DSS, INC. — Director's Dealing 2006

Dec 27, 2006

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: DOCUMENT SECURITY SYSTEMS INC (DMC)
CIK: 0000771999
Period of Report: 2006-12-20

Reporting Person: Ettinger Peter (President)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2006-12-20	Common Stock	A	310000	$10.19	Acquired	360000	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2006-12-20	Employee Stock Option (right to buy)	$10.19	A	40000	Acquired	2011-12-19	Common Stock (40000)	Direct

Footnotes

F1: Consists of shares of restricted Common Stock issued pursuant to the Company's Employee Stock Option Plan, which vest as follows: 250,000 shares that vest only upon a Change of Control of the Issuer and 60,000 shares that vest only upon the attainment of certain performance goals as indicated in Mr. Ettinger's employment agreement with the Issuer.

F2: Consists of shares of restricted Common Stock issued pursuant to the Company's Employee Stock Option Plan, which vest as follows: 250,000 shares that vest only upon a Change of Control of the Issuer; 60,000 shares that vest only upon the attainment of certain performance goals as indicated in Mr. Ettinger's employment agreement with the Issuer; 16,667 shares that vest on June 12, 2007; 16,667 shares that vest on June 12, 2008, and 16,666 shares that vest on June 12, 2009.

F3: The option vests 50% immediately and 50% on December 20, 2007.