ELECTRO SCIENTIFIC INDUSTRIES, INC. DEFERRED COMPENSATION PLAN

Exhibit 10.14

CONFORMED COPY

ELECTRO SCIENTIFIC INDUSTRIES, INC.

DEFERRED COMPENSATION PLAN

2008 Restatement

January 1, 2008

TABLE OF CONTENTS

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INDEX OF TERMS

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ELECTRO SCIENTIFIC INDUSTRIES, INC.

DEFERRED COMPENSATION PLAN

2008 Restatement

January 1, 2008

The Company adopted this Deferred Compensation Plan (the “Plan“) effective May 11, 2001, as a nonqualified plan of deferred compensation for Company Officers. The most recent amendment was signed March 12, 2004. The purpose of the Plan is to provide an additional benefit to Company Officers and other select employees as a means to attract and retain highly effective individuals.

Generally effective January 1, 2005, new section 409A of the Internal Revenue Code (the “Code”) imposed new requirements on nonqualified deferred compensation plans and provided for substantial penalties for noncompliance. Amounts that are deferred under the Plan after December 31, 2004 are subject to section 409A of the Code and the Plan is intended to comply with section 409A. In order to update the Plan to accommodate new developments and to maintain the intended deferral of compensation and related deferral of income taxation, the Company amends and restates the Plan, in its entirety, as follows.

1.1 This Restatement is generally effective January 1, 2008. Cash Deferral Elections for Bonuses otherwise payable in 2008 must be submitted by September 30, 2007.

1.2 The Plan shall apply to the Company and affiliates of the Company for whom an employee performs services. The term “Employer“ refers to the Company or such affiliate for which such services are performed. Except as provided in 9.1 and 9.2, Company functions or responsibilities shall be exercised by the chief executive officer of the Company, who may delegate all or any part of those functions.

1.3 The Plan shall be administered by the Compensation Committee of the Board of Directors of the Company (the “Committee“). The Committee shall interpret the Plan, determine eligibility and the amount of benefits, maintain records, determine interest rates and generally be responsible for seeing that the purposes of the Plan are accomplished. The Committee may delegate all or part of its administrative duties to others.

1.4 The “Plan Year” of the Plan is a calendar year.

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1.5 The Plan is intended to be unfunded for purposes of deferring the time of taxation under the Code and for purposes of constituting an unfunded plan maintained by an employer primarily for the purpose of providing deferred compensation to a select group of management or highly compensated employees under Title I of ERISA.

2.1 Officers and other employees designated by the chief executive officer of the Company (“CEO”), in the CEO’s discretion, shall be eligible to participate in the Plan. The CEO may delegate authority to designate eligible employees. “Officer” means an appointed officer of the Company whose functions are not merely formal. An employee other than an Officer shall not be initially eligible unless the CEO reasonably expects that the employee will have Salary for the year of not less than $125,000, without regard for any salary reduction election.

2.2 “Participant” means an Officer or other eligible employee who has an Account under the Plan or who has elected to defer compensation pursuant to Section 3 for any Plan Year.

2.3 Participation shall continue until the individual has been paid all amounts in accordance with the Plan. An individual who ceases to be an Officer or who the CEO or delegate determines is no longer eligible shall continue to be a Participant, but shall not elect to defer additional amounts. Any election in effect while the individual is eligible shall remain in effect with respect to the entire Plan Year or with respect to a Bonus, as applicable.

3.1 An eligible employee may elect to participate for each Plan Year by completing a form prescribed by the Committee (a “Cash Deferral Election“), signing it and returning it to the Committee. The Cash Deferral Election provides for a deferral of Compensation under 3.2.

3.2 “Compensation“ means the following, without regard for any deferral of compensation under the Plan:

(a) Base salary (“Salary”) earned and payable within the Plan Year (except for usual payroll administrative delay).

(b) Annual performance bonus (“Bonus”) payable within the Plan Year. Bonus is intended to be “performance based compensation” within the meaning of section 409A of the Code and related regulations. Amounts described as “bonus” within the payroll system that are not determined with respect to performance criteria established for the Company’s fiscal year are not Bonus and are not Salary.

3.3 A Cash Deferral Election shall specify the percentage of Salary or Bonus to be deferred, subject to the following restrictions:

(a) A deferral of Salary shall be for a minimum of 10 percent and a maximum of 50 percent, unless the employee defers none of the Salary.

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(b) A deferral of Bonus shall be a minimum of 10 percent and a maximum of 100 percent, unless the employee defers none of the Bonus.

3.4 To be effective for a Plan Year, the Cash Deferral Election must be returned before a date established by the Committee and the following apply:

(a) The date for submitting a Cash Deferral Election for Salary shall be not later than the December 31 before the first day of the Plan Year, except as provided in (c).

(b) The date for submitting a Cash Deferral Election for Bonus shall be not later than the date that is six months before the end of the performance period. The election shall apply to Bonus amounts otherwise payable in the Plan Year. An individual who has not performed services continuously from the date on which the Bonus performance criteria for the performance period are established may not defer Bonus for the Plan Year in which the performance period ends.

(c) An individual under 2.1 who first becomes an employee of an Employer during a Plan Year may elect to participate for the remainder of the Plan Year by completing, signing, and returning to the Committee a Cash Deferral Election within 30 days after becoming an employee. The Cash Deferral Election shall apply to the Participant’s elected percentage of Salary for the Plan Year earned after the end of the pay period in which the Cash Deferral Election is received by the Committee.

(d) An individual who first becomes an employee during a performance period may not elect to participate with respect to Bonus for the performance period.

(e) The Committee may determine that an employee is ineligible to elect a deferral of Bonus if the Committee determines that the timing of the election does not comply with requirements of section 409A of the Code. If the Committee determines that the employee is not eligible, any attempted deferral of Bonus shall be void.

3.5 Subject to stopping elective deferrals for the remainder of a year under 8.2, or in connection with a hardship withdrawal under a 401(k) plan of Employer to the extent of suspension required by the terms of the 401(k) plan, Cash Deferral Elections shall be irrevocable as of the date established by the Committee or otherwise applicable under 3.4 for delivery of the Cash Deferral Election.

3.6 An eligible employee may elect to participate with respect to restricted stock units granted in a Plan Year by completing a form prescribed by the Committee (a “Stock Deferral Election”), signing it and returning it to the Committee. The Stock Deferral Election provides for the deferral of compensation under a restricted stock unit to a time later than the time the restricted stock unit vests or is otherwise payable.

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3.7 A “restricted stock unit” means a restricted stock unit granted under the Company’s 2004 Stock Option Incentive Plan, subject to the following:

(a) A restricted stock unit (“RSU”) is payable in a share of Company common stock (“Stock”), subject to vesting.

(b) A performance based restricted stock unit (“PRSU”) is payable in a number of shares of Stock that is a multiple of the units granted. The multiplier is determined after the end of a performance measurement period applicable to the unit. The multiplier may be less than one and may be zero.

3.8 The Stock Deferral Election shall specify the restricted stock units that are subject to the Stock Deferral Election and the number of shares of Stock represented by the restricted stock units that are subject to the Stock Deferral Election in accordance with procedures adopted by the Committee. Fractional shares shall be disregarded. An election must cover a minimum of 10 percent of the shares represented by the restricted stock units granted to the Participant as of a certain date, without regard for the multiplier applicable to PSRUs.

3.9 To be effective for a Plan Year, the Stock Deferral Election must be returned before a date established by the Committee and the following shall apply:

(a) The Stock Deferral Election shall be irrevocable, and the date for submitting a Stock Deferral Election, shall not be later than the December 31 before the first day of the Plan Year, except as provided in (b).

(b) An individual under 2.1 who first becomes an employee of an Employer during a Plan Year may elect to defer restricted stock units granted in the Plan Year by completing, signing and returning to the Committee a Stock Deferral Election within 30 days after becoming an employee. A Stock Deferral Election may not be returned on or after the date that restricted stock units are granted to the participant in the Plan Year.

3.10 Employer shall reduce the Participant’s Salary and Bonus by the amounts deferred under a Cash Deferral Election and shall credit such amounts to the Participant’s Account under Section 4. Taxes under Chapter 21 of the Code (“FICA taxes”) due on a Participant’s deferred Salary and Bonus shall be withheld from the Participant’s remaining nondeferred compensation. If the Participant has insufficient remaining nondeferred compensation for timely payment of FICA taxes, the Participant shall pay cash to the Employer in an amount sufficient to cover the FICA tax due.

3.11 Employer shall credit the number of shares of Stock specified under the Stock Deferral Election to the Participant’s Account under section 4. Employer shall adjust the number of phantom shares that are subject to a multiplier by application of the multiplier as provided in the related PSRU, except fractional shares remaining after aggregating the adjusted phantom shares shall be disregarded. The Participant shall not receive compensation with

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respect to RSUs or PRSUs covered by Stock Deferral Elections for income tax purposes upon the vesting of an RSU or the determination or application of a multiplier for a PRSU. The value of the shares of Stock reflected as phantom shares shall be treated as wages for purposes of FICA taxes as follows:

(a) Phantom shares shall be treated as wages at the time the shares are no longer subject to a substantial risk of forfeiture. Shares relating to a PRSU are considered to be subject to a substantial risk of forfeiture until the multiplier is determined. If the number of shares is subject to a multiplier, the number of shares treated as wages shall be the product of the number of shares granted times the multiplier.

(b) Related earnings, if any, shall be treated as wages when they are no longer subject to a substantial risk of forfeiture. Earnings credit on amounts that have been treated as wages before the effective date of the earnings credit shall not be treated as wages.

4.1 An Account shall be maintained for each Participant on the books of the Company until full payment has been made to the Participant or Beneficiaries under Sections 5 and 6 and the following shall apply, subject to Section 5:

(a) The Committee shall maintain such subaccounts under each Account as may be necessary to give effect to the Participant’s elections concerning time and form of payment, to proper earnings credit, to multipliers for PRSUs, and to any other terms of the Plan that may affect the balance of the Account.

(b) The Company shall not be obligated to set aside or earmark any funds or Stock for the Account, which shall be purely a bookkeeping device.

(c) All amounts of deferred compensation under this Plan shall remain at all times the unrestricted assets of the Company, and the promise to pay the deferred amounts shall at all times remain unfunded as to the Participants and Beneficiaries.

(d) All payments to Participants and Beneficiaries under the Plan shall be charged against Account and subaccount balances and guideline investments and phantom shares of Stock ratably, except amounts described in 8.1(b) shall be charged last for any distribution other than a distribution under 8.1(b). Forfeiture of phantom shares of Stock shall be charged against only the phantom shares.

4.2 The Account of each Participant shall be adjusted by adding credit for deferrals under Section 3 and credit for additional phantom shares of Stock after application of a multiplier as provided in 3.11. Deferred shares of Stock under Section 3 shall be credited as whole phantom shares. Cash amounts shall be credited as soon as practicable after the date the amount would have been paid if not deferred. Shares of deferred Stock shall be credited as soon

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as practicable after receipt of a Stock Deferral Election whether or not the number of shares is subject to later adjustment because of determination of a multiplier. If application of a multiplier would cause credit of fractional phantom shares, the fractional phantom shares shall be recorded, maintained and aggregated with other fractional phantom shares, but fractional phantom shares remaining after aggregation shall be disregarded for payment and no other payment shall be made with respect to fractional phantom shares.

4.3 Subject to 4.4, the Company shall credit earnings to each Participant’s Account, based on guideline investment earnings, until the entire Account has been paid out, as follows:

(a) The Committee shall establish guideline investment funds for amounts other than Stock with investment objectives fixed by the Committee, and may change the funds in its discretion. The guideline funds may parallel funds or other investments available under any insurance policy or policies purchased by the Company in connection with the Plan, funds available under any irrevocable trust established under Section 5 or other investment indexes established from time to time by the Committee, but neither the Company nor a trustee shall have any obligation to invest any amounts in any guideline fund. A guideline fund shall not be composed substantially of Stock.

(b) Each Participant shall, under procedures established by the Committee, elect among available guideline funds for credit of earnings for the Participant’s Account under this Plan. In the absence of a proper election, a guideline fund designated by the Committee will be used. Participant elections may be changed at such times and subject to such limits as may be fixed by the Committee.

(c) The Committee shall credit Accounts in accordance with earnings (which may be negative) of the elected guideline funds in accordance with procedures established by the Committee.

4.4 Amounts recorded as phantom shares of Stock shall not be subject to 4.3 and the following shall apply:

(a) A phantom share of Stock shall be subject to the same forfeiture and vesting provisions that applied to the related restricted stock unit. A phantom share relating to a PRSU shall have the same performance multiplier as applied to the related PRSU, based on t