Exhibit 10.1

FORM OF

GSI GROUP INC.

200     ANNUAL EQUITY INCENTIVE PLAN

Restricted Stock Grant Agreement

THIS AGREEMENT made as of this             day of             , 20            by
and between GSI GROUP INC., a corporation continued and existing under the laws
of New Brunswick, Canada (the “Company”), and the individual identified below
(the “Recipient”).

W I T N E S S E T H T H A T:

WHEREAS, Recipient’s association with the Company or an Affiliate is considered
by the Company to be important for the growth of it and its Affiliates; and

WHEREAS, the Company intends to issue Recipient restricted shares of the
Company’s Common Stock pursuant to the Company’s 2006 Equity Incentive Plan (the
“Plan”) according to the terms and conditions hereof;

WHEREAS, the Recipient agrees to receive the stock subject to the restrictions
set forth herein, and subject to forfeiture in the event that Recipient fails to
vest ownership; and

WHEREAS, such restrictions will lapse and the shares will vest in accordance
with the terms set forth below;

NOW, THEREFORE, in consideration of the promises and mutual covenants herein and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties agree as follows:

 

1. Issuance of Common Stock

1.1. The Company hereby agrees to issue to Recipient an aggregate of
                             (            ) shares of Common Stock in
consideration of his/her performance of future services, and on the terms and
conditions of this Agreement and all other applicable terms and conditions of
the Plan.

1.2 All of the share numbers set forth in the Plan reflect the capital structure
of the Company as of the date of the approval of the Plan by the Company’s
shareholders on May 15, 2006. Subject to the Plan, if subsequent to that date
the outstanding shares of Stock (or any other securities covered by the Plan by
reason of the prior application of this Section) are increased, decreased, or
exchanged for a different number or kind of shares or other securities, or if
additional shares or new or different shares or other securities are distributed
with respect to shares of Stock, through acquisition, merger, consolidation,
sale of all or substantially all the property of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, or other similar distribution

--------------------------------------------------------------------------------

with respect to such shares of Stock, an appropriate and proportionate
adjustment will be made in: (i) the maximum numbers and kinds of shares provided
in Section 4 below; (ii) the numbers and kinds of shares or other securities
subject to the then outstanding Awards; (iii) the exercise price for each share
or other unit of any other securities subject to then outstanding Options and
Stock Appreciation Rights (without change in the aggregate purchase price as to
which such Options or Rights remain exercisable); and (iv) the repurchase price
of each share of Restricted Stock then subject to a Risk of Forfeiture in the
form of a Company repurchase right.

1.3 For purposes of this Agreement, all shares granted hereunder shall be
referred to as “Restricted Shares” until such time as they convert to “Vested
Shares” in the manner detailed herein.

1.4 Upon receipt by the Company of a copy of this Agreement duly executed and
completed by the Recipient, the Company shall hold the Restricted Shares in
escrow in the name of Recipient until such time as the Restricted Shares become
Vested Shares.

 

2. Vesting and Forfeiture of Restricted Shares

2.1. All Restricted Shares shall be subject to the risk of forfeiture and
repurchase for cancellation in accordance with Section 2.2. Restricted Shares
shall vest and no longer be subject to the risk of forfeiture and repurchase for
cancellation under Section 2.2 upon satisfaction of the vesting provisions of
Schedule A attached hereto. Restricted Shares which have vested in accordance
with the provisions of Schedule A are herein referred to as “Vested Shares”.
Unless otherwise expressly provided on Schedule A, no Restricted Shares shall
become Vested Shares following the date of the voluntary or involuntary
termination of the Recipient’s employment or other association with the Company
and its Affiliates, for any reason whatsoever, including death or disability
and/or an entity ceasing to be an Affiliate of the Company (“Recipient’s
Termination Date”); provided however, that nothing herein shall affect the
Recipient’s rights under Articles 8 and 9 of the Plan; and provided further;
that military or sick leave shall not be deemed a termination of employment or
other association if it does not exceed the longer of 90 days or the period
during which the Recipient’s reemployment rights, if any, are guaranteed by
statute or by contract.

2.2. As of the Recipient’s Termination Date, all Restricted Shares shall be
forfeited by the Recipient or any Permitted Transferee (as defined in
Section 3.1 below), and shall be deemed automatically returned for cancellation
by the Company. As of the Recipient’s Termination Date, and without requirement
of notice or other action, the Company shall become the legal and beneficial
owner of all Restricted Shares and all rights and interests therein or relating
thereto, and the Company shall receive for cancellation such Restricted Shares
for no consideration whatsoever.

 

3. Restriction on Transfer

3.1. Other than as provided in Section 6.4 of the Plan, and except for the
escrow described in Section 4, no Restricted Shares or any beneficial interest
therein shall be sold, transferred, assigned, pledged, encumbered or otherwise
disposed of in any way at any time

--------------------------------------------------------------------------------

(including, without limitation, by operation of law) other than to the Company
or its assignees for cancellation.

 

4. Escrow of Shares

4.1. Each Restricted Share granted pursuant to this Agreement shall be held in
escrow by the Company, as escrow holder (“Escrow Holder”) until it shall either:
(a) be forfeited to and repurchased for cancellation by the Company upon the
earlier of the expiration of the vesting schedule in Schedule A, or at the
Recipient’s Termination Date in accordance with Section 2; or (b) become a
Vested Share and the Recipient shall have satisfied the requirements of
Section 5 (relating to tax withholdings) with respect to any taxable income
attributable to such Share.

4.2. Upon the forfeiture of any Restricted Shares to, and the return for
cancellation by the Company in accordance with Section 2, the Company shall have
the right as Escrow Holder to take all steps necessary to accomplish the
transfer of such Share to it for cancellation, including but not limited to,
presentment of certificates representing the Restricted Shares, together with a
stock power executed by or in the name of the Recipient appropriately completed
by the Escrow Holder, to the Company’s transfer agent with irrevocable
instructions to register transfer of such Shares into the name of the Company
for cancellation. The Recipient hereby appoints the Company as his or her
irrevocable attorney-in-fact to execute in his or her name, acknowledge and
deliver all stock powers and other instruments as may be necessary or desirable
with respect to the Restricted Shares.

4.3. When any portion of the Restricted Shares have become Vested Shares, upon
Recipient’s request the Company shall, at its sole election, either request that
the Transfer Agent: 1.) issue and deliver a stock certificate for such Shares to
Recipient; or 2.) electronically transfer the Shares to a brokerage account in
the name of Recipient. Issued certificates for Vested Shares shall be delivered
directly to the Recipient and shall be free of the legend described in
Section 8.3 below. In the event that any certificates are issued with the legend
described in Section 8.3, such certificates shall be replaced with certificates
without the legend once all vesting requirements have been fulfilled. The
Company reserves the right to require Recipient to open a brokerage account at a
designated brokerage firm for the express purpose of accepting delivery of
Vested Shares. The Company’s obligations under this section are subject to the
Recipient’s satisfaction of the requirements of Section 5 relating to tax
withholdings.

4.4. Until the Restricted Shares or any portion thereof become Vested Shares,
Recipient acknowledges and agrees that he/she has no right to receive dividends
for any Restricted Shares and has no voting rights with respect to any
Restricted Shares, and that the Company is designated as his agent in fact to
vote all Restricted Shares. In the event that a dividend is declared, the
Company shall have the exclusive right to receive such dividend. If, from time
to time during the term of the escrow, there occurs any corporate or other
action giving rise to substituted or additional securities by reason of
ownership of the Restricted Shares, such substituted or additional securities
shall be automatically deemed to be Restricted Shares subject to these terms and
conditions, including Schedule A, and if

--------------------------------------------------------------------------------

certificated, the additional shares shall be immediately deposited with the
Company as Escrow Holder.

4.5 Notwithstanding Section 7.3(b) of the Plan, certificates for Restricted
Shares shall only be issued to Recipient at the time that the Restricted Shares
become Vested Shares.

 

5. Tax Consequences

5.1. It is understood by the Company and Recipient that the issuance of the
Restricted Shares hereunder may be deemed compensatory in purpose and in effect,
and that as a result the Company or an Affiliate may be obligated to pay
withholding taxes in respect of such Restricted Shares as a result of the
receipt or vesting of the Restricted Shares. In the event that at the time the
above-said withholding tax obligations arise: Recipient hereby agrees to provide
the Company or its Affiliate with an amount sufficient to pay all withholding
taxes required to be paid as and when such taxes become payable. Recipient may
elect to pay such amount: 1.) by directing the Company in writing to withhold
sufficient net take home pay from his/her paycheck to satisfy the tax
obligation; provided however, that the full amount of the tax obligation must be
satisfied by the net available proceeds of the paycheck immediately following
the date that the shares vest; 2.) providing the Company with a check in the
amount of the tax obligation; or 3.) provided that a public market for the
Company’s stock exists, through a “same day sale” commitment from the Recipient
and a broker-dealer that is a member of the National Association of Securities
Dealers (an “NASD Dealer”) whereby the Recipient irrevocably elects to sell a
portion of Restricted Shares sufficient to pay for the total of the Recipient’s
tax obligation and whereby the NASD Dealer irrevocably commits upon receipt of
the proceeds from such shares to forward the proceeds to the Company.

5.2 In the event that Recipient fails to make timely provision for payment of
taxes, Company, in its capacity as Escrow Holder, may in its sole discretion
sell on behalf of Recipient that number shares of Recipient’s Stock required to
provide Company with net sale proceeds sufficient to satisfy Company’s tax
withholding obligations for Recipient. All such sale proceeds shall be delivered
to Company by the broker to be used in satisfaction of Recipient’s tax
obligation.

5.3 Recipient agrees that, in the event and to the extent the Company and its
Affiliates determine that they are not obligated to withhold taxes payable by
Recipient with respect to Restricted Shares, but the Company or an Affiliate is
later held liable due to any non-payment of taxes on the part of Recipient, the
Recipient shall indemnify and hold the Company and its Affiliates harmless from
the amount of any payment made by them in respect of such liability.

5.4 Recipient hereby agrees to promptly deliver to the Company (and his or her
employing Affiliate, if applicable) a signed copy of any instrument, letter or
other document he or she may execute and file with the Internal Revenue Service
evidencing his or her election under Section 83(b)(2) of the Internal Revenue
Code of 1986, as amended, to treat his or her receipt of the Restricted Shares
as includible in his or her gross income in the year of receipt. Recipient shall
deliver the said copy of any such instrument of election within

--------------------------------------------------------------------------------

five (5) days after the date on which any such election is required to be made
in accordance with the appropriate provisions of the Internal Revenue Code or
applicable Regulations thereunder.

 

6. Account Administration

6.1 The Company has appointed E*Trade Financial Corporate Services, Inc.
(“E*Trade”) as the Company’s exclusive broker under this equity incentive plan.
Recipient shall be required to open an E*Trade employee brokerage services
account to receive Vested Shares.

6.2 Section 16 officers of the Company are obligated to open and maintain a
10b5-1 Trading Plan with E*Trade Securities, LLC. All trades of Company
securities by Section 16 officers shall be exclusively through the officer’s
E*Trade Rule 10b5-1 Trading Plan. To the extent that Recipient is or becomes a
Section 16 officer of the Company, Recipient agrees to be bound by the above
trading restrictions.

 

7. Compliance with Law

7.1 Recipient represents and warrants, as a condition of transfer, that he or
she is acquiring the Restricted Shares for his or her own account for the
purpose of investment and not with a view to, or for sale in connection with,
the distribution of any such Restricted Shares.

7.2 Recipient acknowledges and agrees, that neither the Company nor any agent of
the Company shall be under any obligation to recognize any transfer of any of
the Restricted Shares if, in the opinion of counsel for the Company, such
transfer would result in violation by the Company of any federal or state law
with respect to the offering, issuance or sale of securities.

 

8. General Provisions

8.1 This Agreement shall be governed and enforced in accordance with the terms
of the Plan and the laws of the province of Ontario, Canada, without regard to
the conflict of laws principles thereof, and shall be binding upon the heirs,
personal representatives, executors, administrators, successors and assigns of
the parties.

8.2 This Agreement and the applicable terms of the Plan embody the complete
agreement and understanding among the parties hereto with respect to the subject
matter hereof, supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way and may only be modified or amended in
writing signed by the Company and the Recipient.

8.3 All Restricted Shares shall be endorsed with the following legend if issued
prior to the completion of all vesting requirements:

 

--------------------------------------------------------------------------------

The transferability of this certificate and the shares represented by this
certificate are subject to the terms and conditions (including, without
limitation, the potential forfeiture and repurchase for cancellation of the
same) of the 2006 Equity Incentive Plan and a Restricted Stock Grant Agreement
entered into by the registered owner and GSI Group Inc. Copies of such Plan and
Agreement are on file in the offices of GSI Group Inc, 39 Manning Road,
Billerica, Massachusetts 01821, U.S.A.

8.4 The rights and obligations of each party under this Agreement shall inure to
the benefit of and be binding upon such party’s heirs, legal representatives,
successors and permitted assigns. The rights and obligations of the Company
under this Agreement shall be assignable by the Company to any one or more
persons or entities without the consent of the Recipient or any other person.
The rights and obligations of any person other than the Company under this
Agreement may only be assigned with the prior written consent of the Company.

8.5 No consent to or waiver of any breach or default in the performance of any
obligations hereunder shall be deemed or construed to be a consent to or waiver
of any other breach or default in the performance of any of the same or any
other obligations hereunder. Failure on the part of any party to complain of any
act or failure to act of any other party or to declare any party in default,
irrespective of the duration of such failure, shall not constitute a waiver of
rights hereunder and no waiver hereunder shall be effective unless it is in
writing, executed by the party waiving the breach or default hereunder.

8.6 If any provision of this Agreement shall be held illegal, invalid or
unenforceable, such illegality, invalidity or unenforceability shall attach only
to such provision and shall not in any manner affect or render illegal, invalid
or unenforceable any other severable provisions of this Agreement.

8.7 The headings in this Agreement are for convenience of identification only,
do not constitute a part hereof, and shall not affect the meaning or
construction hereof.

8.8 Recipient agrees upon request to execute any further documents or
instruments necessary or desirable to carry out the purposes or intent of this
Agreement.

8.9 In case of any dispute hereunder, the parties will submit to the exclusive
jurisdiction and venue of any state or federal court of competent jurisdiction
sitting in the county in which the Company’s headquarters in the Commonwealth of
Massachusetts is located, and will comply with all requirements necessary to
give such court jurisdiction over the parties and the controversy. Each party
hereto, in addition to being entitled to exercise all rights granted by law
including recovery of damages (but subject to the remainder of this subsection),
will be entitled to specific performance of his, her or its rights under this
Agreement. The parties hereto agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach of the provisions of
this Agreement and hereby agree to waive the defense in any action for specific
performance that a remedy at law would be adequate. EACH PARTY HEREBY WAIVES ANY
RIGHT TO A JURY TRIAL AND TO CLAIM OR RECOVER PUNITIVE DAMAGES. Nothing
contained

--------------------------------------------------------------------------------

in this Section shall be construed to limit or otherwise interfere in any
respect with the authorities granted the Committee under the Plan, including
without limitation, its sole and exclusive discretion to interpret the Plan and
all awards granted thereunder (including pursuant to this Agreement).

8.10 Nothing contained in this Agreement shall confer upon the Recipient any
right with respect to the continuation of his or her employment or other
association with the Company or any Affiliate, or interfere in any way with the
right of the Company and its Affiliates, subject to the terms of Recipient’s
separate employment or consulting agreement, if any, or provision of law or
corporate articles or by-laws to the contrary, at any time to terminate such
employment or consulting agreement or otherwise modify the terms and conditions
of Recipient’s employment or association with the Company or an Affiliate.

8.11 This Agreement may be executed in one or more counterparts, each of which
when executed shall be deemed an original and all of which, taken together,
shall constitute one and the same instrument. In making proof of this Agreement
it shall not be necessary to produce or account for more than one such
counterpart.

8.12 All capitalized terms used but not defined herein shall have the respective
meaning given such terms in the Plan.

8.13 In the event of a conflict between this Agreement and the Plan, the terms
and conditions of the Plan shall govern.

IN WITNESS WHEREOF, the parties have duly executed this Agreement under seal as
of the month, day and year first set forth above.

 

GSI GROUP INC.

 

 

By:                                                                  

 

Title:                                                               

 

RECIPIENT

 

______________________________________

 

Recipient’s Name & Address:

 

______________________________________

 

______________________________________

 

______________________________________

 

______________________________________

 

 

--------------------------------------------------------------------------------

SCHEDULE A

This Schedule A sets out the circumstances under which Restricted Shares granted
to the Recipient will vest. Capitalized terms not defined herein shall have the
same meaning as such terms are assigned under the RSA. All of the terms of the
RSA are incorporated by reference herein.

 

  1. Time-Based Vesting Schedule.

 

Grant Date   Vesting Date   No. of Shares

 

  2. Performance-Based Vesting Schedule.

[insert performance trigger matrix here]

 

Grant Date   Vesting Date   No. of Shares

 

3. Automatic Vesting on Certain Events. As required by Sections 8 and 9 of the
Plan, there is hereby incorporated by reference the vesting provisions set forth
therein.