THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Electro Scientific Industries (ESIO)

9/7/2005 Proxy Information

On June 9, 2005, the Company agreed to purchase My SAP Business Suite and related software from SAP. The purchase price for the software is subject to the confidentiality provisions of the license agreement with SAP. The salesperson for SAP in the transaction was the son-in-law of Robert Chamberlain, Senior Vice President of Customer Operations of the Company. Mr. Chamberlain disclosed this relationship to the Company at the time and recused himself from the decision-making process.

9/8/2004 Proxy Information

On June 3, 2003, the Company entered into a Separation Agreement with Gary M. Kapral pursuant to which he resigned as an officer the Company effective June 11, 2003. The agreement provided for payment of base salary of $245,000 through December 15, 2003 and continued medical benefits through December 31, 2003.

On September 9, 2003, the Company entered into a Separation Agreement with Joseph L. Reinhart pursuant to which he resigned as an officer of the Company effective August 29, 2003, but continued to be employed by ESI, receiving regular pay and benefits through November 30, 2003. The agreement provided for payment of severance pay equivalent to six months of wages at the rate of $220,000 per annum and payment of COBRA premiums for coverage through May 31, 2004. All rights under ESIÕs stock incentive plans with respect to stock options and stock grants to Mr. Reinhart were as stated in the plan documents or related agreements. For purposes of stock option vesting and exercise, the termination date was November 30, 2003.

9/22/2003 Proxy Information

On February 27, 2003, the Company entered into a Separation Agreement with Bradford S. Cooley pursuant to which he resigned as an officer of the Company effective February 18, 2003. The agreement provided for payment of base salary of $235,000 and continued medical benefits through August 31, 2003. All rights under ESIÕs Stock Incentive Plans with respect to stock options and stock grants to Mr. Cooley shall be as stated in the plan documents or related agreements. For purposes of stock option vesting and exercise, the termination date will be February 18, 2003.

On June 3, 2003, the Company entered into a Separation Agreement with Gary M. Kapral pursuant to which he resigned as an officer the Company effective June 11, 2003. The agreement provided for payment of base salary of $245,000 through December 15, 2003 and continued medical benefits through December 31, 2003.

On September 18, 2002, the Company entered into a Separation Agreement with Kevin T. Longe pursuant to which he resigned as an officer of the Company effective September 9, 2002. The agreement provided for payment of severance pay equivalent to $125,000 through December 31, 2002 and payment of COBRA premiums for coverage through February 28, 2003.