Document:

Exhibit 10.18

KLA-Tencor Corporation

2004 EQUITY INCENTIVE PLAN

NOTICE OF GRANT OF RESTRICTED STOCK UNITS

          Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Notice of Grant.

          Name: _______________________

          You have been granted  _________Restricted Stock Units. Each such Unit is equivalent to one Share of Common Stock of the Company for purposes of determining the number of Shares subject to this award.  None of the Restricted Stock Units will be issued (nor will you have the rights of a stockholder with respect to the underlying shares) until the vesting conditions described below are satisfied.  Additional terms of this grant are as follows:

	
  
 
  	
  
Date of Grant
  	
  
___________________, 2004
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
Expiration Date:
  	
  
[1 day later than grant   date]________, 2004
  

          FIFTY PERCENT (50%) OF THIS GRANT WILL VEST FOUR YEARS FROM THE DATE OF GRANT AND THE REMAINING FIFTY PERCENT (50%) OF THIS GRANT WILL VEST ONE YEAR THEREAFTER SO THAT FIVE YEARS FROM THE DATE OF THE GRANT, ALL OF THE VESTING CONDITIONS WILL BE SATISFIED.  YOU MUST REMAIN A SERVICE PROVIDER, IN GOOD STANDING, DURING THE ENTIRE VESTING PERIOD IN ORDER TO HAVE THE RIGHT TO ACQUIRE ANY OR ALL OF THE SHARES AFTER YEAR FOUR OR YEAR FIVE.

          You acknowledge and agree that this agreement and the vesting schedule set forth herein does not constitute an express or implied promise of continued engagement as a Service Provider for the vesting period, for any period, or at all, and shall not interfere with your right or the Company’s right to terminate your relationship as a Service Provider at any time, with or without cause.

          You hereby agree to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan and this Award.  

          By your signature and the signature of the Company’s repre-sentative below prior to the Expiration Date, you and the Company agree that  this Notice of Grant, the 2004 Equity Incentive Plan, attached hereto as Exhibit A, and the form of Restricted Stock Unit Agreement posted on the Company’s intranet at [Insert Link] constitute your entire agreement with respect to this Award and may not be modified adversely to your interest except by means of a writing signed by the Company and you.

	
  
GRANTEE:
  	
  
 
  	
  
KLA-Tencor Corporation
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  

  	
  
 
  	
  

  
	
  
Signature
  	
  
 
  	
  
By
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
   
  	
   
  
	
   
  	
   
  	
   
  
	
  

  	
   
  	
  

  
	
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  TitleExhibit 10.1

                               EXCHANGE AGREEMENT

This Exchange Agreement (this "Agreement") is entered into as of May 2, 2006 by
and between Electroglas, Inc. (the "Company"), and ____________________ (the
"Exchanging Holder") on the basis of the following:

A.      The Company has outstanding 5.25% Convertible Subordinated Notes Due
        2007 (the "Convertible Securities").
B.      The Convertible Securities are currently convertible by the holders
        thereof into the Company's common stock, par value $0.01 per share ("the
        Common Stock"), at a stated conversion rate of 97.6029 shares of Common
        Stock per $1,000 principal amount of Convertible Securities.

C.      The Exchanging Holder is the Holder of at least $___________ Convertible
        Securities.
D.      Exchanging Holder has indicated to the Company its desire to exchange
        the Convertible Securities for Common Stock of the Company and cash and,
        after negotiation between the parties hereto, such parties have agreed
        to effect such exchange on the terms and conditions hereinafter set
        forth.

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE ONE: AGREEMENT TO EXCHANGE SECURITIES.

1.1     Exchange of Securities. On the terms and subject to the conditions set
        forth herein, the Exchanging Holder shall sell, assign, deliver and
        transfer to the Company all of its right, title and interest in and to
        the $_________ Convertible Securities in exchange for ___________ shares
        of Common Stock and $__________

1.2     Closing. The Completion of the transactions contemplated by this
        Agreement ("the "Closing") shall take place as soon as practical and, in
        any event, prior to 5:00 p.m., EST, on May 5, 2006 (the "Closing Date")
        as follows:

        (a)     The Exchanging Holder shall deliver or cause to be delivered to
                the Company or the Company's agent the Convertible Securities to
                be exchanged hereunder in such a manner as shall be acceptable
                to the Company and effective to convey all right, title and
                interest of the Exchanging Holder in the Convertible Securities
                to the Company against delivery by the Company of (A) the number
                of shares of Common Stock provided for herein, through the
                Depositary Trust Company or such other means as shall be
                acceptable to the Exchanging Holder registered in such names as
                the Exchanging Holder shall specify to the Company prior to the
                Closing and (B) $___________ by wire transfer to an account
                specified by the Exchanging Holder for that purpose.
        (b)     The consideration to be paid pursuant to the Agreement for each
                of the Convertible Securities offered to herein has been
                negotiated between the Company and the Exchanging Holder. The
                Company will pay to the Exchanging Holder on the Closing Date
                all accrued and unpaid interest on the Convertible Notes to, but
                not including, the Closing Date. The Exchanging Holder will not
                be entitled to any other payment or amount with respect to the
                Convertible Securities being exchanged herein.

<PAGE>

ARTICLE TWO: REPRESENTATIONS AND WARRANTIES

2.1     Mutual Representations and Warranties. Each party hereto (and, with
        respect to Section 2.1(b)(ii) below only, each person signing this
        Agreement) hereby makes the following representations and warranties to
        the other party hereto:

        (a)     It is duly organized and validly existing, in good standing
                under the laws of its jurisdiction of incorporation or
                organization.
        (b)     (i) It has full power and authority to enter into this Agreement
                and to consummate the transactions contemplated hereby, and (ii)
                the person who has executed this Agreement on its behalf is duly
                authorized to do so and thereby bind the party on whose behalf
                he or she is purporting to act.
        (c)     This Agreement is its valid and binding agreement, enforceable
                against it in accordance with its terms.
        (d)     Neither the execution and delivery of this Agreement, nor the
                consummation of the transactions contemplated hereby, will
                violate, result in a breach of any of the terms or provisions
                of, constitute a default (or any event that, with the giving of
                notice or the passage of time or both would constitute a
                default) under, accelerate any obligations under, or conflict
                with, (i) its charter, articles or certificate of incorporation,
                partnership agreement or bylaws (or other organizational
                documents), if applicable, or any agreement, indenture or other
                instrument to which it is a party or by which it or its
                properties are bound, (ii) any judgement, decree, order or award
                or any court, governmental body or arbitrator to which it is
                subject or (iii) any law, rule or regulation applicable to it.

2.2     Representations and Warranties of the Company. The Company hereby
        represents and warrants to the Exchanging Holder that (a) upon issuance,
        the Common Stock to be issued by it hereunder will be duly and validly
        authorized and issued, fully paid and nonassessable, and the Exchanging
        Holder will acquire such Common Stock free and clear of any liens,
        encumbrances, pledges, security interest or other restrictions or claims
        of third parties, other than any of the foregoing created by the
        Exchanging Holder; and (b) the Common Stock to be issued by the Company
        to the Exchanging Holder pursuant to this Exchange Agreement is not
        required to be registered under the Securities Act of 1933 in order to
        make the Common Stock in the hands of the Exchanging Holder freely
        saleable into the public market, provided that (x) the Exchanging holder
        is not an "affiliate" of the Company as that term is defined under the
        Securities Act of 1933 (the "Act") and the Convertible Securities held
        by the Exchanging Holder were acquired in a transaction that was (A)
        registered under the Act pursuant to Registration Statement No.
        333-96817, as amended, and were sold by a selling security holder listed
        therein pursuant to such registration statement, or (y) the Exchanging
        Holder is not an "affiliate" of the Company and has not been an
        "affiliate" during the preceding three months and a period of at least
        two years has elapsed since the date the Convertible Securities were
        acquired from the Company or from an "affiliate" of the Company.

<PAGE>

2.3     Representations and Warranties of the Exchanging Holder. The Exchanging
        Holder hereby represents and warrants to the Company that the Exchanging
        Holder: (a) is the sole legal and beneficial owner of the Convertible
        Securities, and, upon the Closing, the Company will acquire the
        Convertible Securities free and clear of any liens, encumbrances,
        pledges, security interests or other restrictions or claims of third
        parties, other than any of the foregoing created by the Company; (b) is
        an "accredited investor" (as defined in Regulation D under the Act) and
        is acquiring the Common Stock for its own account and not with a view to
        any distribution thereof except in compliance with the Act; and (c) has
        (i) made all investigations that it deems necessary or desirable in
        connection with the transactions contemplated by this Agreement and has
        received and has had full opportunity to review the Company's Annual
        Report on Form 10-K with respect to its fiscal year ended December 31,
        2004; its Quarterly Transition Report on Form 10-QT with respect to its
        transitional quarter ended May 31, 2005; its Quarterly Reports on Form
        10-Q with respect to its fiscal quarters ended September 3, 2005,
        December 3, 2005 and March 4, 2006; its Form 8-K filed on April 14,
        2006; and its Proxy Statement filed on January 4, 2006, (ii) had an
        opportunity to ask questions of and receive answers from the Company and
        its management regarding such reports and filings, (iii) such knowledge
        and experience in financial and business matters as to be capable of
        evaluating the merits and risks of its investment in the Common Stock.

2.4     Survival of Representations and Warranties. All representations,
        warranties and agreements of each party hereto shall survive the
        Closing.

ARTICLE THREE:  MISCELLANEOUS

3.1     Further Assurances. Each party hereto shall promptly execute and deliver
        such further agreements and instruments, and take such further actions,
        as the other party may reasonably request in order to carry out the
        purpose and intent of this Agreement.

3.2     Notices. All notices, requests, demands and other communications
        hereunder shall be in writing and shall be deemed given if delivered
        personally or by facsimile transmission (with subsequent letter
        confirmation by mail) or two days after being mailed by certified or
        registered mail, postage prepaid, return receipt requested, to the
        parties, their successors in interest or their assignees at the
        following addresses, or at such other addresses as the parties may
        designate by written notice in the manner aforesaid:

If to the Exchanging Holder:

                              _________________
                              _________________
                              _________________
                              _________________

<PAGE>

If to the Company:

                              Electroglas, Inc.
                              5729 Fontanoso Way
                              San Jose, CA 95138
                              Attention: Thomas Brunton, Vice President and CFO
                              Facsimile: (408) 528-3542

3.3     Assignability and Parties in Interest. This Agreement shall not be
        assignable by any of the parties hereto without the consent of the other
        party hereto. This Agreement shall inure to the benefit of and be
        binding upon the parties and their respective permitted successors and
        assigns.

3.4     Governing Law. This Agreement shall be governed by and construed and
        enforced in accordance with the internal substantive law, and not the
        law pertaining to conflicts or choice of law, of the State of New York.

3.5     Counterparts. This Agreement may be executed in several counterparts,
        each of which shall be deemed an original, but all of which shall
        constitute one and the same instrument.

3.6     Complete Agreement. This Agreement is an integrated agreement containing
        the entire agreement between the parties hereto with respect to the
        subject matter hereof and shall supersede all previous, and all
        contemporaneous oral or written negotiations, commitments or
        understandings.

3.7     Modifications, Amendments and Waivers. This agreement may be modified,
        amended or otherwise supplemented only by a writing signed by the party
        against whom it is sought to be enforced. No waiver of any right or
        power hereunder shall be deemed effective unless and until a writing
        waiving such right or power is executed by the party waiving such right
        or power.

3.8     No Third Party Beneficiaries. There are no third party beneficiaries
        under this Agreement or intended by any party hereto.

3.9     Expenses. Each party hereto shall bear its own costs and expenses,
        including, without limitation, attorneys' fees, incurred in connection
        with this Agreement and the transactions contemplated hereby.

ELECTROGLAS, INC.
By: ______________________________________
    Name: ________________________________
    Title: _______________________________

____________________

By: ______________________________________
    Name: ________________________________
    Title: _______________________________

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