Exhibit 10.1
 
[cartesian.jpg]

June 3, 2015

Donald E. Klumb
CEO, President, and CFO
Cartesian, Inc.

Dear Mr. Klumb:

This Separation Agreement (the “Agreement”) is entered into by and between you
and Cartesian, Inc. (the “Company”), and confirms the agreement that has been
reached with you in connection with your separation from employment as the
Company's Chief Executive Officer, President, and Chief Financial Officer. In
consideration of the promises and the mutual covenants set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, hereby agree as
follows:

ARTICLE I.  SEPARATION FROM EMPLOYMENT

1.1  Transition.  Your employment with the Company as its Chief Executive
Officer, President, and Chief Financial Officer as well as all positions with
the Company's affiliates as an employee or officer severed effective June 3,
2015 ("Separation Date").

1.2  Payments and Benefits.  In consideration of your execution of this
Agreement and your compliance with its terms and conditions, the Company agrees
to pay or provide to you, subject to the terms and conditions set forth in this
Agreement, with the benefits described in this Section 1.2.  You acknowledge and
agree that the benefits below shall be in full satisfaction of your obligations
and the Company's obligations under the terms of your employment agreement
entered into with the Company on September 16, 2014 and all applicable cash or
equity incentive compensation plans and agreements.

As of the Separation Date, the Company will pay you:

(a)       Salary.  Salary and benefits accrued but unpaid up to the Separation
Date, in accordance with the Company's regular payroll schedule.

(b)       Expenses.  Reasonable business expenses accrued and payable, if any,
in accordance with the Company's rules and procedures.
 
 
 
 
 

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(c)       Separation Payment.  The total gross sum of three hundred fifty
thousand dollars ($350,000.00), less appropriate payroll deductions, payable in
installments as follows: (i) $100,000 payable 10 days after the Separation Date,
(ii) $100,000 payable 30 days after the Separation Date, (iii) $100,000 payable
60 days after the Separation Date, (iv) $50,000 payable 90 days after the
Separation Date, provided you execute and return this Agreement, and have not
revoked this Agreement pursuant to the terms of Section 2.2 of this Agreement.

In addition to the above, the Company will also provide the following benefits:

(d)       Accrued Vacation.  As of the Separation Date, the Company will pay you
the balance of any vacation days accrued but not yet taken as of the Separation
Date in accordance with the Company's vacation cash-out policy, minus
withholdings as required by law.  Payment of this amount is not contingent upon
your signing this Agreement.

(e)       Benefits.  The Company will provide you with separate written
notification of your right to continue coverage under the Company's group
medical, dental, and vision insurance plans under COBRA, 29 U.S.C. §1161 et
seq.  Other than your right to receive the Company’s 401(k) matching benefit,
your right to continued participation in all other of the Company's benefit
plans shall cease on the Separation Date; provided, however, that any accrued
benefit you have under the Company's 401(k) retirement plan shall be paid in
accordance with the terms of such plan.  To the extent permitted by applicable
law and without subjecting the Company to any fines, penalty or excise taxes,
the Company will pay the premium for any COBRA benefits you elect through the
Company for a period of twelve (12) months from the Separation Date.  If a
change in the law prevents the Company from paying your COBRA premiums directly
to the insurer, then the Company will pay the cash value of any remaining COBRA
premium payments to you on an after-tax basis.  Each monthly payment for COBRA
coverage will be paid only so long as you or any of your dependents elect to
continue health care coverage pursuant to COBRA.

(f)        Put Right for Company Stock.  Effective as of the Separation Date,
the Company shall provide you with an irrevocable right and option to sell to
the Company until March 15, 2016 up to 112,692 of your currently-owned shares of
Company common stock ("Shares") at a purchase price of $4.50 per share.  In
connection with each and any exercise of the Put Right, you agree to provide the
Company with at least five (5) business days' notice before an eligible put date
of each and any election to exercise the Put Right and that each and any
election to exercise the Put Right will be for a minimum of 5,000 shares.  Such
notice must provide the number of Shares you elect for the Company to purchase
and the date you elect for the Company to purchase the Shares.  Once elected,
any Put Right for the designated number of Shares shall be irrevocable unless
the Company permits you to amend or revoke any submitted Put Right.  On the
eligible put date(s) specified in the Put Right notice(s) to the Company, the
Company shall pay you in cash or by certified, cashier's or other check
acceptable to you, $4.50 for each Share purchased by the Company pursuant to the
Put Right, less any amount of required tax or payroll withholding.
Notwithstanding the prior sentence, if any payment to be made by the Company is
prohibited by any applicable law, then such payment shall be made by the Company
at the earliest time, and to the extent possible, when compliance with the law
may be effected, and the Company agrees that it will execute all such documents
and take all reasonable other steps as may be necessary to expedite and
effectuate to the extent possible such compliance. You agree that you will be
responsible for all tax implications resulting from the sale of your Shares to
the Company in connection with any exercise of the Put Right.  Furthermore, you
agree to indemnify and hold the Company harmless for any liability resulting
from the tax obligations resulting from the sale of these shares.
 
 
 

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1.3  Forfeiture of All Equity Awards.  As of the Separation Date all unvested or
unexercised awards under the Company's 1998 Equity Incentive Plan ("Equity
Plan") shall be forfeited and expire notwithstanding any contrary terms set
forth in any award agreement or the Equity Plan.

1.4  Unemployment Compensation.  The Company will not file a written protest to
any claim for unemployment compensation benefits that you may file with the
State of Kansas; however, the Company will report any wages or separation
payments as required by Kansas law.

1.5  Board Member.  You will retain your position as a member of the Company's
Board of Directors (the "Board") and receive any applicable remuneration
provided to other Board directors.

ARTICLE II.  OTHER AGREEMENTS

2.1  General Release.  In exchange for the promises set forth herein, the
sufficiency of which you hereby acknowledge, you, on behalf of yourself, your
heirs, executors, representatives, successors, administrators and assigns
(referred to collectively as “You” for purposes of this Section 2.1), hereby
release and forever discharge the Company and any of its parent(s),
subsidiaries, affiliates or predecessor entities and all current and former
directors, officers, shareholders, employees, agents, insurers, attorneys,
successors and assigns (referred to collectively as “Cartesian”), from any and
all suits, claims, injuries, demands, debts, sums of money, damages, interest,
attorneys’ fees, expenses, actions, causes of action, judgments, accounts,
promises, contracts, agreements, and any and all claims of law or in equity,
whether now known or unknown, which You now have or ever have had against them,
or any of them, including, but not limited to, any claims under Title VII of the
Civil Rights Act of 1964, as amended, the Americans With Disabilities Act, the
Rehabilitation Act of 1973, the Family and Medical Leave Act, 42 U.S.C. §§ 1981,
1983 and 1985, the Employee Retirement Income Security Act, the Kansas Acts
Against Discrimination, the Kansas Age Discrimination in Employment Act, and any
other federal, state or local statute, regulation, ordinance or common law
creating employment-related causes of action, and all claims related to or
arising out of your employment or the separation of your employment with
Cartesian.

2.2  Release of Age Discrimination Claims; 21 Days to Consider Agreement; 7-Day
Revocation Period; and Consultation with Attorney.  This release also includes a
release of any claims for age discrimination under the Age Discrimination in
Employment Act, as amended (“ADEA”).  The ADEA requires the Company to advise
you to consult an attorney prior to signing this Agreement.  You acknowledge
that you have been given a period of at least 21 days in which to consider this
Agreement.  You agree that any changes to this Agreement (whether material or
not) must be made in writing and signed and dated by both parties.  You also
agree that any negotiated and agreed-upon changes (whether material or
immaterial) do not restart the running of the 21-day period.  You have the right
to revoke this Agreement by giving written notice to Nancy Morrow, 7300 College
Blvd., Suite 302, Overland Park, KS 66210, Nancy.Morrow@Cartesian.com, during
the seven day period after you sign it.  You understand that this Agreement will
not become effective or enforceable until the 7-day revocation period has
expired.

2.3  Restrictions.

(a)       Non-Disclosure.  You agree to use best efforts and exercise utmost
diligence to protect and to safeguard the trade secrets and/or any confidential
or proprietary information concerning the Company or its business or any
Affiliates of the Company (including, without limitation, trade secrets, plans,
processes, customer lists, contracts and compilations of information, records
and specifications) which became known to you as a result of your employment and
which is not (independent of disclosure by you) public knowledge or general
knowledge in the trade.  You agree not to disclose any of the Company's or any
Affiliate's trade secrets and/or confidential information and/or proprietary
information except as required by legal process, in which case, you agree to
provide the Company with as much notice as is reasonably practicable in the
event the Company wishes to intervene to protect its rights.  You agree not to
use Company's or any Affiliate's trade secrets and/or confidential information
and/or proprietary information, directly or indirectly, for your own benefit or
for the benefit of another.  All files, records, documents, drawings,
specifications, memoranda, notes, or other documents relating to the business of
the Company or any Affiliate, whether prepared by you or otherwise coming into
your possession, shall be the exclusive property of the Company.
 
 
 
 
 

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(b)       Non-Solicitation.  For a period of one (1) year from the execution of
this Agreement, you shall not directly or indirectly, for yourself or for any
third party, except as otherwise agreed to in writing by the Company:

 
(i)           contact, solicit, advise, consult or do business with any Customer
(as hereinafter defined) with which you have had direct contact during, and
arising from, your employment by the Company, for the purpose of causing such
Customer to purchase, or otherwise obtain products or services which are similar
to or in any way compete with the products or services sold or provided by the
Company or an Affiliate, or

 
(ii)           induce, or attempt to induce, any Customer with which you have
had direct contact during the term of, and arising from, your employment by the
Company to cancel, diminish, decrease or curtail any business relationship,
contractual or otherwise, with the Company or an Affiliate, or

(iii)           contact, solicit, induce or attempt to induce or influence any
employee, independent contractor or agent of any Customer or Company or
Affiliate to terminate his or her employment, engagement or contractual
relationship with such Customer or Company or Affiliate, or

(iv)           employ or hire any person who is employed by the Company or
Affiliate (whether as an employee or an independent contractor) with any
business or other entity that is engaged in the industry in which Company or
Affiliate is involved.

(c)       Covenants Against Competition.  For a period of one (1) year from the
execution of this Agreement, you shall not within the Restricted Area (as
hereinafter defined), directly or indirectly as an employee, employer,
consultant, agent, principal, partner, shareholder, corporate officer, director
or through any other kind of ownership (other than ownership of securities of
publicly-held corporations of which you own less than five (5%) percent of any
class of securities) or in any other representative or individual capacity:

(i)           assist or have an interest (whether or not such interest is
active), in any person, firm, partnership, association, corporation or business
organization, entity or enterprise that is or is about to become directly or
indirectly engaged in, any business or activity (whether such enterprise is in
operation or in the planning or development stage) that provides, sells,
distributes or markets any products or services that compete in any manner with
the business conducted by Company or an Affiliate.
 
 
 
 

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(ii)           enter into the employment of or act as an independent contractor
or agent for or advisor or consultant to, any person, firm, partnership,
association, corporation or business organization, entity or enterprise that is
or is about to become directly or indirectly engaged in, any business or
activity (whether such enterprise is in operation or in the planning or
development stage) that provides, sells, distributes or markets any products or
services that compete in any manner with the business conducted by Company or an
Affiliate.

(d)       Definitions.  For purposes of this Section 2.3, the following
definitions shall apply:
 
(i)           "Affiliate" shall mean any corporation, partnership, limited
liability company, joint venture, or other entity or organization directly or
indirectly controlling or controlled by or under direct or indirect common
control with such other entity through the ownership of all or part of such
entity.

(ii)           "Customer" shall mean any individual, corporation, partnership,
joint venture or other entity, or successors thereof, which has either (i)
purchased or contracted for services or products by or through the Company at
any time within one (1) year prior to the separation of your employment with the
Company, or (ii) has been directly solicited by the Company within six (6)
months prior to the separation of your employment with the Company, regardless
of whether you have had direct contact with such individual, corporation,
partnership, joint venture or entity.

(iii)           "Restricted Area" shall mean collectively the United States of
America.

2.4  Non-Disparagement.  You agree not to take any action or make any statement,
written or oral, to any third party that disparages the character, reputation,
business practices, competence or conduct of the Company, its affiliates, or its
directors, officers, shareholders, managers, employees, agents, representatives,
or strategic partners, including current customers and prospective customers of
strategic partners.  The Company's Board of Directors and its CEO, President,
CFO, and Senior Vice Presidents agree not to take any action or make any
statement, written or oral, to any third party that disparages your character,
reputation, business practices, competence or conduct.

2.5  References.  You agree to refer any prospective employers to the Company's
Human Resources Department.  The Company's policy is to verify dates of
employment, positions held and, if authorized by you, salary information.

ARTICLE III.  MISCELLANEOUS PROVISIONS

3.1  Severability.  You agree that should any of the provisions of this
Agreement be declared or determined by any court to be illegal or invalid, the
validity of the remaining parts, terms or provisions shall not be affected
thereby.

3.2  Enforcement; Applicable Law; Jurisdiction.  This Agreement shall be
governed by and construed in accordance with the laws of the State of
Kansas.  You agree that all disputes arising under or out of this Agreement
shall be brought in courts of competent jurisdiction within the State of Kansas
and you hereby consent to jurisdiction in courts located in the State of Kansas
with respect to all matters arising out of or related to this Agreement.
 
 
 
 

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3.3  Entire Agreement; No Representations.  This Agreement constitutes the
entire agreement between you and the Company concerning the terms and conditions
of your separation from employment with the Company as an employee and
supersedes all agreements, understandings, negotiations and discussions, whether
oral or written, between you and the Company.  Notwithstanding the foregoing, in
no event shall this provision prevent the parties from entering into any written
consulting agreement executed by the parties contemporaneously with this
Agreement or in the future; provided that, in no event shall any such consulting
agreement supersede or modify the terms of this Agreement.  You agree that the
Company has not made any statements or promises to you regarding the meaning or
implication of any provision of this Agreement other than as stated herein.

3.4  Modification and Waiver.  This Agreement may be amended or modified only in
a writing signed by you and an authorized representative of the Company.  The
failure of you or the Company at any time to require the performance of any
provision of this Agreement shall in no manner affect either party's right at a
later time to enforce the same provision.

3.5  Non-Admission.  By entering into this Agreement, the Company does not admit
any liability to you or any other person arising out of or attributable to your
employment at the Company or the ending of that employment, and the Company
expressly denies any and all such liability and denies it has engaged in any
wrongful act.

3.6  Read, Understand and Voluntarily Signed.  You confirm that you have been
supplied with and have read a copy of this Agreement and understand its terms,
that you have been advised to consult with an attorney before signing it, that
you understand the content and effect of this Agreement and that you enter into
it voluntarily and not as a result of coercion, duress or undue influence.

3.7  Indemnification.  You agree to indemnify and hold the Company harmless from
any and all expenses incurred, including but not limited to attorneys' fees, as
the result of the assertion, after you execute this Agreement, of any claims,
actions, causes of action, rights, demands, costs, expenses, compensation,
liabilities or obligations which you have released and discharged in this
Agreement.

3.8  Section 409A.  The intent of the parties is that payments and benefits
under this Agreement (and all other Company plans and agreements) comply with
Code Section 409A and, accordingly, to the maximum extent permitted, this
Agreement shall be interpreted to be in compliance therewith.  Notwithstanding
anything contained herein to the contrary, you shall not be considered to have
severed employment with the Company for purposes of any payments under this
Agreement which are subject to Code Section 409A until you have incurred a
“separation from service” from the Company within the meaning of Code Section
409A.  Each amount to be paid or benefit to be provided under this Agreement
shall be construed as a separate identified payment for purposes of Code Section
409A.  Without limiting the foregoing and notwithstanding anything contained
herein to the contrary, to the extent required in order to avoid an accelerated
or additional tax under Code Section 409A, amounts that would otherwise be
payable and benefits that would otherwise be provided pursuant to this Agreement
(or any plans or agreements referenced herein) during the six-month period
immediately following your separation from service shall instead be paid as soon
as administratively practical after the date that is six months following your
separation from service (or, if earlier, your date of death).  To the extent
required to avoid an accelerated or additional tax under Code Section 409A,
amounts reimbursable to you shall be paid to you on or before the last day of
the year following the year in which the expense was incurred and the amount of
expenses eligible for reimbursement (and in kind benefits provided to you)
during one year may not affect amounts reimbursable or provided in any
subsequent year. In no event whatsoever shall the Company be liable for any
additional tax, interest or penalty that may be imposed on you by Code Section
409A or damages for failing to comply with Code Section 409A.
 
 
 
 

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3.9  Each Party the Drafter.  This Agreement and the provisions contained in it
shall not be construed or interpreted for, or against, any party to this
Agreement because that party drafted or caused that party's legal
representatives to draft any of its provisions.
 
Please indicate your understanding and acceptance of this Agreement by signing
and returning one copy to me at 7300 College Boulevard – Suite 302, Overland
Park, KS  66210.  The other copy is for your records.
 
 

          Sincerely,          
 
 
/s/ Bob Currey               Bob Currey       Chairman of the Board          

 

 

Accepted and Agreed:

 
 

/s/ Donald E. Klumb
Dated:  June 3, 2015
 
Donald E. Klumb