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<SEC-DOCUMENT>0001125282-06-000043.txt : 20060104
<SEC-HEADER>0001125282-06-000043.hdr.sgml : 20060104
<ACCEPTANCE-DATETIME>20060104172334
ACCESSION NUMBER:		0001125282-06-000043
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20051228
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20060104
DATE AS OF CHANGE:		20060104

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DOCUMENT SECURITY SYSTEMS INC
		CENTRAL INDEX KEY:			0000771999
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
		IRS NUMBER:				161229730
		STATE OF INCORPORATION:			NY
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-32146
		FILM NUMBER:		06509122

	BUSINESS ADDRESS:	
		STREET 1:		36 WEST MAIN ST
		STREET 2:		SUITE 710
		CITY:			ROCHESTER
		STATE:			NY
		ZIP:			14614
		BUSINESS PHONE:		585 232 1500

	MAIL ADDRESS:	
		STREET 1:		36 W MAIN ST
		STREET 2:		SUITE 710
		CITY:			ROCHESTER
		STATE:			NY
		ZIP:			14614

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NEW SKY COMMUNICATIONS INC
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	THOROUGHBREDS USA INC
		DATE OF NAME CHANGE:	19861118
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>b410957_8k.htm
<DESCRIPTION>CURRENT REPORT
<TEXT>
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Prepared and filed by St Ives Financial
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<p align="center"><b><font face="serif" size="5">UNITED STATES<br>
SECURITIES AND EXCHANGE COMMISSION </font></b><br>
<font size="3" face="serif"><b>Washington, D.C. 20549 </b></font></p>
<hr size="1" width="133" noshade>
<p align="center"><b><font face="serif" size="5">FORM 8-K </font></b></p>
<p align="center"><b><font face="serif" size="5">CURRENT REPORT </font></b></p>
<p align="center"><font size="2" face="serif"><b>Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 </b></font></p>
<p align="center"><font size="2" face="serif">Date of Report (Date of earliest event reported): <b>December 28, 2005 </b></font></p>
<p align="center"><b><font face="serif" size="6">DOCUMENT SECURITY SYSTEMS, INC. </font></b><br>
<b><font face="serif" size="1">(Exact name of registrant as specified in its charter) </font></b></p>
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<td><font size="2" face="serif"><b>New York</b></font></td>
<td><font size="2" face="serif"><b>0-14621</b></font></td>
<td><font size="2" face="serif"><b>16-1229730</b></font></td>
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<td width="35%"><font size="2" face="serif"><b><font face="serif" size="1">(State or other jurisdiction of incorporation)</font></b></font></td>
<td><font size="2" face="serif"><b><font face="serif" size="1">(Commission File Number)</font></b></font></td>
<td width="35%"><font size="2" face="serif"><b><font face="serif" size="1">(IRS Employer Identification No.)</font></b></font></td>
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<br><br>
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<td width="45%"><font size="2" face="serif"><b>First Federal Plaza, Suite 1525<br>
28 East Main Street<br>
Rochester, NY  </b></font></td>
<td></td>
<td width="15%"><font size="2" face="serif"><b>14614</b></font></td>
<td width="15%">&nbsp;</td>
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<td><font size="2" face="serif"><b><font face="serif" size="1">(Address of principal executive offices)</font></b></font></td>
<td></td>
<td><font size="2" face="serif"><b><font face="serif" size="1">(Zip
        Code)</font></b></font></td>
<td>&nbsp;</td>
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<p align="center"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Registrant&#8217;s telephone number, including area code: <b>(585) 325-3610</b></font></p>
<p align="center"><font size="2" face="serif"><b>Not Applicable </b></font><br>
<b><font face="serif" size="1">(Former name or former address, if changed since last report.) </font></b></p>
<p align="left"><font size="2" face="serif">&nbsp;Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): </font></p>  <table width="100%" cellspacing="0" cellpadding="0" border="0">
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<td align="left"><font size="2" face="serif">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </font></td>
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<td align="left"><font size="2" face="serif">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </font></td>
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<td align="left"><font size="2" face="serif">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </font></td>
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<td align="left"><font size="2" face="serif">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </font></td>
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<p align="center"><font face="serif" size="2">&nbsp;</font></p>
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<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p align="left"><font size="2" face="serif"><b>ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT </b></font></p>
<p align="left"><font size="2" face="serif">On December 28, 2005, the Compensation Committee of the Board of Directors of Document Security Systems, Inc. (the &quot;Committee&quot;) approved accelerating the vesting of all unvested options for all employees, including executive officers, but excluding non-employee directors. The Committee took the action in the strong belief that it is in the best interest of shareholders as the primary purpose of the vesting acceleration is to minimize future compensation expense associated with the accelerated options upon the Company's planned adoption of FASB Statement No. 123(R), &quot;Share-Based Payment,&quot; effective for fiscal periods beginning after June 15, 2005.</font></p>
<p align="left"><font size="2" face="serif">Employees and officers will benefit from the accelerated vesting of their stock options in the event they terminate their employment with the Company prior to completion of the original vesting terms as they would have the ability to exercise certain options that would have otherwise been forfeited. Stock-based compensation expense will be recorded in the quarter ended December 31, 2005 based on the intrinsic value of in-the-money options subject to acceleration and our estimate of the extent to which our employees and officers are going to benefit from this modification. The closing market price per share of our common stock on December 28, 2005 was $12.30 and the exercise price of the approximately 116,000 in-the-money options on that date
ranged from $7.14 to $8.38. Based on our expected employee turnover rates, we will record non-cash stock-based compensation expense of approximately $70,000 during the quarter ended December 31, 2005 with respect to these options.  As a result of this acceleration, we expect to avoid charges in respect of stock-based compensation in the aggregate amount of approximately $275,000 (pre-tax) over the next two fiscal years. </font></p>
<p align="left"><font size="2" face="serif">Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment (SFAS 123R), effective January 1, 2006, will require that compensation cost related to share-based payment transactions, including stock options, be recognized in our financial statements. </font></p>
<p align="left"><font size="2" face="serif"><b>Item 9.01    Financial Statements and Exhibits</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.</font></p>
<p align="center"><font face="serif" size="2">2</font></p>
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<p><a href="#contents"><font size="2">Back to Contents</font></a></p>
<p align="center"><font size="2" face="serif"><b>SIGNATURE </b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. </font></p>  <table width="100%" cellspacing="0" cellpadding="0" border="0">
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<td align="left"><font size="1" face="serif">&nbsp;</font></td> </tr>
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<td colspan="3" align="left"><font size="2" face="serif"><b>DOCUMENT SECURITY SYSTEMS, INC.</b></font></td>
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<td align="left" width="58%"><font size="2" face="serif">Dated: January 4, 2006</font></td>
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<td align="left" width="3%"><font size="2" face="serif">By:</font></td>
<td align="left" width="1%"></td>
<td align="center"><font size="2" face="serif">                    /<font face="serif" size="1">S</font>/&nbsp;&nbsp;&nbsp;&nbsp;Patrick A. White</font></td>
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<td align="center"><font size="2" face="serif"><b>Patrick A. White</b></font></td>
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<td align="center"><font size="2" face="serif"><b><i>Chief Executive Officer</i></b></font></td>
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<p align="center"><font face="serif" size="2">3</font></p>
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