Exhibit 10.1
SEPARATION
AGREEMENT
This Separation Agreement (the
“Agreement”) is being entered into on January 23,
2009 (the “Effective Date”) between GSI Group Inc. (the
“Company”) and Daniel J. Lyne (the
“Employee” or “You”). For purposes of this
Agreement, Company includes parent, subsidiary and affiliated
entities, and the stockholders, trustees, directors, officers,
agents and employees of the Company or such entities. Employee
includes heirs, spouse, legal representative and assigns of the
Employee.
This Agreement will serve as notice
and confirm the termination of your employment with the Company and
the terms of the separation package offered to You. The purpose of
this Agreement is to establish an amicable arrangement for ending
our employment relationship, to provide you with separation
benefits to assist you in transitioning to new employment, and to
release the Company from any claims that you may have against it in
exchange for the separation benefits. With that understanding,
Employee and the Company agree as follows:
We have mutually agreed that for
purposes of this Agreement the Termination Date shall be
October 28, 2008. Employee confirms that he is resigning from
all positions and offices that he held with the Company (and all of
its subsidiaries) as of the Effective Date. The Company
acknowledges that Employee voluntarily resigned from the Company
and was not terminated for performance issues.
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2.
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Payments/Benefits upon
Termination
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On your Termination Date, you will
be entitled to the following regardless of whether you sign this
Agreement:
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a.
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All salary and
wages earned through your Termination Date.
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b.
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A payment for
unused, earned vacation time accrued through your Termination Date;
and, if applicable, unused, earned personal need time. As of the
date of the Agreement, You have 200 hours of such time.
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c.
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The opportunity
to elect continuing coverage under the Company’s health
insurance at your cost and expense, pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”).
You will receive COBRA information under separate cover. Please
note, however, that this provision is subject to Section 3(b)
herein.
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d.
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The opportunity
to elect to convert your life insurance policy coverage (which will
terminate on the Effective Date) to an individual policy, at your
cost and expense.
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Following your Termination Date, you
will not be entitled to participate in any Company-provided benefit
programs or practices, including, but not limited to, the
following:
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ii.
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If applicable,
personal need time accrual;
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iii.
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Any equity
and/or stock plan or program. In addition, please be advised that
all vesting in any such plan shall cease as of the Termination
Date. Please see the Company’s stock plan and your stock
agreement(s) for applicable terms and conditions; and
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iv.
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Ability to make
any 401(k) contributions and entitlement to any Company matches.
Please contact Prudential directly at 877-778-2100 to discuss
distributions and loan payback options.
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All amounts set forth in this
Section 2 are subject to any applicable federal, state and
local deductions, withholdings, payroll and other taxes. Your
existing equity grants shall continue to be governed under the
Plans and granting agreements in effect as of the respective
granting dates.
Except as otherwise provided in this
Agreement, your salary will cease on your Termination Date and any
entitlement you have or might have under a Company-provided benefit
plan, program or practice will terminate on such date, except as
required by federal or state law.
In consideration of your execution
of this Agreement, including specifically the release provisions in
Sections 4 and 5, the Company agrees to the following:
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a.
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Salary
continuation: The Company will pay you $145,745.70 within fourteen
days of the Effective Date, representing a lump sum payment of the
remaining unpaid amounts of your current per pay period base salary
of $10,051.46 for the period of nine (9) months following your
Termination Date. In total, the Company will pay $196,003 in
additional salary from the Termination Date, of which $50,257.30
has already been paid as of the Effective Date. One-third
(1/3) of the salary paid under this section shall be in
consideration of the release of any claims under the Age
Discrimination in Employment Act of 1967 (ADEA), and in the event
you opt to revoke your consent to this Agreement per
Section 5(e), you will forfeit one-third of the salary paid;
the remaining provisions of this Agreement, including the release
of non-age related claims in Section 4, below, will remain
intact.
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b.
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Health Benefits: Following (and
subject to the occurrence of) the Effective Date, the Company shall
(1) continue to provide health and dental insurance group
benefits that are comparable to those provided to you and your
family as of the Termination Date until the first to occur of
(i) the nine (9)-month anniversary of the Termination Date or
(ii) the date you and your family become eligible to receive
health and dental insurance benefits under the plans of your
subsequent employer. This period will be reduced to six months in
the event you opt to revoke the Agreement under Section 5(e).
You agree to immediately notify the Company upon the commencement
of your employment with a subsequent employer
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whereby you are eligible to receive
medical/dental benefits and to provide the Company with a complete
copy of the health and dental benefit coverages offered to you by
your new employer.
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c.
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During the time that you
receive Health Benefits from the Company, you will be required to
make a monthly contribution consistent with the terms provided
under these plans. Please contact Carole Leavitt concerning the
amount of monthly contribution required, and arrange to send your
monthly payment to Carole Leavitt at GSI Human Resources in
Bedford, MA by the 20 th of the month for the following
month of coverage. Please note that your contribution amount is
subject to change based on plan costs contracted by GSI and the
Company’s shared cost arrangement with employees.
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d.
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Except as set
forth above, all other benefits, including but not limited to
disability and life insurance, shall cease as of the Termination
Date. All stock options or restricted stock grants shall continue
to be governed exclusively under the terms of the Plans and
granting agreements under which such grants were originally made to
you.
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e.
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Bonus: At such
time as the Company would customarily pay bonuses, but not later
than March 15, 2009, the Company will pay you an amount equal
to $78,793.00 which represents 50% of your Target Bonus. This
amount considers 100% achievement or 20 points for item 2, the
Personal Objectives component of your 2008 Incentive Bonus Plan and
100% achievement or 30 points for item 4, the Extra Bonus
Opportunity: M&A component of the Incentive Bonus Plan. Based
on projected 2008 full year GSI Group Profit results against plan,
no bonus for item 1 of the Incentive Bonus Plan is payable. No
bonus will be payable for item 3, the Discretionary component. No
additional bonus or other payments shall be due or payable to you.
The Company agrees and stipulates that your bonus has been fully
earned as of your Termination Date; however, you will only receive
66% of this amount in the event you opt to revoke your consent to
release age claims under the Agreement per Section 5(e). The
Company will not withhold or reduce your bonus for any other
reason.
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f.
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Section 409A: You and the
Company agree that the payment schedule for any payments described
in this Section 3 may be adjusted as necessary to avoid the
application of the provisions of Section 409A of the Internal
Revenue Code of 1986, as amended, (“Section 409A”),
provided that no such adjustment shall result in either a decrease
of any benefit or payment contemplated herein, nor an increase in
the cost of providing such payment or benefit. For example, if at
the time of your separation from service, you are a
“specified employee,” as hereinafter defined, any and
all amounts payable under this Section 3 in connection with
such separation from service that constitute deferred compensation
subject to Section 409A, as determined by the Company in its
sole discretion, and that would (but for this sentence) be payable
within six months following such separation from service, shall
instead be paid on the date that follows the date of such
separation from service by six (6) months. For purposes of the
preceding sentence, “separation from service” shall be
determined in a manner consistent with subsection (a)(2)(A)(i) of
Section 409A and the term “specified employee”
shall mean an
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individual determined by the Company
to be a specified employee as defined in subsection (a)(2)(B)(i) of
Section 409A. This Agreement will be interpreted and
administered in accordance with the applicable requirements of, and
exemptions from, Section 409A in a manner consistent with
Treas. Reg. § 1.409A-1(c). To the extent payments and benefits
are subject to Section 409A, this Agreement shall be
interpreted, construed and administered in a manner that satisfies
the requirements of (i) Section 409A(a)(2), (3) and
(4), (ii) Treas. Reg. § 1.409A-1, et seq. , and
(iii) transitional relief under IRS Notice 2007-86, and
(iv) other applicable authority issued by the Internal Revenue
Service and the U.S. Department of the Treasury.
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All payments set forth in this
Section 3 shall be subject to any applicable federal, state
and/or local deductions, withholdings, payroll and other
taxes.
You will only be entitled to the
payments and benefits described above and to no other payments or
benefits. You acknowledge that the payments and benefits described
in Section 3(a), (b) and (e) above represent
valuable consideration in excess of that to which you might
otherwise be entitled by reason of your employment by and
termination from employment with the Company.
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4.
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Mutual
Release of Claims
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a.
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In exchange for the Separation
Benefits described in Section 3 above, which you agree you are
not entitled to otherwise receive, you and your representatives,
agents, estate, heirs, successors and assigns (collectively
“you”) voluntarily agree to release and discharge the
Company and its parents, affiliates, subsidiaries, successors,
assigns, plan sponsors and plan fiduciaries (and the current and
former trustees, officers, directors, shareholders, employees, and
agents of each of the foregoing, 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 your employment by and/or termination
from the Company, arising on or before the Effective Date. This
release is intended by you to be all encompassing and to act as a
full and total release of any claims you may have or have had
against the Releasees from the beginning of your employment with
the Company to the Effective Date of this Agreement, 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, including all claims under Title VII of
the Civil Rights Act (42 U.S.C. § 2000e et seq.); the
Americans With Disabilities Act (42 U.S.C. § 12101 et seq.);
the
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Rehabilitation Act (29 U.S.C. §
701 et seq.); the Equal Pay Act; the Age Discrimination in
Employment Act (“ADEA”) (29 U.S.C. § 729, et
seq.); the Employee Retirement Income Security Act
(“ERISA”) (29 U.S.C. §
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