a.

Base Salary.  The Company shall pay to Executive an annual base salary (the “Base Salary”) of Two Hundred Five Thousand Dollars ($205,000).  The Executive’s Base Salary shall be reviewed at least annually with the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”), and the Compensation Committee may, but shall not be required to, increase the Base Salary during the Term based upon changes in cost of living, the Executive’s performance and other factors deemed relevant by the Compensation Committee.  The Base Salary will be payable at such intervals as salaries are paid generally to other executive officers of the Company.

b.

Bonus.

c.

Restricted Stock Units.  Each fiscal year the Executive will have the potential to earn 25% of his Base Salary in restricted stock units (“RSUs”) vesting in approximately equal quarterly amounts over eight calendar quarters and subject to all other terms and conditions set forth in the Company’s 1995 Long Term Incentive Plan.  The Executive also will be eligible to receive additional grants of performance-vesting RSUs that, if granted, may vest based upon metrics such as performance against budget, profitability and stock price performance, as determined by Compensation Committee and approved by the Board of Directors.  All such grants shall be made via a written grant agreement issued to Executive in connection with the grant of such RSUs.

d.

Benefits.  Executive shall be entitled to participate in all employee benefit plans maintained by the Company for its senior executives or employees including, without limitation, the Company’s medical, dental, vision, 401(k), and life insurance plans and the following benefits:

i.

Vacation.  Executive shall be entitled to vacation in accordance with the Company’s policy for its senior executives.

ii.

Medical/Dental/Vision Insurance.  The Company shall pay Executive’s monthly Medical, Dental, and Vision Insurance premiums in association with Company provided health insurance plans.

iii.

Other Benefits.  Executive shall be eligible to participate in all benefit plans (including 401(k) and life insurance plans) sponsored or maintained by the Company for its executive officers, to the extent permitted under applicable law and subject to the terms of each plan.  Nothing in this Agreement obligates the Company to adopt, maintain, or refrain from amending, freezing, or terminating any benefit plan, regardless of whether such action affects Executive or executive officers as a group.

a.

Acknowledgements.  The Executive acknowledges and agrees that the services to be rendered by the Executive to the Company are of a special and unique character; that the Executive will obtain knowledge and skill relevant to the Company’s industry, methods of doing business and marketing and investment strategies by virtue of the Executive’s employment; and that the restrictive covenants and other terms and conditions of this Agreement are reasonable and reasonably necessary to protect the legitimate business interest of the Company.  The Executive further acknowledges that:  the amount of the Executive’s compensation reflects, in part, the Executive’s obligations and the Company’s rights under this Agreement; that the Executive has no expectation of any additional compensation, royalties or other payment of any kind not otherwise referenced herein in connection herewith; and that the Executive will not be subject to undue hardship by reason of his full compliance with the terms and conditions of this Agreement or the Company’s enforcement thereof.

b.

Non-Competition.  Because of the Company’s legitimate business interest as described herein and the good and valuable consideration offered to the Executive, during the Term and for the 12-month period beginning on the last day of the Executive’s employment with the Company, the Executive agrees and covenants not to engage in Prohibited Activity within the United States.  For purposes of this Section 6, “Prohibited Activity” means any activity to which the Executive contributes his knowledge, directly or indirectly, in whole or in part, as an employee, employer, owner, operator, manager, advisor, consultant, agent, employee, partner, director, stockholder, officer, volunteer, intern or any other similar capacity to an entity engaged in the same or similar business as the Company anywhere in the world.  Nothing herein shall prohibit the Executive from purchasing or owning less than five percent (5%) of the publicly traded securities of any corporation, provided that such ownership represents a passive investment and that the Executive is not a controlling person of, or a member of a group that controls, such corporation.

c.

Non-solicitation of Employees.  The Executive agrees and covenants not to directly or indirectly solicit, hire, recruit, attempt to hire or recruit, or induce the termination of employment of any employee of the Company during the Term and the 12-month period beginning on the last day of the Executive’s employment with the Company.

d.

Non-solicitation of Customers.  The Executive understands and acknowledges that because of the Executive’s experience with and relationship to the Company, he will have access to and learn about much or all of the Company’s customer information.  “Customer Information” includes, but is not limited to, names, phone numbers, addresses, e-mail addresses, order history, order preferences, chain of command, pricing information and other information identifying facts and circumstances specific to the customer.  The Executive understands and acknowledges that loss of this customer relationship and/or goodwill will cause significant and irreparable harm to the Company.  The Executive agrees and covenants, during the Term and for the 12-month period following the effective date of termination of this Agreement for any reason, not to directly or indirectly solicit, contact (including but not limited to e-mail, regular mail, express mail, telephone, fax, and instant message), attempt to contact or meet with the Company’s current customers for purposes of offering or accepting goods or services similar to or competitive with those offered by the Company or for purposes of inducing any such customer to terminate its relationship with the Company.

e.

Confidential Information.  All Confidential Information which Executive may now possess, may obtain during the Term, or may create prior to the end of the Term relating to the business of the Company or of any of its customers or suppliers shall not be published, disclosed, or made accessible by him to any other person, firm, or corporation either during or after the termination of his employment or used by him except during the Term in the business and for the benefit of the Company, in each case without prior written permission of the Company.  Executive shall return all tangible evidence of any Confidential Information to the Company prior to or at the termination of his employment.  For purposes of this Agreement, “Confidential Information” means any and all information related to the Company or any of its subsidiaries that is not generally known by others with whom they compete or do business.

f.

Enforcement.  Executive acknowledges and agrees that the covenants contained herein are fair and reasonable in light of the consideration paid hereunder, and that damages alone shall not be an adequate remedy for any breach by Executive of his covenants which then apply and accordingly expressly agrees that, in addition to any other remedies which the Company may have, the Company shall be entitled to injunctive relief in any court of competent jurisdiction for any breach or threatened breach of any such covenants by Executive.  Nothing contained herein shall prevent or delay the Company from seeking, in any court of competent jurisdiction, specific performance or other equitable remedies in the event of any breach or intended breach by Executive of any of his obligations hereunder.

g.

Tolling.  The period of time applicable to any covenant in this Section 6 will be extended by the duration of any violation by Executive of such covenant.

h.

Reformation.  If any covenant in this Section 6 is held to be unreasonable, arbitrary, or against public policy, such covenant will be considered to be divisible with respect to scope, time, and geographic area, and such lesser scope, time, or geographic area, or all of them, as a court of competent jurisdiction may determine to be reasonable, not arbitrary, and not against public policy, will be effective, binding, and enforceable against Executive.

a.

Death.  Executive’s employment hereunder shall terminate upon his death.

b.

Disability.  If, as a result of Executive’s incapacity due to physical or mental illness, Executive shall have been unable to perform his duties hereunder on a full-time basis for a period of three consecutive months, or for 180 days in any 12-month period, with or without reasonable accommodation (a “Disability”), the Company may, on 30 days written Notice of Termination (defined in Section 8(e)), terminate Executive’s employment if Executive fails to return to the performance of his duties hereunder on a full-time basis within said period.

c.

Cause.  The Company may terminate Executive’s employment hereunder for Cause.  For purposes of this Agreement, the Company shall have “Cause” to terminate Executive’s employment upon the occurrence of any of the following:

i.

the willful and continued failure by Executive to substantially perform his material duties or obligations hereunder (other than any such failure resulting from Executive’s incapacity due to physical or mental illness), after written demand for substantial performance is delivered by the Company that specifically identifies the manner in which the Company believes Executive has not substantially performed his duties or obligations, and provides the Executive with at least 30 days to effect a cure;

ii.

the willful engaging by Executive in misconduct which, in the reasonable opinion of the Board, will have a material adverse effect on the reputation, operations, prospects or business relations of the Company;

iii.

the conviction of Executive of any felony or the entry by Executive of any plea of nolo contendere in response to an indictment for a crime involving moral turpitude;

iv.

Executive abuses alcohol, illegal drugs or other controlled substances which impact Executive’s performance of his duties;

v.

the material breach by Executive of a material term or condition of this Agreement.

d.

Termination Without Cause.  The Executive’s employment hereunder may be terminated without cause by either the Company or the Executive at any time upon at least 60 days’ prior written notice.  The giving by the Company of notice of its intent not to extend the Term pursuant to Section 3 shall be deemed, at the option of the Executive, to be a termination of his employment without cause (“Deemed Termination”).  Executive may exercise that option by giving written notice thereof to the Company within 30 days of his receipt of the notice of non-renewal.

e.

Notice of Termination.  Any termination of Executive’s employment (other than termination pursuant to Section 8(a)) shall be communicated by a Notice of Termination given by the terminating party to the other party hereto.  For purposes of this Agreement, a “Notice of Termination” shall mean a written notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated.

f.

Date of Termination.  “Date of Termination” shall mean (i) if Executive’s employment is terminated by his death, the date of his death, (ii) if Executive’s employment is terminated pursuant to Section 8(b), 30 days after Notice of Termination is given (provided that Executive shall not have returned to the performance of his duties on a full-time basis during such 30-day period), (iii) if a Deemed Termination occurs, upon the date of Executive’s notice to the Company of exercise of his option to treat such event as a termination without Cause, and (iv) if Executive’s employment is terminated for any other reason, the date specified in the Notice of Termination, which shall not be earlier than the date on which the Notice of Termination is given.

a.

Disability.  During any period that Executive fails to perform his duties hereunder as a result of Disability (“disability period”), Executive shall continue to receive his full salary at the rate then in effect for such period until his employment is terminated pursuant to Section 8(b), provided that payments so made to Executive during the disability period shall be reduced by the sum of the amounts, if any, payable to Executive at or prior to the time of any such payment under disability benefit plans of the Company and which were not previously applied to reduce any such payment, and the Company shall have no further obligation to the Executive.

b.

For Cause.  If Executive’s employment is terminated for Cause, the Company shall pay Executive his full salary through the Date of Termination at the rate in effect at the time Notice of Termination is given, and the Company shall have no further obligation to the Executive.

c.

Any other Reason.  If Executive’s employment shall be terminated by the Company for a reason other than Death, Disability or Cause, or if Executive terminates his employment for Good Reason (defined below), upon Executive’s execution of a release of claims in favor of the Company, its affiliates and their respective officers and directors in a form provided by the Company (the “Release”) and such Release becoming effective:

i.

the Company will continue to pay the Executive his Base Salary for a period of 12 months, payable at such intervals as salaries are paid generally to other executive officers of the Company;

ii.

the Executive shall continue to be eligible to participate in all medical, dental, and vision insurance benefits (collectively, “Benefits”), on the same terms and at the same level of participation and company contribution to the cost thereof, as in effect at the time of termination of employment for a period of six months following termination to the extent Executive remains eligible under the applicable employee benefit plans and to the extent Executive’s eligibility is not contrary to, or does not negate, the tax favored status of the plans or of the benefits payable under the plan.  If Executive is unable to continue to participate in any employee benefit plan or program provided for under this Agreement, Executive shall be compensated in respect of such inability to participate through payment by GSE to Executive, in advance, of an amount equal to the annual cost that would have been incurred by GSE if the Executive were able to participate in such plan or program.

iii.

Executive shall receive a prorated Bonus equal to the product of (I) the Bonus, if any, that the 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 on the Company’s actual results of operations for such year and (II) a fraction, the numerator of which is the number of days the Executive was employed by the Company during the year of termination and the denominator of which is the number of days in such year.  The prorated Bonus shall be paid on the date that annual bonuses are paid to similarly situated employees, but in no event later than the date which not later than two and one-half (2½) months following the end of the calendar year in which the Date of Termination occurs.

d.

“Good Reason” shall mean the occurrence of any of the following:  (a) Executive’s duties, responsibilities or authority are materially reduced as compared to those of Executive’s current position without his consent; (b) Executive’s Base Salary (as the same may be increased at any time hereafter) or Bonus are reduced; (c) Executive’s Benefits are either discontinued or materially reduced, in the aggregate; (d) Executive’s primary office or location is moved more than fifty (50) miles from Executive’s current office or location; or (e) either the Company or any successor company materially breaches this Agreement.

a.

If Executive terminates his employment for Good Reason within one year following the effective date of a Change of Control, Executive shall, in lieu of any benefits provided for in Section 9, continue to receive the Base Salary and Benefits that Executive is receiving as of the effective date of the Change of Control for a period of twelve (12) months from the date of termination of his employment.  Such Base Salary and Benefits shall be paid at such intervals as salaries are paid generally to other executive officers of the Company.

b.

In addition, if the Executive terminates his employment for Good Reason or the Company terminates his employment for any reason other than Cause, in each case within one year following the effective date of a Change of Control, in lieu of the payment described in Section 9(c)(iii), the Executive shall also be entitled to receive, on the Date of Termination, an amount, payable in one lump sum, equal to the greater of (i) the actual amount of bonus earned by the Executive as of such date or (ii) the target amount of bonus for the period during which the employment of the Executive terminates.

c.

In the event of Executive’s decision to terminate employment for Good Reason, Executive must give notice to Company of the existence of the conditions giving rising to the termination for Good Reason within ninety (90) days of the initial existence of the conditions.  Upon such notice, Company shall have a period of thirty (30) days during which it may remedy the conditions (“Cure Period”).  If the Company fails to cure the conditions constituting the Good Reason during the Cure Period to Executive’s reasonable satisfaction, Executive’s termination of employment must occur within a period of ninety (90) days following the expiration of the Cure Period in order for the termination to constitute a termination pursuant to Good Reason for purposes of this Agreement.

d.

For purposes of this Agreement, a “Change in Control” of the Company shall be deemed to have occurred as of the first day that any one or more of the following conditions shall have been satisfied:

i.

Any Person (other than a Person in control of the Company as of the date of this Agreement, or other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company, or a company owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of voting securities of the Company) becomes the beneficial owner, directly or indirectly, of securities of the Company representing a majority of the combined voting power of the Company’s then outstanding securities; or

ii.

The stockholders of the Company approve:  (x) a plan of complete liquidation of the Company (which includes a termination and liquidation of all Executive’s rights under any arrangement governed by Section 409A of the Internal Revenue Code of 1986, as amended (“Code”); or (y) an agreement for the sale or disposition of all or substantially all the Company’s assets; or (z) a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least a majority of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization.

iii.

For purposes of this definition of Change in Control, “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and used in Section 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof, and “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and regulations under the 1934 Act.

1.

Entire Agreement. This Agreement embodies the entire agreement and understanding between the Company and Executive pertaining to the subject matter hereof, and 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 and shall not be altered, amended or terminated by this Agreement and 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 and shall continue to be governed by the terms of those plan documents 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 May 31, 2024 or such date as agreed by the Parties] (“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 on or before the next regularly scheduled payday following the Separation Date. At that time, per Company policy, Executive shall also be paid for up to eighty (80) hours of accrued but unused paid time off.

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 from his positions as a director of GSE Systems and its subsidiaries. Executive hereby confirms that his resignation is not a result of any disagreement on any matter relating to the Company’s operations, policies or practices.

4.

Cooperation. Executive agrees to cooperate in the transition of his responsibilities and to make himself reasonably available to respond to and cooperate with requests for information from the Company and to fully cooperate with the Company on all matters relating to Executive’s employment and the conduct of the Company’s business, including but not limited to any litigation or other matter in which the Company deems that Executive’s cooperation is needed.

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, dental, and vision benefits pursuant to COBRA, GSE Systems shall pay 100% of the total cost to continue such coverage, including the two percent (2%) COBRA administrative premium, until December 31, 2024. All payments pursuant to this paragraph will be paid directly to the COBRA benefit provider. 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). Any conversion or continuation rights for other insurance or benefits plans will be governed by the terms of those plans.

6.

RESERVED

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 Agreement attached hereto as Exhibit A (the “RSU Amendment”). As set forth in greater detail in the RSU Amendment, (a) certain RSUs awarded to Executive pursuant to the LTIP exceeded the shares available under the LTIP; (b) the Company intends to pursue stockholder approval or ratification of such over-issuance at the 2024 annual meeting of stockholders; and (c) if the stockholders shall fail to approve the over-issuance, the Company shall repurchase the shares comprising and constituting the over-issuance at fair market value as of the date of the annual meeting. If necessary, such repurchase will occur within thirty (30) days of the annual meeting. 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 five (5) 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 and Executive returns all property belonging to the Company in accordance with Paragraph 11.

10.

Standstill. Executive agrees that, from the date of this Agreement until December 31, 2024, 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 the Company, or beneficial ownership thereof, or any Securities convertible or exchangeable into or exercisable for any Securities of the Company, or beneficial ownership thereof (other than (i) Securities issued pursuant to a stock split, stock dividend or similar corporate action initiated by the Company with respect to any Securities beneficially owned by Executive on the date of this Agreement; (ii) open market purchases made solely for investment purposes and pursuant to applicable securities laws and regulations (including those pertaining to the use of material non-public information), provided that such purchases do not cause the Executive and his Affiliates to beneficially own more than 4.9% of the Company’s issued and outstanding common stock; 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) 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, (c) 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, (d) 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, (e) disclose any intention, plan or arrangement inconsistent with the foregoing or (f) 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. For the avoidance of doubt, nothing in this Paragraph 10 shall require the Executive to sell any securities of the Company held or beneficially owned by the Executive as of the Separation Date.

11.

Return of Property. By signing below, Executive confirms that within five days after the Separation Date Executive will return all property belonging to GSE Systems, 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 laws relating to employment and employment discrimination, termination rights, compensation or benefits, such as, but not limited to, Title VII of the Civil Rights Act of 1964, the Family and Medical Leave Act (“FMLA”), the Americans with Disabilities Act (“ADA”), the Civil Rights Act of 1866, or the National Labor Relations Act, the Employee Retirement Income Security Act of 1974, (“ERISA”), the Internal Revenue Code, the Fair Credit Reporting Act (“FCRA”), the Uniformed Services Employment and Reemployment Rights Act (“USERRA”), including any amendments and their respective implementing regulations, and all other claims arising under the law of any state or locality, including but not limited to the laws of the State of Maryland; 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: (1) the rights and obligations contained in or provided for under this Agreement; (2) any right or entitlement that Executive is not allowed by applicable law to waive or release; (3) 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); (4) any rights to vested benefits Executive may have under the Company's benefit plans or to any entitlement to continued insurance coverage under COBRA; and (5) 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.

13.

Covenant Not to Sue. Executive further agrees that he will not commence any action or proceeding against any of the Released Parties in any court 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, except that this provision does not limit Executive’s ability to recover monies in any proceedings by or before the Securities and Exchange Commission.

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 (other than as expressly agreed in this Agreement); (c) has received all leave to which he was entitled under the FMLA; (d) is not currently aware of any facts or circumstances constituting a violation of the FMLA or the Fair Labor Standards Act; and (e) has not engaged in and is not aware of any unlawful conduct relating to the business of the Company.

16.

Non-Disparagement. The Parties agrees that each 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 Parties. Notwithstanding the foregoing, this paragraph does not, in any way, restrict or impede Executive from exercising protected rights, including rights under applicable law, including the federal securities laws, such as 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.

17.

Confidential Information. Notwithstanding his employment termination, Executive acknowledges that he has a continuing duty to preserve and protect the confidentiality of the Company’s Confidential Information. "Confidential Information" as defined in the Employment Agreement, includes information that is of value to, and has been obtained or developed by the Company for use in its business, including but not limited to such information that was provided to it by customers or consultants or developed by Executive or others in working for the Company. It includes any type of such information, whether in hard copy or electronic format or communicated orally, that Executive acquired or developed through employment with GSE Systems and that GSE Systems designates or treats as confidential through its policies, procedures and/or practices. Examples of Confidential Information include without limitation the following non-public information:

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 and its Exhibit(s) have 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 or AAA, pursuant to JAMS’s Streamlined Arbitration Rules and Procedures or the equivalent AAA procedures, and initiated in Columbia, Maryland. 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 17 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.

22.

No Admission. Nothing in this Agreement shall be considered an admission of any breach, wrongdoing, negligence, retaliation or discrimination on the part of either Party.

23.

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.

24.

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. This Agreement shall be binding upon Executive, Executive’s heirs, and personal representatives. This Agreement may not be assigned by Executive. This Agreement shall inure to the benefit of and shall be binding on the Company, as well as its present and future affiliates, parents, subsidiaries, successors, and assigns.

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.

26.

Expenses; Attorney’s Fees. Each Party hereto shall bear all of their own expenses and attorneys’ fees and costs in connection with this Agreement. If any action, of any kind, is necessary to enforce or interpret the terms of this Agreement, the prevailing Party shall be entitled to an award of its reasonable attorneys’ fees and costs, at all levels, including appeals.

27.

Effective Date. This Agreement shall become binding on the date it is signed by both the Parties.

28.

Counterparts. This Agreement may be executed electronically in two or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same legally recognized instrument.

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Mr. Ravi Khanna has been named President and CEO of the Company and appointed as a Class II Director of the Board of Directors, effective immediately. Mr. Khanna has been with GSE since 2016 as its Senior Vice President of Professional Services. With a 20+ year track record of leading teams delivering complex technical services projects and software technology solutions, his experience in the Defense, Satellite Telecommunications, Management Consulting, and Nuclear Sectors make him an ideal fit for the role.

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Mr. Kyle Loudermilk has submitted a letter of resignation to the Board of Directors and will remain with the company through May 31, 2024 to assist in a seamless transition.