8-K

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                                  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

       Date of Report (Date of earliest event reported): December 16, 2005

                                 GSI GROUP INC.
             (Exact name of registrant as specified in its charter)

                              New Brunswick, Canada
                 (State or other jurisdiction of incorporation)

            000-25705                              98-0110412
     (Commission File Number)          (I.R.S. Employer Identification No.)

                 39 Manning Road, Billerica, Massachusetts 01821
          (Address of principal executive offices, including zip code)

                                 (978) 439-5511
              (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 (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
220.425)

[ ] 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))

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ITEM 7.01. REGULATION FD DISCLOSURE.

The Board of Directors (the "Board") of GSI Group Inc. (the "Company") approved
a resolution to accelerate vesting on all currently outstanding unvested
time-based stock options. These options were previously awarded to directors,
officers and employees of the Company. The acceleration is effective as of
December 16, 2005. As a result of the acceleration, options to purchase 558,446
shares of GSI Group Inc.'s common stock, which would otherwise have vested over
the next 4 years, are now fully vested. This includes 196,571 options held by
executive officers, 180,000 options held by non-employee directors, 10,000
options held by a consultant and 171,875 options held by other employees. The
options represent approximately 16% of the total options presently outstanding.
The total weighted average option exercise price per share is $10.64. The
closing price of GSI Group Inc. stock on December 21, 2005 was $11.20.

In order to prevent unintended personal benefit to executive officers and
directors, restrictions are imposed on any shares received through the exercise
of accelerated options held by those individuals. Those restrictions prohibit
the sales of shares purchased under accelerated options until the earlier of:
1.) the date on which the options would otherwise have vested under the original
option grants; or 2.) twelve months from the date of acceleration; or 3.)
termination of employment or resignation from the Board. A specimen copy of the
Stock Sale Restriction Agreement is attached as Exhibit 99.1 to this Current
Report on Form 8-K and incorporated herein by reference.

The Board's decision to accelerate the vesting of these options was made
primarily to reduce future compensation expense that would have been recorded in
the Company's income statement upon the adoption of Financial Accounting
Standards Board Statement No. 123R in 2006.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

      (a)   Financial Statements of Businesses Acquired.

            Not applicable.

      (b)   Pro Forma Financial Information.

            Not applicable.

      (c)   Exhibits.
            99.1 Stock Sale Restriction Agreement

      The information in this Current Report on Form 8-K (including the
agreement attached as Exhibit 99.1 hereto) shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or otherwise subject to the liabilities of that section, nor
shall it be deemed incorporated by reference into any filing under the
Securities Act of 1933, as amended, or the Exchange Act, regardless of any
general incorporation language in such filing, unless the Company expressly sets
forth in such future filing that such information is to be considered "filed" or
incorporated by reference therein.

                                    SIGNATURE

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

                                           GSI GROUP INC.
                                           (Registrant)

Date: December 22, 2005                    By:  /s/  Daniel J. Lyne
                                              ----------------------------------
                                              Daniel J. Lyne
                                              Vice President and General Counsel

                                  EXHIBIT INDEX




Exhibit No.      Description
              
99.1             Stock Sale Restriction Agreement.

EX-99.1

                        STOCK SALE RESTRICTION AGREEMENT

This STOCK SALE RESTRICTION AGREEMENT is made as of the 16th day of December,
2005 ("the Effective Date") by and between GSI Group Inc. a New Brunswick
corporation with principle offices at 39 Manning Road, Billerica, MA 01821
("GSI") and {Name}, an officer or director of GSI, with a home address of [_]
(hereinafter, "Restricted Party").

WHEREAS, Restricted Party is a director or Section 16 reporting officer of GSI,
and an Insider for Canadian securities law reporting purposes, and in such
capacity is subject to the reporting and other substantive restrictions of (1)
Section 16 of the Securities and Exchange Act of 1934 and the rules promulgated
thereunder and (2) the Insider reporting requirements of the Canadian securities
laws; and

WHEREAS, Restricted Party is the owner of certain stock options, granted by GSI
under its 1995 Equity Incentive Plan (the "Plan"), representing the right to
purchase GSI common stock, which options are intended to vest over a period of
time; and

WHEREAS, for its own benefit and business reasons, GSI desires to accelerate the
vesting of such options, so that all such options are fully vested as of the
Effective Date hereof; and

WHEREAS, Restricted Party is willing to enter into certain restrictions on
his/her ability to sell shares acquired upon the exercise of such accelerated
options;

NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

1)    ACCELERATION

The options subject to this Agreement are listed in Appendix A hereto
(hereinafter, the "Options"). For and in consideration of the aforesaid
acceleration of vesting of the options, Restricted Party herby agrees to the
sale restrictions contained herein.

2)    SALE RESTRICTIONS

Restricted Party agrees that he/she shall not sell any shares obtained through
the exercise of the Options until the earliest of: (a) the date on which the
Options would otherwise have vested under the original option grant
agreement(s); (b) twelve months from the Effective Date; or (c) termination of
employment with GSI, or resignation as a director of GSI, for any reason.
Restricted Party agrees during the term hereof to obtain prior written consent
from GSI before the sale of any such shares, which consent shall, if such sale
is in compliance hereunder, including written limitation paragraph (4) below, be
provided promptly. Upon exercise during the Term, Restricted Party shall not
deposit such shares into Restricted Party's 10b5-1 stock sale plan until the
restrictions set forth above lapse, but rather shall hold the shares in a
separate securities account not subject to such Plan.

3)    LIQUIDATED DAMAGES

The parties acknowledge and agree that, should Restricted Party violate the
provisions of this Agreement, the damages to GSI would be difficult to
ascertain. Therefore, as a reasonable and good-faith attempt to establish the
amount of such damages, the parties agree that Restricted Party shall pay to
GSI, as liquidated damages and not as a penalty, the amount of after tax profit
that Restricted Party realized by virtue of such stock sale.

4)    OTHER RESTRICTIONS OPERATIVE

Restricted Party agrees and acknowledges that all other restrictions and
regulations regarding sale of his/her GSI stock remain operative and are not
affected by this Agreement, including, but not limited to the Plan, the Federal
and state securities laws and GSI company policies.

WHEREFORE, THE PARTIES, INTENDING TO BE LEGALLY BOUND, HAVE EXECUTED THIS
AGREEMENT AS OF THE DATE SET FORTH ABOVE.

{Name}                                          GSI Group, Inc.

_____________________________                   By______________________________

                                                Title: _________________________