8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 30, 2009

ELECTRO SCIENTIFIC INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

OREGON	0-12853	93-0370304
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

13900 NW Science Park Drive, Portland, Oregon	97229
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (503) 641-4141

No Change

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On September 30, 2009, Electro Scientific Industries, Inc. (“ESI”) entered into Amendment No. 3 to Employment Agreement with Nicholas Konidaris, President and Chief Executive Officer of ESI (the “Amendment”).

The Amendment provides that if Mr. Konidaris is terminated without cause or terminates his employment for good reason and there has not been a change of control of ESI, (i) Mr. Konidaris will be entitled to receive one year’s base salary payable over 12 months, plus the prorata portion of the bonus that would have been earned by him for the year in which termination occurred, and (ii) all of his equity awards will continue to vest for two years following the date of termination and will continue to be exercisable for three years following that date (subject to the original expiration date of the award). This severance payment shall be repaid and the continued vesting and exercisability shall terminate if Mr. Konidaris violates in any material respect the Employee Confidentiality, Non-Competition and Assignment Agreement between him and the Company.

The Amendment also requires all equity awards made to Mr. Konidaris after September 30, 2009 to provide that upon his retirement after age 67, any unvested part of the award will continue to vest and will continue to be exercisable for three years following the date of retirement (subject to the original expiration date of the award). This continued exercisability shall terminate if Mr. Konidaris violates in any material respect the Employee Confidentiality, Non-Competition and Assignment Agreement between him and the Company.

The Amendment is filed as Exhibit 10 hereto.

Item 9.01 Exhibits

(d) Exhibits

Exhibit 10 Amendment No. 3 to Employment Agreement, dated September 30, 2009, between Electro Scientific Industries, Inc. and Nicholas Konidaris.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 2, 2009.

Electro Scientific Industries, Inc.
(Registrant)
By:	/S/    KERRY MUSTOE
Name:	Kerry Mustoe
Title:	Vice President, Corporate Controller and Chief Accounting Officer

EX-10

Exhibit 10

AMENDMENT NO. 3 TO EMPLOYMENT AGREEMENT

This Amendment to Executive Employment Agreement (the “Amendment”) is made as of September 30, 2009 between Electro Scientific Industries, Inc. (“ESI” or the “Company”) and Nicholas Konidaris (“Executive”).

Pursuant to an Employment Agreement dated as of January 7, 2004 (the “Employment Agreement”), as amended, between the Company and Executive, the Company agreed to employ Executive, and Executive agreed to provide his services and expertise, in the position of President and Chief Executive Officer.

WHEREAS, the parties wish to amend the Employment Agreement with respect to the payment to Executive in the event there is a termination of Executive without cause or a termination by Executive for good reason.

NOW, THEREFORE, the parties agree as follows:

1. Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Employment Agreement.

2. Section 9(b)(ii) of the Employment Agreement is amended in its entirety to read as follows:

(ii) if a without Cause termination or termination for Good Reason occurs and there has been no Change of Control, (A) a severance payment (subject to applicable taxes and withholding) in an amount equal to one year of Executive’s Base Salary in effect immediately prior to the time of termination paid in equal installments in accordance with ESI’s normal pay practices over the 12 month period following the date of termination, plus the prorata portion of the bonus that would have been earned by Executive for the year in which the termination occurs (prorated for the number of days in the year prior to the date of the termination) and (B) all equity awards will continue to vest for two years following the date of termination and will continue to be exercisable for three years following the date of termination (subject to the original expiration date of the award); provided, however, that any payments made pursuant to this subsection (ii) shall be repaid by Executive and the continued vesting and exercisability of equity awards provided in this subsection (ii) shall terminate in the event Executive violates in any material respect the Employee Confidentiality, Non Competition and Assignment Agreement provided for in Section 10(a) hereof;

3. All equity awards made to Executive after the date of this Amendment shall provide that upon Executive’s retirement after age 67, any unvested part of the award will continue to vest and will continue to be exercisable for three years following the date of retirement (subject to the original expiration date of the award; provided, however, that exercisability of equity awards provided in this subsection (ii) shall terminate in the event Executive violates in any material respect the Employee Confidentiality, Non Competition and Assignment Agreement provided for in Section 10(a) hereof.

4. Except as modified hereby, the Employment Agreement, as amended, remains in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and year first written above.

ELECTRO SCIENTIFIC INDUSTRIES, INC.
By:	/S/    JON D. TOMPKINS
Name:	Jon D. Tompkins
Title:	Chairman of the Board
	/S/    NICHOLAS KONIDARIS
	Nicholas Konidaris, Executive