Document:

EX-10.39

 Exhibit 10.39 

ELECTRO SCIENTIFIC INDUSTRIES, INC. 

2004 STOCK INCENTIVE PLAN 

(As amended January 25, 2005, April 20, 2005, October 25, 2007, May 12, 2011, December 21, 2012, August 21,
2014, 
 August 18, 2015 and August 18, 2016) 

1. Purpose. The purpose of this 2004 Stock Incentive Plan (the “Plan”) is to enable Electro Scientific Industries, Inc. (the
“Company”) to attract and retain the services of (i) selected employees, officers and directors of the Company or any parent or subsidiary of the Company and (ii) selected non-employee
agents, consultants, advisors and independent contractors of the Company or any parent, subsidiary of the Company. For purposes of this Plan, a person is considered to be employed by or in the service of the Company if the person is employed by or
in the service of any entity (the “Employer”) that is either the Company or a parent or subsidiary of the Company. 
 2. Shares
Subject to the Plan. Subject to adjustment as provided below and in Section 12, the shares to be offered under the Plan shall consist of Common Stock of the Company (“Common Stock”), and the total number of shares of Common Stock
that may be issued under the Plan shall be 4,750,000 shares plus any shares that at the time the Plan is approved by shareholders are available for grant under the Company’s 1989 Stock Option Plan, 1996 Stock Incentive Plan and 2000 Stock
Option Incentive Plan, which plans were previously approved by shareholders of the Company, and the Company’s 2000 Stock Option Plan, which plan was not previously approved by the Company’s shareholders (collectively, the “Prior
Plans”), or that may subsequently become available for grant under any of the Prior Plans through the expiration, termination, forfeiture or cancellation of grants. If an option, stock appreciation right or Performance-Based Award granted under
the Plan expires, terminates or is canceled, the unissued shares subject to that option, stock appreciation right or Performance-Based Award shall again be available under the Plan. If shares awarded as a bonus pursuant to Section 9 or sold
pursuant to Section 10 under the Plan are forfeited to or repurchased by the Company, the number of shares forfeited or repurchased shall again be available under the Plan. Shares used to satisfy tax obligations related to an award, other than
for a stock option or stock appreciation right, will not become available for future grant under the Plan. 
 3. Effective Date and
Duration of Plan. 
 3.1 Effective Date. The Plan shall become effective as of July 15, 2004. No awards shall be made
under the Plan until the Plan is approved by shareholders of the Company in accordance with rules of The Nasdaq Stock Market. 
 3.2
Duration. The Plan shall continue in effect until all shares available for issuance under the Plan have been issued and all restrictions on the shares have lapsed. The Board of Directors may suspend or terminate the Plan at any
time except with respect to Awards then outstanding under the Plan. Termination shall not affect any Awards or any right of the Company to repurchase shares or the forfeitability of shares issued under the Plan. 

4. Administration. 

4.1 Board of Directors. The Plan shall be administered by the Board of Directors of the Company, which shall determine and
designate the individuals to whom awards shall be made, the amount of the awards and the other terms and conditions of the awards. Subject to the provisions of the Plan, including without limitation the provisions of Section 19 which limit the
ability of the Board of Directors to accelerate awards except in the case of death, disability, or a Transaction as provided in Section 12.2, the Board of Directors may adopt and amend rules and regulations relating to administration of the
Plan, advance the lapse of any waiting period, accelerate any exercise date, waive or modify any restriction applicable to shares (except those restrictions imposed by law) and make all other determinations in the judgment of the Board of Directors
necessary or desirable for the administration of the Plan. The interpretation and construction of the provisions of the Plan and related agreements by the Board of Directors shall be final and conclusive. The Board of Directors may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or in any related agreement in the manner and to the extent it deems expedient to carry the Plan into effect, and the Board of Directors shall be the sole and final judge of
such expediency. 

 4.2 Committee. The Board of Directors may delegate to any committee of
the Board of Directors (the “Committee”) any or all authority for administration of the Plan. If authority is delegated to the Committee, all references to the Board of Directors in the Plan shall mean and relate to the Committee, except
(i) as otherwise provided by the Board of Directors and (ii) that only the Board of Directors may amend or terminate the Plan as provided in Sections 3 and 13. 

5. Types of Awards; Eligibility; Limitations. 

5.1 Types of Awards, Eligibility. The Board of Directors may, from time to time, take the following actions, separately or
in combination, under the Plan (“Awards”): (i) grant Incentive Stock Options, as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), as provided in Sections 6.1, 6.2 and 8; (ii) grant
options other than Incentive Stock Options (“Non-Statutory Stock Options”) as provided in Sections 6.1, 6.3 and 8; (iii) grant stock appreciation rights as provided in Sections 7 and 8; (iv) award
stock bonuses (including bonuses in the form of restricted stock units) as provided in Section 9; (v) sell shares subject to restrictions as provided in Sections 10; (vi) award Performance-Based Awards as provided in Section 11. Awards may
be made to employees, including employees who are officers or directors, and to non-employee directors; provided, however, that only employees of the Company or any parent or subsidiary of the Company (as
defined in subsections 424(e) and 424(f) of the Code) are eligible to receive Incentive Stock Options under the Plan. The Board of Directors shall select the individuals to whom awards shall be made and shall specify the action taken with respect to
each individual to whom an award is made. 
 5.2 Per Employee Share Limitations. No employee may be granted options
and/or stock appreciation rights for more than an aggregate of 500,000 shares of Common Stock in any calendar year or restricted stock or restricted stock units (including, for the avoidance of doubt, performance-based restricted stock units) for
more than an aggregate of 650,000 shares of Common Stock in any calendar year; provided, however, that to the extent the annual limitation is not fully used in any year for an employee, any shares not used may be added to the number of shares for
which options and/or stock appreciation rights or restricted stock and/or restricted stock units, as applicable, may be granted to that employee in any future year. 

5.3 Maximum Number of Shares Issuable Upon Exercise of ISOs. The maximum aggregate number of shares of Common Stock that
may be issued under the Plan upon exercise of Incentive Stock Options will not exceed 9,568,684 shares. 
 5.4 Reservation of
Additional Shares. Except as provided in Section 12, additional shares of Common Stock may not be reserved for issuance under the Plan without the approval of the Company’s shareholders. 

6. Stock Options. 
 6.1
General Rules Relating to Options. 
 6.1-1 Terms of Grant. The Board of
Directors may grant options under the Plan. With respect to each option grant, the Board of Directors shall determine the number of shares subject to the option, the exercise price, the period of the option, the time or times at which the option may
be exercised and whether the option is an Incentive Stock Option or a Non-Statutory Stock Option. 

6.1-2 Nontransferability. Each Incentive Stock Option and, unless otherwise determined by the
Board of Directors, each other option granted under the Plan by its terms (i) shall be nonassignable and nontransferable by the optionee, either voluntarily or by operation of law, except by will or by the laws of descent and distribution of
the state or country of the optionee’s domicile at the time of death, and (ii) during the optionee’s lifetime, shall be exercisable only by the optionee. No stock option may be transferred by an optionee in exchange for cash or
property. 
 6.1-3 Purchase of Shares. Unless the Board of Directors determines otherwise,
on or before the date specified for completion of the purchase of shares pursuant to an option exercise, the optionee must pay the Company the full purchase price of those shares in cash or by check or, with the consent of the Board of Directors, in
whole or in part, in 

 
Common Stock of the Company valued at fair market value, restricted stock or other contingent awards denominated in either stock or cash, promissory notes and other forms of consideration. Unless
otherwise determined by the Board of Directors, any Common Stock provided in payment of the purchase price must have been previously acquired and held by the optionee for at least six months. The fair market value of Common Stock provided in payment
of the purchase price shall be the closing price of the Common Stock last reported before the time payment in Common Stock is made or, if earlier, committed to be made, if the Common Stock is publicly traded, or another value of the Common Stock as
specified by the Board of Directors. No shares shall be issued until full payment for the shares has been made, including all amounts owed for tax withholding. With the consent of the Board of Directors, an optionee may request the Company to apply
automatically the shares to be received upon the exercise of a portion of a stock option (even though stock certificates have not yet been issued) to satisfy the purchase price for additional portions of the option. 

6.2 Incentive Stock Options. Incentive Stock Options shall be subject to the following additional terms and conditions:

 6.2-1 Limitation on Amount of Grants. If the aggregate fair market value of stock
(determined as of the date the option is granted) for which Incentive Stock Options granted under this Plan (and any other stock incentive plan of the Company or its parent or subsidiary corporations, as defined in subsections 424(e) and 424(f) of
the Code) are exercisable for the first time by an employee during any calendar year exceeds $100,000, the portion of the option or options not exceeding $100,000, to the extent of whole shares, will be treated as an Incentive Stock Option and the
remaining portion of the option or options will be treated as a Non-Statutory Stock Option. The preceding sentence will be applied by taking options into account in the order in which they were granted. If,
under the $100,000 limitation, a portion of an option is treated as an Incentive Stock Option and the remaining portion of the option is treated as a Non-Statutory Stock Option, unless the optionee designates
otherwise at the time of exercise, the optionee’s exercise of all or a portion of the option will be treated as the exercise of the Incentive Stock Option portion of the option to the full extent permitted under the $100,000 limitation. If an
optionee exercises an option that is treated as in part an Incentive Stock Option and in part a Non-Statutory Stock Option, the Company will designate the portion of the stock acquired pursuant to the exercise
of the Incentive Stock Option portion as Incentive Stock Option stock by issuing a separate certificate for that portion of the stock and identifying the certificate as Incentive Stock Option stock in its stock records. 

6.2-2 Limitations on Grants to 10 percent Shareholders. An Incentive
Stock Option may be granted under the Plan to an employee possessing more than 10 percent of the total combined voting power of all classes of stock of the Company or any parent or subsidiary (as defined in subsections 424(e) and 424(f) of the
Code) only if the option price is at least 110 percent of the fair market value, as described in Section 6.2-4, of the Common Stock subject to the option on the date it is granted and the option by
its terms is not exercisable after the expiration of five years from the date it is granted. 

6.2-3 Duration of Options. Subject to Sections
6.2-2, 8.1 and 8.2, Incentive Stock Options granted under the Plan shall continue in effect for the period fixed by the Board of Directors, except that by its terms no Incentive Stock Option shall be
exercisable after the expiration of 10 years from the date it is granted. 
 6.2-4 Option
Price. The option price per share shall be determined by the Board of Directors at the time of grant. The option price shall not be less than 100 percent of the fair market value of the Common Stock covered by the Incentive Stock
Option at the date the option is granted. The fair market value shall be the closing price of the Common Stock last reported on the date the option is granted, if the stock is publicly traded, or another value of the Common Stock as specified by the
Board of Directors. 
 6.2-5 Limitation on Time of Grant. No Incentive Stock Option
shall be granted on or after the tenth anniversary of the last action by the Board of Directors adopting the Plan or approving an increase in the number of shares available for issuance under the Plan, which action was subsequently approved within
12 months by the shareholders. 

 6.2-6 Early Dispositions. If within
two years after an Incentive Stock Option is granted or within 12 months after an Incentive Stock Option is exercised, the optionee sells or otherwise disposes of Common Stock acquired on exercise of the Option, the optionee shall within 30 days of
the sale or disposition notify the Company in writing of (i) the date of the sale or disposition, (ii) the amount realized on the sale or disposition and (iii) the nature of the disposition (e.g., sale, gift, etc.). 

6.3 Non-Statutory Stock Options.
Non-Statutory Stock Options shall be subject to the following terms and conditions, in addition to those set forth in Sections 6.1 and 8. 

6.3-1 Option Price. The option price for
Non-Statutory Stock Options shall be determined by the Board of Directors at the time of grant. The option price shall not be less than 100 percent of the fair market value of the Common Stock covered by
the Non-Statutory Stock Option at the date the option is granted. The fair market value shall be the closing price of the Common Stock last reported on the date the option is granted, if the stock is publicly
traded, or another value of the Common Stock as specified by the Board of Directors. 
 6.3-2
Duration of Options. Non-Statutory Stock Options granted under the Plan shall continue in effect for the period fixed by the Board of Directors, except that no
Non-Statutory Option shall be exercisable after the expiration of 10 years from the date it is granted. 

7. Stock Appreciation Rights. 

7.1 Grant. Stock appreciation rights may be granted under the Plan by the Board of Directors, subject to such rules, terms, and
conditions as the Board of Directors prescribes. The Board of Directors may provide that stock appreciation rights may be granted in substitution for stock options granted under the Plan. With respect to each grant, the Board shall determine the
number of shares subject to the stock appreciation right, the exercise price of the stock appreciation right, the period of the stock appreciation right, and the time or times at which the stock appreciation right may be exercised. The exercise
price of a stock appreciation right shall not be less than 100 percent of the fair market value of the Common Stock covered by the stock appreciation right on the date the stock appreciation right is granted. The fair market value shall be the
closing price of the Common Stock last reported on the date the stock appreciation right is granted, if the stock is publicly traded, or another value of the Common Stock as specified by the Board of Directors. Stock appreciation rights shall
continue in effect for the period fixed by the Board of Directors., not to exceed ten years. 
 7.2 Stock Appreciation Rights Granted
in Connection with Options. If a stock appreciation right is granted in connection with an option, the stock appreciation right shall be exercisable only to the extent and on the same conditions that the related option could be exercised.
Upon exercise of a stock appreciation right, any option or portion thereof to which the stock appreciation right relates terminates. If a stock appreciation right is granted in connection with an option, upon exercise of the option, the stock
appreciation right or portion thereof to which the grant relates terminates. 
 7.3 Exercise. Each stock appreciation right
shall entitle the holder, upon exercise, to receive from the Company in exchange therefor an amount equal in value to the excess of the fair market value on the date of exercise of one share of Common Stock of the Company over the exercise price as
determined by the Board of Directors (or, in the case of a stock appreciation right granted in connection with an option, the option price per share under the option to which the stock appreciation right relates), multiplied by the number of shares
covered by the stock appreciation right, or portion thereof, that is surrendered. Payment by the Company upon exercise of a stock appreciation right may be made in Common Stock valued at fair market value, in cash, or partly in Common Stock and
partly in cash, all as determined by the Board of Directors. For this purpose, the fair market value of the Common Stock shall be the closing price of the Common Stock last reported before the time of exercise, or such other value of the Common
Stock as specified by the Board of Directors. 
 7.4 Fractional Shares. No fractional shares shall be issued upon exercise of
a stock appreciation right. In lieu thereof, cash may be paid in an amount equal to the value of the fraction or, if the Board of Directors shall determine, the number of shares may be rounded downward to the next whole share. 

 7.5 Nontransferability. Each stock appreciation right granted in
connection with an Incentive Stock Option and, unless otherwise determined by the Board of Directors, each other stock appreciation right granted under the Plan, by its terms shall be nonassignable and nontransferable by the holder, either
voluntarily or by operation of law, except by will or by the laws of descent and distribution of the state or country of the holder’s domicile at the time of death, and each stock appreciation right by its terms shall be exercisable during the
holder’s lifetime only by the holder. No stock appreciation right may be transferred by the holder in exchange for cash or property. 

8. Exercise of Options and Stock Appreciation Rights. 

8.1 Exercise. Except as provided in Section 8.2 or as determined by the Board of Directors, no option or stock appreciation
right granted under the Plan may be exercised unless at the time of exercise the holder is employed by or in the service of the Company and shall have been so employed or provided such service continuously since the date the option or stock
appreciation right was granted. Except as provided in Sections 8.2, 12 and 17, options and stock appreciation rights granted under the Plan may be exercised from time to time over the period stated in each option or stock appreciation right in
amounts and at times prescribed by the Board of Directors, provided that options and stock appreciation rights may not be exercised for fractional shares. Except as provided in Section 12 or in the provisions of an award agreement addressing
treatment of an award in a Transaction (as defined in Section 12.2), no stock option or stock appreciation right granted under the Plan shall be exercisable until at least twelve months after the date it was granted, except that awards may be
made under the Plan for stock options and stock appreciation rights that are exercisable in less than twelve months after the date of grant provided that the aggregate number of shares of Common Stock subject to such awards do not to exceed five
percent of the total shares reserved for issuance under the Plan. Unless otherwise determined by the Board of Directors, if a holder does not exercise an option or stock appreciation right in any one year for the full number of shares to which the
holder is entitled in that year, the holder’s rights shall be cumulative and the holder may acquire those shares in any subsequent year during the term of the option or stock appreciation right. 

8.2 Termination of Employment or Service. 

8.2-1 General Rule. Unless otherwise determined by the Board of Directors, if a holder’s
employment or service with the Company terminates for any reason other than because of total disability or death as provided in Sections 8.2-2 and 8.2-3, his or her
option or stock appreciation right may be exercised at any time before the expiration date of the option or stock appreciation right or the expiration of 3 months after the date of termination, whichever is the shorter period, but only if and to the
extent the holder was entitled to exercise the option or stock appreciation right at the date of termination. Notwithstanding the foregoing, unless otherwise determined by the Board of Directors, if a holder’s employment or service with the
Company terminates for any reason other than because of total disability or death as provided in Sections 8.2-2 and 8.2-3, and such holder dies before the expiration
date of the option or stock appreciation right and the expiration of 3 months after the date of termination, his or her option or stock appreciation right may be exercised at any time before the expiration date of the option or stock appreciation
right or before the date 12 months after the date of termination, whichever is the shorter period, but only if and to the extent the holder was entitled to exercise the option or stock appreciation right at the date of termination and only by the
person or persons to whom the holder’s rights under the option or stock appreciation right shall pass by the holder’s will or by the laws of descent and distribution of the state or country of domicile at the time of death. 

8.2-2 Termination Because of Total Disability. Unless otherwise determined by the Board
of Directors, if a holder’s employment or service with the Company terminates because of total disability, his or her option or stock appreciation right may be exercised at any time before the expiration date of the option or stock appreciation
right or before the date 12 months after the date of termination, whichever is the shorter period, but only if and to the extent the holder was entitled to exercise the option or stock appreciation right at the date of termination. The term
“total disability” means a medically determinable mental or physical impairment that is expected to result in death or has lasted or is expected to last for a continuous period of 12 months or more and that, in the opinion of the Company
and two independent physicians, causes the holder to be unable to perform his or her duties as an employee, director or officer of the Employer and unable to be engaged in any substantial gainful activity. Total disability shall be deemed to have
occurred on the first day after the two independent physicians have furnished their written opinion of total disability to the Company and the Company has reached an opinion of total disability. 

 8.2-3 Termination Because of Death. Unless
otherwise determined by the Board of Directors, if a holder dies while employed by or providing service to the Company, his or her option or stock appreciation right may be exercised at any time before the expiration date of the option or stock
appreciation right or before the date 12 months after the date of death, whichever is the shorter period, but only if and to the extent the holder was entitled to exercise the option or stock appreciation right at the date of death and only by the
person or persons to whom the holder’s rights under the option or stock appreciation right shall pass by the holder’s will or by the laws of descent and distribution of the state or country of domicile at the time of death. 

8.2-4 Amendment of Exercise Period Applicable to Termination. The Board of Directors may at
any time extend the 3-month and 12-month exercise periods any length of time not longer than the original expiration date of the option or stock appreciation right. 

8.2-5 Failure to Exercise Option or Stock Appreciation Right. To the extent that the
option or stock appreciation right of any deceased holder or any holder whose employment or service terminates is not exercised within the applicable period, all further rights to purchase shares pursuant to the option or stock appreciation right
shall cease and terminate. 
 8.2-6 Leave of Absence. Absence on leave approved by the
Employer or on account of illness or disability shall not be deemed a termination or interruption of employment or service. Unless otherwise determined by the Board of Directors, vesting of options and stock appreciation rights shall continue during
a medical, family or military leave of absence or other leave approved by the Employer, whether paid or unpaid, and vesting of options and stock appreciation rights shall be suspended during any other unpaid leave of absence. 

8.3 Notice of Exercise or Surrender. Unless the Board of Directors determines otherwise, shares may be acquired pursuant to an
option or stock appreciation right granted under the Plan only upon the Company’s receipt of written notice from the holder of the holder’s binding commitment to purchase shares, specifying the number of shares the holder desires to
acquire under the option or stock appreciation right and the date on which the holder agrees to complete the transaction, and, if required to comply with the Securities Act of 1933, containing a representation that it is the holder’s intention
to acquire the shares for investment and not with a view to distribution. Unless the Board of Directors determines otherwise, cash may be paid upon surrender of a stock appreciation right granted under the Plan only upon the Company’s receipt
of written notice from the holder of the holder’s binding commitment to surrender the stock appreciation right, specifying the number of shares subject to the stock appreciation right being surrendered and the date on which the holder agrees to
complete the surrender. 
 8.4 Tax Withholding. Each holder who has exercised an option or stock appreciation right shall,
immediately upon notification of the amount due, if any, pay to the Company in cash or by check amounts necessary to satisfy any applicable federal, state and local tax withholding requirements. If additional withholding is or becomes required (as a
result of exercise of an option or stock appreciation right or as a result of disposition of shares acquired pursuant to exercise of an option or stock appreciation right) beyond any amount deposited before delivery of the certificates, the holder
shall pay such amount, in cash or by check, to the Company on demand. If the holder fails to pay the amount demanded, the Company or the Employer may withhold that amount from other amounts payable to the holder, including salary, subject to
applicable law. With the consent of the Board of Directors, a holder may satisfy this obligation, in whole or in part, by instructing the Company to withhold from the shares to be issued upon exercise or by delivering to the Company other shares of
Common Stock; provided, however, that the number of shares so withheld or delivered in connection with an option exercise shall not exceed the minimum amount necessary to satisfy the required withholding obligation. 

8.5 Reduction of Reserved Shares. Upon the exercise of an option or stock appreciation right, the number of shares reserved for
issuance under the Plan shall be reduced by the number of shares issued upon exercise of the option or stock appreciation right and the number of shares subject to the award that are not issued shall be available for issuance under the Plan. Cash
payments of stock appreciation rights shall not reduce the number of shares of Common Stock reserved for issuance under the Plan. 

 9. Stock Bonuses. The Board of Directors may award shares under the Plan as stock
bonuses, including restricted stock units that provide for delivery of Common Stock at a later date. Shares awarded as a bonus shall be subject to the terms, conditions and restrictions determined by the Board of Directors. The restrictions may
include restrictions concerning transferability and forfeiture of the shares awarded, together with any other restrictions determined by the Board of Directors. The Board of Directors may require the recipient to sign an agreement as a condition of
the award, but may not require the recipient to pay any monetary consideration other than amounts necessary to satisfy tax withholding requirements. The agreement may contain any terms, conditions, restrictions, representations and warranties
required by the Board of Directors. The certificates representing the shares awarded shall bear any legends required by the Board of Directors. The Company may require any recipient of a stock bonus to pay to the Company in cash or by check upon
demand amounts necessary to satisfy any applicable federal, state or local tax withholding requirements. If the recipient fails to pay the amount demanded, the Company or the Employer may withhold that amount from other amounts payable to the
recipient, including salary, subject to applicable law. With the consent of the Board of Directors, a recipient may satisfy this obligation, in whole or in part, by instructing the Company to withhold from any shares to be issued or by delivering to
the Company other shares of Common Stock; provided, however, that the number of shares so withheld or delivered shall not exceed the minimum amount necessary to satisfy the required withholding obligation. Upon the issuance of a stock bonus, the
number of shares reserved for issuance under the Plan shall be reduced by the sum of the number of shares issued plus the number of shares withheld to satisfy tax obligations as provided in the immediately preceding sentence. 

10. Restricted Stock. 

10.1 Restricted Stock. The Board of Directors may issue shares under the Plan for any consideration (including promissory notes
and services) determined by the Board of Directors. Shares issued under the Plan shall be subject to the terms, conditions and restrictions determined by the Board of Directors; provided, however, that, except as provided in Section 12 or in
the provisions of an award agreement addressing treatment of an award in a Transaction (as defined in Section 12.2), any award made under this Section 10 the vesting for which is time-based will provide for a restriction period of at least
three years, with the restriction to lapse no more quickly than with respect to one-third of the shares annually over the three-year restriction period. Subject to the provisions of the Plan, the restrictions
may include restrictions concerning transferability, repurchase by the Company and forfeiture of the shares issued, together with any other restrictions determined by the Board of Directors. All Common Stock issued pursuant to this Section 10.1
shall be subject to a Restricted Stock Agreement, which shall be executed by the Company and the prospective recipient of the shares before the delivery of certificates representing the shares. The Agreement may contain any terms, conditions,
restrictions, representations and warranties required by the Board of Directors. 
 10.2 Other Provisions. The
certificates representing shares of restricted stock shall bear any legends required by the Board of Directors. The Company may require any participant receiving restricted stock to pay to the Company in cash or by check upon demand amounts
necessary to satisfy any applicable federal, state or local tax withholding requirements. If the participant fails to pay the amount demanded, the Company or the Employer may withhold that amount from other amounts payable to the participant,
including salary, subject to applicable law. With the consent of the Board of Directors, a participant may satisfy this obligation, in whole or in part, by instructing the Company to withhold from any shares to be issued or by delivering to the
Company other shares of Common Stock; provided, however, that the number of shares so withheld or delivered shall not exceed the minimum amount necessary to satisfy the required withholding obligation. Upon the issuance of restricted stock, the
number of shares reserved for issuance under the Plan shall be reduced by the sum of the number of shares issued and the number of shares withheld to satisfy tax obligations as provided in the immediately preceding sentence. 

11. Performance-Based Awards. The Board of Directors may grant awards intended to qualify as qualified performance-based compensation
under Section 162(m) of the Code and the regulations thereunder (“Performance-Based Awards”). Performance-Based Awards shall be denominated at the time of grant either in Common Stock (“Stock Performance Awards”) or in
dollar amounts (“Dollar Performance Awards”). Payment under a Stock Performance Award or a Dollar Performance Award shall be made, at the discretion of the Board of Directors, in Common Stock (“Performance Shares”), or in cash or
in any combination thereof. Performance-Based Awards shall be subject to the following terms and conditions: 
 11.1 Award
Period. The Board of Directors shall determine the period of time for which a Performance-Based Award is made (the “Award Period”). 

 11.2 Performance Goals and Payment. The Board of Directors shall
establish in writing objectives (“Performance Goals”) that must be met by the Company or any subsidiary, division or other unit of the Company (“Business Unit”) during the Award Period as a condition to payment being made under
the Performance-Based Award. The Performance Goals for each award shall be one or more targeted levels of performance with respect to one or more of the following objective measures with respect to the Company or any Business Unit: earnings,
earnings per share, stock price increase, total shareholder return (stock price increase plus dividends), return on equity, return on assets, return on capital, economic value added, sales, revenues, operating income, inventories, inventory turns,
cash flows, or any of the foregoing before the effect of acquisitions, divestitures, accounting changes, restructuring and special charges, extraordinary items and all items of gain, loss or expense determined to be extraordinary or unusual in
nature or infrequent in occurrence (determined according to criteria established by the Board of Directors). The Board of Directors shall also establish the number of Performance Shares or the amount of cash payment to be made under a
Performance-Based Award if the Performance Goals are met or exceeded, including the fixing of a maximum payment (subject to Section 11.4). The Board of Directors may establish other restrictions to payment under a Performance-Based Award, such
as a continued employment requirement, in addition to satisfaction of the Performance Goals. Some or all of the Performance Shares may be issued at the time of the award as restricted shares subject to forfeiture in whole or in part if Performance
Goals or, if applicable, other restrictions are not satisfied. 
 11.3 Computation of Payment. During or after an Award
Period, the performance of the Company or Business Unit, as applicable, during the period shall be measured against the Performance Goals. If the Performance Goals are not met, no payment shall be made under a Performance-Based Award. If the
Performance Goals are met or exceeded, the Board of Directors shall certify that fact in writing and certify the number of Performance Shares earned or the amount of cash payment to be made under the terms of the Performance-Based Award. 

11.4 Maximum Awards. No participant may receive in any fiscal year Stock Performance Awards under which the aggregate
amount payable under the Awards exceeds the equivalent of 650,000 shares of Common Stock or Dollar Performance Awards under which the aggregate amount payable under the Awards exceeds $4,000,000. 

11.5 Tax Withholding. Each participant who has received Performance Shares shall, upon notification of the amount due,
pay to the Company in cash or by check amounts necessary to satisfy any applicable federal, state and local tax withholding requirements. If the participant fails to pay the amount demanded, the Company or the Employer may withhold that amount from
other amounts payable to the participant, including salary, subject to applicable law. With the consent of the Board of Directors, a participant may satisfy this obligation, in whole or in part, by instructing the Company to withhold from any shares
to be issued or by delivering to the Company other shares of Common Stock; provided, however, that the number of shares so delivered or withheld shall not exceed the minimum amount necessary to satisfy the required withholding obligation. 

11.6 Effect on Shares Available. The payment of a Performance-Based Award in cash shall not reduce the number of shares
of Common Stock reserved for issuance under the Plan. The number of shares of Common Stock reserved for issuance under the Plan shall be reduced by the sum of the number of shares issued upon payment of an award and any shares withheld to satisfy
tax obligations as provided in the last sentence of Section 11.5 in the case of Performance-Based Awards that are in the form of performance-based restricted stock units. 

12. Changes in Capital Structure. 

12.1 Stock Splits, Stock Dividends, Changes in Capitalization. If the outstanding Common Stock of the Company is hereafter
increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any stock split, combination of shares, dividend payable in shares, recapitalization or reclassification,
appropriate adjustment shall be made by the Board of Directors in the number and kind of shares available for grants under the Plan and in all other share amounts set forth in the Plan. In addition, the Board of Directors shall make

 
appropriate adjustment in the number and kind of shares subject to any Awards theretofor granted, and the exercise and settlement prices of those Awards, if any, so that the holder’s
proportionate interest before and after the occurrence of the event is maintained without changing the aggregate exercise or settlement price, if any. If any other change to the capital or corporate structure of the Company affecting Common Stock
occurs, such as an extraordinary non-recurring dividend in cash or property, in order to prevent or limit diminution or enlargement of benefits or potential benefits intended to be made available under the
Plan, the Board of Directors, in its sole discretion, may adjust the number or kind of shares subject to and/or the exercise price of outstanding Awards and make appropriate adjustments to any related share limits in the Plan with respect to Awards;
provided that no such adjustments shall be made with respect to stock options or stock appreciation rights in the case of dividends of cash or property that are not extraordinary and non-recurring.
Notwithstanding the foregoing, the Board of Directors shall have no obligation to effect any adjustment that would or might result in the issuance of fractional shares, and any fractional shares resulting from any adjustment may be disregarded or
provided for in any manner determined by the Board of Directors. Any such adjustments made by the Board of Directors shall be conclusive. 

12.2 Mergers, Reorganizations, Etc. In the event of a merger, consolidation, plan of exchange, acquisition of property or
stock, split-up, split-off, spin-off, reorganization or liquidation to which the Company is a party or any sale, lease, exchange
or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company (each, a “Transaction”), the Board of Directors shall, in its sole discretion and to the extent possible
under the structure of the Transaction, select one or more of the following alternatives for treating outstanding Awards under the Plan, with the Board of Directors having the discretion to apply different alternatives to various outstanding Awards:

 12.2-1 Outstanding Awards shall remain in effect in accordance with their terms. 

12.2-2 Outstanding Awards shall be converted into (a) Awards with respect to stock in one or
more of the corporations, including the Company, that are the surviving or acquiring corporations in the Transaction, or (b) in a Transaction in which the consideration received is cash, if determined in the sole discretion of the Board of
Directors, a cash obligation of the acquiring entity, with such conversion to occur by assumption of the Plan, assumption of Awards, or substitution of Awards. The amount, type of securities subject thereto and exercise or settlement price of the
converted Awards shall be determined by the Board of Directors of the Company, taking into account the relative values of the companies involved in the Transaction and the exchange rate, if any, used in determining shares of the surviving
corporation(s) to be held by holders of shares of the Company following the Transaction. Unless otherwise determined by the Board of Directors, the converted Awards shall be vested or released from restrictions on transfer and repurchase and
forfeiture rights only to the extent that the vesting requirements or restrictions relating to Awards granted hereunder have been satisfied. 

12.2-3 The Board of Directors shall provide a period of 30 days or less before the completion of the
Transaction during which outstanding Awards may be exercised to the extent then exercisable, and upon the expiration of that period, all outstanding Awards (including Awards that are not options or stock appreciation rights) shall immediately
terminate. 
 12.2-4 Outstanding Awards shall be cancelled immediately prior to the completion of
the Transaction in exchange for a payment with respect to each vested or exercisable share subject to such cancelled Award in (i) cash, (ii) stock in one or more corporations that are the surviving or acquiring corporations in the Transaction,
or (iii) other property which, in any such case, shall have a fair market value equal to the fair market value of the consideration to be paid per share of Common Stock in the Transaction over the exercise or settlement price per share under
the Award, if any (the “Spread”). In the event such determination is made by the Board of Directors, the Spread (reduced by applicable withholding taxes, if any) shall be paid to the holders in respect of their cancelled Awards as soon as
practicable following the closing of the Transaction. This provision shall not apply to Incentive Stock Options awarded prior to October 25, 2007. 

The Board of Directors may, in its sole discretion, accelerate in full or in part the vesting or exercisability of Awards under the Plan and
the full or partial release from restrictions on transfer and repurchase or forfeiture rights of Award under the Plan, on such terms and conditions as the Board of Directors may specify prior to the completion of the Transaction. 

 12.3 Dissolution of the Company. In the event of the dissolution of the
Company, options and stock appreciation rights shall be treated in accordance with Section 12.2-3. 

12.4 Rights Issued by Another Corporation. The Board of Directors may also grant options, stock appreciation rights,
stock bonuses and Performance-Based Awards and issue restricted stock under the Plan with terms, conditions and provisions that vary from those specified in the Plan, provided that any such awards are granted in substitution for, or in connection
with the assumption of, existing options, stock appreciation rights, stock bonuses, Performance-Based Awards or restricted stock granted, awarded or issued by another corporation and assumed or otherwise agreed to be provided for by the Company
pursuant to or by reason of an acquisition of another entity, business or an interest in another entity whether by merger, stock purchase, asset purchase or other form of transaction. 

13. Amendment of the Plan. The Board of Directors may at any time modify or amend the Plan in any respect. Except as provided in
Section 12, however, no change in an award already granted shall be made without the written consent of the holder of the award if the change would adversely affect the holder. 

14. Approvals. The Company’s obligations under the Plan are subject to the approval of state and federal authorities or
agencies with jurisdiction in the matter. The Company will use its best efforts to take steps required by state or federal law or applicable regulations, including rules and regulations of the Securities and Exchange Commission and any stock
exchange on which the Company’s shares may then be listed, in connection with the grants under the Plan. The foregoing notwithstanding, the Company shall not be obligated to issue or deliver Common Stock under the Plan if such issuance or
delivery would violate state or federal securities laws. 
 15. Employment and Service Rights. Nothing in the Plan or any award
pursuant to the Plan shall (i) confer upon any employee any right to be continued in the employment of an Employer or interfere in any way with the Employer’s right to terminate the employee’s employment at will at any time, for any
reason, with or without cause, or to decrease the employee’s compensation or benefits, or (ii) confer upon any person engaged by an Employer any right to be retained or employed by the Employer or to the continuation, extension, renewal or
modification of any compensation, contract or arrangement with or by the Employer. 
 16. Rights as a Shareholder. The recipient of
any award under the Plan shall have no rights as a shareholder with respect to any shares of Common Stock until the date the recipient becomes the holder of record of those shares. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date occurs before the date the recipient becomes the holder of record. 

17. Suspension or Termination of Awards; Claw-Back. Notwithstanding any provision of the Plan to the contrary, if at any
time (including after a notice of exercise has been delivered with respect to an Award that is an option or stock appreciation right), the Board of Directors, including any Committee authorized pursuant to Section 4.2 (the Board of Directors or
such Committee, the “Committee” for purposes of this Section), reasonably believes that a participant, other than a non-employee director, has committed an act of misconduct as described in this
section, the Committee may suspend the participant’s right to exercise any stock option or stock appreciation right or the vesting of restricted stock or restricted stock unit awards pending a determination of whether an act of misconduct has
been committed. If the Committee determines a participant, other than a non-employee director, has committed an act of embezzlement, fraud, dishonesty, nonpayment of any obligation owed to the Company or its
subsidiaries, breach of fiduciary duty or deliberate disregard of Company rules resulting in loss, damage or injury to the Company, or if a participant makes an unauthorized disclosure of any Company trade secret or confidential information, engages
in any conduct constituting unfair competition, induces any customer to breach a contract with the Company or induces any principal for whom the Company or its subsidiaries acts as agent to terminate such agency relationship, neither the participant
nor his or her estate shall be entitled to exercise any stock option or stock appreciation right whatsoever and the participant’s restricted stock or restricted stock unit agreement shall be terminated and cancelled. In addition, for any
participant who is designated an “executive officer” by the Board of Directors, if the Committee determines that the participant engaged in an act of embezzlement, fraud or breach of fiduciary duty during the participant’s employment
that contributed to an obligation to restate the Company’s financial statements (“Contributing Misconduct”), the participant 

 
shall be required to repay to the Company, in cash and upon demand, the Option Proceeds and/or Restricted Stock Proceeds, as applicable, resulting from the sale or other disposition (including to
the Company) of shares issued or issuable upon exercise of a stock option or stock appreciation right or upon vesting of restricted stock or a restricted stock unit, as applicable, if the sale or disposition was effected during the 12-month period following the first public issuance or filing with the Securities and Exchange Commission of the financial statements required to be restated. The term “Option Proceeds” means, with respect
to any sale or other disposition (including to the Company) of shares issued or issuable upon exercise of an option or stock appreciation right, an amount determined appropriate by the Committee to reflect the effect of the restatement on the
Company’s stock price, up to the amount equal to the number of shares sold or disposed of multiplied by the difference between the market value per share at the time of such sale or disposition and the exercise price. The term “Restricted
Stock Proceeds” means, with respect to any sale or other disposition (including to the Company) of restricted stock or a restricted stock unit, an amount determined appropriate by the Committee to reflect the effect of the restatement on the
Company’s stock price, up to the amount equal to the market value per share at the time of such sale or other disposition multiplied by the number of shares or units sold or disposed of. The return of Option Proceeds and/or Restricted Stock
Proceeds is in addition to and separate from any other relief available to the Company due to the executive officer’s Contributing Misconduct. Any determination by the Committee with respect to the foregoing shall be final, conclusive and
binding on all parties. For any participant who is an “executive officer,” the determination of the Committee shall be subject to the approval of the Board of Directors. 

18. Repricing of Stock Options or SARs. Except as provided in Section 12, any amendment to the Plan or any award agreement
that results in the repricing of an option or stock appreciation right issued under the Plan shall not be effective without prior approval of the shareholders of the Company. For this purpose, repricing includes a reduction in the exercise price of
a stock option or a stock appreciation right or the cancellation of a stock option or a stock appreciation right in exchange for cash, stock options or stock appreciation rights with an exercise price less than the exercise price of the cancelled
stock option or stock appreciation right, other awards under the Plan or any other consideration provided by the Company. 
 19.
No Discretionary Acceleration of Vesting. Notwithstanding any provision of the Plan to the contrary, except as set forth in the proviso below, the Board of Directors shall not exercise discretion to accelerate vesting of any Award granted
under the Plan; provided, however, that, notwithstanding any provision of the Plan to the contrary, the Board of Directors shall have the authority, in its discretion, to provide for accelerated vesting, exercisability and distribution of any Awards
held by a participant under the Plan in the event of the participant’s death or disability or upon or following consummation of a Transaction as provided in Section 12.2.EX-10.40

 Exhibit 10.40 

RESTRICTED STOCK UNITS 

AWARD AGREEMENT 
 This
Award Agreement (the “Agreement”) is entered into as of __________ by and between Electro Scientific Industries, Inc., an Oregon corporation (the “Company”), and __________ (“Recipient”), for the grant of restricted
stock units with respect to the Company’s Common Stock (“Common Stock”). By accepting this award Recipient agrees to be bound by the terms and conditions of this Agreement. 

On __________, the Compensation Committee of the Company’s Board of Directors (the “Committee”) made a restricted stock units
award to Recipient pursuant to the Company’s 2004 Stock Incentive Plan (the “Plan”) and Recipient desires to accept the award subject to the terms and conditions of this Agreement. 

IN CONSIDERATION of the mutual covenants and agreements set forth in this Agreement, the parties agree to the following. 

1. Grant and Terms of Restricted Stock Units. The Company grants to Recipient __________ restricted stock units, subject to the
adjustments, restrictions, terms and conditions set forth in this Agreement. 
 (a) Rights under Restricted Stock Units. A restricted
stock unit (an “RSU”) represents the unsecured right to require the Company to deliver to Recipient one share of Common Stock for each RSU, subject to Section 1(c). The number of shares of Common Stock deliverable with respect to each
RSU is subject to adjustment as determined by the Board of Directors of the Company as to the number and kind of shares of stock deliverable upon any merger, reorganization, consolidation, recapitalization, stock dividend, spin-off or other change in the corporate structure affecting the Common Stock generally. 
 (b)
Vesting and Delivery Dates. The RSUs issued under this Agreement shall initially be 100% unvested and subject to forfeiture. Subject to this Section 1(b) and Section 1(c), the RSUs shall vest 25% annually on each of the first four
anniversaries of the date of grant. The RSUs shall become vested on the vesting date only if Recipient continues to be an employee of the Company through such vesting date. The delivery date for a RSU shall be the date on which such RSU vests. 

(c) Payment before Vesting Date. 

(1) Payment on Death or Total Disability. If Recipient ceases to be an employee of the Company by reason of
Recipient’s death or physical disability, outstanding but unvested RSUs shall become immediately vested in an amount determined by multiplying the total number of RSUs subject to this Agreement by a percentage calculated by dividing the number
of whole months elapsed from the date of this Agreement to the date of termination of employment by 48 (the “Pro Rata Percentage”). The delivery date shall also accelerate. The term “total disability” means a
medically determinable mental or physical impairment that is expected to result in death or has lasted or is expected to last for a continuous period 

 
of 12 months or more and that, in the opinion of the Company and two independent physicians approved by the Company, causes Recipient to be unable to perform his or her duties as an employee,
director, officer or consultant of the Company and unable to engage in any substantial gainful activity. Total disability shall be deemed to have occurred after both of the following have occurred: 

(A) The two independent physicians have furnished their written opinion of total disability to the Company; and 

(B) The Company has reached an opinion of total disability. 

(2) Acceleration on Normal Retirement. After Recipient attains age 65, outstanding but unvested RSUs shall become vested
each calendar year in an amount determined by multiplying the total number of RSUs subject to this Agreement by the Pro Rata Percentage as of the earlier of December 31 of the year or the date of Recipient’s termination of employment. The
delivery date shall also be accelerated. 
 (3) Double Trigger Acceleration on Change in Control. 

(i) All of the RSUs shall immediately vest if a Change in Control (as defined below) occurs and at any time after the Change in
Control and on or before the first anniversary of the Change in Control, (i) the Recipient’s employment is terminated by the Company (or its successor) without Cause (as defined below), or (ii) the Recipient’s employment is
terminated by the Recipient for Good Reason (as defined below); provided, however, that the RSUs may also immediately vest in connection with a sale of the Company as provided in Section 1(c)(4) below. 

(ii) For purposes of this Agreement, a “Change in Control” of the Company shall mean the occurrence of any of the
following events: 
 (A) At any time during a period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Company (“Incumbent Directors”) shall cease for any reason to constitute at least a majority thereof; provided, however, that the term “Incumbent Director” shall also include each
new director elected during such two-year period whose nomination or election was approved by two-thirds of the Incumbent Directors then in office; 

(B) Any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) shall,
as a result of a tender or exchange offer, open market purchases or privately negotiated purchases from anyone other than the Company, have become the beneficial owner (within the meaning of Rule 13d-3 under
the Exchange Act), directly or indirectly, of more than fifty percent (50%) of the then outstanding Common Stock of the Company; 

  
 2 

 (C) A consolidation, merger or plan of exchange involving the Company
(“Merger”) as a result of which the holders of outstanding securities of the Company ordinarily having the right to vote for the election of directors (“Voting Securities”) immediately prior to the Merger do not continue to hold
at least 50% of the combined voting power of the outstanding Voting Securities of the surviving corporation or a parent corporation of the surviving corporation immediately after the Merger, disregarding any Voting Securities issued to or retained
by such holders in respect of securities of any other party to the Merger; or 
 (D) A sale, lease, exchange, or other
transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company. 

(iii) For purposes of this Agreement, “Cause” shall mean (a) the willful and continued failure to perform
substantially the Recipient’s reasonably assigned duties with the Company (or its successor) (other than any such failure resulting from incapacity due to physical or mental illness) after a demand for substantial performance is delivered to
the Recipient by the Company (or its successor) which specifically identifies the manner in which the Company (or its successor) believes that the Recipient has not substantially performed the Recipient’s duties, (b) the willful engagement
in illegal conduct which is materially and demonstrably injurious to the Company (or its successor), or (c) the commission of an act by Recipient, or the failure of Recipient to act, which constitutes gross negligence or gross misconduct. No
act, or failure to act, shall be considered “willful” if the Recipient reasonably believed that the action or omission was in, or not opposed to, the best interests of the Company (or its successor). 

(iv) For purposes of this Agreement, “Good Reason” shall mean Recipient’s voluntary termination, within 30 days
following the expiration of any Company cure period (discussed below) following the occurrence of one or more of the following, without Recipient’s consent: 

(A) the assignment of a different title, job or responsibilities that results in a substantial reduction in the duties of the
Recipient after the Change in Control when compared to the Recipient’s duties with respect to the Company’s operations prior to the Change in Control; provided that any change made solely as the result of the Company becoming a subsidiary
or business unit of a larger company in a Change in Control shall not constitute Good Reason unless Recipient’s new duties are substantially reduced from his or her prior duties; 

(B) a reduction in Recipient’s target bonus or base salary; 

(C) the Company’s requiring Recipient to be based more than 50 miles from the principal office at in which Recipient is
based immediately prior to the Change in Control, except for reasonably required travel on the Company’s business; or 

  
 3 

 (D) the failure by any successor to the Company to expressly assume this
Agreement or any obligation under this Agreement. 
 Recipient may not resign for Good Reason without first providing the Company with written notice within
90 days of the initial existence of the condition that Recipient believes constitutes Good Reason specifically identifying the acts or omissions constituting the grounds for Good Reason and a reasonable cure period of not less than 30 days following
the date of such notice. 
 For purposes of the “Good Reason” definition, the term “Company” will be interpreted to include any
subsidiary, parent, affiliate or successor thereto, if applicable. 
 (4) Sale of the Company. If there shall occur a
merger, consolidation or plan of exchange involving the Company pursuant to which the outstanding shares of Common Stock of the Company are converted into cash or other stock, securities or property, or a sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all, or substantially all, the assets of the Company, then, as determined by the Committee or the Board of Directors, either: 

(i) the unvested RSUs shall be converted into restricted stock units for stock of the surviving or acquiring corporation in the
applicable transaction, with the amount and type of shares subject thereto to be conclusively determined by the Committee, taking into account the relative values of the companies involved in the applicable transaction and the exchange rate, if any,
used in determining shares of the surviving corporation to be held by the former holders of the Company’s Common Stock following the applicable transaction, and disregarding fractional shares, with the dates for vesting of RSUs and delivery of
shares of Common Stock unchanged; 
 (ii) the unvested RSUs shall be converted into a cash payment obligation of the
surviving or acquiring corporation in an amount equal to the proceeds a holder of the underlying shares would have received in proceeds from such transaction with respect to those shares; or 

(iii) all of the unvested RSUs shall immediately vest and all underlying shares shall be delivered simultaneously with the
closing of the applicable transaction such that the Recipient will participate as a shareholder in receiving proceeds from such transaction with respect to those shares. 

(d) Forfeiture of RSUs on Other Terminations of Employment. If Recipient ceases to be an employee of the Company for any reason that
does not result in acceleration or payment pursuant to Section 1(c), Recipient shall immediately forfeit all outstanding but unvested RSUs granted pursuant to this Agreement and Recipient shall have no right to receive the related Common Stock.

  
 4 

 (e) Restrictions on Transfer and Delivery on Death. Recipient may not sell, transfer,
assign, pledge or otherwise encumber or dispose of the RSUs. Recipient may designate beneficiaries to receive shares of stock with respect to RSUs if Recipient dies before the delivery date by so indicating on Exhibit A,
which is incorporated into and made a part of this agreement. If Recipient fails to designate beneficiaries on Exhibit A, the shares will be delivered to Recipient’s estate. 

(f) Reinvestment of Dividend Equivalents. On each date on which the Company pays a dividend on a share of Common Stock with respect to
an RSU, the number of RSUs subject to this Agreement shall be increased by a number equal to the number of whole or fractional shares of Common Stock with a value equal to the value of the dividends that would have been paid on the stock deliverable
pursuant to the RSUs (if such shares were outstanding), divided by the closing stock price on the dividend payment date. If the vesting date for any RSUs subject to this Agreement occurs within seven business days of the payment date for a dividend,
the Company, at its option, may elect to pay to Recipient cash, net of withholding, equal to the cash dividend payable on the RSUs which so vest in lieu of increasing the number of RSUs subject to this Agreement. 

(g) Delivery on Delivery Date. As soon as practicable following the delivery date, the Company shall deliver to Recipient a certificate
for the number of shares of Common Stock represented by all RSUs having a delivery date on the same date, rounded down to the whole share. No fractional shares of Common Stock shall be issued. The Company shall pay to Recipient in cash an amount
equal to the value of any fractional shares that would otherwise have been issued, valued as of the delivery date. If shares or cash are to be delivered on a particular date, the shares or cash shall be deemed delivered on that date for purposes of
compliance with the terms of this Agreement if the cash or shares are actually delivered within 45 days after the specified date as determined in the Company’s discretion with the Recipient having no right to determine the delivery date.
Recipient shall not have any right to determine or direct the date of actual delivery. 
 (h) Recipient’s Rights as Shareholder.
Recipient shall have no rights as a shareholder with respect to the RSUs or the shares underlying them until the Company delivers the shares to Recipient on the delivery date. 

(i) Tax Withholding. Recipient acknowledges that, not later than the actual delivery date, the value of delivered shares of Common
Stock will be treated as ordinary compensation income for federal and state income and FICA tax purposes, and that the Company will be required to withhold taxes on this income amount. The Company will notify Recipient of the required withholding
amount. Concurrently with or prior to the delivery of the certificate referred to in Section 1(g), Recipient shall pay to the Company the required withholding amount in cash or, at the election of Recipient (which election must be made on or
before the vesting date), by surrendering to the Company for cancellation shares of the Company’s Common Stock to be delivered with respect to the RSUs or other shares of the Company’s Common Stock valued at the closing market price for
the Company’s Common Stock on the vesting date. If Recipient pays the withholding amount in shares of Common Stock, the Company shall pay to Recipient in cash the amount of any resulting over payment. 

  
 5 

 (j) Section 409A. The award made pursuant to this Agreement shall be interpreted in
accordance with Section 409A and Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance issued after the grant of the award. For example, notwithstanding
anything to the contrary in this Agreement, (i) a termination of employment shall be determined with respect to standards for “separation from service” within the meaning of applicable regulations; (ii) the provisions described
in Sections 1(c)(4)(ii) and 1(c)(4)(iii) shall apply only if such events qualify as a “termination or liquidation of the plan” within the meaning of Treas. Reg. § 1.409A 3(j)(4)(ix); and the provision described in
Section 1(c)(4)(i) shall apply only if such events qualify as a “change of control event” within the meaning of Treas. Reg. § 1.409A-3(i)(5)(i). 

(1) Notwithstanding any provision of the award to the contrary, the Company may adopt such amendments to the award or adopt
other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Company determines are necessary or appropriate to (1) exempt the award from the application of
Section 409A or preserve the intended tax treatment of the benefits provided with respect to the award, or (2) comply with the requirements of Section 409A. 

(2) If an amount is determined to be subject to applicable provisions of Section 409A of the Code, payment in connection
with termination of employment for a reason other than death may not start or be made to Recipient if the Company determines Recipient is a “key employee” as defined in Section 416(i) of the Code, without regard to
Section 416(i)(5) of the Code, before the date which is six months after the date of termination, notwithstanding any other provisions for time of payment in this Agreement, if such delay in payment is necessary to comply with Section 409A
of the Code. The Company may determine that Recipient is a key employee in the event of doubt or to avoid impractical efforts or expense to make an exact determination of key employees. Recipient shall have no claim, rights or remedy if the
determination is not correct. 
 2. Miscellaneous. 

(a) Entire Agreement; Amendment. This Agreement and the Plan (including without limitation Section 17 thereof) constitutes the
entire agreement of the parties with regard to the subjects hereof and may be amended only by written agreement between the Company and Recipient. 

(b) Notices. Any notice required or permitted under this Agreement shall be in writing and shall be deemed sufficient when delivered
personally to the party to whom it is addressed or when deposited into the United States mail as registered or certified mail, return receipt requested, postage prepaid, addressed to Electro Scientific Industries, Inc., Attention: Corporate
Secretary, at its principal executive offices or to Recipient at the address of Recipient in the Company’s records, or at such other address as such party may designate by ten (10) days’ advance written notice to the other party. 

  
 6 

 (c) Rights and Benefits. The rights and benefits of this Agreement shall inure to the
benefit of and be enforceable by the Company’s successors and assigns and, subject to the restrictions on transfer of this Agreement, be binding upon Recipient’s heirs, executors, administrators, successors and assigns. 

(d) Further Action. The parties agree to execute such further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement. 
 (e) Applicable Law; Attorneys’ Fees. The terms and conditions of this
Agreement shall be governed by the laws of the State of Oregon. In the event either party institutes litigation hereunder, the prevailing party shall be entitled to reasonable attorneys’ fees to be set by the trial court and, upon any appeal,
the appellate court. 
  

			
	ELECTRO SCIENTIFIC INDUSTRIES, INC.
		
	 By:
	 	 
		 	 Authorized Officer

  
 7 

 EXHIBIT A 

DESIGNATION OF BENEFICIARY 
  

			
	 Name _____________________________
	  	 Social Security Number ____-___-_____

 I designate the following person(s) to receive any restricted stock units outstanding upon my death under the Restricted Stock
Units Award Agreement with Electro Scientific Industries, Inc.: 
  

	A.	 Primary Beneficiary(ies) 

 

					
		 	 Name________________________
	  	 Social Security Number ____-___-_____

		 	 Birth Date ____________________
	  	 Relationship ________________________

		 	 Address__________________________
	  	 City__________ State____ Zip ________

			
		 	 Name________________________
	  	 Social Security Number ____-___-_____

		 	 Birth Date ____________________
	  	 Relationship ________________________

		 	 Address__________________________
	  	 City__________ State____ Zip ________

			
		 	 Name________________________
	  	 Social Security Number ____-___-_____

		 	 Birth Date ____________________
	  	 Relationship ________________________

		 	 Address__________________________
	  	 City__________ State____ Zip ________

 If more than one primary beneficiary is named, the units will be divided equally among those primary beneficiaries who survive
the undersigned. 
  

	B.	 Secondary Beneficiary(ies) 

In the event no Primary Beneficiary is living at the time of my death, I designate the following the person(s) as my beneficiary(ies): 

 

					
		 	 Name________________________
	  	 Social Security Number ____-___-_____

		 	 Birth Date ____________________
	  	 Relationship ________________________

		 	 Address__________________________
	  	 City__________ State____ Zip ________

			
		 	 Name________________________
	  	 Social Security Number ____-___-_____

		 	 Birth Date ____________________
	  	 Relationship ________________________

		 	 Address__________________________
	  	 City__________ State____ Zip ________

			
		 	 Name________________________
	  	 Social Security Number ____-___-_____

		 	 Birth Date ____________________
	  	 Relationship ________________________

		 	 Address__________________________
	  	 City__________ State____ Zip ________

 If more than one Secondary Beneficiary is named, the units will be divided equally among those Secondary beneficiaries who
survive the undersigned. 
 This designation revokes and replaces all prior designations of beneficiaries under the Restricted Stock Units Award Agreement.

  

					
	 	  		  	 Date signed: ___________________, 20___

	 Signature
	  		  	

  
 A - 1

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