cash deposits made pursuant to
Article II of this Agreement. The cash deposits made pursuant to the Original Enrollment Agreement, including any Funding Payments made under that Agreement with respect to service performed by the Employee for periods before January 1, 2005
and earnings on those deposits, shall offset the benefits accrued by the Employee under the Supplemental Plans as of December 31, 2004, as provided in the Original Enrollment Agreement. Such Funding Payments, and any earnings thereon, shall be
maintained by the Trustee in a separate subaccount in the Trust (hereinafter referred to as “Subaccount FP-A”). This Agreement shall govern the terms of any current compensation payments deposited by the Company on behalf of the Employee
in the Trust pursuant to Article II below, which compensation payments and earnings thereon shall be maintained by the Trustee in a separate subaccount (hereinafter referred to as “Subaccount TP”). 
  
 1.3 The Employee and the Employee’s Spouse, if any, agree that
they will not directly contribute any additional funds to Subaccount TP. The Employee and the Employee’s Spouse also understand that assets held in Subaccount TP will be available for distribution or withdrawal only (a) after the
Employee’s retirement, death or other termination of employment with the Company (for this purpose treating Kraft Foods, Inc. or one of its subsidiaries (“Kraft”) as part of the Company so long as Kraft is then a member of a
controlled group of corporations including the Company), which may include termination by reason of long-term disability, (b) in certain circumstances in which there has been a transfer of the Employee’s employment with the Company or
Kraft to a foreign jurisdiction resulting in a termination of the Trust, (c) in other limited circumstances permitted under the Employee Grantor Trust Agreement, and (d) to the extent that Trust withdrawals are necessary to pay taxes on
Trust earnings as provided in Section 3.1. 
  
 1.4 The
Employee and the Employee’s Spouse, if any, understand that, under the terms of the Employee Grantor Trust Agreement, the Trustee intends to exercise its investment discretion in a manner consistent with the purpose of the Trust specified in
Section I.(3) of the Trust Agreement and acknowledge that they have been informed that the Trustee currently intends to invest the Trust assets in one or more of the Fidelity Freedom Funds in the manner set forth in Item 3 of Schedule A of the
Employee Grantor Trust Agreement, but that the Trustee retains discretion to change the assets in which the Trust will be invested. 
  
 1.5 The Employee (or in the event of the Employee’s death, the Employee’s Beneficiary(ies) as designated by the Employee in the manner
specified by the Administrator) may exercise the rights of withdrawal provided for in Section 1.3 above by directing the Trustee in writing to liquidate the Trust assets and distribute the proceeds to the Employee or Beneficiary(ies) as the
case may be. In the absence of such written direction, the assets in Subaccount TP shall be distributed to the Employee or his or her Beneficiary(ies), as relevant, following the Employee’s termination of employment in kind to the extent
feasible and otherwise in cash, except to the extent any new trust agreement entered into between the Employee (or the Employee’s Beneficiary(ies)) and Fidelity Management Trust Company as contemplated by Section I.(7) of the Grantor Trust
Agreement otherwise provides. 
  
 1.6 Under no circumstances
whatever shall the Company, any other employer, or the 

  

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 Exhibit 10.4 
  
 Administrator have any interest in, or be entitled to receive, any of the Trust assets. 
  
 II. Payments to Trust and Maintenance of Assumed Trust Balances 
  
 2.1 Subject to its right provided in Section 2.5 to discontinue making payments described in Section 2.2,
for each year that the Employee is employed by the Company or by Kraft (if Kraft is then a member of a controlled group of corporations including the Company), the Company agrees to make a payment of additional cash compensation to the Employee for
that year in the form of a payment to the Trust established by the Employee of an amount determined in accordance with the provisions of Section 2.2 (the “Target Payment”). The Employee directs the Company and its agents (a) to
deduct federal, state, and local taxes, using the tax-rate assumptions set forth on Exhibit A (except to the extent that applicable law requires withholding at a higher rate), and any employment or other applicable taxes from the Target Payment, and
remit such taxes to the appropriate authorities, and (b) to pay the remainder of the Target Payment into Subaccount TP in cash. 
  
 2.2 For any calendar year, the Target Payment to be made early in the following year will be determined in accordance with the following provisions.

  
 (a) The Target Payment will include the
sum of the amounts determined under Sections 2.2(a)(i), (ii) and (iii) below: 
  
 (i) an amount equal to: 
  
 (A) the present value of the after-tax benefit that the Employee would have accrued for the year if he or she had been a
participant in the defined benefit portions of the Supplemental Plans for the year, based solely on the benefit service for that year (but not more than one year) that would have been taken into account under the Supplemental Plans, calculated using
reasonable assumptions relating to factors such as, but not limited to, retirement age, earnings in Subaccount TP, and interest rates, all as determined by the Company, and the tax-rate assumptions set forth in Exhibit A; plus 
  
 (B) the present value of any after-tax benefits other
than those described in Section 2.2(a)(i)(A) above that the Employee would have accrued under the defined benefit portions of the Supplemental Plans during the year, if he or she had been a participant in the Supplemental Plans for the year, as
a result of continued service with, or changes in compensation from, the Company (or Kraft, if Kraft is then a member of a controlled group of corporations including the Company) during the year, determined using the assumptions set forth in
Section 2.2(a)(i)(A) immediately above; 
  
 (ii) an amount equal to the estimated after-tax value (calculated using 

  

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 Exhibit 10.4 
  
 the tax-rate assumptions set forth in Exhibit A) of the deemed Company contribution that would have been allocated to the Employee’s account
for the year if he or she had been a participant in the defined contribution portion of the Supplemental Plans for the year; and 
  
 (iii) an amount estimated by the Company to be sufficient to enable the Employee to pay the applicable income taxes on the earnings
of Subaccount TP for the year with respect to which the Target Payment is to be made and on any hypothetical earnings of Assumed Trust Account TP maintained for the Employee pursuant to Section 2.3 for such year if those amounts had been actual
earnings; 
  
 (b) For Target Payments made
with respect to 2006 and subsequent years, the amount determined in accordance with Section 2.2(a) will be adjusted, positively or negatively, to reflect: 
  

(i) the amount by which the earnings on the assets in Subaccount TP for the year for which the Target payment is being made
deviate from the amount the assets in Subaccount TP would have earned if (A) the rate of return for such year on the assets in Subaccount TP attributable to the portions of prior Target Payments that were determined as if the Employee had
participated in the defined benefit components of the Supplemental Plans equaled the corresponding earnings rates incorporated in the assumptions described in Section 2.2(a)(i), and (B) the rate of return on the assets in Subaccount TP
attributable to the portions of prior Target Payments that were determined as if the Employee had participated in the defined contribution component of the Supplemental Plans equaled the amount that would have been credited under the Supplemental
Plans, in both cases treating Subaccount TP as though it contained any balance in Assumed Trust Account TP maintained pursuant to Section 2.3; 
  
 (ii) the decrease, if any, in the present value of the accrued benefit that would have resulted from not commencing benefits under
the defined benefit components of the Supplemental Plans if the Employee had participated in such plans during the year with respect to which the Target Payment is being made, as measured by the decrease, if any, resulting from substituting in the
Target Payment calculation made for the year immediately preceding the year with respect to which the Target Payment is being made the Employee’s age as of the end of the year with respect to which the Target Payment is being made; 

 
 (iii) the increase or decrease that would result
from recalculating (as if the Employee had continued participating in the Supplemental Plans and disregarding the present value of the benefit the Employee actually accrued as a participant under the Supplemental Plans before 2005) 
  
 (A) the present value of the accrued benefit the
Employee would have had under the defined benefit components of the Supplemental Plans as of the end of the year immediately preceding the year with respect to 

  

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 Exhibit 10.4 
  
 which the Target Payment is to be made, determined using the Employee’s age at the end of the year with respect to which the Target Payment is
to be made and the interest rate used under Section 2.2(a)(i) in determining the lump sum value as of the assumed retirement age for purposes of calculating the present value referred to in that section, as in effect for the year immediately
preceding the year with respect to which the Target Payment is to be made, by using 
  
 (B) the interest rate used under Section 2.2(a)(i) in determining the lump sum value as of the assumed retirement age for
purposes of calculating the present value referred to in that section, as in effect for the year with respect to which the Target Payment is to be made; 
  
 (iv) the effect of any difference between the rates at which contributions were made to any qualified defined contribution plans for
the year immediately preceding the year with respect to which the Target Payment is to be made and those assumed in determining the portion of the Target Payment for such preceding year that was determined as if the Employee had participated in the
defined contribution component of the Supplemental Plans; 
  
 (v) the effect of any discrepancies from actual data (such as service, compensation, elective deferrals, etc.) from those used in determining the Target Payment for the preceding year; 
  
 (vi) the amount by which the portion of the Target
Payment determined under Section 2.2(a)(iii) for the year preceding the year with respect to which the Target Payment is being made differs from the amount that such portion of such Target Payment would have been if the actual amount and
character of the relevant earnings on the assets in Subaccount TP (treating the amount credited as hypothetical earnings to Assumed Trust Account TP maintained for the Employee pursuant to Section 2.3 as if those amounts were actual earnings)
had been known at the time that portion of the Target Payment for the year preceding the year with respect to which the Target Payment is being made was determined; 
  
 (vii) the effect that using the Federal, state and local income tax rates applicable under Exhibit A
and in effect in the year for which the Target Payment is being made would have had on the after-tax values taken into account in Sections 2.2(a)(i) and (ii) in calculating prior Target Payments; and 
  
 (viii) to the extent not otherwise reflected in the
calculations under Section 2.2(a), the effect of any increases or decreases in the limitations on compensation taken into account in, benefits under, or contributions to tax-qualified retirement plans. 
  

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 Exhibit 10.4 
  
  
 Notwithstanding the foregoing, if the Employee is not actively
employed by the Company (for this purpose treating Kraft as part of the Company so long as Kraft is then a member of a controlled group of corporations including the Company) on September 30 of the year for which the Target Payment is made
(unless the Employee’s employment was terminated involuntarily or was terminated (1) as the result of the Employee’s death or disability (2) within 60 days after the Employee attained age 55, or (3) within 60 days after the
Employee attained age 65), only those adjustments described in Sections 2.2(b)(i) through (viii) above that would decrease the amount of the Target Payment will be taken into account. In addition, no adjustment will be made under any provision
of this Section 2.2(b) to the extent that it would duplicate an adjustment made under any other provision of this Section 2.2(b). Similarly, no adjustment will be made under this Section 2.2(b) to the extent that section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) allows the Company to make payments currently without penalty with respect to the benefit the Employee had accrued under the Supplemental Plans as of December 31, 2004 and such
current payments would result in a duplicative payment to the Employee. 
  
 (c) The Target Payment will be an amount sufficient to cause the amount remaining after withholding of income taxes (determined as if withholding for federal, state and local income taxes were effected at
the rates specified in Exhibit A), but disregarding any withholding for the Employee’s share of employment taxes, to equal the amount determined under Section 2.2(a) as adjusted in accordance with Section 2.2(b). 
  
 2.3 The Company will maintain an assumed account (“Assumed Trust
Account TP”) to which it will credit each year an amount equal to the sum of (a) the amount paid as the Employee’s share of employment taxes with respect to the Target Payment made during the year, and (b) the amount by which the
federal, state and local income taxes actually withheld from such Target Payment exceeded the amount that would have been withheld if withholding were effected at the rate or rates specified in Exhibit A, each as determined in its discretion by the
Company. In addition, in the event all or a portion of the funds in Subaccount TP are attached by court order or other legal process or are otherwise alienated to third parties, the amount so attached will be credited to Assumed Trust Account TP as
of the date of the attachment or alienation. The Company will also credit to or debit from, as appropriate, Assumed Trust Account TP each year an amount equal to the amount the balance in Assumed Trust Account TP would have earned or lost if that
balance were invested in the same manner as the assets of Subaccount TP. 
  
 2.4 For any year, the Company will make the Target Payment to the Employee by March 15 of the following year, except in any case in which reasonable administrative delay causes the Company to make the Target Payment as of
a later date within the same calendar year. 
  
 2.5 The
Company has the right to discontinue making Target Payments to the Employee at any time. If, however, the Company discontinues making Target Payments to the Employee, the Employee will become covered under the Supplemental Plans, in accordance with
their terms at the time, commencing as of the first day of the year following the year for which 

  

 -6- 

 Exhibit 10.4 
  
 the Company last made a Target Payment to the Employee, to the extent permissible under Code section 409A and disregarding for purposes of the accrual of benefits
any service for the years during which the Employee was not a participant in the Supplemental Plans. 
  
 III. Tax Payments With Respect to Trust Earnings 
  
 3.1 Each year trust assets will be distributed to the Employee to provide the Employee with the amounts estimated by the Administrator, using the tax-rate assumptions set forth in Exhibit A, to be
sufficient to pay federal, state, local and other applicable income taxes with respect to any earnings of Subaccount TP. 
  
 IV. Appointment of ALCS as Agent 
  
 4.1 The Employee appoints ALCS and such persons as may be designated to act on behalf of ALCS as his or her duly authorized agent for the following
purposes: (a) providing, in accordance with the duties of the “Administrator” as set forth in the form of Trust Agreement attached to the Original Enrollment Agreement as Exhibit A, information and direction to the trustee of the
Trust; (b) removing the trustee and appointing a successor trustee of the Trust; (c) examining the books and records of the Trust; (d) amending the Trust as to ministerial matters (and as to other matters, with the consent of the
Employee); and (e) terminating the Trust. 
  
 4.2 The
Employee’s appointment of ALCS as his or her agent is based on the Employee’s special trust and confidence in ALCS, its management and its parent corporation, Altria Group, Inc. In the event of a Change of Control (as defined in
Section 7.4) of ALCS or Altria Group, Inc., the Employee (or, if applicable, the Employee’s Spouse or Beneficiaries under the Trust Agreement) may remove ALCS (or its successor) and any designee of ALCS as the duly authorized agent for
purposes of carrying out the actions set forth in Section 4.1 by delivering to both ALCS (or its successor) and the trustee of the Trust, within any period of two days, written notice of such removal. The trustee shall not be required to verify
that there has been a Change of Control and shall be entitled to rely upon the Employee’s notice of removal unless ALCS provides to the trustee (within 10 days following the trustee’s receipt of the notice of removal from the Employee)
written notice certifying that no Change of Control has occurred. 
  
 4.3 ALCS shall cease to be the Employee’s agent upon termination of the Trust for any reason provided in the Trust Agreement or upon removal of ALCS as Administrator following a Change of Control as provided in Section 4.2 above.

  
 V. Assignment and Attachment of Trust Assets 
  
 5.1 The Employee and the Employee’s Spouse understand and agree
that, except for any distributions from the Trust to pay taxes as provided in this Agreement, neither they nor the Employee’s Beneficiary(ies), as designated by the Employee at the time the Employee executed this Agreement or pursuant to any
later beneficiary designation completed by the Employee and filed with the Administrator, may receive any amounts from Subaccount TP at any time earlier 

  

 -7- 

 Exhibit 10.4 
  
 than the Employee’s termination of employment. Thus, should any amounts under Subaccount TP be assigned to the Employee’s Spouse or any other party
pursuant to a domestic relations order or otherwise, the Employee’s Spouse agrees that such amounts shall not be payable under such order until the Employee’s termination of employment. If the Employee or the Employee’s Spouse resides
in a community property state, the Employee and the Employee’s Spouse understand and agree that all amounts held in the Trust shall be treated as the Employee’s separate property to the extent permitted by applicable law. 
  
 VI. Termination 
  
 6.1 This Agreement shall terminate 30 days after the date on which the last Target Payment is made or, if later, 30
days after the date on which all amounts are distributed from Subaccount TP. 
  
 6.2 Notwithstanding the above, during the lifetime of the Employee, this Agreement may be terminated at any time by ALCS or the Company upon providing 30 days written notice to the Employee, or by the Employee providing 30 days
written notice (or such lesser period as the Company may prescribe) to ALCS and the Company. Any such termination shall operate on a prospective basis only and shall not operate to release the funds already in Subaccount TP or to otherwise alter the
application of the terms of this Agreement to such funds. In addition, if this Agreement is terminated by the Employee, the Employee will not thereafter become a participant in the Supplemental Plans. 
  
 VII. Miscellaneous 
  
 7.1 Nothing in this Agreement shall be construed to confer upon the Employee the right to continue in the employment
of the Company or Kraft, or to require the Company or Kraft to continue the employment of the Employee. 
  
 7.2 This Agreement shall be binding upon and inure to the benefit of ALCS, the Company, their successors and assigns, the Employee, the
Employee’s Spouse and the Employee’s Beneficiary(ies) under the Trust Agreement, and their heirs, executors, other successors in interest, administrators, and legal representatives. 
  
 7.3 The validity and interpretation of this Agreement shall be governed
by the laws of the State of New York. 
  
 7.4 Change of
Control. For the purpose of this Agreement, a “Change of Control” shall mean: 
  

	 	 (a)
	 The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock 

  

 -8- 

 Exhibit 10.4 
  

	 	 of Altria Group, Inc. (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of Altria Group,
Inc. entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from
Altria Group, Inc. or any corporation or other entity controlled by Altria Group, Inc. (the “Affiliated Group”) (ii) any acquisition by a member of the Affiliated Group, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by a member of the Affiliated Group or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this
Section 8.5; or 

  

	 	 (b)
	 Individuals who, as of the date hereof, constitute the Board of Directors of Altria Group, Inc. (the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by Altria Group, Inc.’s shareholders was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

  

	 	 (c)
	 A reorganization, merger, share exchange or consolidation (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be,
of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns such shares and voting power through one or more subsidiaries) in substantially the same proportions
as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any employee benefit plan (or related trust) of
any member of the Affiliated Group or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 40% or more of, respectively, the then 

  

 -9- 

 Exhibit 10.4 
  

	 	 outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the initial agreement or at the time of the action of the Board providing for such Business Combination or were elected, appointed or nominated by the Board; or 

  

	 	 (d)
	 A (i) complete liquidation or dissolution of Altria Group, Inc. or (ii) sale or other disposition of all or substantially all of the assets of Altria Group,
Inc., other than to a corporation, with respect to which following such sale or other disposition, (A) more than 60% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other
disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) less than 40% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by any Person (excluding any employee benefit plan (or related trust) of
any member of the Affiliated Group or such corporation), except to the extent that such Person owned 40% or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities prior to the sale or disposition and (C) at least
a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or at the time of the action of the Board providing for such sale or other disposition
of assets of Altria Group, Inc. or were elected, appointed or nominated by the Board; or 

  

	 	 (e)
	 the entry of an order for relief against Altria Group, Inc. as debtor in a case under the United States Bankruptcy Code, as amended. 

  

	 	 (f)
	 Members of the Affiliated Group cease to own, directly or indirectly, more than 60% of the combined voting power of the then outstanding voting securities of ALCS entitled
to vote generally in the election of directors of ALCS, unless all of the services to be provided by ALCS as Administrator 

  

 -10- 

 Exhibit 10.4 
  

	 	 hereunder are provided by another member of the Affiliated Group. 

  
 7.5 If no one signs this Agreement as the Employee’s Spouse, the Employee hereby certifies that he or she has no
spouse as of the date of this Agreement and further agrees to obtain the signature of any spouse to whom he or she may become married in the future as a party to this Agreement. 
  
 7.6 It is understood and agreed that all rights and obligations arising out of this Agreement relating to any spouse,
Beneficiary(ies) of Subaccount TP or any other third parties are derived from the rights of the Employee under this Agreement and that all provisions of this Agreement relating to any such third parties are to be construed as binding on such third
parties as if they had expressly agreed in writing to such provisions. 
  
 IN WITNESS WHEREOF, the Employee, the Employee’s Spouse, and ALCS have caused this Agreement to be executed as of the day and year first above written. 
  

									
	 Attest:
	 	 	 	 
					
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 Signature of Employee

  

									
	 Attest:
	 	 	 	 
				
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 Signature of Employee’s Spouse

  
 This Agreement is executed on
behalf of ALCS and other participating employers in the Supplemental Plans, including those listed on Exhibit B. 
  
 Attest: 
  

									
	 	 	 	 	 Altria Corporate Services, Inc.

				
	 	 	 	 	 By:
	 	 
	 	 	 	 	 	 	 	 	 

  
 Attachments: 
  
 Exhibit A: Tax-Rate Assumptions

  
 Exhibit B: List of Participating Employers 

 

 -11- 

 Exhibit 10.4 
  
 EXHIBIT A: Tax-Rate Assumptions 
  
 Federal income tax rate: the highest marginal Federal income tax rate as adjusted for the Federal deduction of state and local taxes and the phase out of Federal
deductions under current law (or as adjusted under any subsequently enacted similar provisions of the Code). 
  
 State income tax rate: 
  

	 	 •
	 For purposes of Section 2.2(c), generally, the highest adjusted marginal state income tax rate based on the state in which the Employee is or was last employed by the
Company (or Kraft, if Kraft is then a member of a controlled group of corporations including the Company) as of the date the payment is made. 

  

	 	 •
	 For all other purposes, the highest adjusted marginal state income tax rate based on the Employee’s state of residence on the last day worked by the Employee in the
year for which the Target Payment is being made. 

  
 Local income tax rate: 
  

	 	 •
	 For purposes of Section 2.2(c), generally, the highest adjusted marginal local income tax rate (taking into account the Employee’s resident or nonresident
status) based on the locality in which the Employee is or was last employed by the Company (or Kraft, if Kraft is then a member of a controlled group of corporations including the Company) as of the date the payment is made.

  

	 	 •
	 For all other purposes, the highest adjusted marginal local income tax rate (taking into account the Employee’s resident or nonresident status) based on the
Employee’s locality of residence on the last day worked by the Employee in the year for which the Target Payment is being made. 

  
 Exception: 
  
 In the case of an Employee who is an expatriate actively employed by the Company and subject to United States taxation for all tax purposes, income taxes shall generally be computed as follows. Expatriate
taxes will be calculated assuming the highest marginal Federal income tax rate as adjusted for the Federal deduction of state and local taxes and the phase out of Federal deductions under current law (or as adjusted under any subsequently enacted
similar provisions of the Code). The applicable state and local tax rates will be adjusted to reflect an Employee’s expatriate status to the extent appropriate. 
  
 Capital gains: the ordinary income or capital gains character of items of Trust investment income or deemed investment income shall be
taken into account where relevant. 
  
 The above principles shall generally
be applied in determining tax-rate assumptions for the relevant purpose, but the Company shall have the authority in its discretion to alter the assumptions made where deemed appropriate to take into account particular facts and circumstances.

  

 -12- 

 Exhibit 10.4 
  
  
 EXHIBIT B: List of Participating Employers 
  

					
	 	 	 Altria Group, Inc.
	 	 
	 	 	 Altria Corporate Services, Inc.
	 	 
	 	 	 Philip Morris USA Inc.
	 	 
	 	 	 Philip Morris International Inc.
	 	 
	 	 	 Philip Morris Capital Corporation
	 	 

  
 And the participating
subsidiaries of each of the above entities. 
  

 -13-

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