EXECUTIVE EMPLOYMENT AGREEMENT

Exhibit 10.7

E XECUTIVE E MPLOYMENT A GREEMENT

This Amended Executive Employment Agreement (the “Agreement”), dated August 10, 2007, is between CREDENCE SYSTEMS CORPORATION (the “Company”) and Amir Aghdaei (“Executive”).

A. Position. Executive is employed by the Company to render services to the Company in the position of Senior Vice President—World-wide Field Operations and Marketing, reporting to the Company’s Chief Executive Officer. 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 to the best of his knowledge 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. Company has reviewed Executive’s Long term International Assignment Agreement (“LTI”) between Executive’s former employer and Executive and has concluded that no provision of the LTI is in violation of Executive’s foregoing representation and warranty.

A. Base Salary. In consideration of the services to be rendered under this Agreement, the Company shall pay Executive an annual base salary of Three Hundred Thousand Dollars ($300,000) (“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. Bonuses. Executive shall be paid a sign-on bonus of One Hundred Thousand Dollars ($100,000) on the commencement of employment with the Company, which bonus shall be subject to repayment to the Company by Executive in the event Executive, prior to that date two years after the date of this Agreement, terminates his employment with the Company (other than by reason of death or disability or for “Good Reason” or “Good Reason” after a “Change in Control”) or Executive is terminated by the Company “For Cause.” In the event of a termination giving rise to an obligation by Executive to repay the “sign-on bonus,” the amount of the “sign-on bonus” subject to repayment shall be the pro rata portion of the “sign-on bonus” determined by multiplying the original bonus amount by a fraction, the numerator of which shall be the number of complete days of service by Executive under this Agreement and the denominator of which shall be seven hundred thirty (730). Executive shall be eligible for an annual target incentive bonus equal to Sixty Percent (60%) of his then-current Base Salary (“Target Bonus”), based on Executive’s achievement of performance objectives determined by the Company. During each of the first two bonus periods that Executive is employed by the Company, the minimum bonus paid to Executive shall be Seventy-five Thousand Dollars ($75,000) (the “Minimum Bonus Amount”) and shall be paid even if no Target Bonus is declared or the Target Bonus is less than the Minimum Amount.

C. Initial Equity Grants . Contemporaneous with the commencement of Executive’s employment with the Company, the Company shall grant to Executive an option to purchase Two Hundred Seventy Thousand (270,000) shares of the Company’s Common Stock. The Option Shares exercise price shall be determined by the Company’s Board of Directors but shall be the closing price for the Company’s common stock as determined on the Nasdaq National Market on the date of commencement of Executive’s

employment. The Option Shares shall vest according to the following schedule, subject to Executive’s continued service to the Company: (i) 12.5% of the Option Shares shall vest on the first six months of the date of grant, and (ii) the remaining 87.5% of the Option Shares shall vest in fourteen equal and successive quarterly installments upon the Executive’s completion of each additional three (3) month period of service thereafter. In addition, contemporaneous with the commencement of Executive’s employment, Executive will be granted Fifty Thousand (50,000) restricted shares of the Company’s Common Stock (the “Restricted Shares”), at no cost to Executive, subject to the terms of the Company’s Restricted Stock Agreement (the “Restricted Stock Agreement”) and the Company’s Stock Incentive Plan. The Restricted Shares shall vest according to the following schedule, subject to Executive’s continued service to the Company: 25% of the Restricted Shares shall vest on the first anniversary of the date of grant, and an additional 25% of the Restricted Shares shall vest on each anniversary thereafter for the next three years. The date of grant and the exercise or purchase price per share of the Restricted Shares shall be determined by the Board.

D. 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.

E. 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.

F. Housing Allowance. The Company shall pay to Executive a housing allowance of Ten Thousand Dollars ($10,000) per month during his first thirty months of employment with the Company.

G. Relocation Expenses. Executive has agreed to relocate to California. The Company shall pay to Executive relocation expenses in accordance with its relocation policies, which policies have been disclosed to Executive.

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 the remaining unpaid housing allowance installments, 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 and restricted shares 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; and

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.

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;

(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.

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