Exhibit 10.1

Employment Agreement

This Employment Agreement (the “Agreement”), entered into on November 16, 2010,
with employment effective as of the Effective Date (as defined below), is made
by and between John Roush (the “Executive”) and GSI Group Inc., a company
organized under the laws of the Province of New Brunswick, Canada (together with
any of its subsidiaries and Affiliates as may employ the Executive from time to
time, and any successor(s) thereto, the “Company”).

RECITALS

A. The Company desires to assure itself of the services of the Executive by
engaging the Executive to perform services under the terms hereof.

B. The Executive desires to provide services to the Company on the terms herein
provided.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, including the respective covenants and agreements set
forth below, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

  1. Certain Definitions

(a) “Advisor Period” shall mean the period beginning on the Effective Date and
ending on the date immediately prior to the CEO Date.

(b) “Affiliate” shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
such Person where “control” shall have the meaning given such term under Rule
405 of the Securities Act of 1933, as amended from time to time.

(c) “Agreement” shall have the meaning set forth in the preamble hereto.

(d) “Annual Base Salary” shall have the meaning set forth in Section 3(a).

(e) “Annual Bonus” shall have the meaning set forth in Section 3(e).

(f) “Board” shall mean the Board of Directors of the Company.

(g) The Company shall have “Cause” to terminate the Executive’s employment
hereunder upon: (i) the Executive’s willful failure to substantially perform the

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duties set forth in this Agreement (other than any such failure resulting from
the Executive’s Disability or any inability to engage in any substantial gainful
activity that could reasonably be expected to result in Disability) which is not
remedied within 30 days after receipt of written notice from the Company
specifying such failure; (ii) the Executive’s willful failure to carry out, or
comply with, in any material respect any lawful and reasonable directive of the
Board not inconsistent with the terms of this Agreement, which is not remedied
within 30 days after receipt of written notice from the Company specifying such
failure; (iii) the Executive’s commission at any time of any act or omission
that results in, or may reasonably be expected to result in, a conviction, plea
of no contest, plea of nolo contendere, or imposition of unadjudicated probation
for any felony or crime involving moral turpitude; or (iv) the Executive’s
unlawful use (including being under the influence) or possession of illegal
drugs on the Company’s premises or while performing the Executive’s duties and
responsibilities under this Agreement.

(h) “CEO Date” shall mean the earliest of (i) the first business day following
the date on which the Company becomes current in its reporting obligations under
the Exchange Act, (ii) a date elected by the Executive in a written notice to
the Company providing that that he elects to commence his services as Chief
Executive Officer of the Company on such date (and which date must be on or
following the date such written notice is provided), or (iii) February 1, 2011.

(i) “Change in Control” shall mean and includes any of the following which
occurs on or following the Effective Date:

(i) A transaction or series of transactions whereby any “person” or related
“group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other
than the Company, any of its subsidiaries, an employee benefit plan maintained
by the Company or any of its subsidiaries, a “person” or “group” who as of the
date this Agreement is entered into beneficially owns 5% or more of the total
combined voting power of the Company’s securities outstanding, or a “person”
that, prior to such transaction, directly or indirectly controls, is controlled
by, or is under common control with, the Company) directly or indirectly
acquires beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of securities of the Company possessing either (A) more than 40%
of the total combined voting power of the Company’s securities outstanding
immediately after such acquisition and, in connection with, and within the
twelve-month period immediately following, such acquisition, new directors who
constitute at least 40% of the Board (x) are nominated or designated by the
acquiring “person” or related “group” of acquiring “persons” and (y) are elected
by the Board or the Company’s shareholders (disregarding, for purposes of this
determination, any new directors whose election or nomination is consented to by
the Executive) or (B) more than 50% of the total combined voting power of the
Company’s securities outstanding immediately following such acquisition; or

(ii) During any twelve-month period beginning on or following the Effective
Date, individuals who, at the beginning of such period, constitute the Board
together

 

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with any new director(s) (other than a director designated by a person who shall
have entered into an agreement with the Company to effect a transaction
described in Section 1(i)(i) or Section 1(i)(iii)) whose election by the Board
or nomination for election by the Company’s stockholders was approved by a vote
of at least a majority of the directors then still in office who either were
directors at the beginning of the twelve-month period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or

(iii) The consummation by the Company (whether directly involving the Company or
indirectly involving the Company through one or more intermediaries) of (A) a
merger, consolidation, reorganization, or business combination or (B) a sale or
other disposition of all or substantially all of the Company’s assets in any
single transaction or series of related transactions or (C) the acquisition of
assets or stock of another entity, in each case other than a transaction, which
results in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being
converted into voting securities of the Company or the person that, as a result
of the transaction, controls, directly or indirectly, the Company or owns,
directly or indirectly, all or substantially all of the Company’s assets or
otherwise succeeds to the business of the Company (the Company or such person,
the “Successor Entity”)) directly or indirectly, at least a majority of the
combined voting power of the Successor Entity’s outstanding voting securities
immediately after the transaction; or

(iv) The Company’s stockholders approve a liquidation or dissolution of the
Company.

(j) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(k) “Committee” shall mean the Compensation Committee of the Board, or if no
such committee exists, the Board.

(l) “Company” shall, except as otherwise provided in Section 6(j), have the
meaning set forth in the preamble hereto.

(m) “Date of Termination” shall mean (i) if the Executive’s employment is
terminated due to the Executive’s death, the date of the Executive’s death;
(ii) if the Executive’s employment is terminated due to the Executive’s
Disability, the date determined pursuant to Section 4(a)(ii); or (iii) if the
Executive’s employment is terminated pursuant to Section 4(a)(iii)-(vi) either
the date indicated in the Notice of Termination or the date specified by the
Company pursuant to Section 4(b), whichever is earlier.

(n) “Disability” shall mean the Executive’s inability to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or that can be
expected to last for (i) a

 

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continuous period of not less than ninety days or (ii) at least 180 total
calendar days in any 12 month period, in each case as determined by a physician
selected by the Company or its insurers and reasonably acceptable to Executive.
The Company will inform the Executive of the selection of the physician so that
the Executive may consent to such selection (and the Executive’s consent shall
not be unreasonably withheld). The Executive shall be deemed to have consented
to the selection of the physician if the Executive does not provide the Company
with written notice objecting to such selection within five business days of the
Executive being informed of the physician’s selection. If the Executive objects
to such selection (and the Company determines in good faith that such
withholding is not unreasonable), then the Company shall select another
physician pursuant to the process described in this Section 1(n).

(o) “Effective Date” shall mean December 15, 2010, or such earlier date as may
be elected by the Executive by written notice to the Company providing that he
elects to commence his employment with the Company on such date (and which
commencement date must be on or following the date such written notice is
provided).

(p) “Executive” shall have the meaning set forth in the preamble hereto.

(q) “Extension Term” shall have the meaning set forth in Section 2(b).

(r) The Executive shall have “Good Reason” to terminate the Executive’s
employment hereunder within one (1) year after the occurrence of one or more of
the following conditions without the Executive’s consent: (i) a material
diminution in the nature or scope of the Executive’s responsibilities, duties or
authority, or a material diminution in the Executive’s title; (ii) failure of
the Company to make any material payment or provide any material benefit under
this Agreement; (iii) the Company’s material breach of this Agreement; or (iv) a
material change in the geographic location at which the Executive must perform
the Executive’s material services hereunder (which shall in no event include a
relocation of the Executive’s principal place of business less than 50 miles
from the Bedford, Massachusetts metropolitan area); provided, however, that
notwithstanding the foregoing the Executive may not resign his employment for
Good Reason unless: (A) the Executive provides the Company with at least 30 days
prior written notice of his intent to resign for Good Reason (which notice is
provided not later than the 90th day following the Executive’s knowledge of the
occurrence of the event constituting Good Reason); and (B) the Company does not
remedy the alleged violation(s) within such 30-day period; provided, further,
that, for the avoidance of doubt, the failure of the shareholders to elect the
Executive to the Board following proposal for re-election by the Board as
described in Section 2(c) shall not constitute “Good Reason.”

(s) “Initial Term” shall have the meaning set forth in Section 2(b).

(t) “Notice of Termination” shall have the meaning set forth in Section 4(b).

 

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(u) “Person” shall mean any individual, natural person, corporation (including
any non-profit corporation), general partnership, limited partnership, limited
liability partnership, joint venture, estate, trust, company (including any
company limited by shares, limited liability company or joint stock company),
incorporated or unincorporated association, governmental authority, firm,
society or other enterprise, organization or other entity of any nature.

(v) “Proprietary Information” shall have the meaning set forth in Section 6(d).

(w) “Release” shall have the meaning set forth in Section 5(b).

(x) “Release Expiration Date” shall have the meaning set forth in Section 24(c).

(y) “Restricted Period” shall mean the period from the Effective Date through
the eighteen (18)-month anniversary of the Date of Termination.

(z) “Section 409A” shall mean Section 409A of the Code and the Department of
Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be
issued after the Effective Date.

(aa) “Term” shall have the meaning set forth in Section 2(b).

 

  2. Employment

(a) In General. The Company shall employ the Executive and the Executive shall
enter the employ of the Company, for the period set forth in Section 2(b), in
the position set forth in Section 2(c), and upon the other terms and conditions
herein provided.

(b) Term of Employment. The initial term of employment under this Agreement (the
“Initial Term”) shall be for the period beginning on the Effective Date and
ending on the third anniversary thereof, unless earlier terminated as provided
in Section 4. The Initial Term shall automatically be extended for successive
one year periods (each, an “Extension Term” and, collectively with the Initial
Term, the “Term”), unless either party hereto gives notice of non-extension to
the other no later than 90 days prior to the expiration of the then-applicable
Term.

(c) Position and Duties. During the Term, the Executive: (i) shall serve as
(A) during the Advisor Period, the special advisor to the interim principal
executive officer of the Company, with responsibilities, duties and authority
customary for such position, subject to direction by the Board and (B) during
the portion of the Term other than the Advisor Period, Chief Executive Officer
of the Company and all of its subsidiaries, with responsibilities, duties and
authority customary for such position, subject to direction by the Board;
(ii) shall report directly to the Board; (iii) shall devote substantially all
the Executive’s working time and efforts to the business and affairs of the
Company and its subsidiaries; and (iv) agrees to observe and

 

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comply with the Company’s rules and policies as adopted by the Company from time
to time. In addition, as of the CEO Date, the Company shall cause the Executive
to be appointed to the Board and, during the Term, the Board shall propose the
Executive for re-election to the Board. The parties acknowledge and agree that
Executive’s duties, responsibilities and authority may include services for one
or more subsidiaries or Affiliates of the Company. Notwithstanding anything
herein to contrary, the Executive may (x) serve as a director, trustee or
officer or otherwise participate in not-for-profit educational, welfare, social,
religious and civic organizations; and (y) with the consent of the Board, serve
on the board of directors of other companies, to the extent that such other
activities, either individually or in the aggregate, do not inhibit or interfere
with the performance of the Executive’s duties under this Agreement; provided
that, notwithstanding the foregoing, at any time during the Term after the
second anniversary of the Effective Date, the Executive shall be entitled to
serve on the board of directors of up to two other companies without the consent
of the Board, to the extent that such service, either individually or in the
aggregate with those activities described in subsection (x) above, does not
inhibit or interfere with the performance of the Executive’s duties under this
Agreement.

 

  3. Compensation and Related Matters

(a) Annual Base Salary. During the Term, the Executive shall receive a base
salary at a rate of $500,000 per annum, which shall be paid in accordance with
the customary payroll practices of the Company, subject to review and upward
adjustment by the Board in its sole discretion (the “Annual Base Salary”).

(b) Sign-On Cash Award. On the Effective Date, the Company shall pay the
Executive a one-time cash payment (the “Sign-On Bonus”) in an amount equal to
$176,375 less any amount received by the Executive from PerkinElmer in
connection with his cash bonus with respect to the period beginning on July 1,
2010 and ending on the termination of his employment at PerkinElmer (the “Prior
Employer Bonus”). The Company shall pay the Executive the Sign-On Bonus as soon
as practicable following its receipt from the Executive of reasonable
documentation regarding the amount of the Prior Employer Bonus or a written
statement from the Executive that there will be no Prior Employer Bonus, but in
no event later than March 15, 2011.

(c) Sign-On Equity Award. On the first business day following the date on which
the Form S-8 registering the shares reserved for issuance under the GSI Group
Inc. 2010 Incentive Award Plan (the “2010 Incentive Award Plan”) is filed with
the Securities and Exchange Commission (which the Company shall use its
reasonable best efforts to accomplish as soon as practicable after the Company
becomes current in its reporting obligations under the Exchange Act), the
Company shall grant the Executive 1,000,000 restricted stock units pursuant to
the 2010 Incentive Award Plan (“Sign-On RSUs”). The terms and conditions of the
Sign-On RSUs shall be set forth in one or more written award agreements between
the Company and the Executive, which shall provide that, subject to Executive’s
continued employment with the

 

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Company, (i) the Sign-On RSUs shall vest in substantially equal installments on
each of the first three anniversaries of the Effective Date, and
(ii) notwithstanding the forgoing Section 3(c)(i), the Sign-On RSUs shall become
fully vested immediately prior to a Change in Control, and shall contain other
customary terms and conditions. Prior to vesting, the Sign-On RSUs shall not be
transferable and, except as otherwise provided in this Agreement, shall be
subject to forfeiture upon the Executive’s termination of employment with the
Company. Notwithstanding the foregoing, in no event shall any Sign-On RSUs be
awarded if the Phantom Award becomes payable to the Executive pursuant to
Section 3(d).

(d) Phantom Award. During the period beginning on the Effective Date and ending
immediately prior to the grant of the Sign-On RSUs pursuant to Section 3(c),
upon the occurrence of (i) a Change in Control (provided that such Change in
Control constitutes a “change in control event” as defined in Treasury
Regulations Section 1.409A-3(i)(5)), or (ii) termination of the Executive’s
employment due to death pursuant to Section 4(a)(i), by the Company due to
Disability pursuant to Section 4(a)(ii), by the Company without Cause pursuant
to Section 4(a)(iv), or by the Executive for Good Reason pursuant to
Section 4(a)(v), the Company shall pay the Executive a one-time, lump sum cash
payment equal to the fair market value of 1,000,000 shares of the Company’s
common stock on the date of such occurrence (the “Phantom Award”); provided
that, the Phantom Award shall be cancelled immediately prior to the grant of the
Sign-On RSUs pursuant to Section 3(c) and in no event shall any portion of the
Phantom Award be payable on or following the grant of the Sign-On RSUs (it being
understood by the parties that the Executive shall be entitled to receive either
the Sign-On RSUs or the Phantom Award, but not both).

 

  (e) Annual Bonuses

(i) In General. With respect to each Company fiscal year that ends during the
Term, commencing with fiscal year 2011, the Executive shall be eligible to
receive an annual performance-based cash bonus (the “Annual Bonus”) which shall
be payable based upon the attainment of individual and Company performance goals
established by the Board in consultation with the Executive. The terms of the
Annual Bonus with respect to each fiscal year shall provide that if the Company
and/or Executive attains target performance levels for an applicable fiscal
year, the Executive’s Annual Bonus shall be payable in an amount equal to 85% of
Annual Base Salary (the “Target Bonus”), and may, at the discretion of the
Board, provide for a higher amount if performance targets are exceeded. Each
such Annual Bonus shall be payable on, or at such date as is determined by the
Board within 90 days following the last day of the fiscal year with respect to
which it relates. Except as provided in Section 5, notwithstanding any other
provision of this Section 3(e)(i), no bonus shall be payable with respect to any
fiscal year unless the Executive remains continuously employed with the Company
during the period beginning on the Effective Date and ending on the first day of
the fiscal year following the end of the fiscal year to which the Annual Bonus
relates (for each Annual Bonus, the “Bonus Vesting Date”).

 

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(ii) 2011 Guaranteed Bonus. Notwithstanding Section 3(e)(i), if the Company
and/or Executive does not attain performance target levels with respect to
fiscal year 2011, then the Company shall pay to the Executive a minimum bonus in
an amount equal to 80% of the Target Bonus (the “2011 Guaranteed Bonus”) in lieu
of any Annual Bonus with respect to fiscal year 2011 pursuant to
Section 3(e)(i). The 2011 Guaranteed Bonus, if applicable, shall be payable on
the same date fiscal year 2011 bonuses are payable to other senior executive
officers of the Company (or if no bonuses are payable to other senior executive
officers of the Company with respect to fiscal year 2011, at such date within 90
days following the last day of fiscal year 2011 as shall be determined by the
Board). Except as provided in Section 5 and notwithstanding any other provision
of this Section 3(e)(ii), the 2011 Guaranteed Bonus shall not be payable unless
the Executive remains continuously employed with the Company during the period
beginning on the Effective Date and ending on the first day following the end of
fiscal year 2011.

 

  (f) Annual Equity Award.

(i) In March 2011, with respect to fiscal year 2011, the Executive shall be
granted an annual equity compensation award in the form of 400,000 restricted
stock units (the “2011 RSUs”) pursuant to the 2010 Incentive Award Plan. The
terms and conditions of the 2011 RSUs shall be set forth in one or more written
award agreements between the Company and the Executive, which shall provide that
(A) subject to the Executive’s continuous employment with the Company, the 2011
RSUs shall vest in substantially equal installments on each of the first three
anniversaries of the date of grant, (B) notwithstanding the

forgoing Section 3(f)(i)(A), the 2011 RSUs shall become fully vested immediately
prior to a Change in Control, and subject to Section 3(f)(i)(A) and 3(f)(i)(B),
and shall contain the same general terms and conditions as annual equity awards
made to other senior executives of the Company. Prior to vesting, the 2011 RSUs
shall not be transferable and, except as otherwise set forth in this Agreement,
shall be subject to forfeiture upon the Executive’s termination of employment
with the Company.

(ii) Commencing after fiscal year 2011, the Executive shall be granted an annual
equity compensation award with a value equal to 200% of his Annual Base Salary
in each applicable year of the Term (each such award, an “Annual Equity Award”).
The form of each Annual Equity Award (i.e., options, restricted stock units or
other equity-based compensation awards), and the terms and conditions of each
Annual Equity Award shall be determined by the Committee or the Board in its
discretion and shall be set forth in one or more written award agreements
between the Company and the Executive; provided that each Annual Equity Award
shall be granted at the same time as, and, except as set forth in this
Agreement, shall be subject to the same vesting schedule (including performance
vesting) and other general terms and conditions as, annual equity awards made to
other senior executives of the Company. Notwithstanding the foregoing and
anything to the contrary in the 2010 Incentive Award Plan, the Committee (as
defined in the 2010 Incentive Award Plan) shall not reduce or eliminate the
value of any performance-based portion of an Annual Equity Award to the
Executive pursuant to the last sentence of Section 5.4 of the 2010 Incentive
Award Plan if the applicable performance vesting targets are attained.

 

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(iii) The agreements containing the terms of the Sign-On RSUs and the 2011 RSUs
shall provide that, notwithstanding any provision of the 2010 Incentive Award
Plan or any grant notice thereunder, the Executive is not required to accept as
binding, conclusive or final any decisions or interpretations of the
administrator of such plan unless such decisions or interpretations are
necessary or appropriate to comply with applicable law or the rules of any
securities exchange or automated quotation system on which shares of the
Company’s capital stock are listed, quoted or traded.

(g) Benefits. During the Term, the Executive shall be eligible to participate in
employee benefit plans, programs and arrangements of the Company in accordance
with their terms, as in effect from time to time, and as are generally provided
by the Company to its senior executive officers but in any event on a no less
favorable basis than is provided to any other executive officer of the Company.
During the Term, the Company shall provide the Executive with term life
insurance in a face amount equal to no less than 400% of his Annual Base Salary
(as in effect on the Effective Date) and, in connection therewith, the Executive
shall submit to all medical examinations and take all other necessary or
appropriate actions, as reasonably requested by the Company, in connection with
obtaining such life insurance coverage; provided, however, that, in the event
the health of the Executive is determined as a result of such medical
examinations to be materially worse than that of the average man of his age and,
as a result, the cost of such insurance is materially higher than that which
could be obtained for an average man of his age, the Executive and the Company
will discuss and mutually agree upon an alternative provision regarding life
insurance.

(h) Vacation; Holidays. During the Term, the Executive shall be entitled to four
weeks paid vacation each full calendar year. Any vacation shall be taken at the
reasonable and mutual convenience of the Company and the Executive. Holidays
shall be provided in accordance with Company policy, as in effect from time to
time.

(i) Business Expenses. During the Term, the Company shall reimburse the
Executive for all reasonable, documented, out-of-pocket travel and other
business expenses incurred by the Executive in the performance of the
Executive’s duties to the Company in accordance with the Company’s applicable
expense reimbursement policies and procedures.

(j) Indemnification. Concurrently with execution and delivery of this Agreement,
the Company and GSI Group Corporation, a Michigan corporation (“GGC”), shall
each enter into an Indemnification Agreement with the Executive in substantially
the forms attached hereto as Exhibit A and Exhibit B (collectively, the
“Indemnification Agreements”). Notwithstanding anything to the contrary in this
Agreement, the obligations of the Company and GGC (including, without
limitation, their respective successors) pursuant to the Indemnification
Agreements shall survive the end of the Term.

 

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4. Termination. During the Term, the Executive’s employment hereunder may be
terminated by the Company or the Executive, as applicable, without any breach of
this Agreement only under the following circumstances:

 

  (a) Circumstances

(i) Death. The Executive’s employment hereunder shall terminate upon the
Executive’s death.

(ii) Disability. If the Executive incurs a Disability, the Company may give the
Executive written notice of its intention to terminate the Executive’s
employment. In that event, the Executive’s employment with the Company shall
terminate, effective on the later of the thirtieth (30th) day after receipt of
such notice by the Executive or the date specified in such notice; provided
that, within the thirty (30) day period following receipt of such notice, the
Executive shall not have returned to full-time performance of the Executive’s
duties hereunder.

(iii) Termination for Cause. The Company may terminate the Executive’s
employment for Cause.

(iv) Termination without Cause. The Company may terminate the Executive’s
employment without Cause.

(v) Resignation for Good Reason. The Executive may resign from the Executive’s
employment for Good Reason.

(vi) Resignation without Good Reason. The Executive may resign from the
Executive’s employment without Good Reason.

(b) Notice of Termination. Any termination of the Executive’s employment by the
Company or by the Executive under this Section 4 (other than a termination
pursuant to Section 4(a)(i) above) shall be communicated by a written notice to
the other party hereto (a “Notice of Termination”): (i) indicating the specific
termination provision in this Agreement relied upon, (ii) except with respect to
a termination pursuant to Sections 4(a)(iv) or (vi), setting forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive’s employment under the provision so indicated, and
(iii) specifying a Date of Termination which, if submitted by the Executive,
shall be at least thirty (30) days following the date of such notice; provided,
however, that a Notice of Termination delivered by the Company pursuant to
Section 4(a)(ii) shall not be required to specify a Date of Termination, in
which case the Date of Termination shall be determined pursuant to
Section 4(a)(ii); and provided, further, that in the event that the Executive
delivers a Notice of Termination to the Company, the Company may, in its sole
discretion, accelerate the Date of Termination to any date that occurs following
the date of Company’s receipt of such Notice of Termination (even if such date
is prior

 

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to the date specified in such Notice of Termination). Except as set forth in the
following paragraph in the case of a termination for Cause, (A) a Notice of
Termination submitted by the Company (other than a Notice of Termination under
Section 4(a)(ii) above) may provide for a Date of Termination on the date the
Executive receives the Notice of Termination, or any date thereafter elected by
the Company in its sole discretion and (B) the failure by the Company or the
Executive to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Cause or Good Reason shall not waive any right
of the Company or the Executive hereunder or preclude the Company or the
Executive from asserting such fact or circumstance in enforcing the Company’s or
the Executive’s rights hereunder. Notwithstanding the foregoing, a termination
pursuant to Section 4(a)(iii) shall be deemed to occur if following Executive’s
termination of employment for any reason the Company determines that
circumstances existing prior to such termination would have entitled to the
Company to terminate Executive’s employment pursuant to Section 4(a)(iii) and
the Company complies with the following paragraph.

Notwithstanding anything in this Agreement to the contrary, a termination of the
Executive’s employment with the Company to constitute a termination for “Cause”
for purposes of this Agreement, the Company must provide the Executive with a
Notice of Termination for Cause on or prior to the 90th day after the date that:
(x) either the Chairperson of the Audit Committee of the Board or the
Chairperson of the Board first become aware of the occurrence of the event or
events that form the basis for the alleged Cause (collectively, the “Cause
Event”) and the Executive’s involvement in such Cause Event (and any applicable
cure period to which the Executive is entitled has expired); and (y) such
applicable Chairperson could have reasonably been aware that such Cause Event
could constitute “Cause” (and any applicable cure period to which the Executive
is entitled has expired) (such date, the “Cause Triggering Date”). Such Notice
of Termination must specify that the Executive’s employment will be (or, in the
case of the last sentence of the preceding paragraph, was) terminated for
“Cause” and in reasonable detail the basis and underlying facts supporting the
Company’s belief that a Cause Event has occurred, and, if applicable, that any
applicable cure period has elapsed without cure having been effected. In
addition, the cessation of employment of the Executive shall not be deemed to be
for Cause unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not less than a
majority of the entire membership of the Board at a meeting of the Board called
and held for such purpose (after a Notice of Termination is provided to
Executive and the Executive is given an opportunity, together with counsel, to
be heard before the Board concerning such matter), finding that, in the good
faith reasonable opinion of the Board, the Executive is guilty of the conduct
described in the definition of “Cause.”

 

  5. Company Obligations Upon Termination of Employment

(a) In General. Upon a termination of the Executive’s employment for any reason,
the Executive (or the Executive’s estate) shall be entitled to receive: (i) any
portion of the Executive’s Annual Base Salary through the Date of Termination
not theretofore paid, (ii) any

 

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expenses owed to the Executive under Section 3(i), (iii) any accrued but unused
vacation pay owed to the Executive pursuant to Section 3(h), and (iv) any amount
arising from the Executive’s participation in, or benefits under, any employee
benefit plans, programs or arrangements under Section 3(g), which amounts shall
be payable in accordance with the terms and conditions of such employee benefit
plans, programs or arrangements. Except as otherwise set forth in Section 5(b)
or (c) below, the payments and benefits described in this Section 5(a) shall be
the only payments and benefits payable in the event of the Executive’s
termination of employment for any reason.

(b) Termination without Cause or for Good Reason. In the event of the
Executive’s termination of employment by the Company without Cause pursuant to
Section 4(a)(iv) or by the Executive for Good Reason pursuant to
Section 4(a)(v), in addition to the payments and benefits described in
Section 5(a) above, the Company shall, subject to Section 24 and Section 5(d)
and subject to Executive’s execution and non-revocation of a waiver and release
of claims agreement in substantially in the form attached hereto as Exhibit C in
accordance with Section 24(c) (a “Release”):

(i) Continue to pay to the Executive Annual Base Salary during the period
beginning on the Date of Termination and ending on the eighteen (18)-month
anniversary of the Date of Termination in accordance with the Company’s regular
payroll practice as of the Date of Termination; provided that, notwithstanding
anything to the contrary in this Section 5(b)(i), if such termination of
employment occurs within the twelve (12)-month period immediately following a
Change in Control (and such Change in Control constitutes a “change in control
event” as defined in Treasury Regulations Section 1.409A-3(i)(5)), then, in lieu
of the foregoing payments set forth in this Section 5(b)(i), the Company shall
pay in a lump sum to the Executive an amount equal to 200% of his Annual Base
Salary;

(ii) Pay to the Executive an amount equal to the product of (A) the amount of
the Annual Bonus that would have been payable to the Executive pursuant to
Section 3(e) if the Executive was still employed as of the applicable Bonus
Vesting Date in respect of the fiscal year in which the Date of Termination
occurs based on actual individual and Company performance goals in such year
(provided, however, that, if the Date of Termination occurs in the fiscal year
2011 and the 2011 Guaranteed Bonus is higher than the Annual Bonus based on the
performance goals, the 2011 Guaranteed Bonus shall be used in place of the
Annual Bonus for purposes of this clause (A)) and (B) the ratio of (x) the
number of days elapsed during the fiscal year during which such termination of
employment occurs on or prior to the Date of Termination, to (y) 365. Any amount
payable pursuant to this Section 5(b)(ii) shall, subject to Section 24 and
Section 5(d), be paid to Executive in accordance with Section 3(e)(i) as if the
Executive was still employed on the applicable Bonus Vesting Date, but in no
event later than the 15th day of the third month of the fiscal year immediately
following the fiscal year in which the Date of Termination occurs (provided that
if the Date of Termination is in fiscal year 2011, any amount payable under this
Section 5(b)(ii) shall be paid at the Date of Termination and computed based on
the 2011 Guaranteed Bonus, and, if the Annual Bonus for 2011 is

 

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determined, based on any applicable Company goals achieved, to be higher than
the 2011 Guaranteed Bonus, the amount due under this Section 5(b)(ii) shall be
recomputed and the appropriate additional amount due shall be paid to the
Executive no later than March 15, 2012); and

(iii) Notwithstanding any provision to the contrary in any equity plan or award
agreement with respect to equity awards, cause (A) the Sign-On RSUs which are
not vested as of the Date of Termination to become vested in accordance with the
terms and conditions of the applicable award agreement, and (B) with respect to
the award of the 2011 RSUs, and all Annual Equity Awards subject to
service-based vesting, each such award to become vested with respect to a
prorated portion thereof based on the ratio of the number of days of employment
of the Executive during the applicable service-based vesting period to the total
number of days of such service-based vesting period, and (C) with respect to all
Annual Equity Awards subject to performance-based vesting, each such award to
shall continue to be eligible to become vested in accordance with its terms
based on actual performance with respect to a prorated portion of such award
based on the ratio of the number of days of employment of the Executive during
the applicable performance period to the total number of days of such
performance period; provided that, notwithstanding anything to the contrary in
this Section 5(b)(iii), (x) if such termination of employment occurs during any
period when the Executive is unable to engage in substantial gainful activity
that may reasonably be expected to result in Disability, the Company shall, on
the Date of Termination, cause (I) the Sign-On RSUs, the 2011 RSUs, and all
Annual Equity Awards subject to service-based vesting, to become fully vested
and (II) all Annual Equity Awards subject to performance-based vesting to
continue to be eligible to become vested in accordance with their terms based on
actual performance, and (y) if such termination of employment occurs within the
twelve (12)-month period immediately following a Change in Control, the Company
shall, on the Date of Termination, cause all equity awards held by the Executive
(including, without limitation, the Annual Equity Awards) which are not vested
as of the Date of Termination to become vested for the purposes of the 2010
Incentive Award Plan or any other applicable equity plan, and any applicable
award agreement(s), deeming, for purposes of awards subject to performance-based
vesting, that the Company will attain “target” performance levels.

(c) Termination due to Death or Disability. In the event of the Executive’s
termination of employment due to death pursuant to Section 4(a)(i) or by the
Company due to Disability pursuant to Section 4(a)(ii), in addition to the
payments and benefits described in Section 5(a) above, the Company shall,
subject to Section 24 and Section 5(d) and subject (except in the case of death
or a Disability so severe as to make such execution impossible) to the
Executive’s execution and non-revocation of a Release in accordance with
Section 24(c):

(i) Pay to the Executive an amount equal to the product of (A) the amount of the
Annual Bonus that would have been payable to the Executive pursuant to
Section 3(e) if the Executive was still employed as of the applicable Bonus
Vesting Date in respect of the fiscal year in which the Date of Termination
occurs based on actual individual and Company

 

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performance goals in such year (provided, however, that, if the Date of
Termination occurs in fiscal year 2011 and the 2011 Guaranteed Bonus is higher
than the Annual Bonus based on the performance goals, the 2011 Guaranteed Bonus
shall be used in place of the Annual Bonus for purposes of this clause (A)) and
(B) the ratio of (x) the number of days elapsed during the fiscal year during
which such termination of employment occurs on or prior to the Date of
Termination, to (y) 365. Any amount payable pursuant to this Section 5(c)(i)
shall, subject to Section 24 and Section 5(d), be paid to the Executive in
accordance with Section 3(e)(i) as if the Executive was still employed on the
applicable Bonus Vesting Date in respect of the fiscal year in which the Date of
Termination occurs, but in no event later than the 15th day of the third month
of the fiscal year immediately following the fiscal year in which the Date of
Termination occurs (provided that if the Date of Termination is in fiscal year
2011, any amount payable under this Section 5(c)(i) shall be paid at the Date of
Termination and computed based on the 2011 Guaranteed Bonus, and, if the Annual
Bonus for 2011 is determined, based on any applicable Company goals achieved, to
be higher than the 2011 Guaranteed Bonus, the amount due under this
Section 5(c)(i) shall be recomputed and the appropriate additional amount due
shall be paid to the Executive no later than March 15, 2012); and

(ii) Notwithstanding any provision to the contrary in any equity plan or award
agreement with respect to equity awards, cause (A) with respect to the Sign-On
RSUs, the 2011 RSUs, and all Annual Equity Awards subject to service-based
vesting, each such award to become fully vested, and (B) with respect to all
Annual Equity Awards subject to performance-based vesting, each such award to
shall continue to be eligible to become vested in accordance with its terms
based on actual performance.

(d) Notwithstanding any other provision of this Agreement, no payment shall be
made, and no acceleration in vesting shall occur, pursuant to Section 5(b) or
Section 5(c) following the date the Executive first violates Section 6(a), (b),
(d), or (e) if the Executive does not cure such violation within 30 days of
written notice thereof.

(e) The provisions of this Section 5 shall supersede in their entirety any
severance payment provisions in any severance plan, policy, program or other
arrangement maintained by the Company.

 

  6. Restrictive Covenants.

(a) The Executive hereby agrees that the Executive shall not, at any time during
the Restricted Period, directly or indirectly engage in, have any interest in
(including, without limitation, through the investment of capital or lending of
money or property), or manage, operate or otherwise render any services to, any
Person (whether on his own or in association with others, as a principal,
director, officer, employee, agent, representative, partner, member, security
holder, consultant, advisor, independent contractor, owner, investor,
participant or in any other capacity) that engages in (either directly or
through any subsidiary or Affiliate thereof) the business of marketing or
selling any products which directly compete with the

 

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products sold by the Company but only if the Executive directly or indirectly
engages in, has any interest in (including, without limitation, through the
investment of capital or lending of money or property), or manages, operates or
otherwise renders any services in connection with, such business (whether on his
own or in association with others, as a principal, director, officer, employee,
agent, representative, partner, member, security holder, consultant, advisor,
independent contractor, owner, investor, participant or in any other capacity).
Notwithstanding the foregoing, the Executive shall be permitted to acquire a
passive stock or equity interest in such a Person; provided that such stock or
other equity interest acquired is less than five percent (5%) of the outstanding
interest in such Person.

(b) The Executive hereby agrees that the Executive shall not, at any time during
the Restricted Period, directly or indirectly, either for himself or on behalf
of any other Person, (i) recruit or otherwise solicit or induce any employee,
customer or supplier of the Company to terminate its employment or arrangement
with the Company, or otherwise change its relationship with the Company, or
(ii) hire, or cause to be hired, any person who both (A) was employed by the
Company at any time during the 180-day period before the Date of Termination and
(B) was employed by the Company at the time of recruitment, solicitation,
inducement or hire, or (x) with respect to any former employee of the Company
who following his termination of employment at the Company becomes employed on a
full-time basis with another employer prior to any recruitment, solicitation or
inducement by the Executive (and who at the time of commencement of such other
employment had no intention of becoming employed by the Executive or any Person
affiliated with the Executive), at any time during the 90-day period immediately
prior to recruitment, solicitation, inducement or hire thereof, or (y) with
respect to any other former employee of the Company, at any time during the
180-day period immediately prior to recruitment, solicitation, inducement or
hire thereof; provided, however, that any advertising or solicitation not
specifically directed at the Company or any of its employees, clients or
customers shall not constitute a breach of this Section 6(b) nor shall the
hiring of any person pursuant to such advertising or solicitation whose annual
compensation is less than $60,000 per annum.

(c) The provisions contained in Sections 6(a) and (b) may be altered and/or
waived to be made less restrictive on the Executive with the prior written
consent of the Board or the Committee.

(d) Except as the Executive reasonably and in good faith determines to be
desirable in the faithful performance of the Executive’s duties hereunder or
required in accordance with Section 6(f), the Executive shall, during the Term
and after the Date of Termination, maintain in confidence and shall not directly
or indirectly, use, disseminate, disclose or publish, for the Executive’s
benefit or the benefit of any other Person, any confidential or proprietary
information or trade secrets of or relating to the Company, including, without
limitation, information with respect to the Company’s operations, processes,
protocols, products, inventions, business practices, finances, principals,
vendors, suppliers, customers, potential customers, marketing methods, costs,
prices, contractual relationships, regulatory

 

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status, compensation paid to employees or other terms of employment
(“Proprietary Information”), or deliver to any Person, any document, record,
notebook, computer program or similar repository of or containing any such
Proprietary Information. The Executive’s obligation to maintain and not use,
disseminate, disclose or publish, or use for the Executive’s benefit or the
benefit of any other Person, any Proprietary Information after the Date of
Termination will continue so long as such Proprietary Information is not, or has
not by legitimate means become, generally known and in the public domain (other
than by means of the Executive’s direct or indirect disclosure of such
Proprietary Information) and continues to be maintained as Proprietary
Information by the Company. The parties hereby stipulate and agree that as
between them, the Proprietary Information identified herein is important,
material and affects the successful conduct of the businesses of the Company
(and any successor or assignee of the Company).

(e) Upon termination of the Executive’s employment with the Company for any
reason, the Executive will promptly deliver to the Company (i) all
correspondence, drawings, manuals, letters, notes, notebooks, reports, programs,
plans, proposals, financial documents, and any other documents that are
Proprietary Information, including all physical and digital copies thereof (the
“Materials”); provided, however, that the parties agree that a mutually agreed
upon independent law firm shall retain one copy of the Materials in a secure
location for archival purposes for the Executive to access solely in connection
with any dispute concerning or relating to the Materials provided to the
Executive, and (ii) all other Company property (including, without limitation,
any personal computer or wireless device and related accessories, keys, credit
cards and other similar items) which is in his possession, custody or control.

(f) The Executive may respond to a lawful and valid subpoena or other legal
process but shall give the Company prompt notice thereof, and shall use
reasonable best efforts, as much in advance of the return date as possible, to
make available to the Company and its counsel the documents and other
information sought, and shall assist (at the Company’s expense) such counsel in
resisting or otherwise responding to such process.

(g) Except as required in connection with any legal dispute between the parties
or as required by applicable law or legal process, during the Term and
thereafter: (i) the Company shall instruct its then-current Board members,
executive officers and authorized Company representatives speaking on behalf of
the Company to not willfully make (or direct anyone else to make) any
Disparaging remarks, comments or statements about the Executive to any other
person or entity; and (ii) the Executive shall not willfully make (or direct
anyone else to make) any Disparaging remarks, comments or statements about the
Company (including, without limitation, its directors, officers, agents,
representatives, partners, members, equity holders or Affiliates) to any other
person or entity. For purposes hereof, “Disparaging” written or oral remarks,
comments or statements are those that impugn the character, honesty, integrity
or morality or business acumen or abilities in connection with any aspect of the
operation of business of the individual or entity being disparaged.
Notwithstanding the foregoing, the Executive may make truthful statements about
any Company employee to any member of the Board or his legal representatives and
each Board member may make truthful statements about the Executive to other
Board members or the Company’s legal representatives.

 

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(h) Prior to accepting other employment or any other service relationship during
the Restricted Period, the Executive shall provide a copy of this Section 6 to
any recruiter who assists the Executive in obtaining other employment or any
other service relationship and to any employer or other Person with which the
Executive obtains future employment or any other service relationship prior to
the commencement of such future employment or other service relationship.

(i) In the event the terms of this Section 6 shall be determined by any court of
competent jurisdiction to be unenforceable by reason of its extending for too
great a period of time or over too great a geographical area or by reason of its
being too extensive in any other respect, it will be interpreted to extend only
over the maximum period of time for which it may be enforceable, over the
maximum geographical area as to which it may be enforceable, or to the maximum
extent in all other respects as to which it may be enforceable, all as
determined by such court in such action. Any breach or violation by the
Executive of the provisions of this Section 6 shall toll the running of any time
periods set forth in this Section 6 for the duration of any such breach or
violation.

(j) As used in this Section 6, the term “Company” shall include the Company and
any direct or indirect subsidiary entity thereof.

7. Injunctive Relief. The Executive recognizes and acknowledges that a breach of
the covenants contained in Section 6 will cause irreparable damage to the
Company and its goodwill, the exact amount of which will be difficult or
impossible to ascertain, and that the remedies at law for any such breach will
be inadequate. Accordingly, the Executive agrees that in the event of a breach
of any of the covenants contained in Section 6, in addition to any other remedy
which may be available at law or in equity, the Company will be entitled to
specific performance and injunctive relief.

 

  8. Parachute Payments.

(a) In the event it shall be determined that any payment or distribution to or
for the benefit of the Executive under this Agreement or any other plan,
arrangement or agreement with the Company, any person whose actions result in a
Change in Control or other change in control or any person affiliated with the
Company or such person (the “Payment” and collectively, the “Payments”) would be
subject to the excise tax imposed by Section 4999 of the Code (or any similar
federal, state or local tax that may hereafter be imposed) or any interest or
penalties with respect to such excise tax (collectively, such excise tax,
together with any such interest or penalties, the “Excise Tax”), the Company
shall pay to the Executive at the time specified in Section 8(b) hereof an
additional amount (the “Gross-Up Payment”) such that the net

 

17

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amount retained by Executive, after deduction of any Excise Tax on the Payments
and any federal, state and local income tax and Excise Tax upon the payment
provided for by this Section 8, shall be equal to the Payments. Notwithstanding
anything to the contrary in this Section 8, in no event shall the Company be
required to pay to the Executive any amount under this Section 8 with respect to
any taxes or interest that may arise as a result of Section 409A.

(b) All determinations required to be made under this Section 8 shall be made in
writing by a nationally recognized public accounting firm selected by the
Company and subject to the approval of the Executive, which approval shall not
be unreasonably withheld, and such determinations shall be final and binding on
the Company and the Executive and detailed supporting calculations shall be
provided to the Company and the Executive. Any fees incurred as a result of work
performed by any independent accounting firm pursuant to this Section 8 shall be
paid by the Company. The Gross-Up Payment provided for in this Section 8 shall
be made not later than the date the applicable Excise Tax with respect to which
the portion of the Gross-Up Payment relates is due. In no event shall any
payment made to the Executive pursuant to this Section 8 be made later than the
last day of the calendar year following the calendar year in which the
applicable Excise Tax is paid by the Executive.

(c) For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income taxes at the highest marginal
rate of federal income taxation in the calendar year in which the Gross-Up
Payment is to be made and state and local income taxes at the highest marginal
rate of taxation in the state and locality of the Executive’s residence on the
date of the applicable Payment with respect to which the portion of the Gross-Up
Payment relates, net of the maximum reduction in federal income taxes which
could be obtained from deduction of such state and local taxes. In the event
that the Excise Tax is subsequently determined to be less than the amount taken
into account hereunder for purposes of determining the Gross-Up Payment, the
Executive shall repay to the Company within ten days after the time that the
amount of such reduction in Excise Tax is finally determined the portion of the
Gross-Up Payment attributable to such reduction (plus the portion of the
Gross-Up Payment attributable to the Excise Tax and federal and state and local
income tax imposed on the Gross-Up Payment being repaid by the Executive if such
repayment results in a reduction in Excise Tax and/or federal and state and
local income tax deduction). In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder at the time of the applicable
Payment with respect to which the portion of the Gross-Up Payment relates
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make an
additional gross-up payment in respect of such excess within ten days after the
time that the amount of such excess is finally determined.

9. Attorneys’ Fees. The Company shall pay the Executive’s reasonable and
documented attorneys’ fees and expenses incurred by him in connection with the
review and negotiation of this Agreement, up to a maximum of $25,000.

 

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10. Assignment and Successors. The Company may (a) assign its rights and
obligations under this Agreement to any entity, including any successor to all
or substantially all the assets of the Company, by merger or otherwise, and
(b) may assign or encumber this Agreement and its rights hereunder as security
for indebtedness of the Company and its Affiliates; provided, however, that no
assignment or encumbrance pursuant to Section 10(b) shall relieve the Company of
any of its obligations hereunder. The Executive may not assign the Executive’s
rights or obligations under this Agreement to any individual or entity. This
Agreement shall be binding upon and inure to the benefit of the Company, the
Executive and their respective successors, assigns, personnel and legal
representatives, executors, administrators, heirs, distributees, devisees, and
legatees, as applicable.

11. Governing Law. This Agreement shall be governed, construed, interpreted and
enforced in accordance with the substantive laws of the Commonwealth of
Massachusetts, without giving effect to any principles of conflicts of law,
whether of the Commonwealth of Massachusetts or any other jurisdiction, and
where applicable, the laws of the United States, that would result in the
application of the laws of any other jurisdiction.

12. Validity. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

13. Notices. Any notice, request, claim, demand, document and other
communication hereunder to any party hereto shall be effective upon receipt (or
refusal of receipt) and shall be in writing and delivered personally or sent by
telex, telecopy, or certified or registered mail, postage prepaid, to the
following address (or at any other address as any party hereto shall have
specified by notice in writing to the other party hereto):

 

(a)   If to the Company:   GSI Group Inc.   125 Middlesex Turnpike   Bedford, MA
01730-1409   Attn: Vice President, Corporate Resources   Facsimile: (781)
266-5115

 

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  Copy to:   Latham & Watkins LLP   885 Third Avenue   New York, New York
10022-4802   Attn:     James C. Gorton                Bradd L. Williamson  
Facsimile: (212) 751-4864 (b)   If to the Executive, at the address set forth on
the signature page hereto.   Copy to:   Whalen LLP   19000 MacArthur, Ste. 600  
Irvine, CA 92612   Attn: Michael Whalen   Facsimile: (949) 833-1709

14. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original, but all of which together will
constitute one and the same Agreement.

15. Entire Agreement. The terms of this Agreement (together with any other
agreements and instruments contemplated hereby or referred to herein) is
intended by the parties hereto to be the final expression of their agreement
with respect to the employment of the Executive by the Company and may not be
contradicted by evidence of any prior or contemporaneous agreement (including,
without limitation, any term sheet or offer letter). The parties hereto further
intend that this Agreement shall constitute the complete and exclusive statement
of its terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative, or other legal proceeding to vary the terms of this
Agreement.

16. Amendments; Waivers. This Agreement may not be modified, amended, or
terminated except by an instrument in writing, signed by the Executive and a
duly authorized officer of the Company and approved by the Board, which
expressly identifies the amended provision of this Agreement. By an instrument
in writing similarly executed and approved by the Board, the Executive or a duly
authorized officer of the Company may waive compliance by the other party or
parties hereto with any provision of this Agreement that such other party was or
is obligated to comply with or perform; provided, however, that such waiver
shall not operate as a waiver of, or estoppel with

 

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respect to, any other or subsequent failure to comply or perform. No failure to
exercise and no delay in exercising any right, remedy, or power hereunder shall
preclude any other or further exercise of any other right, remedy, or power
provided herein or by law or in equity.

17. No Inconsistent Actions. The parties hereto shall not voluntarily undertake
or fail to undertake any action or course of action inconsistent with the
provisions or essential intent of this Agreement. Furthermore, it is the intent
of the parties hereto to act in a fair and reasonable manner with respect to the
interpretation and application of the provisions of this Agreement.

18. Construction. This Agreement shall be deemed drafted equally by both of the
parties hereto. Its language shall be construed as a whole and according to its
fair meaning. Any presumption or principle that the language is to be construed
against any party hereto shall not apply. The headings in this Agreement are
only for convenience and are not intended to affect construction or
interpretation. Any references to paragraphs, subparagraphs, sections or
subsections are to those parts of this Agreement, unless the context clearly
indicates to the contrary. Also, unless the context clearly indicates to the
contrary, (a) the plural includes the singular and the singular includes the
plural; (b) “and” and “or” are each used both conjunctively and disjunctively;
(c) “any,” “all,” “each,” or “every” means “any and all,” and “each and every”;
(d) “includes” and “including” are each “without limitation”; (e) “herein,”
“hereof,” “hereunder” and other similar compounds of the word “here” refer to
the entire Agreement and not to any particular paragraph, subparagraph, section
or subsection; and (f) all pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine, neuter, singular or plural as the identity
of the entities or persons referred to may require.

 

  19. Dispute Resolution

(a) With respect to disputes and claims hereunder, each of the parties
irrevocably submits to the exclusive jurisdiction of any court of competent
jurisdiction sitting in Middlesex Country, Massachusetts, for the purposes of
any suit, action or other proceeding arising out of this Agreement, any related
agreement or any transaction contemplated hereby or thereby. Each of the parties
hereto further agrees that service of any process, summons, notice or document
by U.S. registered mail to such party’s respective address set forth or
described in Section 13 shall be effective service of process for any action,
suit or proceeding in any court of competent jurisdiction sitting in Middlesex
Country, Massachusetts with respect to any matters to which it has submitted to
jurisdiction in this Section 19. Each of the parties hereto irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement, any related document or the
transactions contemplated hereby and thereby in any court of competent
jurisdiction sitting in Middlesex County, Massachusetts, and hereby and thereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.

 

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(b) As a specifically bargained for inducement for each of the parties hereto to
enter into this Agreement (after having the opportunity to consult with
counsel), each party hereto expressly waives the right to trial by jury in any
lawsuit or proceeding relating to or arising in any way from this Agreement or
the matters contemplated hereby.

20. Enforcement. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future laws effective during the term
of this Agreement, such provision shall be fully severable; this Agreement shall
be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a portion of this Agreement; and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.

21. Withholding. The Company shall be entitled to withhold from any amounts
payable under this Agreement, any federal, state, local or foreign withholding
or other taxes or charges which the Company is required to withhold. The Company
shall be entitled to rely on an opinion of counsel if any questions as to the
amount or requirement of withholding shall arise.

22. Absence of Conflicts; Executive Acknowledgement; Confidentiality. The
Executive hereby represents that from and after the Effective Date the
performance of the Executive’s duties hereunder will not breach any other
agreement to which the Executive is a party. The Executive acknowledges that the
Executive has read and understands this Agreement, is fully aware of its legal
effect, has not acted in reliance upon any representations or promises made by
the Company other than those contained in writing herein, and has entered into
this Agreement freely based on the Executive’s own judgment.

23. Survival. The expiration or termination of the Term shall not impair the
rights or obligations of any party hereto which shall have accrued prior to such
expiration or termination (including, without limitation, pursuant to the
provisions of Section 6 hereof).

 

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  24. Section 409A.

(a) General. The parties hereto acknowledge and agree that, to the extent
applicable, this Agreement shall be interpreted in accordance with, and
incorporate the terms and conditions required by, Section 409A. Notwithstanding
any provision of this Agreement to the contrary, in the event that the Company
determines that any amounts payable hereunder will be immediately taxable to the
Executive under Section 409A, the Company reserves the right (without any
obligation to do so or to indemnify the Executive for failure to do so) to
(i) adopt such amendments to this Agreement and appropriate policies and
procedures, including amendments and policies with retroactive effect, that the
Company determines to be necessary or appropriate to preserve the intended tax
treatment of the benefits provided by this Agreement, to preserve the economic
benefits of this Agreement and to avoid less favorable accounting or tax
consequences for the Company and/or (ii) take such other actions as the Company
determines to be necessary or appropriate to exempt the amounts payable
hereunder from Section 409A or to comply with the requirements of Section 409A
and thereby avoid the application of penalty taxes thereunder. No provision of
this Agreement shall be interpreted or construed to transfer any liability for
failure to comply with the requirements of Section 409A from the Executive or
any other individual to the Company or any of its Affiliates, employees or
agents.

(b) Separation from Service under Section 409A. Notwithstanding any provision to
the contrary in this Agreement: (i) no amount shall be payable pursuant to
Section 5(b) or 5(c) unless the termination of the Executive’s employment
constitutes a “separation from service” within the meaning of
Section 1.409A-1(h) of the Department of Treasury Regulations; (ii) for purposes
of Section 409A, the Executive’s right to receive installment payments pursuant
to Section 5(b) or 5(c) shall be treated as a right to receive a series of
separate and distinct payments; and (iii) to the extent that any reimbursement
of expenses or in-kind benefits constitutes “deferred compensation” under
Section 409A, such reimbursement or benefit shall be provided no later than
December 31 of the year following the year in which the expense was incurred.
The amount of expenses reimbursed in one year shall not affect the amount
eligible for reimbursement in any subsequent year. The amount of any in-kind
benefits provided in one year shall not affect the amount of in-kind benefits
provided in any other year. Notwithstanding any provision to the contrary in
this Agreement, if the Executive is deemed at the time of his separation from
service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of
the Code, to the extent delayed commencement of any portion of the termination
benefits to which the Executive is entitled under this Agreement is required in
order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the
Code, such portion of the Executive’s termination benefits shall not be provided
to the Executive prior to the earlier of (A) the expiration of the six-month
period measured from the date of the Executive’s “separation from service” with
the Company (as such term is defined in the Treasury Regulations issued under
Section 409A of the Code) or (B) the date of the Executive’s death; upon the
earlier of such dates, all payments deferred pursuant to this sentence shall be
paid in a lump sum to the Executive, and any remaining payments due under the
Agreement shall be paid as otherwise provided herein.

 

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(c) Release. Notwithstanding anything to the contrary in this Agreement, to the
extent that any payments of “nonqualified deferred compensation” (within the
meaning of Section 409A) due under this Agreement as a result of the Executive’s
termination of employment are subject to the Executive’s execution and delivery
of a Release, (i) the Company shall deliver the Release to the Executive within
seven (7) days following the Date of Termination, and (ii) if the Executive
fails to execute the Release on or prior to the Release Expiration Date (as
defined below) or timely revokes his acceptance of the Release thereafter, the
Executive shall not be entitled to any payments or benefits otherwise
conditioned on the Release. For purposes of this Section 24(c), “Release
Expiration Date” shall mean the date that is twenty-one (21) days following the
date upon which the Company timely delivers the Release to the Executive, or, in
the event that the Executive’s termination of employment is “in connection with
an exit incentive or other employment termination program” (as such phrase is
defined in the Age Discrimination in Employment Act of 1967), the date that is
forty-five (45) days following such delivery date. To the extent that any
payments of nonqualified deferred compensation (within the meaning of
Section 409A) due under this Agreement as a result of the Executive’s
termination of employment are delayed pursuant to this Section 24(c), such
amounts shall be paid in a lump sum on the first payroll date to occur on or
after the 60th day following the date of Executive’s termination of employment,
provided that Executive executes and does not revoke the Release prior to such
60th day (and any applicable revocation period has expired).

25. Compensation Recovery Policy. The Executive acknowledges and agrees that, to
the extent the Company adopts any clawback or similar policy pursuant to the
Dodd-Frank Wall Street Reform and Consumer Protection Act, and any rules and
regulations promulgated thereunder, he shall take all action necessary or
appropriate to comply with such policy (including, without limitation, entering
into any further agreements, amendments or policies necessary or appropriate to
implement and/or enforce such policy). For the avoidance of doubt, other than as
provided in this Agreement (including, this Section 25), or as otherwise
required by applicable law or by the rules of any securities exchange or
automated quotation system on which shares of the Company’s capital stock are
listed, quoted or traded, no vested equity award described in this Agreement
shall be subject to any payment, termination or forfeiture obligation described
in Section 11.5(a) of the 2010 Incentive Award Plan and the Executive shall not
be required, and no award under such plan shall be conditioned on requiring
Executive, to enter into any other agreement to the contrary.

26. Full Settlement. The Company’s obligation to make the payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not
be affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against the Executive or others. In
no event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement and such amounts shall not be reduced
whether or not the Executive obtains other employment.

 

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27. Conflicts. To the extent this Agreement describes equity awards that shall
be issued pursuant to the 2010 Incentive Award Plan, such equity awards shall be
subject to the 2010 Incentive Award Plan; provided that, in the event of a
conflict between any term or provision contained herein and a term or provision
of the 2010 Incentive Award Plan, the applicable term or provision of this
Agreement will govern and prevail.

[Signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
and year first above written.

 

COMPANY

By:

  

  /s/ Stephen W. Bershad

  

Name: Stephen Bershad

  

Title:   Chairman of the Board

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EXECUTIVE

By:

 

  /s/ John Roush

  John Roush   Residence Address:  

 

 

 

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EXHIBIT A

GSI GROUP INC.

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (this “Agreement”) is dated as of November 16,
2010 and is between GSI Group Inc., a corporation organized under the laws of
the province of New Brunswick (the “Company”), and John Roush (“Indemnitee”).

RECITALS

A. Indemnitee’s service to the Company substantially benefits the Company.

B. Individuals are reluctant to serve as directors or officers of corporations
or in certain other capacities unless they are provided with adequate protection
through insurance or indemnification against the risks of claims and actions
against them arising out of such service.

C. Indemnitee does not regard the protection currently provided by applicable
law, the Company’s governing documents and any insurance as adequate under the
present circumstances, and Indemnitee may not be willing to serve as a director
or officer without additional protection.

D. In order to induce Indemnitee to continue to provide services to the Company,
it is reasonable, prudent and necessary for the Company to contractually
obligate itself to indemnify, and to advance expenses on behalf of, Indemnitee
as permitted by applicable law.

E. This Agreement is a supplement to and in furtherance of the indemnification
provided in the Company’s bylaws, and any resolutions adopted pursuant thereto,
and this Agreement shall not be deemed a substitute therefor, nor shall this
Agreement be deemed to limit, diminish or abrogate any rights of Indemnitee
thereunder.

The parties therefore agree as follows:

1. Definitions.

(a) A “Change in Control” shall be deemed to occur upon the earliest to occur
after the Effective Date (as defined in that certain Employment Agreement by and
between the Company and Indemnitee dated as of November 16, 2010) of any of the
following events:

(i) Acquisition of Stock by Third Party. Any Person (as defined below) is or
becomes the Beneficial Owner (as defined below), directly or indirectly, of
securities of the Company representing fifteen percent (15%) or more of the
combined voting power of the Company’s then outstanding securities;

(ii) Change in Board Composition. During any period of two consecutive years
(not including any period prior to the Effective Date), individuals who at the
beginning of such period constitute the Company’s board of directors, and any
new directors (other than a director designated by a person who has entered into
an agreement

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with the Company to effect a transaction described in Sections 1(a)(i),
1(a)(iii) or 1(a)(iv)) whose election by the board of directors or nomination
for election by the Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
of the members of the Company’s board of directors;

(iii) Corporate Transactions. The effective date of a merger or consolidation of
the Company with any other entity, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior to such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the surviving entity outstanding immediately after such merger or
consolidation and with the power to elect at least a majority of the board of
directors or other governing body of such surviving entity;

(iv) Liquidation. The approval by the stockholders of the Company of a complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets; and

(v) Other Events. Any other event of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or form) promulgated under
the Securities Exchange Act of 1934, as amended, whether or not the Company is
then subject to such reporting requirement.

For purposes of this Section 1(a), the following terms shall have the following
meanings:

(1) “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended; provided, however, that
“Person” shall exclude (i) the Company, (ii) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, and (iii) any
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.

(2) “Beneficial Owner” shall have the meaning given to such term in Rule 13d-3
under the Securities Exchange Act of 1934, as amended; provided, however, that
“Beneficial Owner” shall exclude any Person otherwise becoming a Beneficial
Owner by reason of (i) the stockholders of the Company approving a merger of the
Company with another entity or (ii) the Company’s board of directors approving a
sale of securities by the Company to such Person.

(b) “Corporate Status” describes the status of a person who is or was a
director, trustee, general partner, managing member, officer, employee, agent or
fiduciary of the Company or any other Enterprise.

 

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(c) “Disinterested Director” means a director of the Company who is not and was
not a party to the Proceeding in respect of which indemnification is sought by
Indemnitee.

(d) “Enterprise” means the Company and any other corporation, partnership,
limited liability company, joint venture, trust, employee benefit plan or other
enterprise of which Indemnitee is or was serving at the request of the Company
as a director, trustee, general partner, managing member, officer, employee,
agent or fiduciary.

(e) “Expenses” include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees and costs of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in, or
otherwise participating in, a Proceeding. Expenses also include (i) Expenses
incurred in connection with any appeal resulting from any Proceeding, including
without limitation the premium, security for, and other costs relating to any
cost bond, supersedeas bond or other appeal bond or their equivalent, and
(ii) for purposes of Section 12(d), Expenses incurred by Indemnitee in
connection with the interpretation, enforcement or defense of Indemnitee’s
rights under this Agreement or under any directors’ and officers’ liability
insurance policies maintained by the Company. Expenses, however, shall not
include amounts paid in settlement by Indemnitee or the amount of judgments or
fines against Indemnitee.

(f) “Independent Counsel” means a law firm, or a partner or member of a law
firm, that is experienced in matters of corporation law and neither presently
is, nor in the past five years has been, retained to represent (i) the Company
or Indemnitee in any matter material to either such party (other than as
Independent Counsel with respect to matters concerning Indemnitee under this
Agreement, or other indemnitees under similar indemnification agreements), or
(ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.

(g) “NBBCA” means the New Brunswick Business Corporations Act.

(h) “Proceeding” means any threatened, pending or completed action, suit,
arbitration, mediation, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or proceeding, whether brought in the right of
the Company or otherwise and whether of a civil, criminal, administrative or
investigative nature, including any appeal therefrom and including without
limitation any such Proceeding pending as of the date of this Agreement, in
which Indemnitee was, is or will be involved as a party, a potential party, a
non-party witness or otherwise by reason of (i) the fact that Indemnitee is or
was a director or officer of the Company, (ii) any action taken by Indemnitee or
any action or inaction on Indemnitee’s part while acting as a director or
officer of the Company, or (iii) the fact that he or she is or was serving at
the request of

 

3

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the Company as a director, trustee, general partner, managing member, officer,
employee, agent or fiduciary of the Company or any other Enterprise, in each
case whether or not serving in such capacity at the time any liability or
Expense is incurred for which indemnification or advancement of expenses can be
provided under this Agreement.

(i) Reference to “other enterprises” shall include employee benefit plans;
references to “fines” shall include any excise taxes assessed on a person with
respect to any employee benefit plan; references to “serving at the request of
the Company” shall include any service as a director, officer, employee or agent
of the Company which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a
manner he or she reasonably believed to be in the best interests of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner “not opposed to the best interests of the Company” as
referred to in this Agreement.

2. Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee
in accordance with the provisions of this Section 2 if Indemnitee is, or is
threatened to be made, a party to or a participant in any Proceeding, other than
a Proceeding by or in the right of the Company to procure a judgment in its
favor. Pursuant to this Section 2, Indemnitee shall be indemnified to the
fullest extent permitted by applicable law against all Expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred by
Indemnitee or on his or her behalf in connection with such Proceeding or any
claim, issue or matter therein, if Indemnitee acted honestly and in good faith
with a view to the best interests of the Company, and in the case of a criminal
or administrative Proceeding that is enforced by a monetary penalty, that person
had reasonable grounds for believing that that person’s conduct was lawful.

3. Indemnity in Proceedings by or in the Right of the Company. The Company
shall, with the leave of the court, indemnify Indemnitee to the fullest extent
permitted by applicable law against all Expenses, judgments, fines and amounts
paid in settlement actually and reasonably incurred by Indemnitee or on his or
her behalf in if Indemnitee is, or is threatened to be made, a party to or a
participant in any Proceeding by or in the right of the Company to procure a
judgment in its favor, provided that the person acted honestly and in good faith
with a view to the best interests of the Company, and in the case of a criminal
or administrative Proceeding that is enforced by a monetary penalty, that person
had reasonable grounds for believing that that person’s conduct was lawful. In
respect to any indemnifiable event pursuant to this Section 3, the Company shall
take all necessary action to petition the appropriate court to indemnify the
Indemnitee and each Indemnitee shall have the right to participate as a party in
such action directly or through his or her counsel; provided, however, the
Company shall not be required to advocate any particular position in such action
if the Company’s Board of Directors shall have determined that doing so would
constitute a breach of the fiduciary duties of directors.

4. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
To the extent that Indemnitee is a party to or a participant in and is
successful (on the merits or otherwise) in defense of any Proceeding or any
claim, issue or matter therein, the Company shall indemnify Indemnitee against
all Expenses actually and reasonably

 

4

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incurred by Indemnitee or on Indemnitee’s behalf in connection therewith. To the
extent permitted by applicable law, if Indemnitee is not wholly successful in
such Proceeding but is successful, on the merits or otherwise, in defense of one
or more but less than all claims, issues or matters in such Proceeding, the
Company shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by Indemnitee or on Indemnitee’s behalf in connection with (a) each
successfully resolved claim, issue or matter and (b) any claim, issue or matter
related to any such successfully resolved claim, issuer or matter. For purposes
of this section, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.

5. Indemnification for Expenses of a Witness. To the extent that Indemnitee is,
by reason of his or her Corporate Status, a witness in any Proceeding to which
Indemnitee is not a party, Indemnitee shall be indemnified to the extent
permitted by applicable law against all Expenses actually and reasonably
incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

6. Additional Indemnification.

(a) Notwithstanding any limitation in Sections 2, 3 or 4, the Company shall
indemnify Indemnitee to the fullest extent permitted by applicable law if
Indemnitee is, or is threatened to be made, a party to or a participant in any
Proceeding (including a Proceeding by or in the right of the Company to procure
a judgment in its favor) against all Expenses, judgments, fines and amounts paid
in settlement actually and reasonably incurred by Indemnitee or on his or her
behalf in connection with the Proceeding or any claim, issue or matter therein.

(b) For purposes of Section 6(a), the meaning of the phrase “to the fullest
extent permitted by applicable law” shall include, but not be limited to:

(i) the fullest extent permitted by the provision of the NBBCA that authorizes
or contemplates additional indemnification by agreement, or the corresponding
provision of any amendment to or replacement of the NBBCA; and

(ii) the fullest extent authorized or permitted by any amendments to or
replacements of the NBBCA adopted after the date of this Agreement that increase
the extent to which a corporation may indemnify its officers and directors.

7. Exclusions. Notwithstanding any provision in this Agreement, the Company
shall not be obligated under this Agreement to make any indemnity in connection
with any Proceeding (or any part of any Proceeding):

(a) for which payment has actually been made to or on behalf of Indemnitee under
any statute, insurance policy, indemnity provision, vote or otherwise, except
with respect to any excess beyond the amount paid;

(b) for an accounting or disgorgement of profits pursuant to Section 16(b) of
the Securities Exchange Act of 1934, as amended, or similar provisions of
federal, state or local statutory law or common law, if Indemnitee is held
liable therefor (including pursuant to any settlement arrangements);

 

5

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(c) for any reimbursement of the Company by Indemnitee of any bonus or other
incentive-based or equity-based compensation or of any profits realized by
Indemnitee from the sale of securities of the Company, as required in each case
under the Securities Exchange Act of 1934, as amended (including any such
reimbursements that arise from an accounting restatement of the Company pursuant
to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or
the payment to the Company of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);

(d) initiated by Indemnitee, including any Proceeding (or any part of any
Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees, agents or other indemnitees, unless (i) the Company’s board
of directors authorized the Proceeding (or the relevant part of the Proceeding)
prior to its initiation, (ii) the Company provides the indemnification, in its
sole discretion, pursuant to the powers vested in the Company under applicable
law, (iii) otherwise authorized in Section 12(d) or (iv) otherwise required by
applicable law; or

(e) if prohibited by applicable law.

8. Advances of Expenses. The Company shall advance the Expenses incurred by
Indemnitee in connection with any Proceeding, and such advancement shall be made
as soon as reasonably practicable, but in any event no later than 60 days, after
the receipt by the Company of a written statement or statements requesting such
advances from time to time (which shall include invoices received by Indemnitee
in connection with such Expenses but, in the case of invoices in connection with
legal services, any references to legal work performed or to expenditure made
that would cause Indemnitee to waive any privilege accorded by applicable law
shall not be included with the invoice). Advances shall be unsecured and
interest free. Indemnitee hereby undertakes to repay any advance to the extent
that it is ultimately determined that Indemnitee is not entitled to be
indemnified by the Company. Prior to, and as a prerequisite to, any advancement
of Expenses pursuant to this Section 8, the Company may require the Indemnitee
to post a bond or provide similar assurance of Indemnitee’s ability to repay any
such advanced Expenses to the extent that it is ultimately determined that
Indemnitee is not entitled to be indemnified by the Company. This Section 8
shall not apply to the extent advancement is prohibited by law and shall not
apply to any Proceeding for which indemnity is not permitted under this
Agreement, but shall apply to any Proceeding referenced in Section 7(b) or 7(c)
prior to a determination that Indemnitee is not entitled to be indemnified by
the Company.

9. Procedures for Notification and Defense of Claim.

(a) Indemnitee shall notify the Company in writing of any matter with respect to
which Indemnitee intends to seek indemnification or advancement of Expenses as
soon as reasonably practicable following the receipt by Indemnitee of notice
thereof. The written notification to the Company shall include, in reasonable
detail, a description of the nature of the Proceeding and the facts underlying
the Proceeding. The failure by Indemnitee to notify the Company will not relieve
the Company from any liability which it may have to Indemnitee hereunder or
otherwise than under this Agreement, and any delay in so notifying the Company
shall not constitute a waiver by Indemnitee of any rights.

 

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(b) If, at the time of the receipt of a notice of a Proceeding pursuant to the
terms hereof, the Company has directors’ and officers’ liability insurance in
effect, the Company shall give prompt notice of the commencement of the
Proceeding to the insurers in accordance with the procedures set forth in the
applicable policies. The Company shall thereafter take all
commercially-reasonable action to cause such insurers to pay, on behalf of
Indemnitee, all amounts payable as a result of such Proceeding in accordance
with the terms of such policies.

(c) In the event the Company may be obligated to make any indemnity in
connection with a Proceeding, the Company shall be entitled to assume the
defense of such Proceeding with counsel approved by Indemnitee, which approval
shall not be unreasonably withheld, upon the delivery to Indemnitee of written
notice of its election to do so. After delivery of such notice, approval of such
counsel by Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee for any fees or expenses of counsel
subsequently incurred by Indemnitee with respect to the same Proceeding.
Notwithstanding the Company’s assumption of the defense of any such Proceeding,
the Company shall be obligated to pay the fees and expenses of Indemnitee’s
counsel to the extent (i) the employment of counsel by Indemnitee is authorized
by the Company, (ii) counsel for the Company or Indemnitee shall have reasonably
concluded that there is a conflict of interest between the Company and
Indemnitee in the conduct of any such defense such that Indemnitee needs to be
separately represented, (iii) the fees and expenses are non-duplicative and
reasonably incurred in connection with Indemnitee’s role in the Proceeding
despite the Company’s assumption of the defense, (iv) the Company is not
financially or legally able to perform its indemnification obligations or
(v) the Company shall not have retained, or shall not continue to retain, such
counsel to defend such Proceeding. The Company shall have the right to conduct
such defense as it sees fit in its sole discretion. Regardless of any provision
in this Agreement, Indemnitee shall have the right to employ counsel in any
Proceeding at Indemnitee’s personal expense. The Company shall not be entitled,
without the consent of Indemnitee, to assume the defense of any claim brought by
or in the right of the Company.

(d) Indemnitee shall give the Company such information and cooperation in
connection with the Proceeding as may be reasonably appropriate.

(e) The Company shall not be liable to indemnify Indemnitee for any settlement
of any Proceeding (or any part thereof) without the Company’s prior written
consent, which shall not be unreasonably withheld.

(f) The Company shall have the right to settle any Proceeding (or any part
thereof) without the consent of Indemnitee.

10. Procedures upon Application for Indemnification.

(a) To obtain indemnification, Indemnitee shall submit to the Company a written
request, including therein or therewith such documentation and information as is

 

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reasonably available to Indemnitee. Any delay in providing the request will not
relieve the Company from its obligations under this Agreement, except to the
extent such failure is prejudicial.

(b) Upon written request by Indemnitee for indemnification pursuant to
Section 10(a), a determination with respect to Indemnitee’s entitlement thereto
pursuant to and in accordance with the terms hereof shall be made in the
specific case (i) if a Change in Control shall have occurred, by Independent
Counsel in a written opinion to the Company’s board of directors, a copy of
which shall be delivered to Indemnitee or (ii) if a Change in Control shall not
have occurred, (A) by a majority vote of the Disinterested Directors, even
though less than a quorum of the Company’s board of directors, (B) by a
committee of Disinterested Directors designated by a majority vote of the
Disinterested Directors, even though less than a quorum of the Company’s board
of directors, (C) if there are no such Disinterested Directors or, if such
Disinterested Directors so direct, by Independent Counsel in a written opinion
to the Company’s board of directors, a copy of which shall be delivered to
Indemnitee or (D) if so directed by the Company’s board of directors, by the
stockholders of the Company. If it is so determined that Indemnitee is entitled
to indemnification, payment to Indemnitee shall be made within ten days after
such determination. Indemnitee shall cooperate with the person, persons or
entity making the determination with respect to Indemnitee’s entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information that is not
privileged or otherwise protected from disclosure and that is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys’ fees and disbursements) reasonably
incurred by Indemnitee in so cooperating with the person, persons or entity
making such determination shall be borne by the Company, to the extent permitted
by applicable law.

(c) In the event the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 10(b), the Independent Counsel
shall be selected as provided in this Section 10(c). If a Change in Control
shall not have occurred, the Independent Counsel shall be selected by the
Company’s board of directors, and the Company shall give written notice to
Indemnitee advising him or her of the identity of the Independent Counsel so
selected. If a Change in Control shall have occurred, the Independent Counsel
shall be selected by Indemnitee (unless Indemnitee shall request that such
selection be made by the Company’s board of directors, in which event the
preceding sentence shall apply), and Indemnitee shall give written notice to the
Company advising it of the identity of the Independent Counsel so selected. In
either event, Indemnitee or the Company, as the case may be, may, within ten
days after such written notice of selection shall have been given, deliver to
the Company or to Indemnitee, as the case may be, a written objection to such
selection; provided, however, that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements
of “Independent Counsel” as defined in Section 1 of this Agreement, and the
objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected shall
act as Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent
Counsel unless and until

 

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such objection is withdrawn or a court has determined that such objection is
without merit. If, within 20 days after the later of (i) submission by
Indemnitee of a written request for indemnification pursuant to Section 10(a)
hereof and (ii) the final disposition of the Proceeding, the parties have not
agreed upon an Independent Counsel, either the Company or Indemnitee may
petition a court of competent jurisdiction for resolution of any objection which
shall have been made by the Company or Indemnitee to the other’s selection of
Independent Counsel and for the appointment as Independent Counsel of a person
selected by the court or by such other person as the court shall designate, and
the person with respect to whom all objections are so resolved or the person so
appointed shall act as Independent Counsel under Section 10(b) hereof. Upon the
due commencement of any judicial proceeding or arbitration pursuant to
Section 12(a) of this Agreement, the Independent Counsel shall be discharged and
relieved of any further responsibility in such capacity (subject to the
applicable standards of professional conduct then prevailing).

(d) The Company agrees to pay the reasonable fees and expenses of any
Independent Counsel and to fully indemnify such counsel against any and all
Expenses, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.

11. Presumptions and Effect of Certain Proceedings.

(a) In making a determination with respect to entitlement to indemnification
hereunder, the person, persons or entity making such determination shall, to the
fullest extent not prohibited by law, presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 10(a) of this Agreement, and the
Company shall, to the fullest extent not prohibited by law, have the burden of
proof to overcome that presumption in connection with the making by such person,
persons or entity of any determination contrary to that presumption.

(b) The termination of any Proceeding or of any claim, issue or matter therein,
by judgment, order, settlement or conviction, or upon a plea of nolo contendere
or its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Indemnitee to indemnification
or create a presumption that Indemnitee did not act in good faith and in a
manner which he or she reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

(c) For purposes of any determination of good faith, Indemnitee shall be deemed
to have acted in good faith to the extent Indemnitee relied in good faith on
(i) the records or books of account of the Enterprise, including financial
statements, (ii) information supplied to Indemnitee by the officers of the
Enterprise in the course of their duties, (iii) the advice of legal counsel for
the Enterprise or its board of directors or counsel selected by any committee of
the board of directors or (iv) information or records given or reports made to
the Enterprise by an independent certified public accountant, an appraiser,
investment banker or other expert selected with reasonable care by the

 

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Enterprise or its board of directors or any committee of the board of directors.
The provisions of this Section 11(c) shall not be deemed to be exclusive or to
limit in any way the other circumstances in which Indemnitee may be deemed to
have met the applicable standard of conduct set forth in this Agreement.

(d) Neither the knowledge, actions nor failure to act of any other director,
officer, agent or employee of the Enterprise shall be imputed to Indemnitee for
purposes of determining the right to indemnification under this Agreement.

12. Remedies of Indemnitee.

(a) Subject to Section 12(e), in the event that (i) a determination is made
pursuant to Section 10 of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of Expenses is not timely
made pursuant to Section 8 or 12(d) of this Agreement, (iii) no determination of
entitlement to indemnification shall have been made pursuant to Section 10 of
this Agreement within 90 days after the later of the receipt by the Company of
the request for indemnification or the final disposition of the Proceeding,
(iv) payment of indemnification pursuant to this Agreement is not made
(A) within ten days after a determination has been made that Indemnitee is
entitled to indemnification or (B) with respect to indemnification pursuant to
Sections 4, 5 and 12(d) of this Agreement, within 30 days after receipt by the
Company of a written request therefor, or (v) the Company or any other person or
entity takes or threatens to take any action to declare this Agreement void or
unenforceable, or institutes any litigation or other action or proceeding
designed to deny, or to recover from, Indemnitee the benefits provided or
intended to be provided to Indemnitee hereunder, Indemnitee shall be entitled to
an adjudication by a court of competent jurisdiction of his or her entitlement
to such indemnification or advancement of Expenses. Alternatively, Indemnitee,
at his or her option, may seek an award in arbitration with respect to his or
her entitlement to such indemnification or advancement of Expenses, to be
conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of
the American Arbitration Association. Indemnitee shall commence such proceeding
seeking an adjudication or an award in arbitration within 180 days following the
date on which Indemnitee first has the right to commence such proceeding
pursuant to this Section 12(a); provided, however, that the foregoing clause
shall not apply in respect of a proceeding brought by Indemnitee to enforce his
or her rights under Section 4 of this Agreement. The Company shall not oppose
Indemnitee’s right to seek any such adjudication or award in arbitration in
accordance with this Agreement.

(b) Neither (i) the failure of the Company, its board of directors, any
committee or subgroup of the board of directors, Independent Counsel or
stockholders to have made a determination that indemnification of Indemnitee is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor (ii) an actual determination by the Company, its board of
directors, any committee or subgroup of the board of directors, Independent
Counsel or stockholders that Indemnitee has not met the applicable standard of
conduct, shall be a defense to the action or create a presumption that
Indemnitee has or has not met the applicable standard of conduct. In the event
that a determination shall have been made pursuant to Section 10 of this
Agreement that Indemnitee is not entitled to indemnification, any judicial
proceeding or arbitration

 

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commenced pursuant to this Section 12 shall be conducted in all respects as a de
novo trial, or arbitration, on the merits, and Indemnitee shall not be
prejudiced by reason of that adverse determination. In any judicial proceeding
or arbitration commenced pursuant to this Section 12, the Company shall, to the
fullest extent not prohibited by law, have the burden of proving Indemnitee is
not entitled to indemnification or advancement of Expenses, as the case may be.

(c) To the fullest extent not prohibited by law, the Company shall be precluded
from asserting in any judicial proceeding or arbitration commenced pursuant to
this Section 12 that the procedures and presumptions of this Agreement are not
valid, binding and enforceable and shall stipulate in any such court or before
any such arbitrator that the Company is bound by all the provisions of this
Agreement. If a determination shall have been made pursuant to Section 10 of
this Agreement that Indemnitee is entitled to indemnification, the Company shall
be bound by such determination in any judicial proceeding or arbitration
commenced pursuant to this Section 12, absent (i) a misstatement by Indemnitee
of a material fact, or an omission of a material fact necessary to make
Indemnitee’s statements not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.

(d) To the extent not prohibited by law, the Company shall indemnify Indemnitee
against all Expenses that are incurred by Indemnitee in connection with any
action for indemnification or advancement of Expenses from the Company under
this Agreement or under any directors’ and officers’ liability insurance
policies maintained by the Company to the extent Indemnitee is successful in
such action, and, if requested by Indemnitee, shall (as soon as reasonably
practicable, but in any event no later than 60 days, after receipt by the
Company of a written request therefor) advance such Expenses to Indemnitee,
subject to the provisions of Section 8.

(e) Notwithstanding anything in this Agreement to the contrary, no determination
as to entitlement to indemnification shall be required to be made prior to the
final disposition of the Proceeding.

13. Contribution. To the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to Indemnitee, the
Company, in lieu of indemnifying Indemnitee, shall contribute to the amounts
incurred by Indemnitee, whether for Expenses, judgments, fines or amounts paid
or to be paid in settlement, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all of the circumstances of such Proceeding in order
to reflect (i) the relative benefits received by the Company and Indemnitee as a
result of the events and transactions giving rise to such Proceeding; and
(ii) the relative fault of Indemnitee and the Company (and its other directors,
officers, employees and agents) in connection with such events and transactions.

14. Non-exclusivity. The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under applicable
law, the

 

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Company’s bylaws, any agreement, a vote of stockholders or a resolution of
directors, or otherwise. To the extent that a change in law, whether by statute
or judicial decision, permits greater indemnification or advancement of Expenses
than would be afforded currently under the Company’s bylaws and this Agreement,
it is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits so afforded by such change, subject to the
restrictions expressly set forth herein or therein. Except as expressly set
forth herein, no right or remedy herein conferred is intended to be exclusive of
any other right or remedy, and every other right and remedy shall be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. Except as expressly set
forth herein, the assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
right or remedy.

15. Intentionally Omitted.

16. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder (or
for which advancement is provided hereunder) if and to the extent that
Indemnitee has otherwise actually received payment for such amounts under any
insurance policy, contract, agreement or otherwise.

17. Insurance. The Company shall maintain an insurance policy or policies
providing directors and officers liability insurance covering the Indemnitee in
a form that is not less favorable to the Indemnitee than the insurance policy or
policies in effect for directors and officers liability insurance on the date of
this Agreement, including the policy limits, self-insured retentions,
attribution rules, exclusions and riders to such policies. If such comparable
insurance is not commercially available, the Company shall maintain insurance
policy or policies providing directors and officers liability insurance that is
as substantially similar as commercially available; provided, however,
Indemnitee shall be covered by such policy or policies to the same extent as the
most favorably-insured persons under such policy or policies in a comparable
position. The Company will not amend, replace, terminate or rescind any
directors and officers liability insurance covering Indemnitee without giving
Indemnitee thirty (30) days advance written notice of such event. The Company
will pay all premiums relating to such policies on or prior to the due dates
therefor.

18. Subrogation. In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.

19. Services to the Company. Indemnitee agrees to serve as a director or officer
of the Company or, at the request of the Company, as a director, trustee,
general partner, managing member, officer, employee, agent or fiduciary of
another Enterprise, for so long as Indemnitee is duly elected or appointed or
until Indemnitee tenders his or her resignation or is removed from such
position. Indemnitee may at any time and for any reason resign from such
position (subject to any other contractual obligation or any

 

12

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obligation imposed by operation of law), in which event the Company shall have
no obligation under this Agreement to continue Indemnitee in such position. This
Agreement shall not be deemed an employment contract between the Company (or any
of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically
acknowledges that any employment with the Company (or any of its subsidiaries or
any Enterprise) is at will, and Indemnitee may be discharged at any time for any
reason, with or without cause, with or without notice, except as may be
otherwise expressly provided in any executed, written employment contract
between Indemnitee and the Company (or any of its subsidiaries or any
Enterprise), any existing formal severance policies adopted by the Company’s
board of directors or, with respect to service as a director or officer of the
Company, the Company’s bylaws or the NBBCA. No such document shall be subject to
any oral modification thereof.

20. Duration. This Agreement shall continue until and terminate upon the later
of (a) ten years after the date that Indemnitee shall have ceased to serve as a
director or officer of the Company or as a director, trustee, general partner,
managing member, officer, employee, agent or fiduciary of any other Enterprise,
as applicable; or (b) one year after the final termination of any Proceeding,
including any appeal, then pending in respect of which Indemnitee is granted
rights of indemnification or advancement of Expenses hereunder and of any
proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement
relating thereto.

21. Successors. This Agreement shall be binding upon the Company and its
successors and assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of the Company, and shall inure to the benefit of Indemnitee and
Indemnitee’s heirs, executors and administrators.

22. Severability. Nothing in this Agreement is intended to require or shall be
construed as requiring the Company to do or fail to do any act in violation of
applicable law. The Company’s inability, pursuant to court order or other
applicable law, to perform its obligations under this Agreement shall not
constitute a breach of this Agreement. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including without limitation, each portion of any
section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby and shall remain
enforceable to the fullest extent permitted by law; (b) such provision or
provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties
hereto; and (c) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that
is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby.

23. Enforcement. The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve as a director or officer of the Company, and the
Company acknowledges that Indemnitee is relying upon this Agreement in serving
as a director or officer of the Company.

 

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24. Entire Agreement. This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof; provided, however,
that this Agreement is a supplement to and in furtherance of the Company’s
bylaws and applicable law.

25. Modification and Waiver. No supplement, modification or amendment to this
Agreement shall be binding unless executed in writing by the parties hereto. No
amendment, alteration or repeal of this Agreement shall adversely affect any
right of Indemnitee under this Agreement in respect of any action taken or
omitted by such Indemnitee in his or her Corporate Status prior to such
amendment, alteration or repeal. No waiver of any of the provisions of this
Agreement shall constitute or be deemed a waiver of any other provision of this
Agreement nor shall any waiver constitute a continuing waiver.

26. Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by registered or certified
mail, postage prepaid, sent by facsimile or electronic mail or otherwise
delivered by hand, messenger or courier service addressed:

(a) if to Indemnitee, to Indemnitee’s address, facsimile number or electronic
mail address as shown on the signature page of this Agreement or in the
Company’s records, as may be updated in accordance with the provisions hereof;
or

(b) if to the Company, to the attention of the Chief Executive Officer or Chief
Financial Officer of the Company at 125 Middlesex Turnpike, Bedford, MA 01730,
or at such other current address as the Company shall have furnished to
Indemnitee, with a copy (which shall not constitute notice) to James C. Gorton,
Esq., Latham & Watkins LLP, 885 Third Avenue, New York, New York 10022.

Each such notice or other communication shall for all purposes of this Agreement
be treated as effective or having been given (i) if delivered by hand, messenger
or courier service, when delivered (or if sent via a nationally-recognized
overnight courier service, freight prepaid, specifying next-business-day
delivery, one business day after deposit with the courier), (ii) if sent via
mail, at the earlier of its receipt or five days after the same has been
deposited in a regularly-maintained receptacle for the deposit of the United
States mail, addressed and mailed as aforesaid, or (iii) if sent via facsimile,
upon confirmation of facsimile transfer or, if sent via electronic mail, upon
confirmation of delivery when directed to the relevant electronic mail address,
if sent during normal business hours of the recipient, or if not sent during
normal business hours of the recipient, then on the recipient’s next business
day.

27. Applicable Law. This Agreement and the legal relations among the parties
shall be governed by, and construed and enforced in accordance with, the
internal laws of the Province of New Brunswick and the laws of Canada applicable
therein, without regard to its conflict of laws rules.

 

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28. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall for all purposes be deemed to be an original but all of
which together shall constitute one and the same Agreement. This Agreement may
also be executed and delivered by facsimile signature and in counterparts, each
of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. Only one such counterpart
signed by the party against whom enforceability is sought needs to be produced
to evidence the existence of this Agreement.

29. Captions. The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction thereof.

(signature page follows)

 

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The parties are signing this Indemnification Agreement as of the date stated in
the introductory sentence.

 

GSI GROUP INC.

/s/ Michael Katzenstein

By:      Michael Katzenstein Title:   Principal Executive Officer JOHN ROUSH

/s/ John Roush

Residence Address:

 

 

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EXHIBIT B

GSI GROUP CORPORATION

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (this “Agreement”) is dated as of November 16,
2010 and is between GSI Group Corporation, a corporation organized under the
laws of the state of Michigan (the “Company”), and John Roush (“Indemnitee”).

RECITALS

A. Indemnitee’s service to the Company will substantially benefit the Company.

B. Individuals are reluctant to serve as directors or officers of corporations
or in certain other capacities unless they are provided with adequate protection
through insurance or indemnification against the risks of claims and actions
against them arising out of such service.

C. Indemnitee does not regard the protection currently provided by applicable
law, the Company’s governing documents and any insurance as adequate under the
present circumstances, and Indemnitee may not be willing to serve as a director
or officer without additional protection.

D. In order to induce Indemnitee to provide services to the Company, it is
reasonable, prudent and necessary for the Company to contractually obligate
itself to indemnify, and to advance expenses on behalf of, Indemnitee as
permitted by applicable law.

E. This Agreement is a supplement to and in furtherance of the indemnification
provided in the Company’s bylaws, and any resolutions adopted pursuant thereto,
and this Agreement shall not be deemed a substitute therefor, nor shall this
Agreement be deemed to limit, diminish or abrogate any rights of Indemnitee
thereunder.

The parties therefore agree as follows:

1. Definitions.

(a) A “Change in Control” shall be deemed to occur upon the earliest to occur
after the Effective Date (as defined in that certain Employment Agreement by and
between the Company and Indemnitee dated as of November 16, 2010) of any of the
following events:

(i) Acquisition of Stock by Third Party. Any Person (as defined below) is or
becomes the Beneficial Owner (as defined below), directly or indirectly, of
securities of the Company representing fifteen percent (15%) or more of the
combined voting power of the Company’s then outstanding securities;

(ii) Change in Board Composition. During any period of two consecutive years
(not including any period prior to the Effective Date), individuals who at the
beginning of such period constitute the Company’s board of directors, and any
new directors (other than a director designated by a person who has entered into
an agreement

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with the Company to effect a transaction described in Sections 1(a)(i),
1(a)(iii) or 1(a)(iv)) whose election by the board of directors or nomination
for election by the Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
of the members of the Company’s board of directors;

(iii) Corporate Transactions. The effective date of a merger or consolidation of
the Company with any other entity, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior to such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the surviving entity outstanding immediately after such merger or
consolidation and with the power to elect at least a majority of the board of
directors or other governing body of such surviving entity;

(iv) Liquidation. The approval by the stockholders of the Company of a complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets; and

(v) Other Events. Any other event of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or form) promulgated under
the Securities Exchange Act of 1934, as amended, whether or not the Company is
then subject to such reporting requirement.

For purposes of this Section 1(a), the following terms shall have the following
meanings:

(1) “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended; provided, however, that
“Person” shall exclude (i) the Company, (ii) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, and (iii) any
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.

(2) “Beneficial Owner” shall have the meaning given to such term in Rule 13d-3
under the Securities Exchange Act of 1934, as amended; provided, however, that
“Beneficial Owner” shall exclude any Person otherwise becoming a Beneficial
Owner by reason of (i) the stockholders of the Company approving a merger of the
Company with another entity or (ii) the Company’s board of directors approving a
sale of securities by the Company to such Person.

(b) “Corporate Status” describes the status of a person who is or was a
director, trustee, general partner, managing member, officer, employee, agent or
fiduciary of the Company or any other Enterprise.

 

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(c) “Disinterested Director” means a director of the Company who is not and was
not a party to the Proceeding in respect of which indemnification is sought by
Indemnitee.

(d) “Enterprise” means the Company, any direct and indirect subsidiaries and
branches of the Company, any direct or indirect subsidiary of GSI Group Inc.,
and any other corporation, partnership, limited liability company, joint
venture, trust, employee benefit plan or other enterprise of which Indemnitee is
or was serving at the request of the Company as a director, trustee, general
partner, managing member, officer, employee, agent or fiduciary.

(e) “Expenses” include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees and costs of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in, or
otherwise participating in, a Proceeding. Expenses also include (i) Expenses
incurred in connection with any appeal resulting from any Proceeding, including
without limitation the premium, security for, and other costs relating to any
cost bond, supersedeas bond or other appeal bond or their equivalent, and
(ii) for purposes of Section 12(d), Expenses incurred by Indemnitee in
connection with the interpretation, enforcement or defense of Indemnitee’s
rights under this Agreement or under any directors’ and officers’ liability
insurance policies maintained by the Company. Expenses, however, shall not
include amounts paid in settlement by Indemnitee or the amount of judgments or
fines against Indemnitee.

(f) “Independent Counsel” means a law firm, or a partner or member of a law
firm, that is experienced in matters of corporation law and neither presently
is, nor in the past five years has been, retained to represent (i) the Company
or Indemnitee in any matter material to either such party (other than as
Independent Counsel with respect to matters concerning Indemnitee under this
Agreement, or other indemnitees under similar indemnification agreements), or
(ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.

(g) “MBCA” means the Michigan Business Corporations Act.

(h) “Proceeding” means any threatened, pending or completed action, suit,
arbitration, mediation, alternate dispute resolution mechanism, investigation,
inquiry, administrative hearing or proceeding, whether brought in the right of
the Company or otherwise and whether of a civil, criminal, administrative or
investigative nature, including any appeal therefrom and including without
limitation any such Proceeding pending as of the date of this Agreement, in
which Indemnitee was, is or will be involved as a party, a potential party, a
non-party witness or otherwise by reason of (i) the fact that Indemnitee is or
was a director or officer of the Company, (ii) any action taken by

 

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Indemnitee or any action or inaction on Indemnitee’s part while acting as a
director or officer of the Company, or (iii) the fact that he or she is or was
serving at the request of the Company as a director, officer, partner, trustee,
employee or agent of the Company or any other Enterprise, in each case whether
or not serving in such capacity at the time any liability or Expense is incurred
for which indemnification or advancement of expenses can be provided under this
Agreement.

(i) Reference to “other enterprises” shall include employee benefit plans;
references to “fines” shall include any excise taxes assessed on a person with
respect to any employee benefit plan; references to “serving at the request of
the Company” shall include any service as a director, officer, employee or agent
of the Company which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a
manner he or she reasonably believed to be in the best interests of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner “not opposed to the best interests of the Company” as
referred to in this Agreement.

2. Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee
in accordance with the provisions of this Section 2 if Indemnitee is, or is
threatened to be made, a party to or a participant in any Proceeding, other than
a Proceeding by or in the right of the Company to procure a judgment in its
favor. Pursuant to this Section 2, Indemnitee shall be indemnified to the
fullest extent permitted by applicable law against all Expenses, judgments,
penalties, fines and amounts paid in settlement actually and reasonably incurred
by Indemnitee or on his or her behalf in connection with such Proceeding or any
claim, issue or matter therein, if Indemnitee acted honestly and in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company or its shareholders, and in the case of a criminal
Proceeding, that person had no reasonable cause to believe his conduct was
unlawful.

3. Indemnity in Proceedings by or in the Right of the Company. The Company shall
indemnify Indemnitee to the fullest extent permitted by applicable law against
all Expenses and amounts paid in settlement actually and reasonably incurred by
Indemnitee or on his or her behalf in if Indemnitee is, or is threatened to be
made, a party to or a participant in any Proceeding by or in the right of the
Company to procure a judgment in its favor, provided that the person acted
honestly and in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Company or its shareholders.
Indemnification shall not be made under this Section 3 in respect of any claim,
issue or matter as to which the Indemnitee has been found liable to the Company,
except to the extent permitted by applicable law.

4. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
To the extent that Indemnitee is a party to or a participant in and is
successful (on the merits or otherwise) in defense of any Proceeding or any
claim, issue or matter therein, the Company shall indemnify Indemnitee against
all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection therewith. To the extent permitted by applicable law, if
Indemnitee is not wholly successful in such Proceeding

 

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but is successful, on the merits or otherwise, in defense of one or more but
less than all claims, issues or matters in such Proceeding, the Company shall
indemnify Indemnitee against all Expenses actually and reasonably incurred by
Indemnitee or on Indemnitee’s behalf in connection with (a) each successfully
resolved claim, issue or matter and (b) any claim, issue or matter related to
any such successfully resolved claim, issuer or matter. For purposes of this
section, the termination of any claim, issue or matter in such a Proceeding by
dismissal, with or without prejudice, shall be deemed to be a successful result
as to such claim, issue or matter.

5. Indemnification for Expenses of a Witness. To the extent that Indemnitee is,
by reason of his or her Corporate Status, a witness in any Proceeding to which
Indemnitee is not a party, Indemnitee shall be indemnified to the extent
permitted by applicable law against all Expenses actually and reasonably
incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

6. Additional Indemnification.

(a) Notwithstanding any limitation in Sections 2, 3 or 4, the Company shall
indemnify Indemnitee to the fullest extent permitted by applicable law if
Indemnitee is, or is threatened to be made, a party to or a participant in any
Proceeding (including a Proceeding by or in the right of the Company to procure
a judgment in its favor) against all Expenses, judgments, fines and amounts paid
in settlement actually and reasonably incurred by Indemnitee or on his or her
behalf in connection with the Proceeding or any claim, issue or matter therein.

(b) For purposes of Section 6(a), the meaning of the phrase “to the fullest
extent permitted by applicable law” shall include, but not be limited to:

(i) the fullest extent permitted by the provision of the MBCA that authorizes or
contemplates additional indemnification by agreement, or the corresponding
provision of any amendment to or replacement of the MBCA; and

(ii) the fullest extent authorized or permitted by any amendments to or
replacements of the MBCA adopted after the date of this Agreement that increase
the extent to which a corporation may indemnify its officers and directors.

7. Exclusions. Notwithstanding any provision in this Agreement, the Company
shall not be obligated under this Agreement to make any indemnity in connection
with any Proceeding (or any part of any Proceeding):

(a) for which payment has actually been made to or on behalf of Indemnitee under
any statute, insurance policy, indemnity provision, vote or otherwise, except
with respect to any excess beyond the amount paid;

(b) for an accounting or disgorgement of profits pursuant to Section 16(b) of
the Securities Exchange Act of 1934, as amended, or similar provisions of
federal, state or local statutory law or common law, if Indemnitee is held
liable therefor (including pursuant to any settlement arrangements);

 

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(c) for any reimbursement of the Company by Indemnitee of any bonus or other
incentive-based or equity-based compensation or of any profits realized by
Indemnitee from the sale of securities of the Company, as required in each case
under the Securities Exchange Act of 1934, as amended (including any such
reimbursements that arise from an accounting restatement of the Company pursuant
to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or
the payment to the Company of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act);

(d) initiated by Indemnitee, including any Proceeding (or any part of any
Proceeding) initiated by Indemnitee against the Company or its directors,
officers, employees, agents or other indemnitees, unless (i) the Company’s board
of directors authorized the Proceeding (or the relevant part of the Proceeding)
prior to its initiation, (ii) the Company provides the indemnification, in its
sole discretion, pursuant to the powers vested in the Company under applicable
law, (iii) otherwise authorized in Section 12(d) or (iv) otherwise required by
applicable law; or

(e) if prohibited by applicable law.

8. Advances of Expenses. The Company shall advance the Expenses incurred by
Indemnitee in connection with any Proceeding, and such advancement shall be made
as soon as reasonably practicable, but in any event no later than 60 days, after
the receipt by the Company of a written statement or statements requesting such
advances from time to time (which shall include invoices received by Indemnitee
in connection with such Expenses but, in the case of invoices in connection with
legal services, any references to legal work performed or to expenditure made
that would cause Indemnitee to waive any privilege accorded by applicable law
shall not be included with the invoice). Advances shall be unsecured and
interest free. Indemnitee hereby undertakes to repay any advance to the extent
that it is ultimately determined that Indemnitee is not entitled to be
indemnified by the Company. Advances shall be made without regard to
Indemnitee’s ultimate ability to repay the Expenses and without regard to
Indemnitee’s ultimate entitlement to indemnification under the other provisions
of this Agreement. This Section 8 shall not apply to the extent advancement is
prohibited by law and shall not apply to any Proceeding for which indemnity is
not permitted under this Agreement, but shall apply to any Proceeding referenced
in Section 7(b) or 7(c) prior to a determination that Indemnitee is not entitled
to be indemnified by the Company.

9. Procedures for Notification and Defense of Claim.

(a) Indemnitee shall notify the Company in writing of any matter with respect to
which Indemnitee intends to seek indemnification or advancement of Expenses as
soon as reasonably practicable following the receipt by Indemnitee of notice
thereof. The written notification to the Company shall include, in reasonable
detail, a description of the nature of the Proceeding and the facts underlying
the Proceeding. The failure by Indemnitee to notify the Company will not relieve
the Company from any liability which it may have to Indemnitee hereunder or
otherwise than under this Agreement, and any delay in so notifying the Company
shall not constitute a waiver by Indemnitee of any rights.

 

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(b) If, at the time of the receipt of a notice of a Proceeding pursuant to the
terms hereof, the Company has directors’ and officers’ liability insurance in
effect, the Company shall give prompt notice of the commencement of the
Proceeding to the insurers in accordance with the procedures set forth in the
applicable policies. The Company shall thereafter take all
commercially-reasonable action to cause such insurers to pay, on behalf of
Indemnitee, all amounts payable as a result of such Proceeding in accordance
with the terms of such policies.

(c) In the event the Company may be obligated to make any indemnity in
connection with a Proceeding, the Company shall be entitled to assume the
defense of such Proceeding with counsel approved by Indemnitee, which approval
shall not be unreasonably withheld, upon the delivery to Indemnitee of written
notice of its election to do so. After delivery of such notice, approval of such
counsel by Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee for any fees or expenses of counsel
subsequently incurred by Indemnitee with respect to the same Proceeding.
Notwithstanding the Company’s assumption of the defense of any such Proceeding,
the Company shall be obligated to pay the fees and expenses of Indemnitee’s
counsel to the extent (i) the employment of counsel by Indemnitee is authorized
by the Company, (ii) counsel for the Company or Indemnitee shall have reasonably
concluded that there is a conflict of interest between the Company and
Indemnitee in the conduct of any such defense such that Indemnitee needs to be
separately represented, (iii) the fees and expenses are non-duplicative and
reasonably incurred in connection with Indemnitee’s role in the Proceeding
despite the Company’s assumption of the defense, (iv) the Company is not
financially or legally able to perform its indemnification obligations or
(v) the Company shall not have retained, or shall not continue to retain, such
counsel to defend such Proceeding. The Company shall have the right to conduct
such defense as it sees fit in its sole discretion. Regardless of any provision
in this Agreement, Indemnitee shall have the right to employ counsel in any
Proceeding at Indemnitee’s personal expense. The Company shall not be entitled,
without the consent of Indemnitee, to assume the defense of any claim brought by
or in the right of the Company.

(d) Indemnitee shall give the Company such information and cooperation in
connection with the Proceeding as may be reasonably appropriate.

(e) The Company shall not be liable to indemnify Indemnitee for any settlement
of any Proceeding (or any part thereof) without the Company’s prior written
consent, which shall not be unreasonably withheld.

(f) The Company shall have the right to settle any Proceeding (or any part
thereof) without the consent of Indemnitee.

10. Procedures upon Application for Indemnification.

(a) To obtain indemnification, Indemnitee shall submit to the Company a written
request, including therein or therewith such documentation and information as is
reasonably available to Indemnitee. Any delay in providing the request will not
relieve the Company from its obligations under this Agreement, except to the
extent such failure is prejudicial.

 

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(b) Upon written request by Indemnitee for indemnification pursuant to
Section 10(a), a determination, if required by applicable law, with respect to
Indemnitee’s entitlement thereto pursuant to and in accordance with the terms
hereof shall be made in the specific case (i) if a Change in Control shall have
occurred, by Independent Counsel in a written opinion to the Company’s board of
directors, a copy of which shall be delivered to Indemnitee or (ii) if a Change
in Control shall not have occurred, (A) by a majority vote of the Disinterested
Directors, even though less than a quorum of the Company’s board of directors,
(B) by a committee of Disinterested Directors designated by a majority vote of
the Disinterested Directors, even though less than a quorum of the Company’s
board of directors, (C) if there are no such Disinterested Directors or, if such
Disinterested Directors so direct, by Independent Counsel in a written opinion
to the Company’s board of directors, a copy of which shall be delivered to
Indemnitee or (D) if so directed by the Company’s board of directors, by the
stockholders of the Company. If it is so determined that Indemnitee is entitled
to indemnification, payment to Indemnitee shall be made within ten days after
such determination. Indemnitee shall cooperate with the person, persons or
entity making the determination with respect to Indemnitee’s entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information that is not
privileged or otherwise protected from disclosure and that is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys’ fees and disbursements) reasonably
incurred by Indemnitee in so cooperating with the person, persons or entity
making such determination shall be borne by the Company, to the extent permitted
by applicable law.

(c) In the event the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 10(b), the Independent Counsel
shall be selected as provided in this Section 10(c). If a Change in Control
shall not have occurred, the Independent Counsel shall be selected by the
Company’s board of directors, and the Company shall give written notice to
Indemnitee advising him or her of the identity of the Independent Counsel so
selected. If a Change in Control shall have occurred, the Independent Counsel
shall be selected by Indemnitee (unless Indemnitee shall request that such
selection be made by the Company’s board of directors, in which event the
preceding sentence shall apply), and Indemnitee shall give written notice to the
Company advising it of the identity of the Independent Counsel so selected. In
either event, Indemnitee or the Company, as the case may be, may, within ten
days after such written notice of selection shall have been given, deliver to
the Company or to Indemnitee, as the case may be, a written objection to such
selection; provided, however, that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements
of “Independent Counsel” as defined in Section 1 of this Agreement, and the
objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person so selected shall
act as Independent Counsel. If such written objection is so made and
substantiated, the Independent Counsel so selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court has determined
that such objection is without merit. If, within 20 days after the later of
(i) submission by Indemnitee of a written request for indemnification pursuant
to Section 10(a) hereof and (ii) the final disposition of the Proceeding, the
parties have not agreed upon an Independent Counsel, either the

 

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Company or Indemnitee may petition a court of competent jurisdiction for
resolution of any objection which shall have been made by the Company or
Indemnitee to the other’s selection of Independent Counsel and for the
appointment as Independent Counsel of a person selected by the court or by such
other person as the court shall designate, and the person with respect to whom
all objections are so resolved or the person so appointed shall act as
Independent Counsel under Section 10(b) hereof. Upon the due commencement of any
judicial proceeding or arbitration pursuant to Section 12(a) of this Agreement,
the Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

(d) The Company agrees to pay the reasonable fees and expenses of any
Independent Counsel and to fully indemnify such counsel against any and all
Expenses, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.

11. Presumptions and Effect of Certain Proceedings.

(a) In making a determination with respect to entitlement to indemnification
hereunder, the person, persons or entity making such determination shall, to the
fullest extent not prohibited by law, presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 10(a) of this Agreement, and the
Company shall, to the fullest extent not prohibited by law, have the burden of
proof to overcome that presumption in connection with the making by such person,
persons or entity of any determination contrary to that presumption.

(b) The termination of any Proceeding or of any claim, issue or matter therein,
by judgment, order, settlement or conviction, or upon a plea of nolo contendere
or its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Indemnitee to indemnification
or create a presumption that Indemnitee did not act in good faith and in a
manner which he or she reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

(c) For purposes of any determination of good faith, Indemnitee shall be deemed
to have acted in good faith to the extent Indemnitee relied in good faith on
(i) the records or books of account of the Enterprise, including financial
statements, (ii) information supplied to Indemnitee by the officers of the
Enterprise in the course of their duties, (iii) the advice of legal counsel for
the Enterprise or its board of directors or counsel selected by any committee of
the board of directors or (iv) information or records given or reports made to
the Enterprise by an independent certified public accountant, an appraiser,
investment banker or other expert selected with reasonable care by the
Enterprise or its board of directors or any committee of the board of directors.
The provisions of this Section 11(c) shall not be deemed to be exclusive or to
limit in any way the other circumstances in which Indemnitee may be deemed to
have met the applicable standard of conduct set forth in this Agreement.

 

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(d) Neither the knowledge, actions nor failure to act of any other director,
officer, agent or employee of the Enterprise shall be imputed to Indemnitee for
purposes of determining the right to indemnification under this Agreement.

12. Remedies of Indemnitee.

(a) Subject to Section 12(e), in the event that (i) a determination is made
pursuant to Section 10 of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of Expenses is not timely
made pursuant to Section 8 or 12(d) of this Agreement, (iii) no determination of
entitlement to indemnification shall have been made pursuant to Section 10 of
this Agreement within 90 days after the later of the receipt by the Company of
the request for indemnification or the final disposition of the Proceeding,
(iv) payment of indemnification pursuant to this Agreement is not made
(A) within ten days after a determination has been made that Indemnitee is
entitled to indemnification or (B) with respect to indemnification pursuant to
Sections 4, 5 and 12(d) of this Agreement, within 30 days after receipt by the
Company of a written request therefor, or (v) the Company or any other person or
entity takes or threatens to take any action to declare this Agreement void or
unenforceable, or institutes any litigation or other action or proceeding
designed to deny, or to recover from, Indemnitee the benefits provided or
intended to be provided to Indemnitee hereunder, Indemnitee shall be entitled to
an adjudication by a court of competent jurisdiction of his or her entitlement
to such indemnification or advancement of Expenses. Alternatively, Indemnitee,
at his or her option, may seek an award in arbitration with respect to his or
her entitlement to such indemnification or advancement of Expenses, to be
conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of
the American Arbitration Association. Indemnitee shall commence such proceeding
seeking an adjudication or an award in arbitration within 180 days following the
date on which Indemnitee first has the right to commence such proceeding
pursuant to this Section 12(a); provided, however, that the foregoing clause
shall not apply in respect of a proceeding brought by Indemnitee to enforce his
or her rights under Section 4 of this Agreement. The Company shall not oppose
Indemnitee’s right to seek any such adjudication or award in arbitration in
accordance with this Agreement.

(b) Neither (i) the failure of the Company, its board of directors, any
committee or subgroup of the board of directors, Independent Counsel or
stockholders to have made a determination that indemnification of Indemnitee is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor (ii) an actual determination by the Company, its board of
directors, any committee or subgroup of the board of directors, Independent
Counsel or stockholders that Indemnitee has not met the applicable standard of
conduct, shall be a defense to the action or create a presumption that
Indemnitee has or has not met the applicable standard of conduct. In the event
that a determination shall have been made pursuant to Section 10 of this
Agreement that Indemnitee is not entitled to indemnification, any judicial
proceeding or arbitration commenced pursuant to this Section 12 shall be
conducted in all respects as a de novo trial, or arbitration, on the merits, and
Indemnitee shall not be prejudiced by reason of that adverse determination. In
any judicial proceeding or arbitration commenced pursuant to this Section 12,
the Company shall, to the fullest extent not prohibited by law, have the

 

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burden of proving Indemnitee is not entitled to indemnification or advancement
of Expenses, as the case may be.

(c) To the fullest extent not prohibited by law, the Company shall be precluded
from asserting in any judicial proceeding or arbitration commenced pursuant to
this Section 12 that the procedures and presumptions of this Agreement are not
valid, binding and enforceable and shall stipulate in any such court or before
any such arbitrator that the Company is bound by all the provisions of this
Agreement. If a determination shall have been made pursuant to Section 10 of
this Agreement that Indemnitee is entitled to indemnification, the Company shall
be bound by such determination in any judicial proceeding or arbitration
commenced pursuant to this Section 12, absent (i) a misstatement by Indemnitee
of a material fact, or an omission of a material fact necessary to make
Indemnitee’s statements not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.

(d) To the extent not prohibited by law, the Company shall indemnify Indemnitee
against all Expenses that are incurred by Indemnitee in connection with any
action for indemnification or advancement of Expenses from the Company under
this Agreement or under any directors’ and officers’ liability insurance
policies maintained by the Company to the extent Indemnitee is successful in
such action, and, if requested by Indemnitee, shall (as soon as reasonably
practicable, but in any event no later than 60 days, after receipt by the
Company of a written request therefor) advance such Expenses to Indemnitee,
subject to the provisions of Section 8.

(e) Notwithstanding anything in this Agreement to the contrary, no determination
as to entitlement to indemnification shall be required to be made prior to the
final disposition of the Proceeding.

13. Contribution. To the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to Indemnitee, the
Company, in lieu of indemnifying Indemnitee, shall contribute to the amounts
incurred by Indemnitee, whether for Expenses, judgments, fines or amounts paid
or to be paid in settlement, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all of the circumstances of such Proceeding in order
to reflect (i) the relative benefits received by the Company and Indemnitee as a
result of the events and transactions giving rise to such Proceeding; and
(ii) the relative fault of Indemnitee and the Company (and its other directors,
officers, employees and agents) in connection with such events and transactions.

14. Non-exclusivity. The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under applicable
law, the Company’s bylaws, any agreement, a vote of stockholders or a resolution
of directors, or otherwise. To the extent that a change in law, whether by
statute or judicial decision, permits greater indemnification or advancement of
Expenses than would be afforded currently under the Company’s bylaws and this
Agreement, it is the intent of the parties

 

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hereto that Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by such change, subject to the restrictions expressly set forth herein
or therein. Except as expressly set forth herein, no right or remedy herein
conferred is intended to be exclusive of any other right or remedy, and every
other right and remedy shall be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. Except as expressly set forth herein, the assertion or employment of
any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other right or remedy.

15. Intentionally Omitted.

16. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder (or
for which advancement is provided hereunder) if and to the extent that
Indemnitee has otherwise actually received payment for such amounts under any
insurance policy, contract, agreement or otherwise.

17. Insurance. To the extent that the Company maintains an insurance policy or
policies providing directors and officers liability insurance, Indemnitee shall
be covered by such policy or policies to the same extent as the most
favorably-insured persons under such policy or policies in a comparable
position. The Company will not amend, replace, terminate or rescind any
directors and officers liability insurance covering Indemnitee without giving
Indemnitee thirty (30) days advance written notice of such event. The Company
will pay all premiums relating to such policies on or prior to the due dates
therefor.

18. Subrogation. In the event of any payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents as
are necessary to enable the Company to bring suit to enforce such rights.

19. Services to the Company. Indemnitee agrees to serve as a director or officer
of the Company or, at the request of the Company, as a director, trustee,
general partner, managing member, officer, employee, agent or fiduciary of
another Enterprise, for so long as Indemnitee is duly elected or appointed or
until Indemnitee tenders his or her resignation or is removed from such
position. Indemnitee may at any time and for any reason resign from such
position (subject to any other contractual obligation or any obligation imposed
by operation of law), in which event the Company shall have no obligation under
this Agreement to continue Indemnitee in such position. This Agreement shall not
be deemed an employment contract between the Company (or any of its subsidiaries
or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that any
employment with the Company (or any of its subsidiaries or any Enterprise) is at
will, and Indemnitee may be discharged at any time for any reason, with or
without cause, with or without notice, except as may be otherwise expressly
provided in any executed, written employment contract between Indemnitee and the
Company (or any of its subsidiaries or any Enterprise), any existing formal
severance policies adopted by the Company’s board of directors or, with respect
to service as a director or officer of the

 

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Company, the Company’s bylaws or the MBCA. No such document shall be subject to
any oral modification thereof.

20. Duration. This Agreement shall continue until and terminate upon the later
of (a) ten years after the date that Indemnitee shall have ceased to serve as a
director or officer of the Company or as a director, officer, partner, trustee,
employee or agent of any other Enterprise, as applicable; or (b) one year after
the final termination of any Proceeding, including any appeal, then pending in
respect of which Indemnitee is granted rights of indemnification or advancement
of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to
Section 12 of this Agreement relating thereto.

21. Successors. This Agreement shall be binding upon the Company and its
successors and assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of the Company, and shall inure to the benefit of Indemnitee and
Indemnitee’s heirs, executors and administrators.

22. Severability. Nothing in this Agreement is intended to require or shall be
construed as requiring the Company to do or fail to do any act in violation of
applicable law. The Company’s inability, pursuant to court order or other
applicable law, to perform its obligations under this Agreement shall not
constitute a breach of this Agreement. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including without limitation, each portion of any
section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby and shall remain
enforceable to the fullest extent permitted by law; (b) such provision or
provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties
hereto; and (c) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that
is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby.

23. Enforcement. The Company expressly confirms and agrees that it has entered
into this Agreement and assumed the obligations imposed on it hereby in order to
induce Indemnitee to serve as a director or officer of the Company, and the
Company acknowledges that Indemnitee is relying upon this Agreement in serving
as a director or officer of the Company.

24. Entire Agreement. This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the
parties hereto with respect to the subject matter hereof; provided, however,
that this Agreement is a supplement to and in furtherance of the Company’s
bylaws and applicable law.

25. Modification and Waiver. No supplement, modification or amendment to this
Agreement shall be binding unless executed in writing by the parties hereto. No
amendment, alteration or repeal of this Agreement shall adversely affect any
right of

 

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Indemnitee under this Agreement in respect of any action taken or omitted by
such Indemnitee in his or her Corporate Status prior to such amendment,
alteration or repeal. No waiver of any of the provisions of this Agreement shall
constitute or be deemed a waiver of any other provision of this Agreement nor
shall any waiver constitute a continuing waiver.

26. Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by registered or certified
mail, postage prepaid, sent by facsimile or electronic mail or otherwise
delivered by hand, messenger or courier service addressed:

(a) if to Indemnitee, to Indemnitee’s address, facsimile number or electronic
mail address as shown on the signature page of this Agreement or in the
Company’s records, as may be updated in accordance with the provisions hereof;
or

(b) if to the Company, to the attention of the Chief Executive Officer or Chief
Financial Officer of the Company at 125 Middlesex Turnpike, Bedford, MA 01730,
or at such other current address as the Company shall have furnished to
Indemnitee, with a copy (which shall not constitute notice) to James C. Gorton,
Esq., Latham & Watkins LLP, 885 Third Avenue, New York, New York 10022.

Each such notice or other communication shall for all purposes of this Agreement
be treated as effective or having been given (i) if delivered by hand, messenger
or courier service, when delivered (or if sent via a nationally-recognized
overnight courier service, freight prepaid, specifying next-business-day
delivery, one business day after deposit with the courier), (ii) if sent via
mail, at the earlier of its receipt or five days after the same has been
deposited in a regularly-maintained receptacle for the deposit of the United
States mail, addressed and mailed as aforesaid, or (iii) if sent via facsimile,
upon confirmation of facsimile transfer or, if sent via electronic mail, upon
confirmation of delivery when directed to the relevant electronic mail address,
if sent during normal business hours of the recipient, or if not sent during
normal business hours of the recipient, then on the recipient’s next business
day.

27. Applicable Law. This Agreement and the legal relations among the parties
shall be governed by, and construed and enforced in accordance with, the
internal laws of the State of Michigan, without regard to its conflict of laws
rules.

28. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall for all purposes be deemed to be an original but all of
which together shall constitute one and the same Agreement. This Agreement may
also be executed and delivered by facsimile signature and in counterparts, each
of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. Only one such counterpart
signed by the party against whom enforceability is sought needs to be produced
to evidence the existence of this Agreement.

29. Captions. The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction thereof.

(signature page follows)

 

14

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The parties are signing this Indemnification Agreement as of the date stated in
the introductory sentence.

 

GSI GROUP CORPORATION

/s/ Michael Katzenstein

By:

Title:

 

Michael Katzenstein

Principal Executive Officer

 

 

 

JOHN ROUSH /s/ John Roush Residence Address:      

 

 

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EXHIBIT C

RELEASE OF CLAIMS

 

1. General Release.

(a) I acknowledge that my employment with the Company and all subsidiaries and
affiliates thereof terminated on [        ]. I further acknowledge that the
Company delivered this release of claims (the “Release”) to me on [        ].

(b) In exchange for the payments and benefits described in that certain
Employment Agreement by and between GSI Group Inc. (the “Company”) and me (the
“Employment Agreement”), which I agree I am not otherwise entitled to receive
absent execution and non-revocation of the Release, I and my representatives,
agents, estate, heirs, successors and assigns (“Releasors”) voluntarily agree to
release and discharge the Company and its parents, affiliates, subsidiaries,
predecessors, successors, assigns, plan sponsors and plan fiduciaries (and the
current and former trustees, officers, directors, employees, and agents of each
of the foregoing, all both individually, in their capacity acting on the
Company’s behalf and in their official capacities) (collectively “Releasees”)
generally from all claims, demands, actions, suits, damages, debts, judgments
and liabilities of every name and nature, whether existing or contingent, known
or unknown, suspected or unsuspected, in law or in equity in connection with my
employment by or termination of employment with the Company, or any of my
dealings, transactions or events involving the Releasees, arising on or before
the date of this Release. This Release is intended by me to be all encompassing
and to act as a full and total release of any claims that the Releasors may have
or have had against the Releasees from the beginning of time to the date of this
Release, including but not limited to all claims in contract (whether written or
oral, express or implied), tort, equity and common law; any claims for wrongful
discharge, breach of contract, or breach of the obligation of good faith and
fair dealing; and/or any claims under any local, state or federal constitution,
statute, law, ordinance, bylaw, or regulation dealing with either employment,
employment discrimination, retaliation, mass layoffs, plant closings, and/or
employment benefits and/or those laws, statutes or regulations concerning
discrimination on the basis of race, color, creed, religion, age, sex, sexual
harassment, sexual orientation, national origin, ancestry, handicap or
disability, veteran status or any military service or application for military
service or any other category protected by law; and any federal, state or local
law or regulation concerning securities, stock or stock options. This Release is
for any relief, no matter how denominated, including but not limited to wages,
back pay, front pay, benefits, compensatory damages, liquidated damages,
punitive damages or attorney’s fees. I also agree not to commence or cooperate
in the prosecution or investigation of any lawsuit, administrative action or
other claim or complaint against the Releasees, except as required by law.

(c) By this Release, I not only release and discharge the Releasees from any and
all claims as stated above that the Releasors could make on my own behalf or on
the behalf of others, but also those claims that might be made by any other
person or organization on my behalf and I specifically waive any right to
recover any damage awards as a member of any class in a case in which any claims
against the Releasees are made involving any matters arising out of my
employment by or termination of employment with the Company, or any of my
dealings, transactions or events involving the Releasees.

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(d) I agree that, except for any payments or benefits set forth in Sections 5, 8
or 24 of the Employment Agreement that have not yet been paid, as applicable,
the payments and benefits the Company previously provided to me are complete
payment, settlement, accord and satisfaction with respect to all obligations and
liabilities of the Releasees to the Releasors, and with respect to all claims,
causes of action and damages that could be asserted by the Releasors against the
Releasees regarding my employment or termination of employment with the Company,
or any of my dealings, transactions or events involving the Releasees,
including, without limitation, all claims for wages, salary, commissions, draws,
car allowances, incentive pay, bonuses, business expenses, vacation, stock,
stock options, severance pay, attorneys’ fees, compensatory damages, exemplary
damages, or other compensation, benefits, costs or sums. Notwithstanding
anything in this Release to the contrary, this Release shall not affect and I do
not waive: (i) rights to indemnification I may have under: (A) applicable law,
(B) any charter document or bylaws, (C) any agreement between me and the Company
or any other Releasee, (D) as an insured under any directors’ and officers’
liability insurance policy now or previously in force, (ii) any right I may have
to obtain contribution in the event of the entry of judgment against me as a
result of any act or failure act for which both I and any Releasee are jointly
responsible; (iii) my rights to vested benefits and payments under any stock
options, restricted stock, restricted stock units or other incentive plans or
any agreements relating thereto or under any retirement plan, welfare benefit
plan or other benefit or deferred compensation plan, all of which shall remain
in effect in accordance with the terms and provisions thereof, or my rights as a
stockholder or equity holder of the Company.

(e) I understand and agree that this Release will be binding on me and my heirs,
administrators and assigns. I acknowledge that I have not assigned any claims or
filed or initiated any legal proceedings against any of the Releasees.

(f) I acknowledge and agree that if any provision of this Release is found, held
or deemed by a court of competent jurisdiction to be void, unlawful or
unenforceable under any applicable statute or controlling law, the remainder of
this Release shall continue in full force and effect.

(g) This Release is deemed made and entered into in the Commonwealth of
Massachusetts, and in all respects shall be interpreted, enforced and governed
under the internal laws of the Commonwealth of Massachusetts, to the extent not
preempted by federal law.

(h) Notwithstanding the comprehensive release of claims set forth in the
preceding paragraphs of this Section 1, nothing in this Release shall bar or
prohibit me from contacting, seeking assistance from or participating in any
proceeding before any federal or state administrative agency to the extent
permitted by applicable federal, state and/or local law. However, I nevertheless
will be prohibited to the fullest extent authorized by law from obtaining
monetary damages in any agency proceeding in which I do so participate.

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2. Waiver of Rights and Claims Under the Age Discrimination in Employment Act of
1967. Since I am 40 years of age or older, I acknowledge and agree that I have
been informed that I have or may have specific rights and/or claims under the
Age Discrimination in Employment Act of 1967 (the “ADEA”) and I agree that:

(a) in consideration for the payments and benefits described in the Employment
Agreement, which I am not otherwise entitled to receive absent execution and
non-revocation of the Release, I specifically and voluntarily waive such rights
and/or claims under the ADEA that I have or might have against the Releasees to
the extent such rights and/or claims arose prior to the date I executed this
Release;

(b) I understand that I am not waiving rights or claims under the ADEA which may
arise after the date that I execute this Release;

(c) I have been advised to consult with or seek advice from an attorney of my
choice or any other person of my choosing before executing this Release;

(d) I have been advised that I have twenty-one (21) days or, in the event that
my termination of employment is “in connection with an exit incentive or other
employment termination program” (as such phrase is defined in the ADEA),
forty-five (45) days (the applicable time period, the “Consideration Period”) to
review this Release and consider its terms before signing it, and I acknowledge
and agree that such Consideration Period will not be affected or extended by any
changes, whether material or immaterial, that might be made to this Release;

(e) in entering into this Release I am not relying on any representation,
promise or inducement made by the Company or its attorneys with the exception of
those promises described in this Release; and

(f) I may revoke this Release for a period of seven (7) days after I sign it and
all rights and obligations of both parties under this Release shall not become
effective or enforceable until the date upon which the seven (7) day revocation
period has expired. For such a revocation to be effective, the Company must
receive it on or before the expiration of the seven (7) day revocation period.

* * * * *

I acknowledge and agree that this Release is a legally binding document and my
signature will commit me to its terms. I acknowledge and agree that I have
carefully read and fully understand all of the provisions of this Release and
that I voluntarily enter into this Release by signing below. Upon execution, I
agree to deliver a signed copy of this Release to Vice President, Corporate
Resources of the Company.

 

 

John Roush

 

Date: