Sec Form 4 Filing - Grady Gill R @ GSE SYSTEMS INC - 2012-09-11

FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

OMB APPROVAL OMB Number: 3235-0287 Expires: November 30, 2011 Estimated average burden hours per response... 0.5

1. Name and Address of Reporting Person Grady Gill R 2. Issuer Name and Ticker or Trading Symbol GSE SYSTEMS INC [ GVP] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner X __ Officer (give title below) _____ Other (specify below) Sr. Vice President (Last) (First) (Middle) GSE SYSTEMS, INC., 1332 LONDONTOWN BLVD. 3. Date of Earliest Transaction (MM/DD/YY) 09/11/2012 (Street) SYKESVILLE, MD21784 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (Check Applicable Line) __ X __ Form filed by One Reporting Person _____ Form filed by More than One Reporting Person (City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned 1.Title of Security (Instr. 3) 2. Transaction Date (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 09/11/2012 M 500 A $ 1.61 600 D Common Stock 09/11/2012 S 500 D $ 1.93 100 D Common Stock 09/12/2012 M 239 A $ 1.61 339 D Common Stock 09/12/2012 S 239 D $ 1.93 100 D

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities) 1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) 6. Date Exercisable and Expiration Date (MM/DD/YY) 7. Title and Amount of Underlying Securities (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares Employee Stock Option $ 1.61 09/11/2012 M 500 ( 1 ) 03/14/2013 Common Stock 500 $ 0 32,100 D Employee Stock Option $ 1.61 09/12/2012 M 239 ( 1 ) 03/14/2013 Common Stock 239 $ 0 31,861 D Employee Stock Option $ 3.4 ( 2 ) 10/28/2017 Common Stock 20,000 20,000 D Employee Stock Option $ 5.95 ( 3 ) 10/23/2018 Common Stock 40,000 40,000 D Employee Stock Option $ 1.85 ( 4 ) 11/11/2018 Common Stock 100,000 100,000 D

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other Grady Gill R GSE SYSTEMS, INC. 1332 LONDONTOWN BLVD. SYKESVILLE, MD21784 Sr. Vice President Signatures /s/ Gill R. Grady 09/13/2012 Signature of Reporting Person Date

Explanation of Responses:

( 1 )Exercisable as follows: 22,000 3/14/2007; 16,500 3/14/2008; 16,500 3/14/2009 ( 2 )Exercisable as follows: 8,000 10/28/2011; 6,000 10/28/2012; 6,000 10/28/2013 ( 3 )Exercisable as follows: 5,714 10/23/2009; 5,714 10/23/2010; 5,714 10/23/2011; 5,715 10/23/2012; 5,714 10/23/2013; 5,714 10/23/2014; 5,715 10/23/2015 ( 4 )Exercisable as follows: 20,000 11/11/2012; 20,000 11/11/2013; 20,000 11/11/2014; 20,000 11/11/2015; 20,000 11/11/2016

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).

** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).

Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number.