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Exhibit
10.2
TERMINATION
AGREEMENT
Agreement made this 9th day
of July 2008, by and between Excel Technology, Inc. (the
“Company”) a Delaware corporation , and Alice Varisano,
the Chief Financial Officer of the Company (the
“Employee”).
WITNESSETH:
WHEREAS, the Company is
proposing to enter into an Agreement and Plan of Merger (the
“Merger Agreement”) with GSI Group, Inc., a New
Brunswick corporation (“GSI”), and Eagle Acquisition
Corporation, a Delaware corporation and an indirect wholly owned
subsidiary of GSI (“Purchaser”), which provides for a
cash tender offer (the “Offer”) by Purchaser for all of
the outstanding shares of voting stock of the Company
(“Shares”), followed by a merger of Purchaser with and
into the Company, with the Company surviving the merger as an
indirect wholly owned subsidiary of GSI; and
WHEREAS, Employee has an
employment agreement (“Employment Agreement”;
capitalized terms used but not defined herein having the meanings
ascribed thereto in the Employment Agreement) with the Company,
dated the 15 th day
of February, 2007, that (a) expires on February 15, 2011,
and (b) provides (i) for a salary, currently payable at
the rate of $350,000 per annum, a minimum yearly bonus of $100,000,
and a yearly expense allowance of $30,000, (ii) in the event
(a) Employee’s employment is terminated without cause or
Employee resigns for Good Reason, Employee is entitled to receive,
in addition to all forms of current and past due compensation to
the date of termination, (A) a cash lump sum payment in an
amount equal to Employee’s Base Salary, plus an amount equal
to the sum of Employee’s prior year’s bonuses and
expense allowance (collectively, the “Severance
Payment” all or a portion of which the Company and Employee
intend to be allocable to the Employee’s agreement not to
compete set forth in Section 6.01 of the Employment Agreement,
and as extended pursuant to Section 4 hereof (the
“Covenant Not to Compete Payment”)), and
(iii) that in the event of a Change of Control, Employee is
entitled to a payment equal to the product of (A) 2.99 and
(B) Employee’s “annualized includible
compensation” as that term is
defined in Section 280G of the Code
and regulations thereunder for the period consisting of the most
recent five (5) taxable years ending before the Change of
Control (the “Change of Control Payment”); provided,
that all such foregoing payments are subject to applicable
withholding taxes; and
WHEREAS, the Employment
Agreement defines (a) Change of Control to mean, among other
things, “the acquisition by any person… of more than
50% of … the then outstanding shares of common stock of the
Company” and (b) Good Reason to mean, among other
things, “the material diminution in the title or job
responsibilities of the Employee; and
WHEREAS, (a) the Company
acknowledges and confirms that, as described in Section 7.14
of the Merger Agreement, at the Purchase Time Employee will have
“Good Reason” for terminating her employment with the
Company pursuant to the Employment Agreement, (b) the Employee
has given notice to the Company that she will leave the employ of
the Company for Good Reason contingent upon the occurrence of and
immediately following the Purchase Time, and (c) the Company
further acknowledges and confirms that if Employee voluntarily
terminates her employment with the Company following the Purchase
Time, Employee shall be entitled to receive the payments and
benefits provided in the Employment Agreement upon the termination
by the Employee of her employment with the Company for Good Reason;
and
WHEREAS, upon
Purchaser’s purchase of Shares pursuant to the Offer, by
accepting for payment Shares validly tendered and not withdrawn as
of the expiration date of the Offer, and paying for such Shares in
accordance with the terms of the Offer by depositing the aggregate
purchase price therefor with the Depositary for the Offer (the
“Depositary”), Parent will acquire ownership of a
majority of the total number of then outstanding Shares on a
fully-diluted basis (the date and time of such deposit with the
Depositary being referred to as the “Purchase Time”);
and
WHEREAS, this Agreement is
being entered into by the Company and Employee to
(i) implement the provisions of the Employment Agreement which
will be applicable, and to set forth the amount of the payments
which Employee and the Company have agreed will be payable to
Employee pursuant to the Employment Agreement, upon the termination
of Employee’s employment with the Company for Good Reason
immediately following the Purchase Time, (ii) set forth an
amount of the Severance Payment which, subject to
Section 3,
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the Company and Employee have initially
agreed to designate as the Covenant Not To Compete Payment,
(iii) provide a procedure for adjusting such amount so
designated and for making commensurate adjustments in the amount of
the Severance Payment, (iv) (A) provide for an extension
to a two-year period of the Employee’s non-compete
obligations set forth in Section 6.01 of the Employment
Agreement and (B) set forth the two-year non-solicitation
covenant agreed to by the Employee and (v) provide for the
mutual releases set forth herein; and
WHEREAS, the terms of this
Agreement and the Employment Agreement have been approved or
ratified by the Compensation Committee of the Company’s Board
of Directors (the “Compensation Committee”) as an
“employment compensation, severance or other employee benefit
arrangement” within the meaning of Rule 14d-10 under the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and the Chairman of the Compensation Committee is
authorized to execute this Agreement on behalf of the
Company;
NOW, THEREFORE, in
consideration of the premises, and other good and valuable
consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Termination of
Employment . Contingent upon the occurrence of and immediately
following the Purchase Time, the Employee’s employment with
the Company shall terminate for Good Reason.
2. Payments . Provided
the Employee has not revoked the Waiver and Release (as defined
herein) in accordance with Section 5(a)(ii), immediately upon
the occurrence of the Purchase Time, the Company shall, subject to
Section 3, pay to the Employee, less any applicable
withholding taxes, (i) the Severance Payment, (ii) the
Covenant Not to Compete Payment and (iii) the Change of
Control Payment. The Company shall remit to the appropriate taxing
authority, at or before the time required by law to be so remitted,
any withholding taxes (including any social security and Medicare
taxes and the Company’s contribution with respect to such
taxes) and excise taxes, if applicable, to the payments provided
for above and to any other amounts or benefits paid or provided to
the Employee pursuant to this Agreement or the Employment Agreement
following the termination of her employment with the Company
(“Withholding Taxes”). Set forth on Exhibit A which
is
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attached hereto and made a part hereof,
are the payments to be made, subject to Withholding Taxes and
subject to Section 3, with respect to the Severance Payment,
the Covenant Not to Compete Payment and the Change of Control
Payment.
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3. Certain Adjustments
.
(a) The amount of the
Covenant Not to Compete Payment set forth on Exhibit A shall be
subject to adjustment and final determination based on a valuation
by an independent valuation firm selected by GSI, which firm shall
complete such valuation and provide the final amount of the
Covenant Not to Compete Payment and supporting calculations to GSI
and the Employee, and shall provide the final amount of the
Covenant Not to Compete Payment to GSI’s independent
accountants, within twenty (20) business days following the
date of this Agreement. The amount of the Severance Payment set
forth on Exhibit A shall be subject to adjustment and final
determination by GSI’s independent accounting firm based on
the final determination of the amount of the Covenant Not to
Compete Payment in accordance with the immediately preceding
sentence, and such final determination, together with supporting
calculations, shall be provided by such accounting firm to GSI and
the Employee within three (3) business days after receiving
the valuation and supporting calculations referred to in the
immediately preceding sentence and in any event prior to the
Purchase Time. The adjustments and final determinations pursuant to
this Section 3 shall be binding upon the Company and the
Employee and Exhibit A shall be amended (and shall be deemed
amended whether or not actually modified) prior to the Purchase
Time to reflect such adjustments and final determinations. The
amount of Withholding Taxes with respect to the Severance Payment
and the Covenant Not to Compete Payment shall be finally determined
by GSI’s independent accountants based on the amount of such
payments as adjusted and finally determined in accordance with this
Section 3 and the Withholding Taxes percentages specified in
the first footnote on Exhibit A hereto. The adjustments and final
determinations pursuant to this Section 3 shall be binding
upon the Company and the Employee and Exhibit A shall be amended
(and shall be deemed amended whether or not actually modified)
prior to the Purchase Time to reflect such adjustments and final
determinations. The fees and disbursements of the independent
valuation firm and the independent accountants for services
referred to in this Section 3 shall be paid by the
Company.
(b) Notwithstanding anything
in this Agreement to the contrary, in the event it shall be
determined pursuant to Section
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