Exhibit 10.2
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 Robert Bowen (“Bowen”). For
purposes of this Agreement, the Company includes parent, subsidiary
and affiliated entities, and the stockholders, trustees, directors,
officers, agents and employees of the Company or such entities.
Bowen includes the heirs, spouse, legal representative and assigns
of Bowen.
This Agreement will serve as notice
and confirm the termination of Bowen’s employment with the
Company and the terms of the separation package offered to Bowen.
The purpose of this Agreement is to establish an arrangement for
ending our employment relationship, to provide Bowen with
separation benefits to assist Bowen in transitioning to new
employment, and to release the Company from any claims that Bowen
may have against it in exchange for the separation benefits. With
that understanding, Bowen and the Company agree as
follows:
We have mutually agreed that
Bowen’s Termination Date is October 27, 2008. Bowen
confirms that he resigned from all positions and offices that he
held with the Company (and all of its subsidiaries) as of the
Termination Date.
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2.
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Payments/Benefits upon
Termination
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On Bowen’s Termination Date,
Bowen will be entitled to the following, regardless of whether
Bowen signs this Agreement:
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a.
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All salary and
wages earned through Bowen’s Termination Date.
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b.
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A payment for
unused, earned vacation time accrued through Bowen’s
Termination Date; and, if applicable, unused, earned personal need
time.
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c.
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The opportunity
to elect to convert Bowen’s life insurance policy coverage
(which will terminate on Bowen’s Termination Date) to an
individual policy, at Bowen’s cost and expense.
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Following Bowen’s Termination
Date, Bowen 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 Bowen’s
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.
Bowen’s 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, Bowen’s salary will cease on Bowen’s
Termination Date and any entitlement Bowen 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 Bowen’s
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 Bowen $254,672 within fourteen
days of the Effective Date, representing a lump sum payment of the
remaining unpaid amounts of Bowen’s current per pay period
base salary of $12,122 for the period of twelve (12) months
following Bowen’s Termination Date. In total, the Company
will pay $315,172 in additional salary from the Termination Date,
of which $60,500 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
Bowen opt to revoke Bowen’s consent to this Agreement
pursuant to Section 5(e), Bowen 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: Bowen has notified the Company that he has commenced
employment with another employer and is receiving health and dental
benefits through that employer.
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c.
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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
Bowen.
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d.
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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 Bowen an amount equal to
$78,793 which represents 50% of Bowen’s Target Bonus. This
amount considers 100% achievement or 20 points for item 2, the
Personal Objectives component of Bowen’s 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
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payable. No bonus will be payable
for item 3, the Discretionary component. No additional bonus or
other payments shall be due or payable to Bowen. The Company agrees
and stipulates that Bowen’s bonus has been fully earned as of
his Termination Date; however, Bowen will only receive 66% of this
amount in the event he opts to revoke his consent to release age
claims under the Agreement per Section 5(e). The Company will
not withhold or reduce Bowen’s bonus for any other
reason.
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e.
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Section 409A: Bowen 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 Bowen’s separation from service, Bowen is 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 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.
Bowen will only be entitled to the
payments and benefits described above and to no other payments or
benefits. Bowen acknowledge that the payments and benefits
described in Section 3(a), (b) and (e) above
represent valuable consideration in excess of that to which Bowen
might otherwise be entitled by reason of Bowen’s employment
by and termination from employment with the Company.
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a.
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In exchange for the Separation
Benefits described in Section 3 above, which Bowen agrees he
is not entitled to otherwise receive, Bowen and Bowen’s
representatives, agents, estate, heirs, successors and assigns
(collectively “Bowen”)
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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 Bowen’s employment by
and/or termination from the Company, arising on or before the
Effective Date. This release is intended by Bowen to be all
encompassing and to act as a full and total release of any claims
Bowen may have or have had against the Releasees from the beginning
of Bowen’s 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 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. § 1001, et seq.); the Family
and Medical Leave Act (29 U.S.C. § 2601, et seq.); the Fair
Credit Reporting Act (15 U.S.C. § 1681 et seq.); the Worker
Adjustment and Retraining Notification Act (29 U.S.C. § 2101
et seq.); all as may have been amended; and any federal, state or
local law or regulation concerning securities, stock or stock
options, including without limitation any claims that might be
brought under the Sarbanes-Oxley Act or other federal or state
whistleblower protection statutes.
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b.
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Bowen expressly
agrees and understands that this is a General Release, and that any
reference to specific Claims arising out of or in connection with
Bowen’s employment and/or its termination is not intended to
limit the release of Claims. Bowen expressly agrees and understands
this General Release means that Bowen is releasing, remising and
discharging the Releasees from and with respect to all Claims,
whether known or unknown, asserted or unasserted, and whether or
not the Claims arise out of or in connection with Bowen’s
employment and/or its termination, or otherwise.
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c.
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Bowen not only releases and
discharges the Releasees from any and all claims as stated above
that Bowen could make on Bowen’s own behalf or on the behalf
of others, but also those claims that might be made by any other
person or
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