Document:

Exhibit 10.1

  

   

  

   EXECUTION

  

  
     

    

    SEPARATION AGREEMENT

    This Separation Agreement (“Agreement”), by and between GSE Systems, Inc., a Delaware corporation
        (“GSE Systems” or the “Company”) and Christopher D. Sorrells (“Executive”), is entered on the last date of execution set forth below. The Company and Executive may be referred to individually as a “Party” and, collectively, as the “Parties”. All
        capitalized terms used but not defined herein shall have the meaning ascribed to them in the Employment Agreement (as defined below).

    WHEREAS, the Parties entered into that certain
        Employment Agreement, by and between the Company and Executive, dated August 15, 2016 (as amended, the “Employment Agreement”) pursuant to which the Company employs the Executive as its Chief Operating Officer; and

    WHEREAS, the Parties now wish to amicably conclude
        their employment relationship and resolve all issues related to the employment relationship between the Company and Executive.

    NOW, THEREFORE, in consideration of the premises, the mutual promises,
        covenants and obligations contained herein, the Parties agree as follows:

    

    

    
      	

            	
              1. Entire Agreement. This Agreement embodies the entire agreement and understanding between the Company and Executive pertaining to the subject matter hereof,
                  the employment relationship between the Company and Executive. Other than as set forth in this paragraph, this Agreement shall supersede and replace all prior agreements, whether verbal or written, between the Parties, including but not
                  limited to the Employment Agreement. Notwithstanding the foregoing, Section 6 of the Employment Agreement, which contains certain Non-Competition, Non-Solicitation and Non-Disclosure obligations of Executive, shall survive the termination
                  of Executive’s employment with the Company, is incorporated herein by reference and Executive expressly reconfirms his intent to abide by Section 6 of the Employment Agreement, which shall remain in full force and effect. In addition,
                  Executive’s vested rights, governed by the Company’s 401(k) Plan and any award agreements by and between the Company and Executive pursuant to that certain GSE Systems, Inc. 1995 Long-Term Incentive Plan (as amended and restated, “LTIP”),
                  shall remain in full force and effect unless otherwise modified herein. This Agreement may not be changed, waived, discharged, or terminated except by an instrument in writing signed by each of the Parties hereto.

            

    

    
      	

            	
              2. Employment Status. Executive’s employment with the Company will terminate on September 30, 2019 (“Separation Date”). The Parties hereby waive the
                  requirement that either Party provide the other with any notice of termination pursuant to the Employment Agreement. Executive shall be paid his regular salary up to and including the Separation Date and, if necessary, on or before the
                  next regularly scheduled payday following the Separation Date.

            

    

    
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              3. Board of Directors. Contemporaneously with the execution of this Agreement, Executive shall execute all necessary documentation, in a form reasonably
                  satisfactory to the Company, to resign his positions as a director of GSE Systems and its subsidiaries. Executive confirms that his resignation is not a result of any disagreement on any matter relating to the Company’s operations,
                  policies or practices.

            

    

    
      	

            	
              4. Severance Wage Payment. Beginning with the day after the Separation Date and ending on November 30, 2020, the Company shall pay, or cause to be paid, to
                  Executive Four Hundred Eight Thousand Three Hundred Thirty-Three Dollars and Thirty Three cents ($408,333.33), less all lawful and required deductions (“Severance Pay”), which is equivalent to fourteen (14) months of Executive’s current
                  salary. The fourteen-month period in which Executive receives this Severance Pay shall be the “Severance Pay Period.” This Severance Pay will be paid at GSE Systems’ regular payroll intervals beginning on the pay period after Executive
                  receives his final paycheck described in paragraph 2. The Company’s obligation to pay the Severance Pay is conditioned upon Executive’s continued compliance with the terms and conditions of this Agreement and upon Executive’s signing this
                  Agreement.

            

    

    
      	

            	
              5. Executive Benefits. Executive’s GSE Systems-provided health benefits will terminate as of the Separation Date. Pursuant to the Consolidated Omnibus Budget
                  Reconciliation Act (“COBRA”), the Company will provide Executive with notice of the right to elect to continue his health and welfare insurance coverage, effective on the first of the month following the Separation Date. So long as
                  Executive timely elects to continue his healthcare benefits pursuant to COBRA, GSE Systems shall continue to pay the same portion it currently pays for Executive’s health benefits, which is 100% of the total cost, until that date that is
                  twelve (12) months after the Separation Date. Thereafter, Executive may continue to receive healthcare coverage pursuant to COBRA at his own expense. All other Company-provided benefits shall end on the Separation Date (including, but not
                  limited to, any entitlement to reimbursements, 401K contribution matches or other benefits).

            

    

    
      	

            	
              6. Bonus Payment. Pursuant to Section 9(c)(iii) of the Employment Agreement, in the event that Executive’s employment were to be terminated by the Company for
                  any reason other than For Cause, Executive would have been entitled to receive “a prorated Bonus equal to the product of (I) the Bonus, if any, that Executive would have earned for the calendar year in which the Date of Termination
                  occurred had he been employed as of the last day of such year, based upon the Company’s actual results of operations for such year and (II) a fraction, the numerator of which is the number of days Executive was employed by the Company
                  during the year of termination and the denominator of which is the number of dates in such year.” The Parties agree and acknowledge that, pursuant to the criteria established by the Compensation Committee of the Company and as of the date
                  of this Agreement, Executive would only be entitled to the discretionary portion of such bonus or up to 10% of his Base Salary for the 2019 fiscal year. As further consideration for entering into this Agreement, and in lieu of any further
                  Bonus (as defined in the Employment Agreement) or payment pursuant to Section 9(c)(iii) of the Employment Agreement, the Company shall pay $35,000 to
                  Executive (less all lawful and required deductions) at the same time as all other then-current executive officers of GSE Systems receive their bonuses for 2019; provided, however, that the foregoing payment shall be made not later than
                  March 15, 2020.

            

    

    
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              7. Restricted Share Units. During the course of his employment with the Company, Executive was granted restricted share units (“RSUs”) pursuant to that certain
                  LTIP, which, upon vesting, convert into shares of the Company’s common stock or result in a cash payment of equivalent value. As further consideration for this Agreement, the Parties hereby agree to amend certain Restricted Share Units
                  Agreements by and between the Company and Executive in the manner set forth in that certain Amendment to Restricted Share Units Agreements attached hereto as Exhibit A (the “RSU Amendment”). As set forth in greater detail in the RSU Amendment, in lieu of forfeiture as of the Separation Date, (a) RSUs awarded to Executive that would otherwise vest if
                  Executive continued to be employed by the Company as of a date certain shall accelerate and vest immediately prior to the Separation Date; and (b) RSUs that will vest upon the achievement of certain performance goals (subject also to
                  Executive’s continued employment with the Company) shall be amended such that the underlying RSUs have the opportunity to vest, if the underlying performance criteria are satisfied, for a period of twelve (12) months following the
                  Separation Date and despite the termination of Executive’s employment with the Company. Executive hereby elects that to have sufficient RSUs withheld from all RSUs vested pursuant to this Section 7 (i.e. a net exercise) to pay any
                  withholding taxes associated with such grant and, to the fullest extent permitted by applicable law, the Company agrees to the same. Other than those performance RSUs covered by the RSU Amendment, Executive acknowledges and agrees that
                  any other equity awards or RSUs that have not vested as of the Separation Agreement shall be forfeited as of such date.

            

    

    
      	

            	
              8. No Other Payments. Other than the amounts set forth herein, GSE Systems shall not pay, or cause to be paid, any other money to or for the benefit of
                  Executive. Executive agrees and acknowledges that he has been fully compensated by GSE Systems for all wages, expenses, vacation, benefits, and/or other compensation that he believes he is owed as a result of his employment with GSE
                  Systems.

            

    

    
      	

            	
              9. Revocation Period. Executive acknowledges and agrees that his receipt of the separation benefits described in paragraphs four (4) through seven (7)
                  (collectively, the “Separation Benefits”) are subject to his execution and non-revocation of this Agreement, and that this Agreement will be neither effective nor enforceable, nor will the Separation Benefits be paid hereunder, unless the
                  Revocation Period (as defined below) expires without his revocation thereof.

            

    

    
      	

            	

            

    

    
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                10. Standstill.
                  Executive agrees that from the date of this Agreement until July 30, 2021, Executive and his Affiliates shall not, in any manner, directly or indirectly,take any
                    of the following actions: (a) acquire, agree or seek to acquire or make any proposal or offer to acquire, or announce any intention to acquire, any securities, including any debt securities (“Securities”) of Company, or beneficial
                    ownership thereof, or any Securities convertible or exchangeable into or exercisable for any Securities of Company, or beneficial ownership thereof (other than (i) Securities issued pursuant to a stock split, stock dividend or similar
                    corporate action initiated by Company with respect to any Securities beneficially owned by Executive on the date of this Agreement; (ii) open market purchases of up to one percent (1%) of the Company’s common stock, provided that such
                    purchases are made solely for investment purposes and pursuant to applicable securities laws and regulations (including those pertaining to the use of material non-public information); or (iii) Securities issued by the Company to
                    Executive in consideration of any stock options or RSUs awarded to Executive prior to the date hereof), (b) acquire, agree or seek to acquire or make any proposal or offer to acquire, or announce any intention to acquire, any property,
                    asset or business of the Company or any of its subsidiaries, (c) acquire, agree or seek to acquire or make any proposal or offer to acquire, or announce any intention to acquire, any ownership interest in any joint venture in which the
                    Company or any of its subsidiaries is a party or any ownership interest in any partner of the Company or any of its subsidiaries in such a joint venture, (d) propose to any person, or effect or seek to effect, whether alone or in
                    concert with others, any tender or exchange offer, merger, consolidation, acquisition, business combination, recapitalization, restructuring, liquidation or dissolution with respect to the Company, (e) make, or in any way participate in
                    any “solicitation” of “proxies” (as such terms are used in the proxy rules of the Securities and Exchange Commission but without regard to the exclusion set forth in Rule 14a-1(l)(2)(iv)) to vote in favor of any proposal for which such
                    solicitation is being made (other than any proposal supported by the Board), or seek to advise any person with respect to the voting of, any voting securities of the Company for any purpose, (f) form, join, advise or in any way
                    participate in a “group” (within the meaning of Section 13(d) of the Securities Exchange Act of 1934) with respect to any voting securities of Company or otherwise in any manner agree, attempt, seek or propose to deposit any voting
                    securities of the Company or any securities convertible or exchangeable into or exercisable for any such securities in any voting trust or similar arrangement, (g) otherwise act, alone or in concert with others, to seek to control,
                    advise or change the management, board of directors, governing instruments, policies or affairs of the Company, (h) disclose any intention, plan or arrangement inconsistent with the foregoing or (i) advise, assist or facilitate the
                    taking of any actions by any other person in connection with any of the foregoing. For this purposes of this paragraph 10, “Affiliates” shall mean, with respect to Executive, any person that, directly or indirectly, through one or more
                    intermediaries, is in control of, is controlled by, or is under common control of the Executive, where “control” shall mean the power, directly or indirectly, either to vote ten percent (10%) or more of the voting securities of such
                    person or direct or cause the direction of the management and policies of such person, whether by contract or otherwise.

              

            

    

    
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              11. Return of Property. By signing below, Executive confirms that within five days
                    after the Separation Date Executive will return all property belonging to GSESystems, including but not limited to all keys, credit cards, computer equipment, documents (whether hard-copy or electronic), and software.

            

    

    
      	

            	
              12. General Release of Claims. In exchange for the benefits described above, Executive forever releases and discharges the Company from any claims, rights, or
                  causes of actions of any kind or nature, both known or unknown, up through and including the date Executive signs this Agreement (“General Release”). Executive provides this General Release not only on behalf of himself, but also his
                  heirs, executors, successors and assigns. Executive further agrees that this release and discharge of the Company includes not only GSE Systems but also any of its current and former parents, subsidiaries, affiliates, joint ventures,
                  their predecessor and successor companies, and with respect to each such entity, all of its past, present and future officers, directors, agents and/or employees (all collectively referred to as the “Released Parties”). This General
                  Release includes, to the maximum extent permitted by law, claims, rights, and causes of action arising (a) under all federal, state or local law relating to employment and employment discrimination, termination rights, compensation or
                  benefits, such as the Age Discrimination in Employment Act (“ADEA”), the Older Worker Benefits Protection Act, Title VII of the Civil Rights Act of 1964, the Family and Medical Leave Act (“FMLA”), the Americans with Disabilities Act, the
                  Civil Rights Act of 1866, or the National Labor Relations Act; and/or (b) upon any other basis for legal, equitable or administrative relief, whether based on express or implied contract, tort, statute, regulation or other legal or
                  equitable ground, and whether employment-related or not, including but not limited to breach of employment contract, fraud, negligence (including negligent hiring and retention), tort, implied contracts or implied covenants of good faith
                  and fair dealing, and any and all other federal, state and local statutes, cases, authorities or laws providing a cause of action. This General Release also includes a release of all claims, rights or causes of action arising under or
                  pursuant to the Employment Agreement, any amendment to the Employment Agreement or any other promises of compensation of any kind, whether written or oral, from the Company to Executive. The Parties expressly acknowledge and agree that
                  the general release and waiver set forth in this paragraph shall exclude: (w) the rights and obligations contained in or provided for under this Agreement; (x) any right or entitlement that Executive is not allowed by applicable law to
                  waive or release; (y) any right Executive has to file, cooperate in or participate in a charge, complaint or proceeding with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and
                  Health Administration, the Securities and Exchange Commission, or any other federal state or local governmental agency or commission (“Government Agencies); and (z) any claim that may arise only after the execution of this Agreement.
                  Executive further understands that this Agreement does not limit his ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including
                  providing documents or other information, without notice to the Company. Executive acknowledges and agrees that should Executive or any administrative agency or third party pursue any claims on Executive’s behalf, Executive waives his
                  right to any individual monetary recovery; except that this provision does not limit Executive’s ability to recover monies pursuant to the Security and
                  Exchange Commission’s whistleblower incentive award program.

            

    

    
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              13. Covenant Not to Sue. Executive further agrees that he will not commence any action or proceeding against any of the Released Parties based upon any claim
                  or right validly released above and if he does, agrees to be liable for damages, attorneys’ fees or costs incurred by any Released Party as a result. If any such action or proceeding is commenced, in whole or in part on his behalf,
                  against of the Released Parties by any third-person, entity or agency in any forum, Executive waives any claim or right in connection with it to any resulting money damages or other personal legal or equitable relief awarded by any court
                  or governmental agency.

            

    

    
      	

            	
              14. Exculpation; Indemnification; D&O Insurance. In his capacity as a director of the Company, Executive’s liability to the Company and its stockholders
                  has been limited to the maximum extent of Delaware law. Following the Separation Date, Executive will continue to be (a) entitled to indemnification to the maximum extent provided by Delaware law for claims, causes of action, litigation
                  (and litigation expenses), losses or damages relating to his service as an officer and/or director of the Company; and (b) covered by the terms of the Company’s policies of insurance (in effect from time to time) as it relates to former
                  directors and officers of the Company; provided, however, that Executive will not be indemnified for  any action, suit, arbitration or other proceeding (or portion thereof) initiated by Executive, unless authorized by the Board of
                  Directors of the Company.

            

    

    
      	

            	
              15. Representations Concerning Claims. Executive further expressly represents that as of the date that he signs this Agreement, he has not filed any
                  grievances, claims, complaints, administrative charges or lawsuits against the Company or any Released Party. In addition, he also acknowledges and represents that he (a) has suffered no injuries or occupational diseases arising out of or
                  in connection with his employment with the Company; (b) has received all wages and other forms of compensation of any kind to which he was entitled as an employee of the Company; (c) has received all leave to which he was entitled under
                  the FMLA; and (d) is not currently aware of any facts or circumstances constituting a violation of the FMLA or the Fair Labor Standards Act.

            

    

    
      	

            	
              16. Non-Disparagement. The parties agree they will not communicate to person, including (but not limited to) any customer, prospective customer, employee,
                  contractor, vendor, agent, stockholder, director, officer, investment banker, financial partner or prospective investor, any adverse, disparaging or derogatory statements or information concerning the other Party. Notwithstanding the
                  foregoing, this paragraph does not, in any way, restrict or impede the Parties from exercising protected rights, including rights under the federal securities laws, including the Dodd-Frank Act, to the extent that these rights cannot be
                  waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law,
                  regulation, or order. Executive agrees that Executive shall promptly provide written notice of any such order to GSE Systems, Inc., c/o Chief Executive
                  Officer, 6940 Columbia Gateway Dr., Suite 470, Columbia, Maryland 21046. The Parties further agree to reasonably cooperate with one another with regard to the preparation and release of a press release regarding Executive’s separation
                  from the Company.

            

    

    
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              17. Confidential Information. Notwithstanding his employment termination, Executive agrees to preserve and protect the confidentiality of the Company’s
                  Confidential Information, as defined and described in the Employment Agreement, and not to disclose or disseminate the Confidential Information to any third party. Executive further covenants that he has returned all Confidential
                  Information belonging to the Company, whether in electronic or document form and that he shall not use such information for his own benefit or for the benefit of any third party.

            

    

    
      	

            	
              18. Severability. Each provision of this Agreement shall be considered severable. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction,
                  such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

            

    

    

    

    
      	

            	
              19. Governing Law. This Agreement has been entered into in and will be interpreted and enforced in accordance with the laws of the State of Maryland, regardless of any principles of
                  conflicts of laws or choice of laws of any jurisdiction.

            

    

    

    

    
      	

            	
              20. Arbitration. Except as set forth in paragraph 21, any dispute, controversy, or claim arising out of or related to this Agreement or any breach of this Agreement shall be submitted
                  to and decided by binding arbitration. Arbitration shall be administered exclusively by JAMS  and initiated in either Dallas, Texas or Baltimore, Maryland (or, if such venue is not available, Washington D.C.) pursuant to its Streamlined
                  Arbitration Rules and Procedures, and shall be conducted consistent with any rules, regulations, and requirements thereof as well as any requirements imposed by state law. Any arbitral award determination shall be final and binding upon
                  the Parties.

            

    

    

    

    
      	

            	
              21. Equitable Relief. Notwithstanding paragraph 20, in the event of a breach or threatened breach by the Executive of Section 6 of the Employment Agreement, which has been
                  incorporated herein by reference, or paragraph 14 of this Agreement, the Executive hereby consents and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or
                  other equitable relief against such breach or threatened breach from U.S. District Court for the District of Maryland (or if such court lacks jurisdiction, the Circuit Court for Howard County, Maryland). The aforementioned equitable
                  relief shall be in addition to, not in lieu of, legal remedies, monetary damages, or other available forms of relief.

            

    

    
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              22. JURY TRIAL WAIVER. EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
                  ACTION, PROCEEDING, CAUSE OF ACTION, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, INCLUDING ANY EXHIBITS, SCHEDULES, AND APPENDICES ATTACHED TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY.

            

    

    

    

    
      	

            	
              23. No Assignment. Executive represents and warrants that he has not directly or indirectly assigned, encumbered, or otherwise transferred any interest in any complaint, charge,
                  action, suit, debt, claim, or demand intended to be included in and/or discharged by this Agreement.

            

    

    

    

    
      	

            	
              24. Older Workers' Benefit Protection Act. This Agreement is intended to satisfy the requirements of the Older Workers' Benefit Protection Act.

            

    

    

    

    a Acknowledgements. Executive acknowledges that he (1) has been advised to
        consult an attorney before executing this Agreement; (2) has obtained and considered such legal counsel as he deems necessary; (3) has been given twenty-one (21) days to consider whether or not to enter into this Agreement and Executive agrees that
        changes to the Agreement, whether material or immaterial, will not re-start the period of consideration; and (4) has read and understands the terms of this Agreement and is relying upon his own judgment and the advice of his counsel, and not on any
        recommendations or representations by the Company. By signing this Agreement, Executive acknowledges that he does so freely, knowingly, and voluntarily. This Agreement does not prohibit Executive from challenging the validity of this Agreement’s
        waiver and release of claims under the ADEA, as amended.

    

    

    b Revocation and Effective Date. Executive may revoke his acceptance of
        this Agreement within seven (7) days after he signs it. Such revocation must be in writing and received by Daniel Pugh, SVP, Chief Legal Officer & Risk Management Officer, GSE Systems, Inc., 6940 Columbia Gateway Drive, #470, Columbia, MD 21046
        by 5:00 p.m. Eastern Time before the close of business on the seventh (7th) day after he initially signs it in order to be effective. If Executive does not revoke acceptance within the seven (7) day period (the “Revocation Period”), his acceptance
        of this Agreement shall become binding and enforceable on the eighth (8th) day.

    

    

    
      	

            	
              25. Voluntary Agreement.  By voluntarily executing this Agreement, the Parties confirm that (a) they have had the opportunity to have the Agreement explained to them by their
                  respective attorneys; (b) in executing this Agreement, they are relying upon their own judgment and the advice of their respective counsel, and not on any recommendations or representations by any opposing party, opposing counsel, or
                  representatives; and (c) they understand and do hereby accept all of the terms and conditions of this Agreement as resolving fully and finally all
                  differences, disputes, and claims that are within the scope of the Agreement.

            

    

    
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    THIS IS A GENERAL RELEASE AND WAIVER OF CLAIMS. YOU ARE ADVISED TO CONSULT WITH LEGAL COUNSEL
        PRIOR TO SIGNING.

    

    

    [Remainder of the Page Blank]

    
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    IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date last set forth below.

    

    

    

    	
            Executive:

          	 	 	 
	 	 	 	 
	 	 	 	 
	
            /s/ Christopher D. Sorrells

          	
            (seal)

          	 	
            September 18, 2019

          
	
            Christopher D. Sorrells

          	 	 	
            Date

          
	 	 	 	 
	 	 	 	 
	
            GSE Systems, Inc.

          	 	 	 
	 	 	 	 
	 	 	 	 
	
            /s/ Emmett Pepe

          	
            (seal)

          	 	
            September 18, 2019

          
	
            Name: Emmett Pepe

          	 	 	
            Date

          
	
            Title: Chief Financial Officer

          	 	 	 

    
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    AMENDMENT TO RESTRICTED SHARE UNIT AGREEMENTS

    This Amendment to Restricted Share Unit Agreements (“Amendment”), by and between GSE Systems, Inc., a Delaware corporation (the “Company”),

        and Christopher D. Sorrells (the “Grantee”), amends the RSU Agreements (as defined below) in the manner and to the extent described herein. This
        Amendment is effective September 18, 2019 (the “Effective Date”).

    WHEREAS, the Company granted the Grantee restricted share units (“RSUs”) pursuant to the Company’s 1995 Long-Term Incentive Plan, as amended and restated, which are payable in cash or shares of common stock of the Company, par value $0.01
        per share (“Common Stock”), and generally vest either (a) over time pursuant to the terms thereof (“TRSUs”) or (b) upon the Company’s achievement of certain performance goals (“PRSUs”);

    WHEREAS, the Company and the Grantee previously entered into the following Restricted Share Unit
        Agreements (the “RSU Agreements”):

    
      	
              (1)

            	
              Restricted Share Unit Agreement, dated August 15, 2016, with respect to 335,000 PRSUs payable in shares of
                  Common Stock (the “August 2016 PRSU Agreement”);

            

    

    
      	
              (2)

            	
              Restricted Share Unit Agreement, dated August 15, 2016, with respect to 75,000 PRSUs payable in cash (the “August 2016 Cash Agreement”);

            

    

    
      	
              (3)

            	
              Restricted Share Unit Agreement, dated January 1, 2018, with respect to 45,954 TRSUs payable in shares of
                  Common Stock (the “January 2018 TRSU Agreement”);

            

    

    
      	
              (4)

            	
              Restricted Share Unit Agreement, dated January 11, 2019, with respect to 71,429 TRSUs payable in shares of
                  Common Stock (the “January 2019 TRSU Agreement”); and

            

    

    
      	
              (5)

            	
              Restricted Share Unit Agreement, dated January 11, 2019, with respect to 89,286 PRSUs payable in shares of
                  Common Stock (the “January 2019 PRSU Agreement”).

            

    

    WHEREAS, each of the RSU Agreements are subject to, among other things, Grantee’s continued
        employment with the Company;

    WHEREAS, each of the PRSUs awarded pursuant to the RSU Agreements are subject to a Period of
        Performance (as defined in such RSU Agreements) and following the Period of Performance any unvested PRSUs are forfeited;

    WHEREAS, contemporaneously herewith, the Company and Grantee have entered into that certain
        Separation Agreement, dated as of the Effective Date (the “Separation Agreement”), pursuant to which the Company and Grantee have mutually agreed
        that, among other things, Grantee’s employment with the Company shall terminate as of the Effective Date;

     

      

    
      
        

    

    
    WHEREAS, in connection with the Grantee’s termination of employment with the Company, the
        Compensation Committee of the Board of Directors, in consultation with the Board of Directors of the Company, has determined that it is advisable and in the best interests of the Company and its stockholders to amend the RSU Agreements to, among
        other things, accelerate the vesting of Grantee’s remaining TRSUs and extend to September 30, 2020 the period of time during which the Company can satisfy the performance criteria for any unvested PRSUs (after which time any unvested PRSUs shall
        expire and be forfeited).

    NOW, THEREFORE, in consideration of the premises, the mutual promises, covenants, and conditions
        herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

    The last paragraph of Exhibit 1 to each of the January 2018 TRSU Agreement and January 2019 TRSU Agreement is hereby
        deleted and replaced in its entirety by the following:

    Notwithstanding the foregoing, to the extent not already vested or previously
        forfeited, the RSUs will become 100% vested as of September 30, 2019 and immediately prior to the termination of Grantee’s employment with the Company.

    Section 2 of each of the August 2016 PRSU Agreement, the August 2016 Cash Agreement and the January
        2019 PRSU Agreement is hereby deleted and replaced in its entirety by the following:

    For the purposes of this Agreement, the term “Performance Period” shall be the period commencing on the Grant Date and ending on September 30, 2020.

    

    

    The “Performance

          Period” described on Exhibit 1 to each of the August 2016 PRSU Agreement and the August 2016 Cash Agreement is hereby deleted and replaced in its entirety by the following:

    Performance Period

    The Performance Period shall be the period commencing on the Grant Date and
        ending on September 30, 2020.

    Section 5 of each of the August 2016 PRSU Agreement, the August 2016 Cash Agreement and the January 2019 PRSU Agreement is hereby deleted and replaced in its entirety by the following:

    5. Termination

            of Employment. Notwithstanding the Grantee’s actual termination of employment effective as of September 30, 2019, and solely for purposes of the vesting of the Grantee’s RSUs, the Grantee’s employment with the Company is to be
        treated as continuous from the Grant Date until September 30, 2020.

     

      

    
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    Section 6 of each of the August 2016 PRSU Agreement and the August 2016 Cash Agreement is hereby deleted and replaced in
        its entirety by the following:

    6. Effect

            of a Change in Control. If there is a Change in Control (as defined in the Employment Agreement), this Section 6 shall determine the vesting of any unvested RSUs. If a Change of Control occurs prior to the expiration of the
        Performance Period, (a) if the VWAP of the Common Stock is greater than $2.50 for the ten trading day period ending on the trading day immediately prior to the effective date of the Change in Control, 50% of the unvested RSUs shall vest on the
        effective date of the Change in Control; or (b) if the VWAP of the Common Stock is less than or equal to $2.50 for the ten trading day period ending on the trading date immediately prior to the effective date of the Change in Control, none of the
        unvested RSUs shall vest.

    Section 6 of the January 2019 PRSU Agreement is hereby deleted and replaced in its entirety by the following:

    6. Effect

            of a Change in Control. If there is a Change in Control (as defined in the Employment Agreement), this Section 6 shall determine the vesting of any unvested RSUs. If a Change of Control occurs prior to the expiration of the
        Performance Period, the RSUs awarded pursuant to this Agreement shall vest as follows:

    
      	
              ·

            	
              [35,715 * ((LTM revenue run rate, including the full LTM of any acquisition (with adjustment for anticipated
                  synergies or reverse synergies to the extent they exist) as of the date on which the Change of Control occurs) / $250 million] RSUs shall vest; and

            

    

    
      	
              ·

            	
              [35,715 * ((LTM Adjusted EBITDA run rate, including the full LTM of any acquisition (with adjustment for
                  anticipated synergies or reverse synergies to the extent they exist) as of the date on which the Change of Control occurs / $25 million] RSUs shall vest.

            

    

    In each case as determined by the Compensation Committee of the Company. In no
        event shall the number of RSUs that vest in each case exceed 35,715 RSUs.

    Any reference to the effect of a Change in Control in Exhibit 1 to the January 2019 PRSU Agreement is hereby deleted.

    All other terms and conditions of the RSU Agreements shall remain in full force and effect.

    [Remainder of the Page Intentionally Blank]

    

    

    
      3

      
        

    

    

    

    IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the Effective Date.

    

      	
              GSE SYSTEMS, INC.

               

            	 	
              GRANTEE

               

            
	
              By:

            	
              /s/ Emmett Pepe

            	 	
              /s/ Christopher D. Sorrells

            
	 	
              Emmett Pepe, Chief Financial Officer

            	 	
              Christopher D. Sorrells

            
	 	 	 	 	 

    

     

      

    	

          	

          

    

  

  4EX-4.1

 Exhibit 4.1 

 

			
	5.625% Series C Cumulative Redeemable	  	5.625% Series C Cumulative Redeemable
	Preferred Stock, $0.01 Par Value per share	  	Preferred Stock, $0.01 Par Value per share

  

			
	Number	  	Shares
	PR C-1	  	

  

			
	INCORPORATED UNDER THE LAWS	  	CUSIP 76169C 407
	OF THE STATE OF MARYLAND	  	SEE REVERSE FOR IMPORTANT NOTICE ON
		  	TRANSFER RESTRICTIONS AND
		  	OTHER INFORMATION

 **SPECIMEN** 

IS THE OWNER OF 
 FULLY PAID AND
NONASSESSABLE SHARES OF 5.625% SERIES C CUMULATIVE REDEEMABLE PREFERRED STOCK, $0.01 PAR VALUE PER SHARE OF 
 REXFORD INDUSTRIAL REALTY,
INC. 
 (the “Corporation”) transferable on the books of the Corporation by the holder hereof in person or by its duly authorized attorney upon
the surrender of this certificate properly endorsed. This certificate and the shares represented hereby are issued and shall be held subject to all of the provisions of the charter of the Corporation (the “Charter”) and the Bylaws of the
Corporation and any amendments thereto. This certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar. 

WITNESS the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers. 

[SEAL] Dated: 
  

							
		 	Secretary	 		  	Co-Chief Executive Officer

  

			
	 COUNTERSIGNED AND REGISTERED:

AMERICAN STOCK TRANSFER & TRUST COMPANY

TRANSFER AGENT AND REGISTRAR,
  

	 BY
                                         
                                         
                                       
	  	
	AUTHORIZED SIGNATURE	  	

 REXFORD INDUSTRIAL REALTY, INC. 

IMPORTANT NOTICE 
 CLASSES
OF STOCK 
 THE CORPORATION WILL FURNISH TO ANY STOCKHOLDER, ON REQUEST AND WITHOUT CHARGE, A FULL STATEMENT OF THE INFORMATION REQUIRED BY SECTION 2-211(B) OF THE CORPORATIONS AND ASSOCIATIONS ARTICLE OF THE ANNOTATED CODE OF MARYLAND WITH RESPECT TO THE DESIGNATIONS AND ANY PREFERENCES, CONVERSION AND OTHER RIGHTS, VOTING POWERS, RESTRICTIONS, LIMITATIONS AS
TO DIVIDENDS AND OTHER DISTRIBUTIONS, QUALIFICATIONS, AND TERMS AND CONDITIONS OF REDEMPTION OF THE STOCK OF EACH CLASS WHICH THE CORPORATION HAS AUTHORITY TO ISSUE AND, IF THE CORPORATION IS AUTHORIZED TO ISSUE ANY PREFERRED OR SPECIAL CLASS IN
SERIES, (I) THE DIFFERENCES IN THE RELATIVE RIGHTS AND PREFERENCES BETWEEN THE SHARES OF EACH SERIES TO THE EXTENT SET, AND (II) THE AUTHORITY OF THE BOARD OF DIRECTORS TO SET SUCH RIGHTS AND PREFERENCES OF SUBSEQUENT SERIES. THE FOREGOING
SUMMARY DOES NOT PURPORT TO BE COMPLETE AND IS SUBJECT TO AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE CHARTER, A COPY OF WHICH WILL BE SENT WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS. SUCH REQUEST MUST BE MADE TO THE SECRETARY OF THE
CORPORATION AT ITS PRINCIPAL OFFICE. 
 RESTRICTION ON OWNERSHIP AND TRANSFER 

The shares represented by this certificate are subject to restrictions on Beneficial and Constructive Ownership and Transfer for the purpose of the
Corporation’s maintenance of its status as a Real Estate Investment Trust under the Internal Revenue Code of 1986, as amended (the “Code”). Subject to certain further restrictions and except as expressly provided in the
Corporation’s Charter, (i) no Person may Beneficially or Constructively Own shares of the Corporation’s Series C Preferred Stock in excess of the Series C Ownership Limit unless such Person is a Series C Excepted Holder (in which case
the Series C Excepted Holder Limit shall be applicable); (ii) no Person may Beneficially or Constructively Own shares of Series C Preferred Stock of the Corporation in excess of the Aggregate Stock Ownership Limit, unless such Person is a Series C
Excepted Holder or an Excepted Holder (in which case the Series C Excepted Holder Limit or Excepted Holder Limit shall be applicable); (iii) no Person may Beneficially or Constructively Own Series C Preferred Stock that could result in the
Corporation being “closely held” under Section 856(h) of the Code or otherwise cause the Corporation to fail to qualify as a REIT; and (iv) no Person may Transfer shares of Series C Preferred Stock if such Transfer would result
in the Capital Stock of the Corporation being owned by fewer than 100 Persons. Any Person who Beneficially or Constructively Owns or attempts to Beneficially or Constructively Own shares of Series C Preferred Stock which causes or may cause a Person
to Beneficially or Constructively Own shares of Series C Preferred Stock in excess or in violation of the above limitations must immediately notify the Corporation or, in the case of such a proposed or attempted transaction, give at least 15 days
prior written notice. If any of the restrictions on transfer or ownership set forth in (i) through (iii) above are violated, the shares of Series C Preferred Stock represented hereby will be automatically transferred to a Trustee of a
Trust for the benefit of one or more Charitable Beneficiaries. In addition, the Corporation may take other actions, including redeeming shares upon the terms and conditions specified by the Board of Directors in its sole and absolute discretion if
the Board of Directors determines that ownership or a Transfer or other event may violate the restrictions described above. Furthermore, upon the occurrence of certain events, attempted Transfers in violation of the restrictions described above may
be void ab initio. All capitalized terms in this legend have the meanings defined in the Charter of the Corporation, as the same may be amended from time to time, a copy of which, including the restrictions on transfer and ownership, will be
furnished to each holder of Series C Preferred Stock of the Corporation on request and without charge. Requests for such a copy may be directed to the Secretary of the Corporation at its Principal Office. Instead of the foregoing legend, a
certificate may state that the Corporation will furnish a full statement about certain restrictions on ownership and transfer of the shares to a stockholder on request and without charge. 

 
  

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according
to applicable laws or regulations: 
  

					
	 TEN COM-
  

TEN ENT-
  

JT TEN-
	  	 as tenants in common
  

as tenants by the entireties
  

as joint tenants with right

of survivorship and not as
 tenants in
common
	  	
UNIF GIFT MIN ACT-              
       
                                    Custodian
                    

                          
                  (Cust)                      
                                         
 (Minor)
  
 under Uniform Gifts to Minors Act
                            

                          
                                      (State)

UNIF TRF MIN ACT-              
       
                                    Custodian (until age
        )

                          
              (Cust)
  

                          
       under Uniform Transfers to Minors Act
                                

            (Minor)             
                                         
                              (State)

 Additional abbreviations may also be used though not in the above list. 

For Value received,
                                         
        hereby sell, assign and transfer unto 
  

 
 PLEASE INSERT SOCIAL SECURITY OR 

OTHER IDENTIFYING NUMBER OF ASSIGNEE

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