Exhibit 10
VOTING AGREEMENT
This Voting Agreement (“
Voting Agreement ”) is entered into as of
December 8, 2008, by and among (i) The D3 Family Fund,
L.P., The D3 Family Bulldog Fund, L.P., The D3 Family Canadian
Fund, L.P., The DIII Offshore Fund, L.P., Nierenberg Investment
Management Company, Inc., Nierenberg Investment Management
Offshore, Inc. and David Nierenberg (collectively, the “
Shareholders ”), and (ii) Electro
Scientific Industries, Inc. (the “ Company
”).
Recitals
A. The Shareholders Own (as defined
below) shares of common stock of the Company.
B. The Shareholders are entering
into this Voting Agreement to provide for the manner in which they
will vote certain of their Subject Securities (as defined
below).
Agreement
NOW, THEREFORE, for good and
valuable consideration, the receipt, sufficiency and adequacy of
which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Certain
Definitions
For purposes of this Voting
Agreement:
(a) An
“Affiliate” of, or Person
“Affiliated” with, a specified Person, is
a Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by, or is under common
Control with, the Person specified; provided, however ,
that, notwithstanding anything to the contrary in this Voting
Agreement, a publicly-held corporation shall not, for purposes of
Section 3.3, be deemed to be an “Affiliate” of a
Shareholder by virtue of being Controlled by such Shareholder,
unless (i) a majority of the members of the board of directors
of such corporation consists of one or more of the Shareholders,
individually or collectively, directly or indirectly through one or
more intermediaries or other representatives or (ii) one or
more of the Shareholders, individually or collectively, directly or
indirectly through one or more intermediaries, is the beneficial
owner of a majority of any class of voting securities of such
corporation.
(b) The term
“Associate,” when used to indicate a
relationship with any Person, means (1) a corporation or
organization (other than the Company) of which such Person is an
officer, member or partner or is, directly or indirectly, the
beneficial owner of 20% or more of any class of equity securities,
(2) any trust or other estate for the benefit of such Person
or as to which such Person serves as trustee or in a similar
capacity, or (3) any relative or spouse of such Person, or any
relative of such spouse, by blood, marriage or adoption and not
more remote than a first cousin; or a trust or other estate for the
benefit of any such relative or spouse or as to which such relative
or spouse serves as trustee or in a similar capacity; or a
corporation or organization (other than the Company) of which such
relative or spouse is an officer, member or
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partner or is, directly or
indirectly, the beneficial owner of 20% or more of any class of
equity securities; provided, however , that, for purposes of
Section 3.3, the term “Associate,”
when used to indicate a relationship with any Person, means
(i) a privately-held corporation or organization of which such
Person is an officer, member or partner or is, directly or
indirectly, the beneficial owner of 20% or more of any class of
equity securities, (ii) any trust or other estate for the
benefit of such Person or as to which such Person serves as trustee
or in a similar capacity, or (iii) any relative or spouse of
such Person, or any relative of such spouse, by blood, marriage or
adoption and not more remote than a first cousin; or a trust or
other estate for the benefit of any such relative or spouse or as
to which such relative or spouse serves as trustee or in a similar
capacity; or a corporation or organization (other than the Company)
of which (x) a majority of the members of the board of
directors (or equivalent governing body) of such entity consists of
one or more of any such relatives or spouses or such Person,
individually or collectively, directly or indirectly through one or
more intermediaries or other representatives, or (y) one or
more of any such relatives or spouses or such Person, individually
or collectively, directly or indirectly through one or more
intermediaries, is a managing partner (or general partner) or a
managing member (or manager) of such entity or is the beneficial
owner of a majority of any class of voting securities of such
entity.
(c) The term
“Control” (including the terms
“Controlling,” “Controlled
by” and “under common Control
with” ) means the possession, direct or indirect, of
the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise; provided, however ,
that a corporation, partnership or limited liability company shall
not be deemed to be Controlled by a Shareholder, unless one or more
of the Shareholders, individually or collectively, directly or
indirectly through one or more intermediaries, serves on such
entity’s board of directors (or equivalent governing body),
has at least one representative on such entity’s board of
directors (or equivalent governing body), is a managing partner (or
general partner) or a managing member (or manager) of such entity
or is the beneficial owner of 20% or more of any class of equity
securities of such entity.
(d) A Person shall be deemed to
“Own” or to have acquired
“Ownership” of or to be the
“Owner” of a security if such Person:
(i) is the record owner of such security; or (ii) is the
“beneficial owner” (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934) of such
security.
(e) The term
“Person” means any individual, sole
proprietorship, partnership, joint venture, trust, unincorporated
association, corporation, limited liability company, entity or
governmental entity (whether foreign, federal, state, county, city
or otherwise and including any instrumentality, division, agency or
department thereof).
(f) “Subject
Securities” shall mean: (i) all securities
issued by the Company (including all shares of Company common stock
and all options, restricted stock units, warrants and other rights
to acquire shares of Company common stock) that are Owned by each
Shareholder as of the date of this Voting Agreement; and
(ii) all additional securities issued or to be issued by the
Company (including all additional shares of Company common stock
and all additional options, restricted stock units, warrants and
other rights to acquire shares of Company
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common stock) of which such
Shareholder acquires Ownership after the date of this Voting
Agreement.
(g) A Person shall be deemed to have
a effected a “Transfer” of a security if
any other Person directly or indirectly acquires Ownership of such
security because such transferor directly or indirectly:
(i) sells, pledges, encumbers, grants an option with respect
to, transfers or disposes of such security or any interest in such
security to any Person other than the Company; (ii) enters
into an agreement or commitment contemplating the possible sale of,
pledge of, encumbrance of, grant of an option with respect to,
transfer of or disposition of such security or any interest therein
to any Person other than the Company; or (iii) reduces such
transferor’s beneficial ownership of, interest in or risk
relating to such security (other than any such reduction that
occurs because such security is repurchased by the
Company).
SECTION 2. Voting of
Shares
2.1 Voting Covenant . If, as of the record
date with respect to any meeting of the shareholders of the Company
(however called) or any written action by consent of shareholders
of the Company, the Shareholders collectively Own issued and
outstanding shares of Company common stock that, in the aggregate,
exceed 15% of the total issued and outstanding shares of Company
common stock as of such record date (the number of shares
collectively Owned by the Shareholders as of such record date less
the number of shares that equals 15% of the total issued and
outstanding shares of Company common stock as of such record date
being referred to herein as the “Excess
Shares” ), then each Shareholder hereby agrees that,
at any such meeting or in any such consent, such Shareholder shall
cause the number of Excess Shares Owned by such Shareholder to be
voted in accordance with the recommendation of the Company’s
Board of Directors. For example and not by way of limitation, if
after the date of this Voting Agreement the Company’s Board
of Directors recommends that shareholders of the Company vote in
favor of a certain proposal to be presented at a
shareholders’ meeting and against a certain other proposal to
be presented at such meeting, then each Shareholder shall cause the
number of Excess Shares with respect to that meeting Owned by such
Shareholder to be voted in favor of the former proposal and against
the latter proposal. With respect to any meeting of the
shareholders of the Company (however called) or any written action
by consent of shareholders of the Company, that portion of the
Excess Shares deemed to be Owned by each Shareholder shall be
determined by the Company in good faith; provided, however ,
that the number of Excess Shares determined by the Company to be
Owned by a Shareholder shall not exceed the number of issued and
outstanding shares of Company common stock Owned by such
Shareholder on the applicable record date. In addition, if some or
all of the issued and outstanding shares of Company common stock
Owned by a Shareholder as of the applicable record date are owned
of record by one or more Persons other than the Shareholder, then
the Company shall determine which (if any) of the shares owned of
record by each such Person shall be included in that portion of the
Excess Shares deemed to be Owned by such Shareholder. No
Shareholder shall enter into any agreement or understanding with
any Person to vote or give instructions in any manner inconsistent
with the foregoing provisions of this Section 2.1. For the
avoidance of doubt, the determination by the Company of the number
of Excess Shares Owned by a Shareholder shall be made for the
purposes of this Voting Agreement only and not for any other
purpose.
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2.2 Proxy; Further
Assurances.
(a) Contemporaneously with the
execution of this Voting Agreement (or, with respect to Persons who
become “Shareholders” under this Voting Agreement after
the date hereof, at such time as such Person becomes a
“Shareholder”), each Shareholder shall deliver to the
Company a proxy in the form attached to this Voting Agreement as
Exhibit A , which proxy is coupled with an interest and
shall be irrevocable to the fullest extent permitted by law (at all
times during the term of this Voting Agreement) with respect to the
shares referred to therein (the “Proxy”
).
(b) Each Shareholder shall, at such
Shareholder’s own expense, perform such further acts and
execute such further proxies and other documents and instruments as
may reasonably be required to vest in the Company the power to
carry out and give effect to the provisions of this Voting
Agreement.
(c) No Shareholder shall enter into
any tender, voting or other agreement, or grant a proxy or power of
attorney, with respect to the Subject Securities that is
inconsistent with this Voting Agreement or otherwise take any other
action with respect to the Subject Securities that would in any way
restrict, limit or interfere with the performance of any
Shareholder’s obligations hereunder or the transactions
contemplated hereby.
SECTION 3. Transfer of Subject
Securities and Voting Rights; Affiliates and
Associates
3.1 Restriction on Transfer of
Subject Securities . No
Shareholder shall, directly or indirectly, knowingly cause or
permit any Transfer of any of the Subject Securities to any
Affiliate or Associate of any Shareholder (other than any Affiliate
or Associate who is already a Shareholder) or to any Person (not
already a Shareholder) who, together with any Shareholder or
Shareholders, acts as a group for the purpose of acquiring,
holding, voting or disposing of securities of the Company, unless,
prior to such Transfer, the transferee agrees in a writing,
reasonably satisfactory in form and substance to the Company, to be
bound by all of the terms of this Voting Agreement as a
“Shareholder” hereunder.
3.2 Restriction on Transfer of
Voting Rights . Each
Shareholder shall ensure that none of the Subject Securities is
deposited into a voting trust.
3.3 Affiliates and Associates . Prior to such
time (if any) as any Affiliate or Associate of a Shareholder (other
than any Affiliate or Associate who is already a Shareholder) shall
acquire Ownership of any securities of the Company, such
Shareholder shall cause such Affiliate or Associate, as applicable,
to agree in a writing, reasonably satisfactory in form and
substance to the Company, to be bound by all of the terms of this
Voting Agreement as a “Shareholder” hereunder. For
example and without limiting the generality of the foregoing, if
after the date of this Voting Agreement a new, privately-held
corporation is formed and 20% of a class of equity securities of
such corporation is issued to a Shareholder, then, prior to such
time as such corporation acquires Ownership of any securities of
the Company, such Shareholder shall cause such corporation to agree
in a writing, reasonably satisfactory in form and substance to the
Company, to be bound by all of the terms of this Voting Agreement
as a “Shareholder” hereunder. In addition, no
Shareholder, directly or indirectly through one or more
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intermediaries, shall agree or enter into any
agreement, arrangement or understanding with any Person (not
already a Shareholder), whether or not in writing, to act as a
group for the purpose of acquiring, holding, voting or disposing of
securities of the Company unless such Shareholder first causes such
Person to agree in a writing, reasonably satisfactory in form and
substance to the Company, to be bound by all of the terms of this
Voting Agreement as a “Shareholder”
hereunder.
SECTION 4. Representations and
Warranties
4.1 Representations and
Warranties of Shareholders . The Shareholders hereby represent and warrant
to the Company as follows:
(a) Authorization, etc . Each
Shareholder has the absolute and unrestricted power, authority and
capacity to execute and deliver this Voting Agreement and the Proxy
and to perform such Shareholder’s obligations hereunder and
thereunder. This Voting Agreement and the Proxy have been duly
executed and delivered by each Shareholder and constitute legal,
valid and binding obligations of each Shareholder, enforceable
against such Shareholder in accordance with their terms, subject
to: (i) laws of general application relating to bankruptcy,
insolvency and the relief of debtors; and (ii) rules of law
governing specific performance, injunctive relief and other
equitable remedies. If any Shareholder is a corporation, then such
Shareholder is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it was
organized. If any Shareholder is a general or limited partnership,
then such Shareholder is a partnership duly organized, validly
existing and in good standing under the laws of the jurisdiction in
which it was organized. If any Shareholder is a limited liability
company, then such Shareholder is a limited liability company duly
organized, validly exist
