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<CONFORMED-NAME>GSI GROUP INC
<CIK>0001050925
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<STREET1>1004 EAST ILLINOIS ST
<CITY>ASSUMPTION
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<ZIP>62510
<PHONE>2172264421
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<TYPE>8-K
<SEQUENCE>1
<FILENAME>henderson8-k.txt
<DESCRIPTION>HENDERSON 8-K
<TEXT>




                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.   20549


                                    Form 8-K


                                 CURRENT REPORT



                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934



                                February 13, 2006
                                -----------------
               (Date of Report - Date of earliest event reported)
               --------------------------------------------------




                               THE GSI GROUP, INC.
             (Exact Name of Registrant as Specified in Its Charter)
             ------------------------------------------------------

                                    DELAWARE
                 (State or Other Jurisdiction of Incorporation)
                 ----------------------------------------------


                333-43089                             37-0856587
         (Commission File Number)          (IRS Employer Identification No.)
         ------------------------          ---------------------------------



                     1004 E. ILLINOIS STREET
                       ASSUMPTION, ILLINOIS                   62510
          (Address of Principal Executive Offices)          (Zip Code)
          ----------------------------------------          ----------



                                (217)   226-4421
              (Registrant's Telephone Number, Including Area Code)
              ----------------------------------------------------

Check  the  appropriate  box  below  if  the  Form  8-K  filing  is  intended to
simultaneously  satisfy the filing obligation of the registrant under any of the
following  provisions:

[  ]  Written  communications  pursuant to Rule 425 under the Securities Act (17
CFR  230.425)

[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)

[  ]  Pre-commencement  communications  pursuant  to  Rule  14d-2(b)  under  the
Exchange  Act  (17  CFR  240.14d-2(b))

[  ]  Pre-commencement  communications  pursuant  to  Rule  13e-4(c)  under  the
Exchange  Act  (17  CFR  240.13e-4(c))

<PAGE>

ITEM  1.01     ENTRY  INTO  A  MATERIAL  DEFINITIVE  AGREEMENT.

          (a)  On  February  16,  2006,  the  Company  entered into an Executive
Severance  and  Restrictive  Covenant  Agreement, dated as of February 13, 2006,
with  John  W.  Henderson  (the  "Henderson  Agreement")  in connection with his
appointment  as  Chief Financial Officer. Under such agreement, Mr. Henderson is
employed  at-will,  will  receive  an annual base salary of $200,000 and will be
eligible  to  receive  discretionary annual performance bonuses as determined by
the  Company's Board of Directors. Mr. Henderson will be entitled to participate
in  benefit  plans  and programs maintained by the Company from time to time and
generally  made available to its senior executive officers. The Company has also
agreed  to  indemnify  Mr. Henderson from certain liability that he may incur in
connection  with  his  employment  by  the  Company.  Such  agreement  includes
provisions that prohibit Mr. Henderson from competing with or soliciting clients
of  the  Company  during  his  employment  period  and for a period of 12 months
thereafter, soliciting employees of the Company during his employment period and
for a period of three years thereafter or disclosing confidential information of
the  Company  or  its  subsidiaries  or  affiliates. In addition, such agreement
imposes  certain  obligations  on  the  Company  upon  the  termination  of  Mr.
Henderson's  employment,  including, under certain circumstances, the payment of
severance  and  the  continuation  of  benefits for a period of one year and the
continued  vesting  and  exercisability of certain equity based compensation. In
the  event  of  the  breach by Mr. Henderson of any of the restrictive covenants
described  above,  Mr. Henderson will forfeit certain severance payments, equity
based  compensation  and  amounts  received in connection with such equity based
compensation.  A  copy  of  the  Henderson Agreement is attached to this Current
Report  on  Form  8-K  as  Exhibit  10.1.


<PAGE>
ITEM  5.02     DEPARTURE  OF  DIRECTORS  OR  PRINCIPAL  OFFICERS;  ELECTION  OF
DIRECTORS;  APPOINTMENT  OF  PRINCIPAL  OFFICERS.

     (b) (c)  Effective February 13, 2006, John W. Henderson, age 42, has joined
The  GSI  Group,  Inc. (the "Company") as its Chief Financial Officer, replacing
Robert  E.  Girardin, who had been Interim Chief Financial Officer since January
30,  2006.
     Mr.  Henderson  has  more  than  twenty  years  of  experience  with  Case
Corporation  and  its  successor  company  CNH  Global,  a  global  leader  in
construction  and agricultural equipment, and its affiliates, including the past
eight  years  as  a  Vice  President.  He  was  most recently Vice President and
Controller,  North  American  Agricultural  Business.
      Mr.  Henderson  holds  a Bachelor of Science Degree from the University of
Wisconsin  and  a  Masters of Business Administration from Marquette University.
     Mr. Henderson is an investor in the parent corporation of this Company, and
as  an  officer  he  will be eligible to participate in stock option grants from
this  Company  and/or  its  parent  corporation.

     (d)  Effective  February  15,  2006, the Company, by action of its Board of
Directors  to  fill a newly-created vacancy on the Board of Directors, appointed
Paul  W.  Farris,  age  59,  as  a  director.  Mr.  Farris  is  the  Landmark
Communications  Professor  of  Business  Administration  at the Darden School of
Business  of  the  University  of  Virginia,  where  he  teaches  marketing  and
e-business  courses in the school's MBA, doctoral and executive programs.  Prior
to  his  appointment  to  the  Darden  faculty in 1980, he taught at the Harvard
Business  School,  and previously worked in marketing management for Unilever in
Germany and for the Lintas advertising agency.  He currently serves on the Board
of  Directors of Sto, Inc.  Mr. Farris holds a Bachelor's Degree in Science from
the  University  of Missouri, an MBA from the University of Washington and a DBA
from  Harvard.
     It  is expected that Mr. Farris will be named to the Audit and Compensation
Committees  of  the  Board  of  Directors.
     Mr. Farris is an investor in the parent corporation of this Company, and as
a  director  he will be eligible to participate in stock option grants from this
Company  and/or  its  parent  corporation.
     Mr.  Farris  is  to  be  compensated  for his service as a director with an
annual  fee  of  $25,000  to  be  paid  by  the  Company.


<PAGE>
ITEM  9.01     FINANCIAL  STATEMENTS  AND  EXHIBITS.

(d)     Exhibits.

EXHIBIT
NUMBER          EXHIBIT  TITLE
------          --------------
10.1      Executive  Severance  and  Restrictive Covenant Agreement, dated as of
          February 13, 2006, between The GSI Group, Inc. and John W.  Henderson.



<PAGE>

                                   SIGNATURES

     Pursuant  to  the  requirements of the Securities Exchange Act of 1934, the
registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  hereunto  duly  authorized.


                                                          THE  GSI  GROUP,  INC.


                                                   By:/s/John W. Henderson
                                                      Name:  John  W.  Henderson
                                                      --------------------------
                                                  Title: Chief Financial Officer

Date:  February  16,  2006


<PAGE>
                                  EXHIBIT INDEX


EXHIBIT
NUMBER          EXHIBIT  TITLE
------          --------------
10.1      Executive  Severance  and  Restrictive Covenant Agreement, dated as of
          February 13, 2006, between The GSI Group, Inc. and John W.  Henderson.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>executiveseverance.txt
<DESCRIPTION>EXECUTIVE SEVERANCE
<TEXT>




Executive Severance and Restrictive Covenant Agreement, dated as of February 13,
2006 (the "Agreement"), between The GSI Group, Inc., a Delaware corporation (the
"Company"),  and  John  W.  Henderson  (the  "Executive").

     The  Company desires to continue to retain the Executive to supply services
to  the  Company, and the Executive desires to continue to provide such services
to  the  Company,  on  the terms and subject to the conditions set forth in this
Agreement.

In consideration of (i) the Executive's agreement to continue to supply services
under  this  Agreement, (ii) the Company's making available to the Executive the
co-investment  opportunity  described  below,  (iii)  the  grant  of  options to
purchase  common stock described herein and (iv) the mutual agreements set forth
below,  the  sufficiency  of  which  is hereby acknowledged, the Company and the
Executive  agree  as  follows:

     SECTION  1.  Employment  Relationship.

     (a)     Employment  by  Company.  The Company hereby employs the Executive,
and  the  Executive hereby agrees to be employed by the Company, in the capacity
indicated  on  Exhibit  A,  and  the  Executive  shall  devote all of his or her
               ----------
business  time,  attention, knowledge and skills and use his or her best efforts
during  the  Employment  Period  (defined  below) to perform services and duties
consistent  with  the  Executive's  title  and position (the "Services") for the
Company  in  accordance with directions given to the Executive from time to time
by  the  reporting  officer  set  forth  on  Exhibit  A.
                                             ----------

(b)     Employment  Period.  The period commencing on the date of this Agreement
and  ending  on  the  date  on which this Agreement is terminated is referred to
herein  as the "Employment Period."  During the Employment Period, the Executive
will  be  an  at-will  employee  of  the Company.  The Employment Period will be
freely  terminable  for  any  reason  by  either  party  at  any  time.

     SECTION  2.  Compensation  and  Benefits.  During  the  Employment  Period:

     (a)     Base  Compensation.  The  Company  will  pay  the  Executive a base
salary  at  the  annual rate as set forth in Exhibit A (as adjusted from time to
                                             ---------
time  by the Company, the "Base Salary") payable in accordance with the standard
policies  of  the  Company.

(b)     Additional  Compensation.  The  Executive  will  be  eligible to receive
discretionary annual performance bonuses as determined by the Board of Directors
of  the  Company  (the  "Board").

(c)     Co-Investment  and  Incentive  Plans.  Simultaneously  herewith,  the
Executive  and  GSI Holdings Corp., a Delaware corporation and the parent of the
Company  ("Holdings"),  are  entering  into  agreements  providing  for  (i) the
co-investment  by  the  Executive  with  Charlesbank  Equity  Fund  V,  Limited
Partnership  and  its affiliates (the "Charlesbank Investors") of the amount set
forth  on  Exhibit  A  to  purchase  common  stock,  $.01 par value (the "Common
           ----------
<PAGE>
Stock"), in Holdings at the same purchase price as the Charlesbank Investors and
(ii) the grant to the Executive of options to purchase shares of Common Stock of
Holdings  under the GSI Holdings Corp. 2005 Management Stock Incentive Plan.  In
addition,  the Executive and the Company are entering into an  agreement setting
forth  the rights and obligations of the Executive with respect to its ownership
of  shares  of  Common  Stock  of the Company. The Executive will be entitled to
participate  in current or future equity incentive plans adopted by the Company.
Such  grants  may  be  awarded  from  time to time in the sole discretion of the
Board.

(d)     Benefit  Plans.  During  the  Employment  Period,  the Executive will be
entitled  to participate in benefit plans and programs maintained by the Company
from time to time and generally made available to its senior executive officers;
provided,  however,  that (i) the Executive's right to participate in such plans
and  programs will not affect the Company's right to amend or terminate any such
plan  and  program, and (ii) the Executive acknowledges that he or she will have
no  vested  rights  under  any such plan or program except as expressly provided
under  the  terms  thereof.

     SECTION  3.  Termination.

     (a)     Cause.    The  Company, at its option, may terminate the Employment
Period  for  Cause,  provided  that  to terminate the Executive's employment for
Cause,  at  least  a majority of the members of the Board must determine in good
faith  that  Cause  has  occurred.  "Cause" means the Executive's (1) indictment
for, conviction of or plea of guilty or nolo contendere to a felony or any crime
involving  moral  turpitude,  fraud,  embezzlement  or  theft,  (2)  breach  of
fiduciary  duties, which breach is not cured within 30 days after written notice
from  the  Company,  or  (3)  gross  negligence  or  willful  misconduct  in the
performance  of the Services, which negligence or misconduct is not cured within
30 days after written notice from the Company.  If the Executive is charged with
a felony, then during the period while such charge or related indictment remains
outstanding  and until finally determined, in the Company's sole discretion, the
Company  may  suspend  the  Executive  without  compensation.

     (ii)     Upon  termination  of  the  Employment  Period  by the Company for
Cause,  (1)  the  Company will pay the Executive's then current Base Salary (but
not  any  bonus) and provide any benefits under the plans in which the Executive
participates  through  the  termination  date,  payable  in  accordance with the
standard  policies of the Company, and (2) with respect to any outstanding stock
options,  restricted  stock  or  other  equity based compensation (collectively,
"Equity  Based  Compensation")  granted by the Company to the Executive, vesting
will cease on all such Equity Based Compensation as of the termination date, all
unvested  Equity  Based  Compensation will be forfeited on the termination date,
and  all  vested  options  and  other  Equity  Based Compensation (with features
similar  to  exercise) will be exercisable only through the termination date and
will  be  forfeited  if  not  exercised  by  such  date.

     (b)     Good  Reason.    The  Executive may terminate the Employment Period
upon  60  days'  prior written notice to the Company for Good Reason (as defined
below) if the basis for such Good Reason is not cured within a reasonable period
of  time  (determined in light of the cure appropriate to the basis of such Good
Reason,  but  in no event less than 15 business days) after the Company receives
written  notice  specifying  the basis of such Good Reason.  "Good Reason" means
<PAGE>
(1) the failure of the Company to pay any amount (in the aggregate over $10,000)
due  to the Executive within 45 days after written notice to the Company of such
failure  (provided  that  if  the  Company  disputes any amount or that any such
amount  is  due,  and pays any undisputed amount, the 45 day cure period will be
tolled  until the resolution of the dispute) or (2) any other material breach by
the  Company  of  any  obligations  owed to the Executive in connection with the
Executive's  employment.

     (ii)     Upon  termination  of  the  Employment Period by the Executive for
Good  Reason,  (1) the Company will pay the Executive's then current Base Salary
(but  not  any bonus) for a period of one year following the date of termination
of employment, provided, that no payment of Base Salary shall be due and payable
to  Executive  during  such  one  year period if such payment would give rise to
adverse tax consequences to Executive under Section 409A of the Internal Revenue
Code  of  1986,  as  amended  (the  "Code"),  and  all  such payments that would
otherwise be payable during such one year period shall become due and payable as
soon  as  practicable  after  the date on which no such adverse tax consequences
under  Section  409A of the Code would be suffered by Executive, (2) the Company
will  provide the Executive with benefits under the plans in which the Executive
participates  through  the  termination  date,  and  (3)  with  respect  to  any
outstanding  Equity  Based Compensation granted by the Company to the Executive,
vesting  will  cease  on  all  unvested  Equity  Based  Compensation  as  of the
termination  date,  all  unvested Equity Based Compensation will be forfeited on
the  termination date and all vested options and other Equity Based Compensation
(with  features  similar  to exercise) will be exercisable for 30 days after the
termination  date  and  will  be  forfeited  if  not  exercised  by  such  date.

(iii)     Upon  termination  of  the  Employment Period by the Executive without
Good  Reason,  (1) the Company will pay the Executive's then current Base Salary
(but  not  any  bonus)  and  provide  any  benefits under the plans in which the
Executive participates through the termination date, and (2) with respect to any
outstanding  Equity  Based Compensation granted by the Company to the Executive,
vesting  will  cease  on  all  unvested  Equity  Based  Compensation  as  of the
termination  date,  all  unvested Equity Based Compensation will be forfeited on
the  termination date and all vested options and other Equity Based Compensation
(with  features  similar  to exercise) will be exercisable for 30 days after the
termination  date  and  will  be  forfeited  if  not  exercised  by  such  date.

     (c)     Without  Cause.    The  Company,  at  its option, may terminate the
Employment  Period  without  Cause  at  any  time.

     (ii)     Upon  termination  of the Employment Period by the Company without
Cause,  (1)  the  Company will pay the Executive's then current Base Salary (but
not  any  bonus)  for  a period of one year following the date of termination of
employment, provided, that no payment of Base Salary shall be due and payable to
Executive during such one year period if such payment would give rise to adverse
tax  consequences  to  Executive  under  Section  409A of the Code, and all such
payments  that  would  otherwise  be  payable  during such one year period shall
become  due  and  payable as soon as practicable after the date on which no such
adverse  tax  consequences  under  Section 409A of the Code would be suffered by
Executive,  (2)  the  Company will provide the Executive with benefits under the
plans  in which the Executive participates through the termination date, and (3)
with respect to any outstanding Equity Based Compensation granted by the Company
to  the  Executive, vesting will cease on all unvested Equity Based Compensation
<PAGE>
as  of  the  termination  date,  all  unvested Equity Based Compensation will be
forfeited  on the termination date and all vested options and other Equity Based
Compensation (with features similar to exercise) will be exercisable for 30 days
after  the termination date and will be forfeited if not exercised by such date.

     (d)     Death or Disability.    If the Executive dies during the Employment
Period,  the  Employment Period will terminate as of the date of the Executive's
death.  If  the  Executive  becomes unable to substantially perform the Services
for  30  consecutive  days,  or  for  shorter periods aggregating 90 days in any
12-month  period, due to a physical or mental disability, whether resulting from
illness, accident or otherwise (each such case, a "Disability"), (1) the Company
may elect to terminate the Employment Period at any time thereafter, and (2) the
Employment  Period  will  terminate  as  of  the  date  of  such  election.  All
disabilities will be certified by a physician acceptable to both the Company and
the  Executive,  or,  if  the  Company  and  the  Executive  cannot agree upon a
physician  within  15  days, by a physician selected by physicians designated by
each of the Company and the Executive.  The Executive's failure to submit to any
physical examination by such physician after such physician has given reasonable
notice  of the time and place of such examination will be conclusive evidence of
the  Executive's  inability  to  perform  his  or  her  duties  hereunder.

     (ii)     Upon  termination  of  the  Employment Period upon the Executive's
death  or Disability, (1) the Company will pay the Executive's then current Base
Salary (but not any bonus) and provide any benefits under the plans in which the
Executive participates through the termination date, and (2) with respect to any
outstanding  Equity  Based Compensation granted by the Company to the Executive,
vesting  on  all  Equity  Based  Compensation will continue for the period of 12
months following the termination date, all of the Executive's vested options and
other  Equity  Based  Compensation  (with  features similar to exercise) will be
exercisable  for  12 months after the termination date and all options and other
Equity  Based  Compensation  (with  features  similar  to  exercise) that remain
unvested or unexercised on the date that is 12 months after the termination date
will  be  forfeited.

     (e)     Termination  of  Obligations.  In  the  event of termination of the
Employment  Period  in  accordance  with  this Section 3, all obligations of the
Company  and  the  Executive under this Agreement will terminate, except for any
amounts  payable  and benefits to be provided by the Company as specifically set
forth in this Section 3; provided, however, that notwithstanding anything to the
contrary  contained in this Agreement, the provisions of Section 4 and Section 5
shall survive such termination in accordance with their respective terms and the
relevant  provisions  of  Section 6 shall survive such termination indefinitely.
In  the  event  of  termination of the Employment Period in accordance with this
Section 3, the Executive agrees to cooperate with the Company in order to ensure
an  orderly  transfer  of  the  Executive's  duties  and  responsibilities.

(f)     Condition.  The  Company  will  not be required to make the payments and
provide  the benefits stated in this Section 3 unless the Executive executes and
delivers  to  the  Company an agreement releasing from all liability (other than
the payments and benefits contemplated by this Agreement and any indemnification
arrangement  of  the Company with respect to the Executive) the Company and each
of  its  parents  and  subsidiaries  and any of their respective past or present
directors,  officers,  employees, shareholders, controlling persons or agents of
<PAGE>
the  Company.  This  agreement  will be in the form normally used by the Company
for  senior  executives  at  the  time.

     SECTION  4.  Confidentiality;  Non-Disclosure.

     (a)       Non-Disclosure  Obligation.  Except  (x)  as  provided  in  this
Section  4(a)  or (y) with the Company's written consent, the Executive will not
disclose any Confidential Information of the Company or any of its affiliates or
subsidiaries  to  any  person,  firm,  corporation,  association or other entity
(other  than  the  Company,  its  affiliates  or  subsidiaries  or  any of their
respective  officers or employees, attorneys, accountants, bank lenders, agents,
advisors or representatives thereof) for any reason or purpose whatsoever (other
than  in the normal course of business on a need-to-know basis after the Company
has received assurances that the confidential or proprietary information will be
kept  confidential), nor will the Executive make use of any such confidential or
proprietary  information  for  his or her own purposes or for the benefit of any
person,  firm, corporation or other entity, except the Company.  As used in this
Section 4, the term "Confidential Information" means all information which is or
becomes  known  to  the  Executive and relates to matters such as trade secrets,
research  and  development  activities,  new  or  prospective  lines of business
(including  analysis  and market research relating to potential expansion of the
business),  books  and  records,  financial  data,  customer  lists,  marketing
techniques,  financing,  credit  policies,  vendor lists, suppliers, purchasers,
potential  business  combinations,  distribution channels, services, procedures,
pricing  information  and private processes as they may exist from time to time;
provided,  however,  that  the  term  Confidential  Information will not include
information  that is or becomes generally available to the public (other than as
a result of a disclosure in violation of this Agreement by the Executive or by a
person  who  received  such  information from the Executive in violation of this
Agreement).

     (ii)     Compulsory  Disclosures.  If the Executive is requested or (in the
opinion of his or her counsel) required by law or judicial order to disclose any
Confidential  Information  (as  defined  above),  the Executive will provide the
Company  with  prompt  notice  of  any  such  request or requirement so that the
Company  may  seek  an appropriate protective order or waiver of the Executive's
compliance  with  the  provisions  of this Section 4(a).  The Executive will not
oppose  any reasonable action by, and will cooperate with, the Company to obtain
an  appropriate  protective  order or other reliable assurance that confidential
treatment  will  be  accorded  to the Confidential Information.  If, failing the
entry  of a protective order or the receipt of a waiver hereunder, the Executive
is, in the opinion of his or her counsel, compelled by law to disclose a portion
of  the  Confidential  Information,  the  Executive may disclose to the relevant
tribunal  without  liability  hereunder  only  that  portion of the Confidential
Information which counsel advises the Executive he or she is legally required to
disclose,  and  each  of the parties hereto agrees to exercise such party's best
efforts to obtain assurance that confidential treatment will be accorded to such
Confidential  Information.

     (b)     Assignment of Inventions.  The Executive agrees that he or she will
promptly  and  fully  disclose  to  the Company all inventions, ideas, software,
trade  secrets  or know-how (whether patentable or copyrightable or not) made or
conceived  by  the  Executive  (either solely or jointly with others) during the
Employment  Period  and  for a period of six months thereafter, and all tangible
<PAGE>
work  product  derived  therefrom  (collectively,  the  "Ideas").  The Executive
agrees that all such Ideas will be and remain the sole and exclusive property of
the  Company.  On  the  request  of  the Company, the Executive will, during and
after  the  term  of  this  Agreement,  without charge to the Company but at the
expense  of the Company, assist the Company in any reasonable way to vest in the
Company,  title to all such Ideas, and to obtain any related patents, trademarks
or  copyrights  in  all  countries  throughout  the  world.  In this regard, the
Executive  will  execute  and deliver any and all documents that the Company may
reasonably  request.

     SECTION  5.  Ongoing  Restrictions  on  Executive's  Activities.

     (a)     General  Effect.  This  Section  uses  the following defined terms:

     "Client"  means  any  client or prospective client of the Group to whom the
Executive  provided  services, or for whom the Executive transacted business, or
whose  identity became known to the Executive in connection with the Executive's
relationship  with  or  employment  by  the  Company.

     "Competitive  Enterprise"  means  any  business  enterprise that either (i)
engages  in  any  material  activity  that  competes  anywhere with any material
activity  in  which  the Group is then engaged or is planning to engage of which
the  Executive  is  aware or (ii) holds a 5% or greater equity, voting or profit
participation  interest  in  any  enterprise  that engages in such a competitive
activity.

      "Group"  means  the  Company and any and all of its parents, subsidiaries,
joint  ventures and affiliated entities as the same may exist from time to time.

     "Post-Employment  Restriction  Period"  means  a  12-month  period  after
termination  of  the  Employment  Period.

     "Solicit"  means  any  direct  or  indirect  communication  of  any  kind,
regardless  of who initiates it, that in any way invites, advises, encourages or
requests  any  person  to  take  or  refrain  from  taking  any  action.

     (b)     Executive's  Importance to the Group and the Effect of this Section
5.  The  Executive  acknowledges  that:

     (i)     In  the  course  of  the  Executive's  involvement  in  the Group's
activities,  the  Executive  has  had  and  will  have  access  to  Confidential
Information  and  the  Group's  client  base  and  will profit from the goodwill
associated  with  the  Group.  In view of the Executive's access to Confidential
Information  and  the  Executive's  importance  to  the  Group, if the Executive
competes  with  the  Group  either during or for some time after the Executive's
employment,  the  Group  will likely suffer significant harm.  In return for the
benefits  the  Executive  will  receive  from  the  Company,  including  without
limitation,  the Executive's co-investment in shares of Common Stock of Holdings
and  stock  option  grant  as described in Section 2(c) above, and to induce the
Company  to  enter  into  this Agreement, and in light of the potential harm the
<PAGE>
Executive  could  cause  the  Company, the Executive agrees to the provisions of
this  Section  5.  The Company would not have entered into this Agreement or the
agreements  described  in  Section 2(c) above to sell stock in Holdings or grant
options  in Holdings to Executive if the Executive did not agree to this Section
5.

(ii)     In light of Section 5(b)(i), if the Executive breaches any provision of
this Section 5, the loss to the Company would be material but the amount of loss
would  be  uncertain  and  not  readily  ascertainable.

(iii)     This  Section 5 limits the Executive's ability to earn a livelihood in
a  Competitive  Enterprise  and the Executive's relationships with Clients.  The
Executive  acknowledges,  however,  that  complying with this Section 5 will not
result  in severe economic hardship for the Executive or the Executive's family.

     (c)     Executive's  Payment  Obligations.

     (i)     If  the  Executive  fails  to comply with this Section 5 during the
Employment  Period  or  the  Post-Employment  Restriction Period, other than any
isolated,  insubstantial  and  inadvertent failure that is not in bad faith, the
Executive  will:

     (1)     forfeit  all  severance  payments  made  or  due  to  the Executive
pursuant  to  Sections  3(b)(ii)  or  3(c)(ii)  of  this  Agreement;

(2)     forfeit all (x) vested and unvested stock options and other Equity Based
Compensation  (with  features  similar  to  exercise)  that have been granted by
Holdings  to  the Executive and not been exercised at the date of determination,
(y)  restricted  stock  and  other  Equity  Based Compensation (without features
similar  to  exercise)  that have been awarded by Holdings and not vested at the
time  of  determination,  and  (z)  amounts  due  and unpaid by Holdings (or any
permitted  assignee  of Holdings' repurchase rights) to the Executive in respect
of  the  repurchase  of  the Executive's shares of Common Stock of Holdings that
exceed  the  lesser  of  cost and fair market value on the termination date; and

(3)     pay  to  the  Company  (or  its  designee) the amount of all gain to the
Executive  within  the  12  months before the date of determination from (w) the
exercise  of  any  options  or  other  Equity  Based Compensation (with features
similar to exercise) that have been granted to the Executive by the Company, (x)
the vesting of any restricted stock and other Equity Based Compensation (without
features  similar  to  exercise)  that  have  been  awarded  by  Holdings to the
Executive,  (y)  the sale of any shares of Common Stock of Holdings to any third
party,  and  (z)  the  repurchase  by  Holdings  (or  any  permitted assignee of
Holdings'  repurchase  rights)  of  the  Executive's  shares  of Common Stock of
Holdings that exceed the lesser of cost and fair market value on the termination
date.

     (ii)     The  Executive  will  pay the Company (or its designee) under this
Section  5(c)  within  30  days of notice by the Company, and the date of notice
will  be  the date of determination for purposes of this Section.  The Executive
will  pay  the  Company  (or  its designee) in cash, and gain will be determined
after  giving effect to any taxes paid or payable by the Executive on such gain.
<PAGE>
The  Executive's  obligations  under  this  Section  5(c)  are  full  recourse
obligations.  The  Company  will  have  the  right  to  offset  the  Executive's
obligations  under  this  Section 5(c) against any amounts otherwise owed to the
Executive  by  any  member  of  the  Group,  including  under  this  Agreement.

     (d)     Non-Competition.  During  the  Employment  Period,  and  for  the
Post-Employment  Restriction  Period,  the  Executive  will  not  directly  or
indirectly:

     (i)     hold  a  5%  or  greater  equity,  voting  or  profit participation
interest  in  a  Competitive  Enterprise;  or

(ii)     associate (including as a director, officer, employee, partner, member,
consultant,  agent  or  advisor) with a Competitive Enterprise and in connection
with  the  Executive's  association  engage, or directly or indirectly manage or
supervise  personnel  engaged,  in  any  activity:
     (1)     that  is  substantially  related to any activity that the Executive
was  engaged  in,

(2)     that  is  substantially  related to any activity for which the Executive
had  direct  or  indirect  managerial  or  supervisory  responsibility,  or

(3)     that  calls  for  the  application  of  specialized  knowledge or skills
substantially  related  to  those  used  by  the  Executive  in  the Executive's
activities;

in  each  case,  for the Group at any time during the year before the end of the
Executive's  employment  (or,  if  earlier,  the  year  before  the  date  of
determination).

     (e)     Non-Solicitation of Clients.  During the Employment Period, and for
the  Post-Employment  Restriction  Period,  the  Executive  will not attempt to:

     (i)     Solicit  any  Client  to  transact  business  with  a  Competitive
Enterprise  or  to  reduce  or  refrain  from doing any business with the Group,

(ii)     transact  business with any Client that would cause the Executive to be
a  Competitive  Enterprise  or to reduce or refrain from doing any business with
the  Group,  or

(iii)     interfere  with  or  damage  any  relationship between the Group and a
Client.

     (f)     Non-Solicitation  of Group Employees.  During the Employment Period
and  for  a  three year period after the termination thereof, the Executive will
not  attempt  to Solicit anyone who is then an employee of the Group (or who was
an  employee  of the Group within the prior six months) to resign from the Group
or  to  apply  for  or  accept  employment  with  any  Competitive  Enterprise.
<PAGE>

(g)     Notice  to  New  Employers.  Before  the Executive either applies for or
accepts  employment  with  any other person or entity while any of Section 5(d),
(e)  or  (f)  is  in effect, the Executive will provide the prospective employer
with  written notice of the provisions of this Section 5 and will deliver a copy
of  the  notice  to  the  Company.

     SECTION  6.  General  Provisions.

     (a)     Enforceability.  It  is the desire and intent of the parties hereto
that  the  provisions  of this Agreement shall be enforced to the fullest extent
permissible  under  the laws and public policies applied in each jurisdiction in
which  enforcement  is  sought.  Accordingly,  although  the  Executive  and the
Company  consider  the restrictions contained in this Agreement to be reasonable
for  the purpose of preserving the Company's goodwill and proprietary rights, if
any  particular  provision of this Agreement shall be determined by any court or
arbitrator  to  be  invalid  or  unenforceable,  such  provision shall be deemed
amended  to  delete  therefrom  the  portion  thus  adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation of such
provision in the particular jurisdiction in which such adjudication is made.  It
is  expressly  understood and agreed that although the Company and the Executive
consider  the  restrictions  contained  in  Section  5  of  this Agreement to be
reasonable,  if  a  final  determination  is  made  by  a  court  of  competent
jurisdiction  or  any  arbitrator  that  the  time  or  territory  or  any other
restriction  contained in this Agreement is unenforceable against the Executive,
the  provisions  of  this  Agreement shall be deemed amended to apply as to such
maximum  time  and  territory  and  to  such  maximum  extent  as  such court or
arbitrator  may  determine  or  indicate  to  be  enforceable.

(b)     Remedies.  The  parties  acknowledge  that  the Company's damages at law
would  be  an inadequate remedy for the breach by the Executive of any provision
of  Section  4  or  Section  5  of this Agreement, and agree in the event of any
actual or threatened breach of Section 4 or 5 of this Agreement that the Company
may  obtain  temporary and permanent injunctive relief restraining the Executive
from  such breach without bond or other security, and, to the extent permissible
under the applicable statutes and rules of procedure, a temporary injunction may
be  granted  immediately  upon  the  commencement  of  any  such  suit.  Nothing
contained herein shall be construed as prohibiting the Company from pursuing any
other  remedies  available at law or equity for such breach or threatened breach
of  Section  4  or  Section  5  of  this  Agreement.

(c)     Withholding.  The  Company  shall  withhold  such  amounts  from  any
compensation  or other benefits payable to the Executive under this Agreement on
account  of  payroll  and  other  taxes  as may be required by applicable law or
regulation  of  any  governmental  authority.

(d)     Assignment.     The  rights  of  the  Company  under this Agreement may,
without  the  consent  of the Executive, be assigned by the Company, in its sole
discretion,  to  any person, firm, corporation or other business entity which at
any  time,  whether  by  purchase,  merger or otherwise, directly or indirectly,
acquires  80%  or  more  of  the  stock, assets or business of the Company. This
Agreement  is  for  the  sole benefit of the parties hereto and their respective
successors  and permitted assigns and not for the benefit of, or enforceable by,
any  third  party,  except  that this Agreement will inure to the benefit of the
Group.
<PAGE>
(e)     Non-Transferability  of Interest. None of the rights of the Executive to
receive  any  form  of  compensation payable pursuant to this Agreement shall be
assignable  or  transferable except through a testamentary disposition or by the
laws  of  descent  and  distribution upon the death of the Executive.  Any other
attempted  assignment, transfer, conveyance or other disposition of any interest
in the rights of the Executive to receive any form of compensation to be made by
the  Company  pursuant  to  this  Agreement  shall  be  void.

(f)     Indemnity.  The  Company  hereby  agrees  to  indemnify  and  hold  the
Executive  harmless  consistent  with  the  Company's policy against any and all
liabilities,  expenses (including attorneys' fees and costs), claims, judgments,
fines,  and  amounts  paid  in  settlement  actually  and reasonably incurred in
connection  with  any  proceeding arising out of the Executive's employment with
the  Company  (whether  civil,  criminal, administrative or investigative, other
than  proceedings  by  or  in  the right of the Company), if with respect to the
actions  at  issue  in the proceeding the Executive acted in good faith and in a
manner  he  or  she  reasonably  believed  to be in, or not opposed to, the best
interests  of  the  Company,  and  (with  respect  to  any  criminal action) the
Executive  had  no  reason  to  believe  his  or her conduct was unlawful.  Said
indemnification arrangement shall (i) survive the termination of this Agreement,
(ii)  apply  to  any  and  all qualifying acts of the Executive which have taken
place  during  any  period  in  which  he  or  she  was employed by the Company,
irrespective  of  the  date of this Agreement or the term hereof, including, but
not limited to, any and all qualifying acts as an officer and/or director of any
affiliate while the Executive is employed by the Company and (iii) be subject to
any  limitations  imposed  from  time  to  time  under  applicable  law.

(g)     Dispute  Resolution;  Attorney's  Fees.  Subject to the Company's rights
under Section 6(b), any dispute, claim or controversy arising out of or relating
to  this  Agreement or the employment relationship, including without limitation
any dispute, claim or controversy concerning validity, enforceability, breach or
termination  hereof or any claims under federal or state law for age, race, sex,
disability  or  other discrimination, shall be finally settled by arbitration in
accordance with the then-prevailing Commercial Arbitration Rules of the American
Arbitration  Association,  as  modified  herein  ("Rules").  There  shall be one
arbitrator  who  shall  be jointly selected by the parties.  If the parties have
not  jointly  agreed  upon  an  arbitrator  within  twenty (20) calendar days of
respondent's  receipt  of  claimant's  notice  of intention to arbitrate, either
party  may  request  the American Arbitration Association to furnish the parties
with  a list of names from which the parties shall jointly select an arbitrator.
If  the parties have not agreed upon an arbitrator within ten (10) calendar days
of  the  transmittal  date of the list, then each party shall have an additional
five  (5)  calendar  days  in  which to strike any names objected to, number the
remaining  names  in  order  of  preference, and return the list to the American
Arbitration  Association,  which  shall  then select an arbitrator in accordance
with Rule 13 of the Rules.  The place of arbitration shall be Chicago, Illinois.
By  agreeing  to  arbitration,  the  parties hereto do not intend to deprive any
court  of  its  jurisdiction  to  issue  a pre-arbitral injunction, pre-arbitral
attachment  or  other  order  in  aid  of arbitration.  The arbitration shall be
governed  by the Federal Arbitration Act, 9 U.S.C. Sec.Sec. 1-16.  Judgment upon
the  award  of  the  arbitrator  may  be  entered  in  any  court  of  competent
jurisdiction.  Each  party  shall  bear its or his own costs and expenses in any
such  arbitration  and  one-half  of  the arbitrator's fees and expenses. If the
arbitration  is  definitively  decided  in  the Executive's favor, the Executive
shall  have  the  right,  in  addition  to  any  other  relief  granted  by such
arbitrator,  to  recover reasonable attorneys' fees; provided, however, that the
<PAGE>
Company  shall  have  the right, in addition to any other relief granted by such
arbitrator,  to  recover  reasonable  attorneys'  fees in the event that a claim
brought  by  the  Executive  is  definitively  decided  in  the Company's favor.

(h)     Acknowledgment.  The  Executive  acknowledges  that  he  or  she has had
adequate  time  to  consider  the  terms  of  this  Agreement, has knowingly and
voluntarily  entered  into this Agreement and has been advised by the Company to
seek  the  advice  of  independent  counsel prior to reaching agreement with the
Company  on  any  of the terms of this Agreement.  The parties to this Agreement
agree that no rule of construction shall apply to this Agreement which construes
ambiguous  language  in  favor of or against any party by reason of that party's
role  in  drafting  this  Agreement.

(i)     Amendments  and  Waivers.  No  modification, amendment or waiver, of any
provision  of,  or  consent  required by, this Agreement, nor any consent to any
departure herefrom, shall be effective unless it is in writing and signed by the
parties  hereto.  Such  modification,  amendment,  waiver  or  consent  shall be
effective  only  in  the  specific instance and for the purpose for which given.

(j)     Notices.  All  notices  or  other  communications  which are required or
permitted  hereunder  shall be in writing and sufficient if delivered personally
or  sent  by  registered  or  certified  mail,  postage  prepaid, return receipt
requested, sent by overnight courier, or sent by facsimile (with confirmation of
receipt),  addressed  as  follows:

If  to  the  Company:

The  GSI  Group,  Inc.
     1004  E.  Illinois  St.
     Assumption,  Illinois  62510
     Attention:  Steve  Basham
     Facsimile:  217-226-6249

with  a  copy  to:

Covington  &  Burling
1330  Avenue  of  the  Americas
New  York,  New  York  10019
Attention:  Scott  F.  Smith
Facsimile:  (212)  841-1010

and:

     Charlesbank  Capital  Partners  LLC
200  Clarendon  Street,  54th  Floor
Boston,  Massachusetts  02116
Attention:  Attention:     Mark  Rosen
                    Tami  Nason
Facsimile:  (617)  619-5402
<PAGE>

If  to  the  Executive,  at  the  address  indicated  on  Exhibit  A.
                                                          ----------
or  at  such  other  address as the party to whom notice is to be given may have
furnished  to the other party in writing in accordance herewith.  If such notice
or  communication  is  mailed,  such  communication shall be deemed to have been
given  on  the fifth business day following the date on which such communication
is  posted.

     (k)     Descriptive  Headings;  Certain  Interpretations.  Descriptive
headings are for convenience only and shall not control or affect the meaning or
construction  of any provision of this Agreement.  Except as otherwise expressly
provided  in  this  Agreement:  (i)  any  reference  in  this  Agreement  to any
agreement,  document  or  instrument  includes  all  permitted  supplements  and
amendments;  (ii) a reference to a law includes any amendment or modification to
such  law  and  any  rules  or  regulations  issued  thereunder; (iii) the words
"include,"  "included" and "including" are not limiting; and (iv) a reference to
a  person  or  entity  includes  its  permitted  successors  and  assigns.

(l)     Counterparts;  Entire  Agreement.  This Agreement may be executed in any
number  of  counterparts, and each such counterpart hereof shall be deemed to be
an  original instrument, but all such counterparts together shall constitute one
agreement.  This Agreement contains the entire agreement between the Company and
the  Executive  with  respect to the transactions contemplated by this Agreement
and  supersedes  all other or prior written or oral agreements or understandings
among  the  parties  with  respect to the Executive's employment by the Company.
The  Company and the Executive hereby agree that the Consulting Agreement, dated
as  of February 3, 2006, between the Company and the Executive, is terminated as
of  the  date  of  this  Agreement.

(m)     GOVERNING  LAW.  THIS  AGREEMENT  SHALL  BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE  WITH  THE  INTERNAL  LAWS  OF  THE  STATE  OF ILLINOIS REGARDLESS OF
PRINCIPLES  OF  CONFLICTS  OF  LAWS.


<PAGE>



     IN  WITNESS  WHEREOF, the parties hereto have executed this Agreement as of
the  day  and  year  first  written  above.

     The  GSI  Group,  Inc.

By:     /s/  William  Branch
        --------------------
Name:  William  Branch
Title:    Chairman


/s/  John  W.  Henderson
------------------------
John  W.  Henderson







</TEXT>
</DOCUMENT>
</SUBMISSION>
