On May 14, 2009 the Board of Directors of Electro Scientific Industries, Inc. (the "Company") declared a dividend of one right (a "Right") for each outstanding share of common stock of the Company ("Common Stock") to shareholders of record at the close of business on May 26, 2009 (the "Record Date"). A Right will attach to each share of Common Stock, of which there were 27,317,026 shares issued and outstanding on May 17, 2009. Each Right entitles the registered holder to purchase from the Company one one-hundredth of a share of Series A No Par Preferred Stock (the "Preferred Stock") at a purchase price of $60 (the "Purchase Price"), subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement") between the Company and Mellon Investor Services LLC, as Rights Agent, dated May 18, 2009.

The Rights will replace preferred stock purchase rights that were previously attached to each share of Common Stock (the "Old Rights"). The Old Rights were issued pursuant to the terms of a Rights Agreement between the Company and First Chicago Trust Company of New York, as Rights Agent, dated May 7, 1999, as subsequently amended (the "Old Rights Agreement"). The Old Rights Agreement and the Old Rights expired according to their terms at 5:00 p.m. Pacific time on May 7, 2009.

Initially, the Rights will be attached to the certificates representing outstanding shares of Common Stock, and no separate Rights certificates will be distributed. The Rights will separate from the Common Stock and a "Distribution Date" will occur upon the earlier of (i) ten days following a public announcement that (A) Third Avenue Management LLC or its affiliates and associates (collectively, "Third Avenue") has acquired, or obtained the right to acquire from shareholders, beneficial ownership of 19.99 percent or more of the outstanding Common Stock; (B) a person or group of affiliated or associated persons other than Third Avenue has acquired, or obtained the right to acquire from shareholders, beneficial ownership of 15 percent or more of the outstanding Common Stock; or (C) the Board of Directors of the Company shall declare any person to be an Adverse Person (as described below) (each, an "Acquiring Person"), or (ii) ten days following the commencement of a tender offer or exchange offer that would result in a person or group beneficially owning 15 percent or more of such outstanding Common Stock, as such periods may be extended pursuant to the Rights Agreement.

An Adverse Person is any person declared to be an Adverse Person by the Board of Directors upon a determination that such person, alone or together with its affiliates and associates, has become the beneficial owner of an amount of Common Stock that the Board of Directors determines to be substantial (which amount shall be more than 10 percent of the Common Stock then outstanding) and a determination by at least a majority of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, including consultation with such persons as such directors shall deem appropriate, that
(i) such beneficial ownership by such person is intended to cause the Company to repurchase the Common Stock beneficially owned by such person or to cause pressure on the Company to take action or enter into a transaction or series of transactions intended to provide such person with short-term financial gain under circumstances where the Board of Directors determines that the best long term interests of the Company and its shareholders would not be served by taking such action or entering into such transactions or series of transactions at that time or (ii) such beneficial ownership is causing or reasonably likely to cause a material adverse impact

Until the Distribution Date, (i) the Rights will be evidenced by and will be transferred with and only with such Common Stock certificates, (ii) new Common Stock certificates issued after May 26, 2009, will contain a legend incorporating the Rights Agreement by reference, and (iii) the surrender for transfer of any certificate for Common Stock will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate.

The Rights are not exercisable until the Distribution Date and will expire at the close of business on May 18, 2019, unless earlier redeemed by the Company as described below.

As soon as practicable after the Distribution Date, Rights certificates will be mailed to holders of record of the Common Stock as of the close of business on the Distribution Date, and thereafter, the separate Rights certificates alone will represent the Rights. Except as otherwise determined by the Board of Directors, the only Common Stock that will be issued with Rights is Common Stock issued prior to the earliest of (i) the time the Rights become exercisable or issued upon exercise or conversion of rights, warrants, options or convertible securities issued prior to the time the Rights become exercisable, (ii) a Redemption Date (as defined in the Rights Agreement) and (iii) the Final Expiration Date (as defined in the Rights Agreement).

In the event that any person becomes an Acquiring Person, each holder of a Right . . .

The disclosures set forth in Item 1.01 and Item 5.03 of this report are incorporated herein by reference.

On May 14, 2009, the Compensation Committee of the Board of Directors approved the use of Stock Settled Stock Appreciation Right ("SSARs") under the Company's 2004 Stock Incentive Plan (the "Plan") in lieu of the stock option component of its annual grant cycle. Specific awards were approved to the officers set forth below with respect to the number of shares set forth opposite his or her name. Awards for 2009 included one-time supplemental grants to increase the retentive value of the Company's equity awards given current economic and market conditions. The awards are being disclosed herein because the Company has not previously awarded SSARs under the Plan.

           Name and Title                             Number of Shares

           Nicholas Konidaris,                                 150,000
           President and CEO

           Paul Oldham,                                         90,000
           Vice President of Administration and CFO

           Robert DeBakker,                                     50,000
           Vice President of Operations

           Kerry Mustoe,                                        35,000
           Vice President, Corporate Controller
           and Chief Accounting Officer

Articles of Incorporation

On May 14, 2009, the Board of Directors adopted an amendment to Article XI of the Third Restated Articles of Incorporation of the Company, which sets forth the terms of the Series A No Par Preferred Stock of the Company, in connection with the adoption of the Rights Agreement described in Item 1.01 of this report. This amendment was filed with the Oregon Secretary of State on May 18, 2009. A copy of the Articles of Amendment to Third Restated Articles of Incorporation of the Company is filed with this report as Exhibit 3.1 and incorporated herein by reference.

Bylaws

On May 14, 2009, the Board of Directors adopted the 2009 Amended and Restated Bylaws of the Company (the "Restated Bylaws"). The principal amendments reflected in the Restated Bylaws include the following:

1. Article I, Section 1.3(a) was amended to clarify that (i) the advance notice provisions set forth in Section 1.3 are the exclusive means for a shareholder to make a director nomination or submit other business (other than matters properly brought under Rule 14a-8 of the federal proxy rules, which contain their own procedural requirements) before an annual meeting of shareholders, and
(ii) notice of a shareholder proposal must be received by the Company at least 90 days, and no earlier than 120 days, before the first anniversary of the prior year's annual shareholder meeting in order to be brought before the upcoming annual shareholder meeting.

2. Article I, Section 1.3(c) was amended to require that a shareholder proposing a matter to be considered at a meeting of shareholders provide additional information to the Company regarding all direct and indirect ownership interests in the Company, including derivative securities, held by the proposing shareholder and any beneficial owner on whose behalf the proposal is made.

4. A new Section 1.3(d) was added to Article I, which requires that any shareholder making a director nomination or proposing other business to be brought before a shareholder meeting must update, if necessary, the information required by Section 1.3(c) (i) not later than ten days after the record date for the meeting so that such information is accurate as of the record date, and
(ii) not later than eight business days prior to the date of the meeting or any adjournment thereof so that the required information is true as of ten days prior to the date of the meeting or any adjournment thereof.

The Board of Directors also made certain technical and conforming amendments that are reflected in the Restated Bylaws.

The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the 2009 Amended and Restated Bylaws, a copy of which are filed with this report as Exhibit 3.2 and incorporated herein by reference.

(d) Exhibits

Exhibit 3.1    Articles of Amendment to Third Restated Articles of Incorporation of
               the Company

Exhibit 3.2    2009 Amended and Restated Bylaws of Electro Scientific Industries,
               Inc.

Exhibit 4.1    Rights Agreement, dated as of May 18, 2009, between Electro
               Scientific Industries, Inc. and Mellon Investor Services LLC