Document:

Exhibit 10.3

  

   

  

  
    THIS WARRANT HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

    

    

    THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF.

    

    

    This Warrant is issued pursuant to that certain Securities Purchase Agreement dated February 23, 2022 by and between the Company and the Holder (as defined below) (the “Purchase Agreement”).  Capitalized terms
      used and not otherwise defined herein shall have the meanings set forth for such terms in the Purchase Agreement.  Receipt of this Warrant by the Holder shall constitute acceptance and agreement to all of the terms contained herein.

    

    

    No. 1

    GSE SYSTEMS, INC.

    

    

    COMMON STOCK PURCHASE WARRANT

    

    

    

    

    GSE Systems, Inc., a Delaware corporation (together with any corporation which shall succeed to or assume the obligations of GSE Systems, Inc. hereunder, the “Company”), hereby certifies that,
      for value received, Lind Global Fund II LP, a Delaware limited partnership (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company at any time during the Exercise Period (as defined in Section 9)
      up to 1,283,732 fully paid and non-assessable shares of Common Stock (as defined in Section 9), at a purchase price per share equal to the Exercise Price (as defined in Section 9).  The number of shares of Common Stock for which this
      Common Stock Purchase Warrant (this “Warrant”) is exercisable and the Exercise Price are subject to adjustment as provided herein.

    

    

    1. DEFINITIONS.  Certain terms are used in this Warrant as specifically defined in Section 9.

    

    

    2. EXERCISE OF WARRANT.

    

    

    2.1. Exercise.  This Warrant may be exercised prior to its expiration pursuant
      to Section 2.5 hereof by the Holder at any time or from time to time during the Exercise Period, by submitting the form of subscription attached hereto (the “Exercise Notice”) duly executed by the Holder, to the Company at its
      principal office, indicating whether the Holder is electing to purchase a specified number of shares by paying the Aggregate Exercise Price as provided in Section 2.2 or is electing to exercise this Warrant as to a specified number of shares
      pursuant to the net exercise provisions of Section 2.3.  On or before the first Trading Day following the date on which the Company has received the Exercise Notice, the Company shall transmit by electronic mail an acknowledgement of
      confirmation of receipt of the Exercise Notice.  Subject to Section 2.4, this Warrant shall be deemed exercised for all purposes as of the close of business on the day on which the Holder has delivered the Exercise Notice to the Company.  The
      Aggregate Exercise Price, if any, shall be paid by wire transfer to the Company within five (5) Business Days of the date of exercise and prior to the time the Company issues the certificates evidencing the shares issuable upon such exercise.  In the
      event this Warrant is not exercised in full, the Company may, at its expense, require the Holder, after such partial exercise, to promptly return this Warrant to the Company and the Company will forthwith issue and deliver to or upon the order of the
      Holder a new Warrant or Warrants of like tenor, in the name of the Holder or as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, calling in the aggregate on the face or faces thereof for the number of shares of
      Common Stock equal (without giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant minus the number of such shares (without giving effect to any adjustment therein) for which this Warrant shall
      have been exercised.

    

    

    2.2. Payment of Exercise Price by Wire Transfer.  If the Holder elects to
      purchase a specified number of shares by paying the Aggregate Exercise Price, the Holder shall pay such amount by wire transfer of immediately available funds to the account designated by the Company in its acknowledgement of receipt of such Exercise
      Notice pursuant to Section 2.1.

    

    

    2.3. Net Exercise.  If a registration statement covering the shares of Common
      Stock that are the subject of the Notice of Exercise is not available for the resale of such Unavailable Warrant Shares to the public or upon exercise of this Warrant in connection with a Fundamental Transaction (such shares of Common Stock, the “Unavailable
        Warrant Shares”), the Holder may elect to exercise this Warrant by receiving shares of Common Stock equal to the number of shares determined pursuant to the following formula:

    

    

    X  =   Y (A - B)

                A

    where,

    	

          	X =	
            the number of shares of Common Stock to be issued to Holder;

          

    	

          	Y =	
            the number of shares of Common Stock as to which this Warrant is to be exercised (as indicated on the Exercise Notice);

          

    	

          	A =	
            VWAP for the Trading Day immediately preceding the date of exercise; and

          

    	

          	B =	
            the Exercise Price.

          

    

    

    2.4. Antitrust Notification.  If the Holder determines, in its sole judgment
      upon the advice of counsel, that the issuance of any Warrant Shares pursuant to the terms hereof would be subject to the provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), the Company shall file
      as soon as practicable after the date on which the Company receives notice from the Holder of the applicability of the HSR Act and a request to so file with the United States Federal Trade Commission and the United States Department of Justice the
      notification and report form required to be filed by it pursuant to the HSR Act in connection with such issuance.

    

    

    2.5. Termination.  This Warrant shall terminate upon the earlier to occur of (i)
      exercise in full or (ii) the expiration of the Exercise Period.

    

    

    3. REGISTRATION RIGHTS.  The Holder of this Warrant has certain rights to require the Company to
      register its resale of the Warrant Shares under the Securities Act and any blue sky or securities laws of any jurisdictions within the United States at the time and in the manner specified in the Purchase Agreement.

    

    

    
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    4. DELIVERY OF STOCK CERTIFICATES ON EXERCISE.

    

    

    4.1. Delivery of Exercise Shares.  As soon as practicable after any exercise of
      this Warrant and in any event within three (3) Trading Days thereafter (such date, the “Exercise Share Delivery Date”), the Company shall, at its expense (including the payment by it of any applicable issue or stamp taxes), cause to be issued
      in the name of and delivered to the Holder, or as the Holder may direct, a certificate or certificates evidencing the number of fully paid and non-assessable shares of Common Stock (which number shall be rounded down to the nearest whole share in the
      event any fractional share may otherwise be issuable upon such exercise and the Company shall pay a cash adjustment to the Holder in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price) to which the
      Holder shall be entitled on such exercise, in such denominations as may be requested by the Holder, which certificate or certificates shall be free of restrictive and trading legends (except for any such legends as may be required under the
      Securities Act).  In lieu of delivering physical certificates for the shares of Common Stock issuable upon any exercise of this Warrant, provided the Warrant Shares are not restricted securities and the Company’s transfer agent is participating in
      the Depository Trust Company (“DTC”) Fast Automated Securities Transfer program or a similar program, upon request of the Holder, the Company shall cause its transfer agent to electronically transmit such shares of Common Stock issuable upon
      exercise of this Warrant to the Holder (or its designee), by crediting the account of the Holder’s (or such designee’s) broker with DTC through its Deposit Withdrawal Agent Commission system (provided that the same time periods herein as for stock
      certificates shall apply) as instructed by the Holder (or its designee).

    

    

    4.2. Compensation for Buy-In on Failure to Timely Deliver Exercise Shares.  In
      addition to any other rights available to the Holder, if the Company fails to cause its transfer agent to transmit to the Holder Exercise Shares pursuant to an exercise on or before the Exercise Share Delivery Date, and if after such date the Holder
      is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Exercise Shares which the Holder
      anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (a) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common
      Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Exercise Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving
      rise to such purchase obligation was executed, and (b) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Exercise Shares for which such exercise was not honored (in which case such exercise shall be
      deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having
      a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (a) of the immediately preceding
      sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and evidence of the amount of such loss. Nothing herein shall
      limit a Holder’s right to pursue a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

    

    

    4.3. Charges, Taxes and Expenses. Issuance of Exercise Shares shall be made
      without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Exercise Shares, all of which taxes and expenses shall be paid by the Company, and such Exercise Shares shall be issued in the
      name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event Exercise Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise
      shall be accompanied by the Assignment Form attached  hereto (the “Assignment Form”) duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax
      incidental thereto.

    

    

    5. CERTAIN ADJUSTMENT.

    

    

    5.1. Stock Dividends and Splits. If the Company, at any time while this Warrant
      is outstanding: (a) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not
      include any shares of Common Stock issued by the Company upon exercise of this Warrant), (b) subdivides outstanding shares of Common Stock into a larger number of shares, (c) combines (including by way of reverse stock split) outstanding shares of
      Common Stock into a smaller number of shares, or (d) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator
      shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event and the
      number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 5.1 shall become effective
      immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

    

    

    5.2 Pro Rata Distributions.  During such time as this Warrant is outstanding, if
      the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of
      cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this
      Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete
      exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is
      taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder's right to participate in any such Distribution would
      result in the Holder exceeding the beneficial ownership limitation provided for in Section 10, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common
      Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the beneficial
      ownership limitation).

    

    

    5.3 Fundamental Transaction.  If, at any time while this Warrant is outstanding,
      (a) the Company effects any merger or consolidation of the Company with or into another Person, (b) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (c) any tender offer or exchange
      offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (d) the Company effects any reclassification of the
      Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (each, a “Fundamental Transaction”), then, upon the closing of a Fundamental
      Transaction and payment of the exercise price therefore (including  at the election of the Holder by cashless exercise), the Holder shall receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the
      occurrence of such Fundamental Transaction the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
      receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 10 on the
      exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one
      share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate
      Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any
      exercise of this Warrant following such Fundamental Transaction.

    

    

    
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    5.4 Adjustment to Exercise Price Upon Issuance of Common Stock.  If the Company
      shall, from the Issue Date until the date that is twenty-four (24) months after the Issue Date, issue or sell any shares of Common Stock (other than any Excluded Securities or with regard to a transaction contemplated by Section 5.1), whether
      directly or indirectly by way of Convertible Securities (“Additional Shares of Common Stock”), without consideration or for consideration per share less than the Exercise Price in effect immediately prior to such issuance or sale, then
      immediately upon such issuance or sale, the Exercise Price in effect immediately prior to such issuance or sale shall be reduced (and in no event increased) to an Exercise Price equal to the consideration per share paid for such Additional Shares of
      Common Stock.

    

    

    5.5 Calculations.  All calculations under this Section 5 shall be made
      to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of
      Common Stock (excluding treasury shares, if any) issued and outstanding at the close of the Trading Day on or, if not applicable, most recently preceding, such given date.

    

    

    5.6 Notice to Holder.

    

    

    (a) Adjustment to Exercise Price. Whenever the Exercise Price is adjusted
      pursuant to any provision of this Section 5, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

    

    

    (b) Notice to Allow Exercise by Holder. If (i) the Company shall declare a
      dividend (or any other distribution in whatever form) on the Common Stock; (ii) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (iii) the Company shall authorize the granting to all holders of
      the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (iv) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common
      Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or
      property; or (v) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall
      appear upon the Warrant Register of the Company, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such
      dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be
      determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be
      entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect
      therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. Subject to applicable law, the Holder is entitled to exercise this Warrant during the period commencing on the date of
      such notice to the effective date of the event triggering such notice. Notwithstanding the foregoing, the delivery of the notice described in this Section 5.6 is not intended to and shall not bestow upon the Holder any voting rights
      whatsoever with respect to outstanding unexercised Warrants.

    

    

    6. NO IMPAIRMENT.  The Company will not, by amendment of the Certificate of Incorporation or
      through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all
      times in good faith assist in the carrying out of all such terms and in taking all such action as may be necessary or appropriate in order to protect the rights of the Holder against impairment.  Without limiting the generality of the foregoing, the
      Company (a) will not increase the par value of any shares of Common Stock receivable on the exercise of this Warrant above the amount payable therefor on such exercise and (b) will take all such action as may be necessary or appropriate in order that
      the Company may validly and legally issue fully paid and non-assessable shares of stock on the exercise of this Warrant from time to time outstanding.

    

    

    7. NOTICES OF RECORD DATE.  In the event of:

    

    

    (a) any taking by the Company of a record of the holders of any class of securities for
      the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to
      receive any other right;

    

    

    (b) any capital reorganization of the Company, any reclassification or recapitalization
      of the capital stock of the Company or any transfer of all or substantially all the assets of the Company to or any consolidation or merger of the Company with or into any other Person or any other Change of Control; or

    

    

    (c) any voluntary or involuntary dissolution, liquidation or winding-up of the Company;

    

    

    then, and in each such event, the Company will mail or cause to be mailed to the Holder a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right,
      and stating the amount and character of such dividend, distribution or right, or (ii) the date on which any such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up is
      anticipated to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable on such reorganization,
      reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up.  Such notice shall be mailed at least fifteen (15) days prior to the date specified in such notice on which any such action is to be taken.

    

    

    8. RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT; REGULATORY COMPLIANCE.

    

    

    8.1. Reservation of Stock Issuable on Exercise of Warrant.  The Company shall at
      all times while this Warrant shall be outstanding, reserve and keep available out of its authorized but unissued Common Stock, such number of shares of Common Stock as shall from time to time be sufficient to effect the exercise of all or any portion
      of the Warrant Shares (disregarding for this purpose any and all limitations of any kind on such exercise).  The Company shall, from time to time in accordance with the Delaware General Corporation Law, increase the authorized number of shares of
      Common Stock or take other effective action if at any time the unissued number of authorized shares shall not be sufficient to satisfy the Company’s obligations under this Section 8.

    

    

    8.2. Regulatory Compliance.  If any shares of Common Stock to be reserved for
      the purpose of exercise of the Warrant Shares require registration or listing with or approval of any Governmental Authority, stock exchange or other regulatory body under any federal or state law or regulation or otherwise before such shares may be
      validly issued or delivered upon exercise, the Company shall, at its sole cost and expense, in good faith and as expeditiously as possible, secure such registration, listing or approval, as the case may be.

    

    

    
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    9. DEFINITIONS.  As used herein the following terms, unless the context otherwise requires, have
      the following respective meanings:

    

    

    “Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person
      specified.

    “Aggregate Exercise Price” means, in connection with the exercise of this Warrant at any time,
      an amount equal to the product obtained by multiplying (i) the Exercise Price times (ii) the number of shares of Common Stock for which this Warrant is being exercised at such time.

    “Business Day” means any day other than a Saturday, Sunday or any other day on which banks are permitted or required to be closed in New York City.

    “Certificate of Incorporation” means the Company’s Restated Certificate of Incorporation as amended to date.

    “Change of Control” has the meaning set forth in the Purchase Agreement.

    “Common Stock” means (i) the Company’s Common Stock, $0.01 par value per share, and (ii) any other securities into which or for which any of the securities described in
      clause (i) above have been converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

    “Convertible Securities” means any debt, equity or other securities that are, directly or indirectly, convertible into or exchangeable for Common Stock.

    “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder from time to time in effect.

    “Excluded Securities” means (i) Exempted Securities (as defined in the Purchase Agreement) and (ii) shares of Common Stock and any Convertible Securities issued in connection with the Note or
      a Fundamental Transaction; provided that, for purposes of this Warrant, shares of Common Stock issued to a Person other than the Holder where the proceeds of such issuance are used to repay any amounts owing under the Transaction Documents shall not
      constitute Excluded Securities to the extent issued without consideration or for consideration per share less than the then Exercise Price.

    

    

     “Exercise Period” means the period commencing on the Issue Date and ending 11:59 P.M. (New York City time) on the date that is sixty (60) months from the Issue Date or
      earlier closing of a Fundamental Transaction (other than a Fundamental Transaction of the type described in clause (d) of the definition thereof resulting in the conversion into or exchange for another security of the Company).

    “Exercise Price” means $1.94 per share, as may be adjusted pursuant to the terms hereof.

    “Exercise Shares” means the shares of Common Stock for which this Warrant is then being exercised.

    “Fair Market Value” means, with respect to any security or other property, the fair market value of such security or other property as determined by the Board of
      Directors, acting in good faith.

    “Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency,
      authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies
      such as the European Union or the European Central Bank).

    “Issue Date” means February 23, 2022.

    “Note” means the senior secured convertible promissory note issued by the Company to the Holder
      pursuant to the Purchase Agreement.

    “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated
      association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

    “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder from time to time in effect.

    “Subsidiary” means, as of any time of determination and with respect to any Person, any United States corporation, partnership, limited liability company or limited
      liability partnership, all of the stock (or other equity interest) of every class of which, except directors’ qualifying shares (or any equivalent), shall, at such time, be owned by such Person either directly or through Subsidiaries and of which
      such Person or a Subsidiary shall have 100% control thereof, except directors’ qualifying shares.  Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.

    “Trading Day” means a day on which the Common Stock is traded on a Trading Market.

    “Trading Market” means the Nasdaq Stock Market (including the Nasdaq Capital Market) or, in the event that shares of Common Stock are no longer traded on the Nasdaq Stock
      Market, any other stock market on which shares of the Common Stock are listed or quoted for trading on the date in question.

    “VWAP” means, as of any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading
      Market, the daily volume weighted average price of one share of Common Stock trading in the ordinary course of business on the applicable Trading Price for such date (or the nearest preceding date) on such Trading Market as reported by Bloomberg
      Financial L.P.; (b) if the Common Stock is not then listed on a Trading Market and if the Common Stock is traded in the over‐the‐counter market, as reported by the OTC Bulletin Board, the volume weighted average price of one share of Common Stock for
      such date (or the nearest preceding date) on the OTC Bulletin Board, as reported by Bloomberg Financial L.P.; (c) if the Common Stock is not then listed or quoted on the OTC Bulletin Board and if prices for the Common Stock is then reported in the
      “Pink Sheets” published by the Pink OTC Markets Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price of one share of Common Stock so reported, as reported by Bloomberg Financial L.P.;
      or (d) in all other cases, the fair market value of one share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company (in each case rounded to four decimal places).

    “Warrant Shares” means collectively the shares of Common Stock of the Company issuable upon
      exercise of the Warrant in accordance with its terms, as such number may be adjusted pursuant to the provisions thereof.

    
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    10. LIMITATION ON BENEFICIAL OWNERSHIP.  Notwithstanding anything to the contrary contained herein,
      the Holder shall not be entitled to receive shares of Common Stock or other securities (together with Common Stock, “Equity Interests”) upon exercise of this Warrant to the extent (but only to the extent) that such exercise or receipt would
      cause the Holder Group to become, directly or indirectly, a “beneficial owner” (within the meaning of Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder) of a number of Equity Interests of a class that is
      registered under the Exchange Act which exceeds the Maximum Percentage (as defined below) of the Equity Interests of such class that are outstanding at such time.  Any purported delivery of Equity Interests in connection with the exercise of the
      Warrant prior to the termination of this restriction in accordance herewith shall be void and have no effect to the extent (but only to the extent) that such delivery would result in the Holder Group becoming the beneficial owner of more than the
      Maximum Percentage of the Equity Interests of a class that is registered under the Exchange Act that is outstanding at such time. If any delivery of Equity Interests owed to the Holder following exercise of this Warrant is not made, in whole or in
      part, as a result of this limitation, the Company’s obligation to make such delivery shall not be extinguished and the Company shall deliver such Equity Interests as promptly as practicable after the Holder gives notice to the Company that such
      delivery would not result in such limitation being triggered or upon termination of the restriction in accordance with the terms hereof.  To the extent limitations contained in this Section 10 apply, the determination of whether this Warrant
      is exercisable and of which portion of this Warrant is exercisable shall be the sole responsibility and in the sole determination of the Holder, and the submission of an Exercise Notice shall be deemed to constitute the Holder’s determination that
      the issuance of the full number of Warrant Shares requested in the Exercise Notice is permitted hereunder, and neither the Company nor any Warrant agent shall have any obligation to verify or confirm the accuracy of such determination.  For purposes
      of this Section 10, (i) the term “Maximum Percentage” shall mean 4.99%; provided, that if at any time after the date hereof the Holder Group beneficially owns in excess of 4.99% of any class of Equity Interests in the Company that is
      registered under the Exchange Act (excluding any Equity Interests deemed beneficially owned by virtue of this Warrant or the Note), then the Maximum Percentage shall automatically increase to 9.99% so long as the Holder Group owns in excess of 4.99%
      of such class of Equity Interests (and shall, for the avoidance of doubt, automatically decrease to 4.99% upon the Holder Group ceasing to own in excess of 4.99% of such class of Equity Interests); and (ii) the term “Holder Group” shall mean
      the Holder plus any other Person with which the Holder is considered to be part of a group under Section 13 of the Exchange Act or with which the Holder otherwise files reports under Sections 13 and/or 16 of the Exchange Act.  In determining the
      number of Equity Interests of a particular class outstanding at any point in time, the Holder may rely on the number of outstanding Equity Interests of such class as reflected in (x) the Company’s most recent Annual Report on Form 10-K or Quarterly
      Report on Form 10-Q filed with the Securities and Exchange Commission, as the case may be, (y) a more recent public announcement by the Company or (z) a more recent notice by the Company or its transfer agent to the Holder setting forth the number of
      Equity Interests of such class then outstanding.  For any reason at any time, upon written or oral request of the Holder, the Company shall, within one (1) Trading Day of such request, confirm orally and in writing to the Holder the number of Equity
      Interests of any class then outstanding. The provisions of this Section 10 shall be construed, corrected and implemented in a manner so as to effectuate the intended beneficial ownership limitation herein contained.

    

    

    11. REGISTRATION AND TRANSFER OF WARRANT.

     

    

    11.1. Registration of Warrant.  The Company shall register and record transfers,
      exchanges, reissuances and cancellations of this Warrant, upon the records to be maintained by the Company for that purpose, in the name of the record holder hereof from time to time.  The Company may deem and treat the registered holder of this
      Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.  The Company shall be entitled to rely, and held harmless in acting or
      refraining from acting in reliance upon, any notices, instructions or documents it believes in good faith to be from an authorized representative of the Holder.

    

    

    11.2 Transferability.  This Warrant and all rights hereunder (including, without
      limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form of
      assignment (the “Assignment Notice”) attached hereto duly executed by the Holder or its agent or attorney.  The Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor, the form and
      substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of the transferred Warrant under the 1933 Act. Upon such surrender, the Company shall execute and deliver a new
      Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such Assignment Notice, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so
      assigned, and this Warrant shall promptly be cancelled. This Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Exercise Shares without having a new Warrant issued.

    

    

    11.3. New Warrants. This Warrant may be divided or combined with other Warrants
      upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section
        11.2, as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for this Warrant or Warrants to be divided or combined in accordance with such notice.
      All Warrants issued on transfers or exchanges shall be dated the original Issue Date and shall be identical with this Warrant except as to the number of Exercise Shares issuable pursuant thereto.

    

    

    12. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT.  The Company covenants that upon receipt by
      the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Exercise Shares, and in case of loss, theft or destruction, of indemnity or security
      reasonably satisfactory to it (which, in the case of this Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or
      stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

    

    

    13. REMEDIES.  The Company stipulates that the remedies at law of the Holder
      in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate, and that such terms may be specifically enforced by a decree for the specific
      performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise.

    14. NO RIGHTS AS A STOCKHOLDER.  Except as otherwise specifically provided herein, the Holder,
      solely in such Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to
      confer upon the Holder, solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of
      stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Exercise Shares.

    

    

    15. NOTICES.  All notices, requests, demands and other communications that are
      required or may be given pursuant to the terms of this Warrant shall be in writing and shall be deemed delivered (i) on the date of delivery when delivered by hand on a Business Day during normal business hours or, if delivered on a day that is not a
      Business Day or after normal business hours, then on the next Business Day, (ii) on the date of transmission when sent by facsimile transmission or email during normal business hours on a Business Day with telephone confirmation of receipt or, if
      transmitted on a day that is not a Business Day or after normal business hours, then on the next Business Day, or (iii) on the second Business Day after the date of dispatch when sent by a reputable courier service that maintains records of receipt.
      The addresses for notice shall be as set forth in the Purchase Agreement.

    16. CONSENT TO AMENDMENTS.  Any term of this Warrant may be amended, and the Company may take any
      action herein prohibited, or compliance therewith may be waived, only if the Company shall have obtained the written consent (and not without such written consent) to such amendment, action or waiver from the Holder.  No course of dealing between the
      Company and the Holder nor any delay in exercising any rights hereunder shall operate as a waiver of any rights of the Holder.

    

    

    17. MISCELLANEOUS.  In case any provision of this Warrant shall be invalid, illegal or
      unenforceable, or partially invalid, illegal or unenforceable, the provision shall be enforced to the extent, if any, that it may legally be enforced and the validity, legality and enforceability of the remaining provisions shall not in any way be
      affected or impaired thereby.  If any provision of this Warrant is found to conflict with the Purchase Agreement, the provisions of this Warrant shall prevail.  If any provision of this Warrant is found to conflict with the Note, the provisions of
      the Note shall prevail.  THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAW OF THE STATE OF DELAWARE EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT
      WOULD PERMIT THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.  The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.

    

    

    [Remainder of Page Intentionally Left Blank]

    

    

    
      5

      
        

    

    IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized officer.

    

    

    Dated as of February 22, 2022

    

    

    GSE SYSTEMS, INC.

    

    

    

    

    

    

    By: /s/ Emmett Pepe

      

    

    

    Name: Emmett Pepe

    

    

    Title: Chief Financial Officer

    

    

    
      6

      
        

    

    FORM OF SUBSCRIPTION

    

    

    (To be signed only on exercise

    of Common Stock Purchase Warrant)

    

    

    TO: GSE Systems, Inc.

    

    

    1. The undersigned Holder of the attached Warrant hereby elects to
      exercise its purchase right under such Warrant to purchase shares of Common Stock of GSE Systems, Inc., a Delaware corporation (the “Company”), as follows (check one or more, as applicable):

    	

          	☐ 	
            to exercise the Warrant to purchase __________ shares of Common Stock and to pay the Aggregate Exercise Price therefor by wire transfer of United States funds to the account of the Company, which transfer has been made prior to or as of
              the date of delivery of this Form of Subscription pursuant to the instructions of the Company;

          

    and/or

    	

          	☐ 	
            to exercise the Warrant with respect to ____________ shares of Common Stock pursuant to the net exercise provisions specified in Section 2.3 of the Warrant.

          

    2. In exercising this Warrant, the undersigned Holder hereby
      confirms and acknowledges that the shares of Common Stock are being acquired solely for the account of the undersigned and not as a nominee for any other party, and for investment, and that the undersigned shall not offer, sell or otherwise dispose
      of any such shares of Common Stock except under circumstances that will not result in a violation of the Securities Act or any state securities laws. The undersigned hereby further confirms and acknowledges that it is an “accredited investor”, as
      that term is defined under the Securities Act.

    3. Please issue a stock certificate or certificates representing
      the appropriate number of shares of Common Stock in the name of the undersigned or in such other name(s) as is specified below:

    Name:  

    Address:  

      

    

      

    

    TIN:  

    	
            (Signature must conform exactly to name of Holder as specified on the face of the Warrant)

          	
            Dated:  

          

    

    

    
      7

      
        

    

    

    

    FORM OF ASSIGNMENT

    (To be signed only on transfer of Warrant)

    

    

    

    

    For value received, the undersigned hereby sells, assigns, and transfers unto ________________ the right represented by the within Warrant to purchase              shares of Common Stock of
      GSE Systems, Inc., a Delaware corporation, to which the within Warrant relates, and appoints _________________ attorney to transfer such right on the books of GSE Systems, Inc., with full power of substitution in the premises.

    

    

    [insert name of Holder]

    

    

    

    

    

    

    Dated:              By: 

    

    

    Title: 

    

    

    [insert address of Holder]

    

    

    

    

    

    

    Signed in the presence of:

    

    

    

    

     

    

    

    

    
      

      

    

  

  8Document

									
	MANAGEMENT – [[LASTNAME]]		EXHIBIT 10.23

                        
                                

VERSO CORPORATION
PERFORMANCE INCENTIVE PLAN

NOTICE OF MANAGEMENT STOCK UNIT AWARD
TIME-BASED

(“Grant Notice”)

You (the “Grantee”) have been granted an award of Stock Units (the “Award”), on the terms and subject to the conditions of the Plan and this Award Agreement, as follows:

Name of Grantee:    [[FIRSTNAME]] [[LASTNAME]] 

Total Number of Stock Units
subject to the Award:    [[SHARESGRANTED]] 

Grant Date:    [_______________], 2022 

Vesting Schedule:    Subject to the Terms (as defined below), including, without limitation, Section 7(e) thereof, the Award will become vested as follows: 33% on January 1, 2023, 33% on January 1, 2024, and 34% on January 1, 2025.

Vested Stock Units will be paid as provided in Section 6 of the Terms.

By your signature and the Corporation’s signature below, you and the Corporation agree that the Award is granted under and governed by the terms and conditions of the Corporation’s Performance Incentive Plan, as the same may be amended, modified or supplemented from time to time (the “Plan”), and the Terms and Conditions of Management Stock Unit Award (the “Terms”), which Terms are attached hereto as Exhibit A and are incorporated herein by this reference. This Grant Notice, together with its exhibits, including the Terms, is referred to as your “Award Agreement” applicable to the Award. Capitalized terms used in this Grant Notice are used as defined in the Terms if not defined herein. Capitalized terms used in this Award Agreement are used as defined in the Plan if not defined in this Grant Notice or in the Terms. You acknowledge receipt of a copy of this Grant Notice, the Terms, the Plan and the Prospectus for the Plan.

VERSO CORPORATION    ACCEPTED AND AGREED BY GRANTEE

By:             By:    
    Terrance M. Dyer        Print name:      Senior Vice President of
         Human Resources and Communications

MANAGEMENT – [[LASTNAME]]    EXHIBIT A

VERSO CORPORATION
PERFORMANCE INCENTIVE PLAN

TERMS AND CONDITIONS OF MANAGEMENT STOCK UNIT AWARD

1.Grant of Stock Units.

(a)General. These Terms and Conditions of Management Stock Unit Award (these “Terms”) apply to a particular stock unit award (the “Award”) if incorporated by reference in the Notice of Management Stock Unit Award Time-Based (the “Grant Notice”) corresponding to that particular grant. The recipient of the Award identified in the Grant Notice is referred to as the “Grantee.” The effective date of grant of the Award as set forth in the Grant Notice is referred to as the “Grant Date.” The Award was granted under and subject to the Verso Corporation Performance Incentive Plan, as the same may be amended, modified or supplemented from time to time (the “Plan”). The number of shares covered by the Award is subject to adjustment under Section 7.1 of the Plan. The Grant Notice and these Terms are collectively referred to as the “Award Agreement” applicable to the Award. Capitalized terms are defined in the Plan if not defined in this Award Agreement. The Award has been granted to the Grantee in addition to, and not in lieu of, any other form of compensation otherwise payable or to be paid to the Grantee.

(b)Stock Units. As used in this Award Agreement, a “Stock Unit” is a non-voting unit of measurement which is deemed for bookkeeping purposes to be equivalent in value to one outstanding share of Class A common stock, par value $0.01 per share, of the Corporation (“Common Stock”). The Stock Units shall be used solely as a device for the determination of any payment to eventually be made to the Grantee if and when such Stock Units vest pursuant to Section 2. The Stock Units create no fiduciary duty to the Grantee and shall create only a contractual obligation on the part of the Corporation to make payments, subject to vesting and the other terms and conditions hereof, as provided in Section 6 below. The Stock Units shall not be treated as property or as a trust fund of any kind. No assets have been secured or set aside by the Corporation with respect to the Award and, if amounts become payable to the Grantee pursuant to this Award Agreement, the Grantee’s rights with respect to such amounts shall be no greater than the rights of any general unsecured creditor of the Corporation.

2.Vesting. The Award shall vest and become earned as set forth in the Grant Notice, subject to earlier termination or acceleration and subject to adjustment as provided in this Award Agreement and in the Plan. 

3.Continuance of Employment or Service Required; No Employment or Service Commitment. Except as otherwise provided in this Award Agreement, the vesting schedule applicable to the Award requires continued employment or service to the Corporation or one of its Subsidiaries through the applicable vesting date as a condition to the vesting of the Award and the rights and benefits under this Award Agreement. Except as provided in the Grant Notice, Section 7 below or under the Plan, employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Grantee to any proportionate vesting of any outstanding and otherwise unvested portion of the Award, or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or service.

Nothing contained in this Award Agreement or the Plan constitutes a continued employment or service commitment by the Corporation or any of its Subsidiaries, confers upon the Grantee any right to remain in employment or service to the Corporation or any Subsidiary, interferes in any way with the right of the Corporation or any Subsidiary at any time to terminate such employment or service, or affects the right of the Corporation or any Subsidiary to increase or decrease the Grantee’s other compensation.  Nothing in this Award Agreement, however, is intended to adversely affect any independent contractual right of the Grantee without his/her consent thereto.

4.Dividend and Voting Rights.

(a)Limitations on Rights Associated with Units. The Grantee shall have no rights as a stockholder of the Corporation, no dividend rights (except as expressly provided in Section 4(b) hereof) and no voting rights with respect to the Stock Units or any shares of Common Stock issuable in respect of such Stock Units, until shares of Common Stock are actually issued to and held of record by the Grantee. Except as expressly provided in Section 4(b) hereof or as may be provided pursuant to Section 7.1 of the Plan, no 
Exhibit A – Page 1

MANAGEMENT – [[LASTNAME]]    EXHIBIT A

adjustments will be made for dividends or other rights of a holder for which the record date is prior to the date of issuance of the stock certificate evidencing the shares.

(b)Dividend Equivalent Reinvestment. In the event that the Corporation pays a cash dividend on its outstanding Common Stock for which the related record date occurs after the Grant Date and prior to the date all Stock Units subject to the Award have either been paid or have terminated, the Corporation shall credit (as of the related dividend payment date) the Grantee with an additional number of Stock Units equal to (i) the amount of the cash dividend paid by the Corporation on a single share of Common Stock on such dividend payment date, multiplied by (ii) the number of Stock Units subject to the Award outstanding and unpaid as of the record date for such dividend payment (including any Stock Units previously credited under this Section 4(b) and with such total number subject to adjustment pursuant to Section 7.1 of the Plan), divided by (iii) the closing price of a share of Common Stock on such dividend payment date. Any Stock Units credited pursuant to the foregoing provisions of this Section 4(b) will be subject to the same vesting, payment, termination and other terms, conditions and restrictions as the original Stock Units to which they relate. No crediting of Stock Units will be made pursuant to this Section 4(b) with respect to any Stock Units which, as of the related record date, have either been paid or have terminated.

5.Restrictions on Transfer. Prior to the time the Stock Units are vested and paid, neither the Stock Units comprising the Award nor any interest therein or amount payable in respect thereof may be sold, assigned, transferred, pledged or otherwise disposed of, alienated or encumbered, either voluntarily or involuntarily. The transfer restrictions in the preceding sentence shall not apply to (a) transfers to the Corporation or (b) transfers by will or the laws of descent and distribution.

6.Timing and Manner of Payment of Stock Units. The Stock Units subject to this Award Agreement that become vested shall be paid in an equivalent number of whole shares of Common Stock promptly after the applicable vesting date (and in all events not later than two and one-half months after the applicable vesting date) in accordance with the terms hereof.  Each such payment of Stock Units shall be subject to the tax withholding provisions of Section 9 hereof and Section 8.5 of the Plan and subject to adjustment as provided in Section 7.1 of the Plan and shall be in complete satisfaction of such vested Stock Units. The Grantee or any other person entitled under the Plan to receive a payment of shares of Common Stock shall deliver to the Corporation any representations or other documents or assurances required pursuant to Section 8.1 of the Plan. The Corporation may make payment of shares of Common Stock either by delivering one or more certificates for such shares or by entering such shares in book entry form, as determined by the Corporation in its discretion. Any Stock Units corresponding to a particular vesting date shall be rounded down to the nearest whole Stock Unit; provided that fractional Stock Units subject to the Award shall be cumulated until sufficient to produce a whole Stock Unit, in all cases remaining fractional Stock Unit interests shall terminate in the event the remaining Stock Units subject to the Award terminate, and any remaining fractional Stock Unit interest shall terminate on the final vesting date applicable to the Award. In the event that payment of Stock Units is triggered by a Separation From Service and Sections 7(c) or 7(d) applies, and the general release contemplated by such section and the expiration of any revocation rights provided therein or pursuant to applicable law could become effective in one of two taxable years depending on when the Grantee executes and delivers the general release, any payment conditioned on the release shall not be made earlier than the first business day of the later of such two tax years (but in all cases within the applicable two and one-half month payment period provided for above).

7.Effect of Termination of Employment or Service; Change in Control.

(a)Termination of Employment or Service Generally. Except as otherwise provided in this Award Agreement, including but not limited to the Grant Notice or Sections 7(b), 7(c) or 7(e) below, the Grantee’s Stock Units shall terminate to the extent that such Stock Units have not become vested on or before the date of the Grantee’s Separation From Service (as defined in Section 19), regardless of the reason for the termination of employment or service that triggers the Separation From Service.

(b)Termination Due to Death or Disability. Except as set forth in Section 7(e) below, in the event the Grantee’s Separation From Service is due to the Grantee’s death or Disability (as defined in Section 19), then the Stock Units, to the extent then outstanding and unvested, shall accelerate and become fully vested upon the Separation From Service (subject to the Grantee’s satisfying the requirement to provide a general release in accordance with Section 7(f) in the case of a Separation from Service due to the Grantee’s Disability).
Exhibit A – Page 2

MANAGEMENT – [[LASTNAME]]    EXHIBIT A

(c)Termination Without Cause Not in Connection With a Change in Control. Except as set forth in Section 7(e), if the Grantee’s Separation From Service is the result of a termination of employment that constitutes a Qualifying Termination (as defined in Section 19) and such event occurs prior to a Change in Control or more than twelve (12) months after a Change in Control (and provided that such Change in Control is not the Merger (as defined below)), then, subject to the Grantee’s satisfying the requirement to provide a general release in accordance with Section 7(f), the next tranche of Stock Units scheduled to vest (and otherwise outstanding and unvested) shall accelerate and become fully vested upon the Separation From Service; provided that if the Qualifying Termination occurs after the effective date of the definitive agreement providing for a Change in Control transaction (other than the Merger) (and such Change in Control transaction is consummated), then the portion of the Award (if any) that is outstanding and unvested immediately prior to the Qualifying Termination and after giving effect to the foregoing acceleration provision shall (subject to the Grantee’s satisfying the requirement to provide a general release in accordance with Section 7(f)) fully vest upon (or, as necessary to give effect to the acceleration, immediately prior to) the Change in Control. 

(d)Termination Without Cause or For Good Reason In Connection With a Change in Control Other Than the Merger. Except as set forth in Section 7(e) below, if the Grantee’s Separation From Service is the result of a termination of employment that constitutes a Qualifying Termination, or a termination of employment by the Grantee for Good Reason (as defined in Section 19), and in either case such event occurs upon, or within twelve (12) months following, a Change in Control (and provided that such Change in Control is not the Merger), the Stock Units, to the extent then outstanding and unvested and subject to the Grantee’s satisfying the requirement to provide a general release in accordance with Section 7(f), shall fully vest upon such Qualifying Termination or resignation for Good Reason.  

(e)Merger Treatment.  Upon the closing (the “Closing”) of the merger (the “Merger”) contemplated by that certain Agreement and Plan of Merger, by and among BillerudKorsnäs Inc., West Acquisition Merger Sub Inc., the Corporation and, for certain purposes set forth therein, BillerudKorsnäs AB, dated as of December 19, 2021 (the “Merger Agreement”), the Stock Units shall be cancelled in exchange for a cash-based award, the amount of which will equal one-third (1/3) of the product of (i) the Per Share Price (as defined in the Merger Agreement), multiplied by (ii) the total number of shares that would have been issuable under this Award Agreement assuming full vesting of the Stock Units, and including, for the avoidance of doubt, any dividend equivalents credited pursuant to Section 4 of this Award Agreement (such cash-based award, the “Cash Award”).  The Cash Award shall vest in full on December 31, 2022 (the “Cliff Vesting Date”), subject to the Grantee’s continued employment or service to the Corporation or one of its Subsidiaries through the Cliff Vesting Date; provided, however, that in the event that the Grantee’s Separation From Service occurs due to a Qualifying Termination, the Grantee’s death or Disability or the Grantee’s resignation for Good Reason, in any such case, prior to the Cliff Vesting Date, the Cash Award shall continue to be payable on the Cliff Vesting Date notwithstanding such termination (and the Cash Award shall be forfeited in the event of any other Separation From Service prior to the Cliff Vesting Date).  In the event that the Merger Agreement is terminated and the Closing does not occur, this Section 7(e) shall be null and void ab initio and shall have no further force or effect.

(f)General Release.  The benefits provided in Sections 7(c), 7(d) and 7(e) in connection with a termination of the Grantee’s employment (and Sections 7(b) or 7(e), as applicable, in the case of a termination due to the Grantee’s Disability) are contingent upon the Grantee’s executing and not revoking a Waiver and Release of Claims Agreement (“Release”) in accordance with the timing and other requirements set forth in this section. The Release must be signed in connection with the termination of Grantee’s employment and not any earlier than the Corporation may prescribe and shall be in a form acceptable to the Corporation (except, if the Grantee is a party to an employment or severance agreement with the Corporation that includes a form of release attached thereto, shall be in the form provided for in such agreement).  The Corporation will provide the final form of Release to the Grantee no later than ten (10) days following the Grantee’s termination of employment, and the Grantee will be required to execute and return the Release to the Corporation within twenty-one (21) days (or forty-five (45) days if such longer period of time is required to make the Release maximally enforceable under applicable law) after the Corporation provides the form of Release to the Grantee.

(g)No Further Rights as to Terminated Units. If any unvested Stock Units terminate pursuant to this Award Agreement, such Stock Units shall automatically terminate and be cancelled as of the applicable 
Exhibit A – Page 3

MANAGEMENT – [[LASTNAME]]    EXHIBIT A

termination date without payment of any consideration by the Corporation and without any other action by the Grantee, or the Grantee’s beneficiary or personal representative, as the case may be, and the Corporation shall have no obligation (or no further obligation, as the case may be) in respect thereof or with respect thereto.

8.Adjustments Upon Specified Events. Upon the occurrence of certain events relating to the Corporation’s stock contemplated by Section 7.1 of the Plan, the Administrator will make adjustments if appropriate in the number of Stock Units contemplated hereby and the number and kind of securities that may be issued in respect of the Award. No such adjustment shall be made with respect to any cash dividend for which dividend equivalents are credited pursuant to Section 4.

9.Taxes; Tax Withholding.

(a)Section 409A. It is intended that the terms of the Award will not result in the imposition of any tax liability pursuant to Section 409A of the Code. This Award Agreement shall be construed and interpreted consistent with that intent. Notwithstanding any provision of these Terms to the contrary, if the Grantee is a “specified employee” as defined in Section 409A of the Code, the Grantee shall not be entitled to any payment with respect to the Award in connection with the Grantee’s “separation from service” (as that term is used for purposes of Section 409A of the Code) until the earlier of the date that is six months and one day after the Grantee’s separation from service for any reason other than the Grantee’s death, or the date of the Grantee’s death. For purposes of clarity, the six month delay shall not apply in the case of severance contemplated by Treasury Regulations Section 1.409A-1(b)(9)(iii) to the extent of the limits set forth therein. Any amounts otherwise payable to the Grantee following the Grantee’s separation from service that are not so paid by reason of this Section 9 shall be paid as soon as practicable for the Corporation (and in all events within 30 days) after the date that is six months after the Grantee’s separation from service (or, if earlier, the date of the Grantee’s death). The provisions of this Section 9 shall only apply if, and to the extent, required to comply with Section 409A of the Code.

(b)Tax Withholding. The Corporation shall reasonably determine the amount of any federal, state, local or other income, employment, or other taxes which the Corporation or any of its Subsidiaries may reasonably be obligated to withhold with respect to the grant, vesting or other event with respect to the Stock Units. If such withholding event occurs in connection with the distribution of shares of Common Stock in respect of the Stock Units and subject to compliance with all applicable laws, the Corporation shall automatically withhold and reacquire the appropriate number of whole shares, valued at their then fair market value (with the “fair market value” of such shares determined in accordance with the applicable provisions of the Plan), to satisfy any withholding obligations of the Corporation or its Subsidiaries with respect to such distribution. If, however, any withholding event occurs with respect to the Stock Units other than in connection with the distribution of shares of Common Stock in respect of the Stock Units, or if the Corporation cannot legally satisfy such withholding obligations by such withholding and reacquisition of shares as described above, the Corporation shall be entitled to require a cash payment by or on behalf of the Grantee and/or to deduct from other compensation payable to the Grantee the amount of any such withholding obligations.

(c)Responsibility for Taxes. Except for such withholding rights of the Corporation, the Grantee shall be solely responsible for any and all tax liability arising with respect to the Award or any payment in respect thereof.

10.Notices. Any notice to be given under the terms of this Award Agreement shall be in writing and addressed to the Corporation at its principal office to the attention of the Secretary, and to the Grantee at the Grantee’s last address reflected on the Corporation’s records. Any notice shall be delivered in person or shall be enclosed in a properly sealed envelope, addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government or a courier of internationally recognized prominence. Any such notice shall be given only when received, but if the Grantee is no longer an Eligible Person, shall be deemed to have been duly given five business days after the date mailed in accordance with the foregoing provisions of this Section 10.

11.Plan. The Award and all rights of the Grantee under this Award Agreement are subject to the terms and conditions of the provisions of the Plan, which are incorporated herein by this reference. The 
Exhibit A – Page 4

MANAGEMENT – [[LASTNAME]]    EXHIBIT A

Grantee agrees to be bound by the terms of the Plan and this Award Agreement. The Grantee acknowledges having read and understanding the Plan, the Prospectus for the Plan, and this Award Agreement. Unless otherwise expressly provided in other sections of this Award Agreement, provisions of the Plan that confer discretionary authority on the Board or the Administrator do not and shall not be deemed to create any rights in the Grantee unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate action of the Board or the Administrator under the Plan after the date hereof.

12.Entire Agreement. This Award Agreement and the Plan together constitute the entire agreement and supersede in their entirety all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The Plan may be amended pursuant to Section 8.6 of the Plan. This Award Agreement may be amended by the Administrator from time to time. Any such amendment must be in writing and signed by the Corporation. Any such amendment that materially and adversely affects the Grantee’s rights under this Award Agreement requires the consent of the Grantee in order to be effective with respect to the Award. The Corporation may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of the Grantee hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof.

13.Governing Law. This Award Agreement shall be governed by, construed under, and enforced in accordance with the laws of the State of Delaware without regard to conflict of law principles thereunder.

14.Effect of Award Agreement. Subject to the Corporation’s right to terminate the Award pursuant to Section 7.2 of the Plan, this Award Agreement shall be assumed by, be binding upon and inure to the benefit of any successor or successors to the Corporation.

15.Counterparts. This Award Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Photographic or other electronic copies of such signed counterparts may be used in lieu of the originals for any purpose.

16.Section Headings. The section headings of this Award Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.

17.Clawback Policy. The Stock Units are subject to the terms of the Corporation’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of the Stock Units or any shares of Common Stock or other cash or property received with respect to the Stock Units (including any value received from a disposition of the shares acquired upon payment of the Stock Units).

18.No Advice Regarding Grant. The Grantee is hereby advised to consult with his or her own tax, legal and/or investment advisors with respect to any advice the Grantee may determine is needed or appropriate with respect to the Award (including, without limitation, to determine the foreign, state, local, estate and/or gift tax consequences with respect to the Award and any shares that may be acquired upon payment of the Award). Neither the Corporation nor any of its officers, directors, affiliates or advisors makes any representation (except for the terms and conditions expressly set forth in this Award Agreement) or recommendation with respect to the Award.

19.Certain Defined Terms. For the purposes of this Award Agreement, the following terms shall have the meanings provided below:

“Cause” means (unless such term is defined in a written employment or severance agreement by and between the Grantee and the Corporation, in which case “Cause” is used as defined in such written employment or severance agreement) that any one or more of the following has occurred:

(a)    The Grantee’s indictment for, conviction of, or pleading guilty or nolo contendere to, a felony (other than motor vehicle offenses the effect of which do not materially impair the Grantee’s performance of the Grantee’s duties to the Corporation).  
Exhibit A – Page 5

MANAGEMENT – [[LASTNAME]]    EXHIBIT A

(b)    The Grantee’s willful failure to substantially perform the material duties of the Grantee’s position with the Corporation (other than any such failure resulting from the Grantee’s incapacity due to physical or mental illness), provided that the Grantee has been provided written notice of such failure and, if such failure is curable, the Grantee has not cured the failure to the satisfaction of the Corporation within 15 days after delivery of such notice.
(c)    The Grantee’s willful failure to obey legal orders consistent with the Grantee’s position at the Corporation given in good faith by the Corporation’s Chief Executive Officer or any other person to whom the Grantee reports at the Corporation, directly or indirectly (or, in the event the Grantee is the Corporation’s Chief Executive Officer, given in good faith by the Board), other than any such failure resulting from incapacity due to physical or mental illness; provided, however, that the Grantee has been given written notice of such failure and, if such failure is curable, the Grantee has not cured the failure to the satisfaction of the Corporation within 15 days after delivery of such notice.
(d)    The Grantee’s willful misconduct or breach of fiduciary duty (including, without limitation, any act of fraud, embezzlement, or dishonesty) which causes or is reasonably expected to result in material injury to the Corporation or its business reputation.
(e)    The Grantee’s entering into an agreement or consent decrease or being the subject of any regulatory order that in any of such cases prohibits the Grantee from serving as an officer or director of a company that has publicly-traded securities.
(f)    The Grantee’s material breach of any agreement that the Grantee may have with the Corporation or of any written policies or procedures of the Corporation, which is injurious to the Corporation; provided, however, that the Grantee has been given written notice of such failure and, if such breach is curable, the Grantee has not cured the breach to the satisfaction of the Corporation within 15 days after delivery of such notice.
“Change in Control” means any of the following events:

(a)A transaction or series of transactions occurs whereby any "person" or related "group" of "persons" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended ("Exchange Act")), directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Corporation possessing more than 50% of the total combined voting power of the Corporation's securities outstanding immediately after such acquisition;

(b)During any period of two consecutive years, the Continuing Directors cease to constitute at least a majority of the Board. For purposes of this definition, the term “Continuing Director” means any director who was (i) a member of the Board at the beginning of the two-year period, (ii) elected to the Board by the Corporation’s stockholders, or (iii) appointed to the Board by a majority of the Continuing Directors then serving on the Board; in the case of clause (ii) and (iii), whose election or appointment to the Board did not occur in connection with any actual or threatened director election contest or proxy solicitation contest or any transaction or proposed transaction involving the Corporation or any subsidiary of the Corporation);

(c)The Corporation, directly, or indirectly through one or more subsidiaries or intermediaries, enters into an agreement to, or consummates, a sale or other disposition of all or substantially all of the Corporation’s assets in any single transaction or series of transactions (including pursuant to a spin-off, split-up or similar transaction) (each, a “Sale of Substantially All Assets”). Without limiting the generality of the foregoing sentence, and subject to the exclusions below, a Sale of Substantially All Assets will include the sale or other disposition, within any two-year period, in any one transaction or series of transactions, of more than two-thirds of the mills (whether determined by reference to mill-generated revenue or by number of mills) owned by the Corporation and its subsidiaries at the beginning of the two-year period.  For purposes of this clause (c), however, in determining whether a Sale of Substantially All Assets has occurred the following assets and mills (or sales of assets and mills, as the case may be) shall be disregarded (together, any sales of such assets and mills, including related assets and real estate) 
Exhibit A – Page 6

MANAGEMENT – [[LASTNAME]]    EXHIBIT A

are referred to as the “Excluded Sales”): (i) all or any portion of the Corporation’s mills, including related assets and real estate, in Wisconsin Rapids, WI and Luke MD, (ii) all or any portion of Consolidated Water Power Company, including related assets and real estate, and (iii) any disposition of assets (including mills) that has been proposed as of, or that occurred prior to, the Grant Date; 

(d)The Corporation, whether directly involving the Corporation or indirectly involving the Corporation through one or more subsidiaries or intermediaries, enters into an agreement to or consummates (i) a merger, combination, consolidation, conversion, exchange of securities, reorganization or business combination, or (ii) an acquisition of the assets or stock of another entity, in any single transaction or series of transactions, which event results in the voting securities of the Corporation outstanding immediately prior thereto failing to continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving or another entity) at least 66% percent of the combined voting power of the voting securities of the Corporation or such surviving or other entity outstanding immediately after such event; or

(e)Any transaction or series of transactions that has the substantial effect of any one or more of the foregoing events.

“Disability” (unless such term is defined in a written employment or severance agreement by and between the Grantee and the Corporation, in which case “Disability” is used as defined in such written employment or severance agreement) has the meaning given to such term in Treas. Reg. Section 1.409A-3(i)(4).

“Good Reason” means (unless such term is defined in a written employment or severance agreement by and between the Grantee and the Corporation, in which case “Good Reason” is used as defined in such written employment or severance agreement) that any one or more of the following events has occurred without the Grantee’s written consent:

(a)    a material reduction by the Corporation in the Grantee’s annual base salary or target-level annual incentive award opportunity, other than a general reduction in the base salaries or target-level annual incentive award opportunities of all or substantially all of the Corporation’s executives;

(b)    a material demotion by the Corporation with respect to the Grantee’s job duties and responsibilities; or

(c)    the Corporation’s material breach of any material agreement between the Grantee and the Corporation;

provided, however, that the Grantee’s termination of his or her employment with the Corporation will not be considered a termination by the Grantee for Good Reason unless the Grantee has: (i) notified the Corporation in writing of the event(s) claimed to constitute Good Reason, no later than 30 days after the initial occurrence of the event(s); (ii) the Corporation has failed to cure or remedy such event(s), no later than 30 days after its receipt of the Grantee’s written notice; and (iii) the Grantee has notified the Corporation in writing that the Grantee is terminating his or her employment for Good Reason on account of such event(s), and the Grantee actually terminates the Grantee’s employment with the Corporation no later than 30 days after the expiration of such 30-day cure period.  For clarity, a reduction in duties or responsibilities as a result of the Excluded Sales shall not constitute “Good Reason” pursuant to clause (b) above.

“Qualifying Termination” means (unless such term is defined in a written employment or severance agreement by and between the Grantee and the Corporation, in which case “Qualifying Termination” is used as defined in such written employment or severance agreement), if the Grantee is employed by the Corporation or one of its Subsidiaries, a termination of the Grantee’s employment by the Corporation or one of its Subsidiaries without Cause and other than due to the Grantee’s death or Disability.

Exhibit A – Page 7

MANAGEMENT – [[LASTNAME]]    EXHIBIT A

“Separation From Service” means (unless such term is defined in a written employment or severance agreement by and between the Grantee and the Corporation, in which case “Separation From Service” is used as defined in such written employment or severance agreement) the Grantee ceases to be employed by, or ceases to provide services as a director to, the Corporation or one of its Subsidiaries; provided that no Separation From Service shall exist in any event unless such separation constitutes a “separation from service” within the meaning of Section 409A of the Code. If the Grantee ceases to be employed by or ceases to provide services as a director to the Corporation or a Subsidiary, but immediately thereafter continues to be employed by or provide services as a director to the Corporation or a Subsidiary (for example, and without limitation, if the Grantee ceases to be employed by the Corporation but immediately thereafter continues to be employed by a Subsidiary or continues to provide services as a director to the Corporation or a Subsidiary), such change shall not constitute a Separation From Service. The provisions of Section 6 of the Plan apply to the Award.

*    *    *
Exhibit A – Page 8

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