Document:

Form of Notice of Grant of Stock Options and Option Agreement and related Terms

 Exhibit 10.27 
 OPTION TERMS AND CONDITIONS 
 2004 Stock Incentive Plan 
 [Incentive][Non-Qualified] Stock Option 
 Pursuant to the Company’s 2004 Stock Option Incentive Plan (the “2004 Plan”), the Board of Directors has voted in favor of granting to the Optionee an option to purchase Common Stock of the Company (the “Option”) in
the amount indicated on the attached notice. 
 1. The Option is granted upon the following terms: 
 1.1 Duration of Options. Subject to reductions in the Option period as hereinafter provided in the event of termination of employment or
death of the Optionee, the Option shall continue in effect for a period of 10 years from the Grant Date. 
 1.2 Time of
Exercise. Except as provided in paragraphs 1.5 and 1.6 and the Plan (including Section 17 thereof), the Option may be exercised from time to time in the following amounts: [Insert vesting schedule]. 
 1.3 Limitations on Rights to Exercise. Except as provided in paragraphs 1.5 and 1.6, the Option may not be exercised unless at the
time of such exercise the Optionee is employed by the Company or any parent or subsidiary of the Company and shall have been so employed continuously since the date such option was granted. 
 1.4 Nonassignability. The Option is nonassignable and nontransferable by the Optionee 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 is exercisable during the Optionee’s lifetime only by the Optionee. 
 1.5 Termination of Employment. 
 (a) Unless otherwise determined by the Board of Directors, if an Optionee’s employment or service with the Company terminates for any reason other than in the circumstances specified in subsection (b) or
(c) below or Section 1.6, his or her option may be exercised at any time before the expiration date of the option or the expiration of three months after the date of termination, whichever is the shorter period, but only if and to the
extent the Optionee was entitled to exercise the option at the date of termination. 
 (b) Unless otherwise determined by the
Board of Directors, if an Optionee’s employment or service with the Company terminates because of total disability, his or her option may be exercised at any time before the expiration date of the option or before the date 12 months after the
date of termination, whichever is the shorter period, but only if and to the extent the Optionee was entitled to exercise the option 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 Optionee to be unable to
perform his or her duties as an employee, director, officer or consultant of the Company 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. 
 (c) Unless otherwise determined by the Board of Directors, if an Optionee dies while employed by or providing service to the Company, his or her option may be exercised at any time before the expiration date of the
option or before the date 12 months after the date of death, whichever is the shorter period, but only if and to the extent the Optionee was entitled to exercise the option at the date of death and only by the person or persons to whom the
Optionee’s rights under the option shall pass by the Optionee’s will or by the laws of descent and distribution of the state or country of domicile at the time of death. 
 (d) To the extent the Option held by any deceased Optionee or by the Optionee whose employment is terminated shall not have been exercised
within the limited periods provided above, all further rights to purchase shares pursuant to the Option shall cease and terminate at the expiration of such periods. 
 (e) Absence on leave approved by the Company 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 shall continue during a medical, family, military or other leave of absence, whether paid or unpaid. 

 1.6 Change in Control. 
 (a) If as a result of a Change in Control, the Company’s Common Stock ceases to be listed for trading on a national securities
exchange (an “Exchange”), any options subject to this award that are unvested on the date of the Change in Control shall continue to vest according to the terms and conditions of this award; provided that such award is replaced with an
award for voting securities of the resulting corporation or the acquiring corporation, as the case may be (including without limitation, the voting securities of any corporation which as a result of the Change in Control owns the Company or all or
substantially all of the Company’s assets either directly or through one or more subsidiaries) (the “Surviving Company”) which are traded on an Exchange (a “Replacement Award”), which Replacement Award shall consist of
options with the number of options and exercise price determined in a manner consistent with Section 424(a) of the Internal Revenue Code of 1986, as amended, with vesting and any other terms continuing in the same manner as this award;
provided, however, that in the event of a termination by the Company without Cause or by the Optionee for Good Reason during the vesting period of any Replacement Award, the Replacement Award shall immediately vest; and provided further that upon
the vesting date of all or a portion of a Replacement Award, the Optionee shall be entitled to receive a lump sum cash payment, paid as soon as practicable, equal to the decrease, if any, in the value of a share of the Surviving Company’s stock
from the date of the Change in Control (as increased on a calendar quarterly basis using an annual interest rate, as of the last business day of the calendar quarter, for zero-coupon U.S. government securities with a constant maturity closest in
length to the time period between the date of the Change in Control and the date of vesting of the Replacement Award) to the time of vesting multiplied by the total number of shares vesting on such date. If any options that are unvested at the time
of the Change in Control are not replaced with Replacement Awards, such options shall immediately vest. 
 (b) If as a result
of a Change in Control, the Company’s Common Stock continues to be listed for trading on an Exchange, any options that are unvested on the date of the Change of Control shall continue to vest according to the terms and conditions of this award;
provided however, that, in the event of a termination by the Company without Cause or by the Optionee for Good Reason during the vesting period of this award such award shall immediately vest; and provided further that upon the vesting date of all
or portion of this award, the Optionee shall be entitled to receive a lump sum cash payment, paid as soon as practicable, equal to the decrease, if any, in the value of a share of the Company’s stock from the date of the Change in Control (as
increased on a calendar quarterly basis using an annual interest rate, as of the last business day of the calendar quarter, for zero-coupon U.S. government securities with a constant maturity closest in length to the time period between the date of
the Change in Control and the date of the vesting) to the time of vesting, multiplied by the total number of shares vesting on such date. 
 (c) For purposes of this Agreement, a “Change in Control” of the Company shall mean the occurrence of any of the following events: 
 (A) any consolidation, merger or plan of share exchange involving the Company (a “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 or continuing corporation immediately after the Merger, disregarding any Voting Securities issued or retained by such holders in respect of securities of any other party to the Merger; 
 (B) any 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; 
 (C) the adoption of any plan or proposal for the liquidation or dissolution of the Company;

 (D) at any time during a period of two consecutive years, individuals who at the beginning of such period constituted the
Board of Directors (“Incumbent Directors”) shall cease for any reason to constitute at least a majority thereof, unless each new director elected during such two-year period was nominated or elected by two-thirds of the Incumbent Directors
then in office and voting (with new directors nominated or elected by two-thirds of the Incumbent Directors also being deemed to be Incumbent Directors); or 
 (E) any Person (as hereinafter defined) 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 Securities Exchange Act of 1934), directly or indirectly, of Voting Securities representing fifty percent (50%) or more
of the combined voting power of the then outstanding Voting Securities. 
  

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 Notwithstanding anything in the foregoing to the contrary, unless otherwise determined by the Board of Directors, no
Change in Control shall be deemed to have occurred for purposes of this Agreement if (1) the Optionee acquires (other than on the same basis as all other holders of the Company Common Stock) an equity interest in an entity that acquires the
Company in a Change in Control otherwise described under subparagraph (A) or (B) above, or (2) the Optionee is part of group that constitutes a Person which becomes a beneficial owner of Voting Securities in a transaction that
otherwise would have resulted in a Change in Control under subparagraph (E) above. 
 (d) For purposes of this Agreement,
the term “Person” shall mean and include any individual, corporation, partnership, group, association or other “person”, as such term is used in Section 14 (d) of the Securities Exchange Act of 1934 (the “Exchange
Act”), other than the Company, a wholly owned subsidiary of the Company or any employee benefit plan(s) sponsored by the Company. 
 (e) Retirement. Termination by the Optionee or by the Company of the Optionee’s employment based on “Retirement” shall mean termination on or after the Optionee’s 65th birthday. 
 (f) Cause. Termination by the Company of Optionee’s employment for “Cause” shall mean termination upon (A) the willful
and continued failure by the Optionee to perform substantially the Optionee’s reasonably assigned duties with the Company consistent with those duties assigned to the Optionee prior to the Change in Control (other than any such failure
resulting from the Optionee’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Optionee by the Chairman of the Board of Directors or Chief Executive Officer of the Company or
the Surviving Company or, if Optionee is not an officer, or an officer or manager with responsibility for Optionee’s department, which specifically identifies the manner in which such executive believes that the Optionee has not substantially
performed the Optionee’s duties, (B) the conviction of guilty or entering of a nolo contendere plea to a felony which is materially and demonstrably injurious to the Company or the Surviving Company or (C) the commission of an act by
Optionee, or the failure of Optionee to act, which constitutes gross negligence or gross misconduct. For purposes of this paragraph (f), no act, or failure to act, on the Optionee’s part shall be considered “willful” unless done, or
omitted to be done, by the Optionee in knowing bad faith. Any act, or failure to act based upon authority given pursuant to a resolution duly adopted by the Board of Directors or based upon the advice of counsel for the Company or the Surviving
Company shall be conclusively presumed to be done, or omitted to be done, by the Optionee in good faith. 
 (g) Good Reason.
Termination by the Optionee of his or her employment for “Good Reason” shall mean termination based on the following, after notice to the Company or the Surviving Company of the condition within one year of the occurrence of the condition
and the failure of the Company or the Surviving Company to remedy the condition within 30 days after notice: 
 (A) a
material diminution of Optionee’s status, title, position(s) or responsibilities from Optionee’s status, title, position(s) and responsibilities as in effect immediately prior to the Change in Control or the assignment to Optionee of any
duties or responsibilities which are inconsistent with such status, title, position(s) or responsibilities (in either case other than is isolated, insubstantial or inadvertent actions which are remedied after notice), or any removal of Optionee from
such position(s), except in connection with the termination of Optionee’s employment for Cause, total disability (as defined in Section 1.5(b)) or as a result of Optionee’s death or voluntarily by Optionee other than for Good Reason;

 (B) a material reduction by the Company or Surviving Company in Optionee’s rate of base salary, bonus or incentive
opportunity or a material reduction in benefits (other than reductions that do not impact Optionee’s compensation opportunity, taken as a whole, or a reduction in benefits applicable to substantially all employees); or 
 (C) the Company’s or Surviving Company’s requiring Optionee to be based more than fifty miles from the principal office at in
which Optionee is based immediately prior to the Change in Control, except for reasonably required travel on the Company’s business. 
 1.7 Purchase of Shares. Shares may be purchased or acquired pursuant to the Option only upon receipt by the Company of notice in writing from the Optionee of the Optionee’s intention to exercise, specifying the
number of shares as to which the Optionee desires to exercise the Option and the date on which the Optionee desires to complete the transaction, which shall not be more than 30 days after receipt of the notice, and, unless in the opinion of counsel
for the Company such a representation is not required in order to comply with the Securities Act of 1933, as amended, containing a representation that it is the Optionee’s present intention to acquire the shares for investment and not with a
view to distribution. On or before the date specified for completion of the purchase of shares pursuant to the Option, the Optionee must have paid the Company the full purchase price of such shares in cash (including cash which may at the election
of the Company be the proceeds of a loan from the Company), or in shares of Common Stock of the Company previously acquired and held by the Optionee for at least six months and valued at fair market value as defined in the 2004 Plan, or in any
combination of cash and shares of Common Stock of the Company. No shares 

  

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shall be issued until full payment therefor has been made, and the Optionee shall have none of the rights of a shareholder until a certificate for shares is
issued to the Optionee. The Optionee shall, upon notification of the amount due, if any, and prior to or concurrently with delivery of the certificates representing the shares with respect to which the Option was exercised, pay to the Company
amounts necessary to satisfy any applicable federal, state and local withholding tax requirements. If additional withholding becomes required beyond any amount deposited before delivery of the certificates, the Optionee shall pay such amount to the
Company on demand. 
 1.8 Changes in Capital Structure. In the event that the outstanding shares of Common Stock of the
Company are hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company or another corporation, by reason of any reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination of shares, or dividend payable in shares, appropriate adjustment shall be made by the Board of Directors in the number and kind of shares for purchase pursuant to the Option and the corresponding Option
price. Any such adjustment made by the Board of Directors shall be conclusive. 
 2. The obligations of the Company under this Agreement are
subject to the approval of such state or federal authorities or agencies, if any, as may have jurisdiction in the matter. The Company will use its best efforts to take such steps as may be 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 issuance or sale of any shares purchased upon the exercise of the Option.

 3. Nothing in the 2004 Plan or this Agreement shall confer upon the Optionee any right to be continued in the employment of the Company or
any subsidiary of the Company, or to interfere in any way with the right of the Company or any subsidiary by whom the Optionee is employed to terminate the Optionee’s employment at any time, with or without cause. 
 4. This Agreement shall be binding upon and shall inure to the benefit of any successor or successors of the Company but except as hereinabove provided
the Option herein granted shall not be assigned or otherwise disposed of by the Optionee. 
  

 4Form of Amended and Restated Performance-Based Restricted Stock Unit Agreement

 Exhibit 10.28 
 AMENDED AND RESTATED PERFORMANCE-BASED 
 RESTRICTED STOCK UNIT AWARD AGREEMENT 
 This Amended and Restated Award Agreement (the “Agreement”) is entered into as of
                    , 2007 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”). 
 On July 19, 2006, the Compensation Committee of the
Company’s Board of Directors made a restricted stock units award to Recipient pursuant to the Company’s 2004 Stock Incentive Plan (the “Plan”). The award is intended to qualify as performance-based compensation under
Section 162(m) of the Internal Revenue Code of 1986. 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 under the Plan              restricted stock units,
subject to the restrictions, terms and conditions set forth in this Agreement. 
 (a) Rights under Restricted Stock
Units. A restricted stock unit (a “RSU”) represents the unsecured right to require the Company to deliver to Recipient one share of Common Stock for each RSU. 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. The RSUs issued under this Agreement shall
initially be 100% unvested and subject to forfeiture as set forth below. 
 (i) Except as set forth in Section 1(d), if
Recipient ceases to be employed by the Company for any reason or for no reason prior to the end of the Performance Period (as defined below), the unvested RSUs shall be forfeited to the Company. 
 (ii) To the extent that any of the RSUs first specified above are reduced in accordance with Section 1(b)(iii) upon achievement to
any extent of the Performance Goal (as defined below) and except as provided in Section 1(d), the unvested RSUs shall be forfeited to the Company. The extent to which the Performance Goal is achieved, if at all, shall be determined no later
than the date that the Company’s Form 10-Q for the first quarter of fiscal year 2010 (the “Determination Date”) is filed. Nothing contained in this Agreement shall confer upon Recipient any right to be employed by the Company or to
continue to provide services to the Company or to interfere in any way with the right of the Company to terminate Recipient’s services at any time for any reason, with or without cause. 
  

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 (iii) The “Performance Goal” shall be based on (A) the average
earnings/(loss) per share of the Company for the twelve quarter period comprised of (1) fiscal 2007, (2) the second, third and fourth quarters of fiscal 2008, (3) fiscal 2009 and (4) the first quarter of fiscal 2010 (the
“Performance Period”) as compared to the average earnings/(loss) per share of the Company for the twelve-quarter period comprised of fiscal 2004, 2005 and 2006 relative to (B) the average earnings/(loss) per share for each member of
the peer group companies set forth on Exhibit A for the twelve-quarter period comprised of the three most recent fiscal years for which annual earnings information is available prior to the Determination Date (the “Comparable
Period”) as compared to the average earnings/(loss) per share for such company for the twelve-quarter period comprised of the three fiscal years preceding the Comparable Period. All information with respect to members of the peer group will be
based upon publicly available information. The RSUs shall be increased or reduced as follows: 
  

			
	 Company Percentile Rank vs. Peer Group
	  	Portion of RSUs subject to this Agreement Vesting
	 3 90th
	  	200%
	 75th
	  	150%
	 50th
	  	100%
	 25th
	  	50%
	 < 25th

	  	0%

 RSUs will vest proportionately between 50% and 200% for
Company rankings between the 25th and 90th
percentiles. The Compensation Committee of the Board of Directors may, in its discretion, permit the vesting of any or all of the RSUs subject to this Agreement for a Company ranking below the 25th percentile. Those RSUs determined pursuant to this Section 1(b)(iii) shall vest on the last day of the Performance Period, subject to Section 1(b)(i). 
 (c) Delivery Date. Except as set forth in Section 1(d)(iv), the delivery date for a RSU subject to this Agreement shall be as
soon as practicable after the Determination Date, but in no event later than December 31 of the calendar year in which the Performance Period ends. 
 (d) Proration upon Termination for Certain Reasons Prior to End of Performance Period; Treatment on Change in Control. 
 (i) Proration on Death or Total Disability. If Recipient ceases to be an employee of the Company by reason of Recipient’s
death or physical disability prior to the end of the Performance Period, the RSUs shall not be forfeited under Section (b)(i) and the following shall apply: 
 (1) The number of RSUs Recipient would otherwise be entitled to receive pursuant to Section 1(b)(iii) if Recipient were employed
through the end of the Performance Period (the “Base Payout”) shall be reduced to a number determined by multiplying the Base Payout by a percentage calculated by dividing the number of months elapsed from the beginning of the Performance
Period to the date of termination of employment (rounded down to the whole month) by 24 (the “Pro Rata Percentage”). RSUs that exceed the reduced number shall be forfeited to the Company. 
  

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 (2) The Board of Directors or the Compensation Committee of the Board of Directors, in
its discretion, may increase the number of RSUs the Recipient would otherwise be entitled to receive under this Section 1(d)(i); the Recipient shall have no right to any increase. 
 (3) The amounts of RSUs determined under (1) and (2) shall be delivered as soon as practicable after the Determination Date,
but in no event later than December 31 of the calendar year in which the Performance Period ends. 
 (4) 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 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 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. 
 (ii) Proration on Normal Retirement. If Recipient terminates his employment with the Company following normal retirement under the
Company’s retirement policy in place at such time but prior to the end of the Performance Period, the RSUs shall not be forfeited under Section (b)(i) and the following shall apply: 
 (1) The Base Payout shall be reduced to a number determined by multiplying the Base Payout by the Pro Rata Percentage. RSUs that exceed
the reduced number shall be forfeited to the Company. 
 (2) The Board of Directors or the Compensation Committee of the
Board of Directors, in its discretion, may increase the number of RSUs the Recipient would otherwise be entitled to receive under this Section 1(d)(ii); the Recipient shall have no right to any increase. 
 (3) The amounts of RSUs determined under (1) and (2) shall be delivered as soon as practicable after the Determination Date,
but in no event later than December 31 of the calendar year in which the Performance Period ends. 
 (iii) Proration
on Termination Other Than for Cause. If the Company terminates Recipient’s employment with the Company other than for cause prior to the end of the Performance Period, the RSUs shall not be forfeited under Section (b)(i) and the following
shall apply: 
 (1) The Base Payment shall be reduced to a number determined by multiplying the Base Payment by the Pro Rata
Percentage. RSUs that exceed reduced number shall be forfeited to the Company. 
  

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 (2) The Board of Directors or the Compensation Committee of the Board of Directors, in
its discretion, may increase the number of RSUs the Recipient would otherwise be entitled to receive under this Section 1(d)(iii); the Recipient shall have no right to any increase. 
 (3) The amounts of RSUs determined under (1) and (2) shall be delivered as soon as practicable after the Determination Date,
but in no event later than December 31 of the calendar year in which the Performance Period ends. 
 (4) The term
“cause” shall mean (i) the willful and continued failure by Recipient to perform substantially Recipient’s reasonably assigned duties with the Company, other than a failure resulting from Recipient’s incapacity due to
physical or mental illness, after a written demand for performance has been delivered to Recipient by the Company which specifically identifies the manner in which the Company believes that Recipient has not substantially performed Recipient’s
duties, (ii) the conviction of guilty or entering of a nolo contendere plea to a felony which is materially and demonstrably injurious to the Company, or (iii) the commission of an act by Recipient, or the failure of Recipient to act,
which constitutes gross negligence or gross misconduct. For purposes of this Section 1(d)(iii), no act, or failure to act, on Recipient’s part shall be considered “willful” unless done, or omitted to be done, by Recipient in
knowing bad faith. Any act, or failure to act based upon authority given pursuant to a resolution duly adopted by the Board of Directors or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be
done, by Recipient in good faith. 
 (iv) Treatment following Change in Control. 
 (1) If as a result of a Change in Control, the Company’s Common Stock ceases to be listed for trading on a national securities
exchange (an “Exchange”), any RSUs subject to this award that are unvested on the date of the Change in Control shall continue to vest according to the terms and conditions of this award; provided that such award is replaced with an award
for voting securities of the resulting corporation or the acquiring corporation, as the case may be (including without limitation, the voting securities of any corporation which as a result of the Change in Control owns the Company or all or
substantially all of the Company’s assets either directly or through one or more subsidiaries) (the “Surviving Company”) which are traded on an Exchange (a “Replacement Award”), which Replacement Award shall consist of RSUs
with a value (determined using the Surviving Company’s stock price as of the date of the Change in Control) equal to the value of the replaced award of RSUs (determined using the Company’s stock price and assuming attainment of target
performance or actual performance achieved, if greater, as of the date of the Change in Control); provided, however, that in the event of a termination by the Company without Cause or by Recipient for Good Reason during the Performance Period, the
Replacement Award shall immediately vest and the shares shall be delivered as soon as practicable after the Determination Date, but in no event later than December 31 of the calendar year in which the Performance Period ends; and provided
further that Recipient shall be entitled to receive a lump sum cash payment, paid as soon as practicable after the 

  

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Determination Date, but in no event later than December 31 of the calendar year in which the Performance Period ends, equal to the decrease, if any, in
the value of a share of the Surviving Company’s stock from the date of the Change in Control (as increased on a calendar quarterly basis using an annual interest rate, as of the last business day of the calendar quarter, for zero-coupon U.S.
government securities with a constant maturity closest in length to the time period between the date of the Change in Control and the date of vesting of the Replacement Award) to the time of vesting multiplied by the total number of RSUs vesting on
such date. If any RSUs that are unvested at the time of the Change in Control are not replaced with Replacement Awards, the number of such RSUs shall immediately be adjusted based upon deemed attainment of target performance or actual performance
achieved, if greater, shall immediately become vested and be delivered as soon as practicable. 
 (2) If as a result of a
Change in Control, the Company’s Common Stock continues to be listed for trading on an Exchange, any RSUs that are unvested on the date of the Change of Control shall continue to vest in accordance with the terms and conditions of this award;
provided however, that, in the event of a termination by the Company without Cause or by Recipient for Good Reason during the vesting period of this award such award shall immediately vest and the shares shall be delivered as soon as practicable
after the Determination Date, but in no event later than December 31 of the calendar year in which the Performance Period ends; and provided further that Recipient shall be entitled to receive a lump sum cash payment, paid as soon as
practicable after the Determination Date, but in no event later than December 31 of the calendar year in which the Performance Period ends, equal to the decrease, if any, in the value of a share of the Company’s stock from the date of the
Change in Control (as increased on a calendar quarterly basis using an annual interest rate, as of the last business day of the calendar quarter, for zero-coupon U.S. government securities with a constant maturity closest in length to the time
period between the date of the Change in Control and the date of the vesting) to the time of vesting, multiplied by the total number of RSUs vesting on such date. 
 (3) For purposes of this Agreement, a “Change in Control” of the Company shall mean the occurrence of any of the following
events: 
 (A) Any consolidation, merger or plan of share exchange involving the Company (a “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 or continuing corporation immediately after the Merger, disregarding any Voting Securities issued or retained by such holders in respect of securities of any other party to the
Merger; 
 (B) Any 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; 
  

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 (C) The adoption of any plan or proposal for the liquidation or dissolution of the
Company; 
 (D) At any time during a period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors (“Incumbent Directors”) shall cease for any reason to constitute at least a majority thereof, unless each new director elected during such two-year period was nominated or elected by two-thirds of the
Incumbent Directors then in office and voting (with new directors nominated or elected by two-thirds of the Incumbent Directors also being deemed to be Incumbent Directors); or 
 (E) Any Person (as hereinafter defined) 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 Securities Exchange Act of 1934), directly or indirectly, of Voting Securities representing fifty percent (50%) or more
of the combined voting power of the then outstanding Voting Securities. 
 Notwithstanding anything in the foregoing to the contrary, unless otherwise
determined by the Board of Directors, no Change in Control shall be deemed to have occurred for purposes of this Agreement if (1) Recipient acquires (other than on the same basis as all other holders of the Company Common Stock) an equity
interest in an entity that acquires the Company in a Change in Control otherwise described under subparagraph (A) or (B) above, or (2) Recipient is part of group that constitutes a Person which becomes a beneficial owner of Voting
Securities in a transaction that otherwise would have resulted in a Change in Control under subparagraph (E) above. 
 (4) For purposes of this Agreement, the term “Person” shall mean and include any individual, corporation, partnership, group, association or other “person”, as such term is used in Section 14 (d) of the
Securities Exchange Act of 1934 (the “Exchange Act”), other than the Company, a wholly owned subsidiary of the Company or any employee benefit plan(s) sponsored by the Company. 
 (5) For purposes of this Agreement, termination by Recipient of his or her employment for “Good Reason” shall mean termination
based on the following, after notice to the Company or the Surviving Company by the Recipient of the condition within one year of the occurrence of the condition and failure of the Company or the Surviving Company to remedy the condition within 30
days after notice: 
 (A) a material diminution of Recipient’s status, title, position(s) or responsibilities from
Recipient’s status, title, position(s) and responsibilities as in effect immediately prior to the Change in Control or the assignment to Recipient of any duties or responsibilities which are inconsistent with such status, title, position(s) or
responsibilities (in either case other than is isolated, insubstantial or inadvertent actions which are remedied after notice), or any removal of Recipient from such position(s), except in connection with the termination of Recipient’s
employment for Cause, total disability (as defined in Section 1(d)(i)) or as a result of Recipient’s death or voluntarily by Recipient other than for Good Reason; 
  

 6 

 (B) a material reduction by the Company or Surviving Company in Recipient’s rate of
base salary, bonus or incentive opportunity or a material reduction in benefits (other than reductions that do not impact Recipient’s compensation opportunity, taken as a whole, or a reduction in benefits applicable to substantially all
employees); or 
 (C) the Company’s or Surviving Company’s requiring Recipient to be based more than fifty 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. 
 (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 stock if Recipient dies before the delivery date by so indicating on Exhibit B, which is incorporated into and made a part of this agreement. If Recipient fails to
designate beneficiaries on Exhibit B, 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 shares of Common Stock underlying a RSU, Recipient shall receive additional whole or fractional RSUs in an amount 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. 
 (g) Delivery on Delivery Date. As soon as practicable following the delivery date for a RSU, the Company shall deliver a certificate for the number of shares represented by all vested 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. 
 (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, at the delivery date, the value of such vested RSUs 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. Promptly following the delivery date, 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 the Recipient (which election must be made on or before the Determination Date), by surrendering to the Company for
cancellation shares of the Company’s Common Stock to be issued 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 Determination Date. If the
Recipient pays the withholding amount in shares of Common Stock, the Company shall pay to the Recipient in cash the amount of any resulting over payment. 
  

 7 

 (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. 
 (i) 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. 
 (ii) 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 or total disability 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. 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 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 the 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 the 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. 
 (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 the
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. 
  

 8 

 (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. 
 (f) Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original. 
 (g) Amendment and Restatement of Prior Agreement. This Agreement amends and restates in
its entirety the Performance-Based Restricted Stock Unit Award Agreement, dated                     , 2006, between the Company and
Recipient. 
  

					
	ELECTRO SCIENTIFIC INDUSTRIES, INC.
		
	By:	 	 
		 	Authorized Officer
		
	 	 	 
	
	                                       
                                      , 
Recipient    

  

 9 

 EXHIBIT A 
 PEER GROUP COMPANIES 
 Applied Materials 
 Asyst Technologies 
 Axcelis Technologies 
 Brooks Automation 
 Coherent 
 Cohu 
 Credence Systems 
 Cymer 
 FEI 
 FSI International 
 GSI Lumonics 
 KLA-Tencor 
 Kulicke & Soffa Industries 
 Lam Research 
 LTX 
 Mattson Technology 
 Newport 
 Novellus Systems 
 Photronics 
 Teradyne 
 Ultratech 
 Varian Semiconductor 
 Veeco Instruments 
 Zygo 
  

 A - 1 

 EXHIBIT B 
 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 Performance-Based 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 Performance-Based
Restricted Stock Units Award Agreement. 
 __________________________________
                                Date signed: _______________________, 20___ 

Signature 
  

 B - 1

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