Summary of GSE SYSTEMS INC

Entry into a Material Definitive Agreement, Financial Statements and Exhibits

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.      Director, Chairman          100,000       $5.95 10/23/2018
      Feldman        of Board
      Michael D.     Director, Executive          25,000       $5.95 10/23/2018
      Feldman        Vice President
      Gill R.        Sr. Vice President           40,000       $5.95 10/23/2018
      Grady
      Jeffery G.     Sr. Vice President,          40,000       $5.95 10/23/2018
      Hough          Chief Financial
                     Officer
      Chin-our       President, Chief             40,000       $5.95 10/23/2018
      Jerry Jen      Operating Officer
      John V.        Director, Chief             150,000       $5.95 10/23/2018
      Moran          Executive Officer
      Jane Bryant    Director                      5,833       $5.95 10/23/2018
      Quinn

(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

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.