Item 1.01 Entry into a Material Definitive Agreement.

Non-Statutory Stock Option Awards

On October 23, 2008, certain officers, directors and employees of the Company were awarded stock options in accordance with the provisions of the Company’s Amended and Restated 1995 Long-Term Incentive Plan (the “Plan”).  The Plan was approved at the Company’s Annual Meeting of Stockholders on December 13, 2007.  The purpose of the Plan is to promote the long-term growth and profitability of the Company by (i) providing key people with incentives to improve stockholder value and to contribute to the growth and financial success of the Company and (ii) enabling the Company to attract, retain and reward the best available persons.  The Company may, to the extent permitted by law, deduct any tax obligations from any payment of any kind otherwise due to the grantee or the holder of any such awards made pursuant to the Plan.

The October 23, 2008 option grants were made to fifty-four (54) individuals.  The aggregate number of shares of the Company’s common stock issuable upon exercise of the options is 770,833.  The stock options awarded pursuant to the Plan are evidenced by option agreements, the form and substance of which are substantially similar to the Non-statutory Stock Option Agreement in the form attached as Exhibit 10.2 hereto and incorporated herein by reference.   The following table provides information on the stock options granted to the Company’s directors and executive officers.

 

				Number of
				Securities	Exercise or
Name		Title		Underlying	Base
				Options	Price	Expiration
				Granted (1)	($/share)	Date
Jerome I. Feldman		Director, Chairman of Board		100,000	$5.95	10/23/2018
Michael D. Feldman		Director, Executive Vice President		25,000	$5.95	10/23/2018
Gill R. Grady		Sr. Vice President		40,000	$5.95	10/23/2018
Jeffery G. Hough		Sr. Vice President, Chief Financial Officer		40,000	$5.95	10/23/2018
Chin-our Jerry Jen		President, Chief Operating Officer		40,000	$5.95	10/23/2018
John V. Moran		Director, Chief Executive Officer		150,000	$5.95	10/23/2018
Jane Bryant Quinn		Director		5,833	$5.95	10/23/2018

 

(1)-  The options become exercisable in seven installments with 1/7 of the shares vesting on the first anniversary of the date of grant and an additional 1/7 of the shares on each of the next six anniversaries of the date of grant.

Item 9.01 Financial Statements and Exhibits

(c)  Exhibits

Exhibit Number	Description
10.1	Amended and Restated 1995 Long-Term Incentive Plan.  Previously filed in connection with the GSE Systems, Inc. DEF Form 14A filed with the Securities and Exchange Commission on November 20, 2007.
10.2	Form of Stock Option Agreement under the GSE Systems, Inc. 1995 Long-Term Incentive Plan.  Previously filed in connection with the GSE Systems, Inc. Form 10-K as filed with the Securities and Exchange Commission on March 22, 1996 and incorporated herein by reference.

 

                                                    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.

	GSE SYSTEMS, INC.
Date: October 29, 2008	/s/ Jeffery G. Hough
	Jeffery G. Hough
	Senior Vice President and Chief Financial Officer