ELECTRO SCIENTIFIC INDUSTRIES INC
EXHIBIT 10.9
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<TYPE>EX-10
<SEQUENCE>11
<FILENAME>a4451391_ex10-9.htm
<DESCRIPTION>EXHIBIT 10.9
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     <!-- Control Number: 03-56507                                                         -->
     <!-- Rev Number:     1.0                                                              -->
     <!-- Client Name:    Electro Scientific Industries, Inc.                              -->
     <!-- Project Name:   Form Type: Exhibits                                              -->
     <!-- Firm Name:      Business Wire                                                    -->
     <TITLE>EX-10.8</TITLE>
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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mr. Gary Kapral<BR>June 11,
2003<BR>Page &#150; 52 </FONT></P>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT 10.9 </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CHANGE IN CONTROL
AGREEMENT </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Electro Scientific Industries, Inc.,
an Oregon corporation (the &#147;Company&#148;), considers the establishment and
maintenance of a sound and vital management to be essential to protecting and enhancing
the best interest of the Company and its shareholders. In this connection, the Company
recognizes that, as is the case with many publicly held corporations, the possibility of a
change in control may exist and that such possibility, and the uncertainty and questions
which it may raise among management, may result in the departure or distraction of
management personnel to the detriment of the Company and its shareholders. Accordingly,
the Board of Directors of the Company (the &#147;Board&#148;) has determined that
appropriate steps should be taken to reinforce and encourage the continued attention and
dedication of members of the Company&#146;s management to their assigned duties without
distraction in circumstances arising from the possibility of a change in control of the
Company. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In order to induce you to remain in
the employ of the Company, this agreement, the form of which has been approved by the
Board, sets forth the severance benefits which the Company agrees will be provided to you
in the event your employment with the Company is terminated subsequent to a &#147;change
in control&#148; of the Company under the circumstances described below. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Agreement to Provide Services;
Right to Terminate</B>.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Except as otherwise provided in
paragraph (ii) below, the Company or you may terminate your employment at any time,
subject to the provisions of any employment agreement between you and the Company&#146;s
providing the benefits hereinafter specified in accordance with the terms hereof.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In the event of a potential change
in control of the Company as defined in Section 4 hereof, you agree that you will not
leave the employ of the Company (other than as a result of Disability or upon Retirement,
as such terms are hereinafter defined) and will render the services contemplated in the
recitals to this Agreement until the earliest of (a) a date which is 270&nbsp;days from
the occurrence of such potential change in control of the Company, or (b), a termination
of your employment pursuant to which you become entitled under this Agreement to receive
the benefits provided in Section 6(iii) below.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Effective Date. </B> The Effective Date
of this agreement is January 16, 2003. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Term of Agreement</B>. This
Agreement shall commence on the Effective Date and shall continue in effect until
December 31, 2003; provided, however, that commencing on the first day of the new year
following the Effective Date and each January&nbsp;1 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless at least 90&nbsp;days
prior to such January&nbsp;1 date, the Company or you shall have given notice that this
Agreement shall not be extended (provided that no such notice may be given by the Company
during the pendency of a potential change in control); and provided, further, that this
Agreement shall continue in effect for a period of twenty-four (24) months beyond the
term provided herein if a change in control of the Company, as defined in Section 4
hereof, shall have occurred during such term. Notwithstanding anything in this Section 3
to the contrary, this Agreement shall terminate if you or the Company terminate your
employment prior to a change in control of the Company as defined in Section 4 hereof. In
addition, the Company may terminate this Agreement during your employment if, prior to a
change in control of the Company as defined in Section 4 hereof, you cease to hold your
current position with the Company, except by reason of a promotion.  </FONT></P>


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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">52 </FONT> </P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mr. Gary Kapral<BR>June 11,
2003<BR>Page &#150; 53 </FONT></P>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Change in Control; Potential
Change in Control; Person</B>.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For purposes of this Agreement, a
&#147;change in control&#148; of the Company shall mean the occurrence of any of the
following events:  </FONT></P>

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<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(III)&nbsp;&nbsp;&nbsp;&nbsp;          The
approval by the shareholders of the Company of:  </FONT>
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<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;          any
consolidation, merger or plan of share exchange involving the Company (a           &#147;Merger&#148;)
in which the Company is not the continuing or surviving           corporation or pursuant
to which shares of Common Stock of the Company           (&#147;Company Shares&#148;)
would be converted into cash, securities or other           property, other than a Merger
involving Company Shares in which the holders of           Company Shares immediately
prior to the Merger have the same proportionate           ownership of common stock of
the surviving corporation immediately after the           Merger;  </FONT>
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<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;          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;
          or  </FONT>
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<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;          the
adoption of any plan or proposal for the liquidation or dissolution of the
          Company;  </FONT>
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<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(JJJ)&nbsp;&nbsp;&nbsp;&nbsp;          At
any time during a period of two consecutive years, individuals who at the
          beginning of such period constituted the Board (&#147;Incumbent Directors&#148;)
          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  </FONT>
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<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(KKK)&nbsp;&nbsp;&nbsp;&nbsp;          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 securities of the Company ordinarily having the right to vote for the
          election of directors (&#147;Voting Securities&#148;) representing twenty
          percent (20%) or more of the combined voting power of the then outstanding
          Voting Securities.  </FONT>
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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mr. Gary Kapral<BR>June 11,
2003<BR>Page &#150; 54 </FONT></P>





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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Notwithstanding anything in the
foregoing to the contrary, unless otherwise determined by the board, no change in control
shall be deemed to have occurred for purposes of this Agreement if (1) you acquire (other
than on the same basis as all other holders of the Company Shares) an equity interest in
an entity that acquires the Company in a change in control otherwise described under
subparagraph (A) above, or (2) you are 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 (C) above. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For purposes of this Agreement, a
&#147;potential change in control&#148; of the Company shall be deemed to have occurred
if:  </FONT></P>


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<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(LLL)&nbsp;&nbsp;&nbsp;&nbsp;          the
Company enters into an agreement, the approval of which by the shareholders
          would result in the occurrence of a change in control of the Company;  </FONT>
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<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(MMM)&nbsp;&nbsp;&nbsp;&nbsp;          any
Person (including the Company) publicly announces an intention to take or to
          consider taking actions which if consummated would constitute a change in
          control of the Company; or  </FONT>
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<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(NNN&nbsp;&nbsp;&nbsp;&nbsp;          the
Board adopts a resolution to the effect that, for purposes of this           Agreement, a
potential change in control of the Company has occurred.  </FONT>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For purposes of this Agreement, the
term &#147;Person&#148; shall mean and include any individual, corporation, partnership,
group, association or other &#147;person&#148;, as such term is used in Section 14 (d) of
the Securities Exchange Act of 1934 (the &#147;Exchange Act&#148;), other than the
Company or any employee benefit plan(s) sponsored by the Company.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Termination Following Change in
Control</B>. If any of the events described in Section 4 hereof constituting a change in
control of the Company shall have occurred, you shall be entitled to the benefits
provided in Section 6(iii) hereof upon the termination of your employment within
twenty-four (24) months after such event, unless such termination is (a) because of your
death or Retirement, (b) by the Company for Cause or Disability or (c) by you other than
for Good Reason based on an event occurring concurrent with or subsequent to a change in
control (as all such capitalized terms are hereinafter defined).  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Disability.          Termination
by the Company of your employment based on &#147;Disability&#148;          shall mean
termination because of your absence from you duties with the Company           on a
full-time basis for one hundred eighty (180) consecutive days as a result           of
your incapacity due to physical or mental illness, unless within thirty (30)
          days after Notice of Termination (as hereinafter defined) is given to you
          following such absence you shall have returned to the full-time performance of
          your duties.  </FONT></P>



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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mr. Gary Kapral<BR>June 11,
2003<BR>Page &#150; 55 </FONT></P>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Retirement.          Termination
by you or by the Company of your employment based on           &#147;Retirement&#148; shall
mean termination on or after your 65th birthday.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cause.          Termination
by the Company of your employment for &#147;Cause&#148; shall mean           termination
upon (a) the willful and continued failure by you to perform           substantially your
reasonably assigned duties with the Company consistent with           those duties
assigned to you prior to the change in control (other than any such           failure
resulting from your incapacity due to physical or mental illness) after           a
demand for substantial performance is delivered to you by the Chairman of the
          Board or President of the Company which specifically identifies the manner in
          which such executive believes that you have not substantially performed your
          duties, or (b) the willful engaging by you in illegal conduct which is
          materially and demonstrably injurious to the Company. For purposes of this
          paragraph (iii), no act, or failure to act, on your part shall be considered
          &#147;willful&#148; unless done, or omitted to be done, by you in knowing bad
          faith and without reasonable belief that your action or omission was in, or not
          opposed to, the best interests of the Company. Any act, or failure to act,
based           upon authority given pursuant to a resolution duly adopted by the Board
or based           upon the advise of counsel for the Company shall be conclusively
presumed to be           done, or omitted to be done, by you in good faith and in the
best interests of           the corporation. Notwithstanding the foregoing, you shall not
be deemed to have           been terminated for Cause unless and until there shall have
been delivered to           you a copy of a resolution duly adopted by the affirmative
vote of not less than           three-quarters of the entire membership of the Board at a
meeting of the Board           called and held for the purpose (after reasonable notice
to you and an           opportunity for you, together with your counsel, to be heard
before the Board),           finding that in the good faith opinion of the Board you were
guilty of the           conduct set forth above in (a) or (b) of this paragraph (iii) and
specifying the           particulars thereof in detail.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Good Reason.  Termination by you of
your employment for "Good Reason" shall mean termination based on: </FONT></P>

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<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(OOO)&nbsp;&nbsp;&nbsp;&nbsp;          a
change in your status, title, position(s) or responsibilities as an officer of
          the Company which, in your reasonable judgment, does not represent a promotion
          from your status, title, position(s) and responsibilities as in effect
          immediately prior to the change in control, or the assignment to you of any
          duties or responsibilities which, in your reasonable judgment, are inconsistent
          with such status, title or position(s), or any removal of you from or any
          failure to reappoint or reelect you to such position(s), except in connection
          with the termination of your employment for Cause, Disability or Retirement or
          as a result of your death or by you other than for Good Reason;  </FONT>
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<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(PPP)&nbsp;&nbsp;&nbsp;&nbsp;          a
reduction by the Company in your base salary as in effect immediately prior to
          the change in control;  </FONT>
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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mr. Gary Kapral<BR>June 11,
2003<BR>Page &#150; 56 </FONT></P>

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<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(QQQ)&nbsp;&nbsp;&nbsp;&nbsp;          the
failure by the Company to continue in effect any Plan (as hereinafter           defined)
in which you are participating at the time of the change in control of           the
Company (or Plans providing you with at least substantially similar           benefits)
other than as a result of the normal expiration of any such Plan in           accordance
with its terms as in effect at the time of the change in control, or           the taking
of any action, or the failure to act, by the Company which would           adversely
affect your continued participation in any of such Plans on at least           as
favorable a basis to you as in the case on the date of the change in control           or
which would materially reduce your benefits in the future under any of such
          Plans or deprive you of any material benefit enjoyed by you at the time of the
          change in control;  </FONT>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(RRR)&nbsp;&nbsp;&nbsp;&nbsp;          the
failure by the Company to provide and credit you with the number of paid
          vacation days to which you are then entitled in accordance with the
          Company&#146;s normal vacation policy as in effect immediately prior to the
          change in control;  </FONT>
</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(SSS)&nbsp;&nbsp;&nbsp;&nbsp;          the
Company&#146;s requiring you to be based anywhere other than where your           office
is located immediately prior to the change in control except for required
          travel on the Company&#146;s business to an extent substantially consistent
with           the business travel obligations which you undertook on behalf of the
Company           prior to the change in control;  </FONT>
</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(TTT)&nbsp;&nbsp;&nbsp;&nbsp;          the
failure by the Company to obtain from any Successor (as hereinafter defined)
          the assent to this Agreement contemplated by Section 7 hereof; or  </FONT>
</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(UUU)&nbsp;&nbsp;&nbsp;&nbsp;          any
purported termination by the Company of your employment which is not           effected
pursuant to a Notice of Termination satisfying the requirements of           paragraph
(v) below (and, if applicable, paragraph (iii) above); and for           purposes of this
Agreement, no such purported termination shall be effective.  </FONT>
</TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For purpose of this Agreement,
&#147;Plan&#148; shall mean any compensation plan such as an incentive, stock option or
restricted stock plan or any employee benefit plan such as a thrift, pension, profit
sharing, medical, disability, accident, life insurance, or relocation plan or policy or
any other plan, program or policy of the Company intended to benefit employees. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Notice of Termination. Any purported
termination by the Company or by you following a change in control shall be communicated
by written Notice of Termination to the other party hereto. For purposes of this
Agreement, a &#147;Notice of Termination&#148; shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for termination
of your employment under the provision so indicated.  </FONT></P>


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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">56 </FONT> </P>

<HR SIZE=5 COLOR=GRAY NOSHADE>

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</TD>
</TR>
</TABLE>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>
<BR>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mr. Gary Kapral<BR>June 11,
2003<BR>Page &#150; 57 </FONT></P>




<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date of Termination. &#147;Date of
Termination&#148; following a change in control shall mean (a) if your employment is to
be terminated for Disability, thirty (30) days after Notice of Termination is given
(provided that you shall not have returned to the performance of your duties on a
full-time basis during such thirty (30) day period), (b) if your employment is to be
terminated by the Company for Cause, the date on which a Notice of Termination is given,
and (c) if your employment is to be terminated by you or by the Company for any other
reason, the date specified in the Notice of Termination, which shall be a date no earlier
than ninety (90) days after the date on which a Notice of Termination is given (provided
that if the termination is by you for Good Reason the circumstances giving rise to the
Good Reason have not been fully corrected by the specified date), unless an earlier date
has been agreed to by the party receiving the Notice of Termination either in advance of,
or after, receiving such Notice of Termination. Notwithstanding anything in the foregoing
to the contrary, if the party receiving the Notice of Termination has not previously
agreed to the termination, then within thirty (30) days after any Notice of Termination
is given, the party receiving such Notice of Termination may notify the other party that
a dispute exists concerning the termination, in which event the Date of Termination shall
be the date set either by mutual written agreement of the parties or by the arbitrators
in a proceeding as provided in Section 13 hereof.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Compensation Upon Termination or
During Disability.</b> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During any period following a change
in control that you fail to perform your duties as a result of incapacity due to physical
or mental illness, you shall continue to receive your full base salary at the rate then
in effect and any benefits or awards under any Plans shall continue to accrue during such
period, to the extent not inconsistent with such Plans, until your employment is
terminated pursuant to and in accordance with paragraphs 5(i) and 5(vi) hereof.
Thereafter, your benefits shall be determined in accordance with the Plans then in
effect.  </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If your employment shall be
terminated for Cause or as a result of Retirement or Death following a change in control
of the Company, the Company shall pay you your full base salary through the Date of
Termination at the rate in effect just prior to the time a Notice of Termination is given
plus any benefits or awards (including both the cash and stock components) which pursuant
to the terms of any Plans have been earned or become payable, but which have not yet been
paid to you. Thereupon the Company shall have no further obligations to you under this
Agreement.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If, within twenty-four (24) months
after a change in control of the Company shall have occurred, as defined in Section 4
above, your employment by the Company shall be terminated (a) by the Company other than
for Cause, Disability or Retirement or (b) by you for Good Reason based on an event
occurring concurrent with or subsequent to a change in control, then, by no later than
the fifth day following the Date of Termination (except as otherwise provided), you shall
be entitled, without regard to any contrary provisions of any Plan, to a severance
benefit (the &#147;Severance Benefit&#148;) equal to the lesser of (x) the Specified
Benefits (as defined in subsection (A) below), or (y) the Capped Benefit (as defined in
subsection (B) below).  </FONT></P>


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</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(VVV)&nbsp;&nbsp;&nbsp;&nbsp;
         The &#147;Specified Benefits&#148; are as follows:  </FONT>
</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">57 </FONT> </P>

<HR SIZE=5 COLOR=GRAY NOSHADE>

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</TD>
</TR>
</TABLE>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>
<BR>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mr. Gary Kapral<BR>June 11,
2003<BR>Page &#150; 58 </FONT></P>

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</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          the
company shall pay your full base salary through the Date of Termination at           the
rate in effect just prior to the time a Notice of Termination is given plus           any
benefits or awards (including both cash and stock components) which pursuant           to
the terms of any Plans have been earned or become payable, but which have not
          yet been paid to you (including amounts which previously had been deferred at
          your request);  </FONT>
</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          as
severance pay and in lieu of any further salary for periods subsequent to the
          Date of Termination, the Company shall pay to you in a single payment an amount
          in cash equal to two times the higher of (a) your annual base salary at the
rate           in effect just prior to the time a Notice of Termination is given or (b)
your           annual base salary in effect immediately prior to the change in control of
the           Company;  </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 3-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          for
a twenty-four (24) month period after the Date of Termination, the Company
          shall arrange to provide you and your dependents with life, accident, medical
          and dental insurance benefits substantially similar to those which you were
          receiving immediately prior to the change in control of the Company.
          Notwithstanding the foregoing, the Company shall not provide any benefit
          otherwise receivable by you pursuant to this paragraph (3) to the extent that a
          similar benefit is actually received by you from a subsequent employer during
          such twenty-four (24) month period, and any such benefit actually received by
          you shall be reported to the Company; and  </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 3-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          the
Company shall pay you for any vacation time earned but not taken at the Date           of
Termination, at an hourly rate equal to your annual base salary as in effect
          immediately prior to the time a Notice of Termination is given divided by 2080.  </FONT>
</TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 2-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(WWW)&nbsp;&nbsp;&nbsp;&nbsp;
         The &#147;Capped Benefit&#148; equals the Specified Benefits, reduced by the
          minimum amount necessary to prevent any portion of the Specified Benefits from
          being a &#147;parachute payment&#148; as defined in Section 280G (b)(2) of the
          Internal Revenue Code of 1986, as amended (&#147;IRC&#148;), or any successor
          provision. The amount of the Capped Benefit shall therefore equal (1) three
          times the &#147;base amount&#148; as defined in IRC, &sect;&nbsp;280G (b)(3)(A)
          reduced by $1 (One Dollar), and further reduced by (2) the present value of all
          other payments and benefits you are entitled to receive from the Company that
          are contingent upon a change in control of the Company within the meaning of
IRC           &sect;&nbsp;280G (b)(2)(A)(i), including accelerated vesting of options and
          other awards under the Company&#146;s stock option plans, and increased by (3)
          all Specified Benefits that are not contingent upon a change in control within
          the meaning of IRC &sect;&nbsp;280G (b)(2)(A)(i). If you receive the Capped
          Benefit, you may determine the extent to which each of the Specified Benefits
          shall be reduced. The parties recognize that there is some uncertainty
regarding           the computations under IRC &sect;&nbsp;280G which must be applied to
determine           the Capped Benefit. Accordingly, the parties agree that, after the
Severance           Benefit is paid, the amount of the Capped Benefit may be
retroactively adjusted           to the extent any subsequent Internal Revenue Service
regulations, rulings,           audits or other pronouncements establish that the
original calculation of the           Capped Benefit was incorrect. In that case, amounts
shall be paid or reimbursed           between the parties so that you will have received
the Severance Benefit you           would have received if the Capped Benefit had
originally been calculated           correctly.  </FONT>
</TD>
</TR>
</TABLE>
<BR>



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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<!-- MARKER FORMAT-SHEET="Para Center 10" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">58 </FONT> </P>

<HR SIZE=5 COLOR=GRAY NOSHADE>

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</TD>
</TR>
</TABLE>

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<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Workstation" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>
<BR>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mr. Gary Kapral<BR>June 11,
2003<BR>Page &#150; 59 </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Except as specifically provided
above, the amount of any payment provided for in this Section 6 shall not be reduced,
offset or subject to recovery by the Company by reason of any compensation earned by you
as the result of employment by another employer after the Date of Termination, or
otherwise. Your entitlements under Section (6)(iii) are in addition to, and not in lieu
of, any rights, benefits or entitlements you may have under the terms or provisions of
any Plan.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Successors; Binding Agreement.</b> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Upon your written request, the
Company will seek to have any Successor (as hereinafter defined), by agreement in form
and substance satisfactory to you, assent to the fulfillment by the Company of its
obligations under this Agreement. Failure of the Company to obtain such assent prior to
or at the time a Person becomes a Successor shall constitute Good Reason for termination
by you of your employment and, if a change in control of the Company has occurred, shall
entitle you immediately to the benefits provided in Section 6(iii) hereof upon delivery
by you of a Notice of Termination which the Company, by executing this Agreement, hereby
assents to. For purposes of this Agreement, &#147;Successor&#148; shall mean any Person
that succeeds to, or has the practical ability to control (either immediately or with the
passage of time), the Company&#146;s business directly, by merger, consolidation or
purchase of assets, or indirectly, by purchase of the Company&#146;s Voting Securities or
otherwise.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This Agreement shall inure to the
benefit of and be enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If you should die
while any amount would still be payable to you hereunder if you had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to your devisee, legatee or other designee or, if there be no
such designee, to your estate.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Fees and Expenses</B>. The
Company shall pay all legal fees and related expenses incurred by you as a result of (i)
your termination following a change in control of the Company (including all such fees
and expenses, if any, incurred in contesting or disputing any such termination) or (ii)
your seeking to obtain or enforce any right or benefit provided by this Agreement.  </FONT></P>




<!-- MARKER FORMAT-SHEET="Para Center 10" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">59 </FONT> </P>

<HR SIZE=5 COLOR=GRAY NOSHADE>

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</TD>
</TR>
</TABLE>

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<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Workstation" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>
<BR>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mr. Gary Kapral<BR>June 11,
2003<BR>Page &#150; 60 </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Survival</B>.          The
respective obligations of, and benefits afforded to, the Company and you as
          provided in Section 6, 7(ii), 8 and 13 of this Agreement shall survive
          termination of this Agreement.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Notice</B>.          For
the purposes of this Agreement, notices and all other communications           provided
for in this Agreement shall be in writing and shall be deemed to have           been duly
given when delivered or mailed by United States registered mail,           return receipt
requested, postage prepaid and addressed to the address of the           respective party
set forth on the first page of this Agreement, provided that           all notices to the
Company shall be directed to the attention of the Chairman of           the Board or
President of the Company, with a copy to the Secretary of the           Company, or to
such other address as either party may have furnished to the           other in writing
in accordance herewith, except that notice of change of address           shall be
effective only upon receipt.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Miscellaneous</B>.          No
provision of this Agreement may be modified, waived or discharged unless such
          modification, waiver or discharge is agreed to in a writing signed by you and
          the Chairman of the Board or President of the Company. No waiver by either
party           hereto at any time of any breach by the other party hereto of, or of
compliance           with, any condition or provision of this Agreement to be performed
by such other           party shall be deemed a waiver of similar or dissimilar
provisions or conditions           at the same or at any prior or subsequent time. No
agreements or           representations, oral or otherwise, express or implied, with
respect to the           subject matter hereof have been made by either party which are
not expressly set           forth in this Agreement. The validity, interpretation,
construction and           performance of this Agreement shall be governed by the laws of
the State of           Oregon.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Validity</B>.          The
invalidity or unenforceability of any provision of this Agreement shall not
          affect the validity or enforceability of any other provision of this Agreement,
          which shall remain in full force and effect.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Arbitration</B>.          Any
dispute or controversy arising under or in connection with this Agreement           shall
be settled exclusively by arbitration in Portland, Oregon by three           arbitrators
in accordance with the rules of the American Arbitration Association           then in
effect. Judgment may be entered on the arbitrators&#146; award in any           court
having jurisdiction; provided, however, that you shall be entitled to seek
          specific performance of your right to be paid until the Date of Termination
          during the pendency of any dispute or controversy arising under or in
connection           with this Agreement. The Company shall bear all costs and expenses
arising in           connection with any arbitration proceeding pursuant to this Section
13.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Related Agreements</B>. To the
extent that any provision of any other agreement between the Company or any of its
subsidiaries and you shall limit, qualify or be inconsistent with any provision of this
Agreement, then for purposes of this Agreement, while the same shall remain in force, the
provision of this Agreement shall control and such provision of such other agreement
shall be deemed to have been superseded, and to be of no force or effect, as if such
other agreement had been formally amended to the extent necessary to accomplish such
purpose.  </FONT></P>




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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">60 </FONT> </P>

<HR SIZE=5 COLOR=GRAY NOSHADE>

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</TD>
</TR>
</TABLE>

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<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>
<BR>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mr. Gary Kapral<BR>June 11,
2003<BR>Page &#150; 61 </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Counterparts</B>.          This
Agreement may be executed in several counterparts, each of which shall be
          deemed to be an original, but all of which together will constitute one and the
          same instrument.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If this correctly sets forth our
agreement on the subject matter hereof, kindly sign and return to the Company the
enclosed copy of this letter which will then constitute our agreement on this subject.  </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[Signature page
follows.] </FONT></P>




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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">61 </FONT> </P>

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<BR>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mr. Gary Kapral<BR>June 11,
2003<BR>Page &#150; 62 </FONT></P>


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<BR>

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    <TD WIDTH=40% align="left" valign="middle"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
    <TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><b>Electro
      Scientific Industries, Inc.</b> <BR>
<BR>
By:&nbsp;&nbsp;JAMES T. DOOLEY<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Name: James T. Dooley <BR>
Title: President &amp; CEO </FONT></TD>
</TR>
</TABLE>
<BR>

<table width=600 cellspacing=0 cellpadding=0 border=0>
  <tr valign=TOP>
    <td width=40%>
      <p><font face="Times New Roman, Times, serif" size="2"><br>
        Agreed to this 29th day of  January, 2003<br>
        <br><BR>
        HOWARD K. TAFT, JR. <br>
        &#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;
        <br>
        Howard K. Taft, Jr. </font></p>
    </td>
  </tr>
</table>
<BR>


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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">62 </FONT> </P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mr. Gary Kapral<BR>June 11,
2003<BR>Page &#150; 63 </FONT></P>



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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ADDENDUM A TO CHANGE
IN CONTROL AGREEMENT </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>
</B>Notwithstanding Section 6 hereof, in the event a change of control in the Company
occurs as a result of a transaction with Newport Corporation on or before December 31,
2003, you shall be entitled to receive the benefits described in Section 6 of the Change
In Control Agreement dated August 14, 1991, which Agreement was otherwise terminated on
December 31, 2002 and superceded in all other respects by the attached Agreement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Addendum expires and is of no further force and effect as of January 1, 2004. </FONT></P>


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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
    <TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><b>Electro
      Scientific Industries, Inc. </b><BR>
<BR>
By:&nbsp;&nbsp;JAMES T. DOOLEY<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
Name: James T. Dooley <BR>
Title: President &amp; CEO </FONT></TD>
</TR>
</TABLE>
<BR>

<table width=600 cellspacing=0 cellpadding=0 border=0>
  <tr valign=TOP>
    <td width=40%>
      <p><font face="Times New Roman, Times, serif" size="2"><br>
        <br><BR>
        HOWARD K. TAFT, JR. <br>
        &#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;
        <br>
        Howard K. Taft, Jr.</font></p>
    </td>
  </tr>
</table>
<BR>


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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">63 </FONT> </P>

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