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OPTION TERMS AND CONDITIONS 2004 Stock Incentive Plan [Incentive][Non-Qualified] Stock Option

Option Agreement

OPTION TERMS AND CONDITIONS 2004 Stock Incentive Plan [Incentive][Non-Qualified] Stock Option | Document Parties: ELECTRO SCIENTIFIC INDUSTRIES INC You are currently viewing:
This Option Agreement involves

ELECTRO SCIENTIFIC INDUSTRIES INC

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Title: OPTION TERMS AND CONDITIONS 2004 Stock Incentive Plan [Incentive][Non-Qualified] Stock Option
Date: 6/11/2008
Industry: Electronic Instr. and Controls     Sector: Technology

OPTION TERMS AND CONDITIONS 2004 Stock Incentive Plan [Incentive][Non-Qualified] Stock Option, Parties: electro scientific industries inc
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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, pa


 
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