8-K/A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

Form 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  June 3, 2015

Cartesian, Inc.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation) 001-34006 (Commission File Number) 48-1129619 (I.R.S. Employer Identification No.)

7300 College Boulevard, Suite 302

Overland Park, Kansas 66210

(Address of principal executive office)(Zip Code)

(913) 345-9315

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

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:

¨   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE

This report amends the Current Report on Form 8-K of Cartesian, Inc. (the "Company") dated June 3, 2015 and filed with the Securities and Exchange Commission on June 9, 2015 (the "Original Filing"), in order to disclose the compensation and employment arrangements negotiated by the Company with Peter H. Woodward, the Company's Chief Executive Officer ("CEO"), President and interim Chief Financial Officer ("CFO").  At the time of the Original Filing, such compensation and employment arrangements had not been negotiated by the parties or approved by the Company.  Except as described in this Explanatory Note, no other information in the Original Filing is modified or amended hereby.

Item 5.02          Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Compensation and Employment Arrangements with Peter H. Woodward

As previously announced by the Company and disclosed in the Original Filing, Mr. Woodward has been appointed CEO, President and interim CFO (principal financial officer and principal accounting officer) of the Company effective June 3, 2015.  The Company stated in the Original Filing that the compensation and employment arrangements with Mr. Woodward were being negotiated.

Employment Agreement.  On June 16, 2015, the Company entered into an employment agreement with Mr. Woodward, effective June 3, 2015 (the "Employment Agreement"), pursuant to which Mr. Woodward will serve as CEO and President of the Company.  The Employment Agreement has a one-year term and is terminable by either party for any reason upon thirty (30) days' written notice. The Employment Agreement also terminates upon Mr. Woodward's death or disability.  If not earlier terminated, the Employment Agreement will renew automatically for successive one-year renewal termsunless either party gives the other party sixty (60) days advance notice of such party's intent not to renew.

Pursuant to the Employment Agreement, Mr. Woodward (i) will receive an annual base salary of $200,000 per year, (ii) will be eligible to receive an annual bonus in accordance with terms of incentive compensation plans to be adopted by the Company in its sole and exclusive discretion and (iii) will be eligible to participate in any health, disability and group life insurance plans or other perquisites and fringe benefits that the Company extends generally to employees of the Company at the executive officer level.

During the term of the Employment Agreement and thereafter, Mr. Woodward has agreed to protect and maintain the confidentiality of the Company's confidential information and trade secrets and to assign to the Company any works relating to his service to the Company.  Additionally, Mr. Woodward has agreed that, during the term of employment and for a six-month period thereafter, he will not (i) compete with the Company, (ii) solicit employees or independent contractors of the Company to terminate their relationship with the Company or (iii) solicit or do business with any customers or clients of the Company who were customers or clients during the twelve-month period prior to the termination of his employment or prospective customers or clients of the Company during the six-month period prior to the termination of his employment.

Stock Option Agreement. In connection with the Employment Agreement, Mr. Woodward received a non-qualified stock option award ("Option") under the Cartesian, Inc. Equity Incentive Plan for 200,000 shares of the Company's common stock having an exercise price of $3.34 per share. The Company and Mr. Woodward entered into a Stock Option Agreement dated June 16, 2015 (the "Stock Option Agreement") with respect to the Option. The Option expires on June 16, 2025. The Option will vest only if the price of the Company's common stock reaches certain price targets, as follows:

●   the Option will vest with respect to 75,000 shares if at any time the closing market price of the Company's common stock on each day during a thirty (30) consecutive trading day period equals or exceeds $4.00 per share;

●   the Option will vest with respect to an additional 75,000 shares if at any time the closing market price of the Company's common stock on each day during a thirty (30) consecutive trading day period equals or exceeds $5.00 per share; and

●   the Option will vest with respect to an additional 50,000 shares if at any time the closing market price of the Company's common stock on each day during a thirty (30) consecutive trading day period equals or exceeds $6.00 per share.

If Mr. Woodward ceases to be an employee for any reason other than having been terminated by the Company for cause (in which case the Option will expire on the termination date), Mr. Woodward may exercise that portion of the Option that was vested as of the termination date until the earlier of (i) the expiration date of the Option and (ii) five years after the termination date.

The foregoing summaries of the Employment Agreement and the Stock Option Agreement are not complete and are qualified in their entirety by reference to the terms and provisions of the Employment Agreement and the terms and provisions of the Stock Option Agreement and the Cartesian, Inc. Equity Incentive Plan. Copies of the Employment Agreement and the form of Stock Option Agreement are filed as Exhibits 10.3 and 10.4, respectively, to this Current Report on Form 8-K and are incorporated herein by reference. The Cartesian, Inc. Equity Incentive Plan has been filed as Exhibit 10.1 to a separate Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on the date hereof and is incorporated herein by reference.

Item 9.01          Financial Statements and Exhibits.

(d)  Exhibits

Exhibit No.	Description
10.3	Employment Agreement, dated as of June 3, 2015, by and between Cartesian, Inc. and Peter Woodward
10.4	Form of Stock Option Agreement

SIGNATURES

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.

CARTESIAN, INC.
By:	/s/ Thurston K. Cromwell
	Thurston K. Cromwell General Counsel and Secretary

Date: June 17, 2015

EXHIBIT INDEX

Exhibit No.	Description
10.3	Employment Agreement, dated as of June 3, 2015, by and between Cartesian, Inc. and Peter Woodward
10.4	Form of Stock Option Agreement

EX-10.3

  7300 College Boulevard Suite 302 Overland Park, KS 66210  USA +1 913 345.9315                                Telephone +1 913 234.3383                                Facsimile www.cartesian.com  

June 3, 2015

Peter Woodward

_________________

_________________

Dear Peter:

This Agreement confirms the terms of Your employment as President and Chief Executive Officer of Cartesian, Inc. (the “Company”).

1.           Term.  The initial term of this Agreement shall be one year from the date first noted above, unless such term is terminated earlier pursuant to paragraph 12 below (the “Term”). The Agreement shall automatically renew for successive one-year renewal terms unless either party gives the other party sixty (60) days advance notice of their intent not to renew.

2.           Base Salary.  You will be paid in bi-weekly installments based on an annual salary of $200,000.

3.           Bonus.  As President and Chief Executive Officer of the Company, You will be eligible to receive annual bonuses in accordance with the terms of Incentive Compensation Plans to be adopted by the Company in its sole and exclusive discretion.  Any earned Bonus will be paid within sixty (60) days of the close of each fiscal year.

4.           Duties.  Your duties and functions as President and Chief Executive Officer of the Company will be defined by the Company in its sole and exclusive discretion, which duties You agree to perform, unless You believe such duties require You to do something unlawful or unethical, in which case You agree to bring the matter to the attention of the Company as soon as is reasonably practicable.  The Company reserves the right to amend or modify Your duties in its sole and exclusive discretion at any time for any reason, provided that in all events Your duties are consistent with those customary and usual for a position as a President and Chief Executive Officer of the Company. In performing Your duties, You shall devote all working time, ability and attention to the business of the Company, You will act to the best of Your ability to further the best interest of the Company, and, in accordance with the highest ethical standards, You shall seek to maximize the financial success of the Company’s business and to optimize the goodwill and reputation of the Company within its industry and with its customers, and You shall not – directly or indirectly – render any services to or for the benefit of any other business, whether for compensation or otherwise, without the prior written approval of the Board of Directors of the Company.  The Board acknowledges and approves of your serving on the board of directors the following companies:  Precision Optics Corporation and Total Site Solutions.  Your employment with the Company shall at all times be subject to the Company’s then applicable policies and practices.

Cartesian – Woodward Employment Agreement

June 3, 2015

Page 2 of 7

5.           Benefits.  In addition to the compensation in paragraphs 2 and 3 of this Agreement, You shall be eligible for the following:

a.           Participation in Employee Plans.  You shall be eligible to participate in any health, disability, and group term life insurance plans or other perquisites and fringe benefits that the Company extends generally from time to time to employees of the Company at the level of executive officer.

b.           Paid Time Off.  You shall be eligible for Paid Time Off in accordance with the Company’s Paid Time Off policy then in effect and applicable to executive officers.

6.           Reimbursement of Expenses.  Subject to such rules and procedures as the Company from time to time specifies, the Company shall reimburse You on a bi-weekly basis for reasonable business expenses necessarily incurred in the performance of Your duties under this Agreement.

7.           Confidentiality/Trade Secrets.  You acknowledge Your position with the Company is one of the highest trust and confidence, both by reason of Your position and by reason of Your access to and contact with the trade secrets and confidential and/or proprietary information of the Company.  Both during the Term of this Agreement and thereafter, You therefore covenant and agree as follows:

a.           You shall use Your best efforts and exercise utmost diligence to protect and to safeguard the trade secrets and confidential and/or proprietary information of the Company, including, but not limited to, the identity of its current and/or prospective customers, suppliers, and licensors; its arrangements with its customers, suppliers, and licensors; and its technical, financial, and marketing data, records, compilations of information, processes, programs, methods, techniques, recipes, and specifications relating to its customers, suppliers, licensors, products, and services;

b.           You shall not disclose any of the Company’s trade secrets or confidential and/or proprietary information, except as may be required in the course of Your employment with the Company or as required by law, 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; and

c.           You shall not use, directly or indirectly, for Your own benefit or for the benefit of another, any of the Company’s trade secrets or confidential and/or proprietary information.

All files, records, documents, drawings, specifications, memoranda, notes, or other documents relating to the business of the Company, whether prepared by You or otherwise coming into Your possession, shall be the exclusive property of the Company and shall be delivered to the Company and not reproduced and/or retained by You upon termination of Your employment for any reason whatsoever or at any other time upon request of the Company.

Cartesian – Woodward Employment Agreement

June 3, 2015

Page 3 of 7

8.           Discoveries.  In addition to Your services, the Company shall exclusively own forever and throughout the world all rights of any kind or nature now or hereafter known in and to all of the products of Your services performed under this Agreement in any capacity and any and all parts thereof, including but not limited to copyright, patent, and all other property or proprietary rights in or to any ideas, concepts, designs, drawings, plans, prototypes, or any other similar creative works and to the product of any or all of such services under this Agreement (“Inventions”).  In addition, You hereby agree, during and after the Term, to assign to the Company in writing (and to take any and all other actions as the Company requests to carry out the intent of this paragraph 8) any and all rights, title, or interest in any such copyrights, patents, property or proprietary rights relating to the Inventions.  You acknowledge and agree that, for copyright purposes, You are performing services as the Company’s employee-for-hire, which services include Inventions relating to the Company’s business or research and development (which may be defined in the Company sole and exclusive discretion and may change from time to time), as well as Inventions developed with the use of the Company’s trade secrets, confidential and/or proprietary information, facilities, or equipment.  You acknowledge and agree that all memoranda, notes, records, and other documents made or compiled by You or made available to You during the Term concerning Your services performed under this Agreement shall be the Company’s property and shall be delivered by You to the Company upon termination of Your employment or at any other time at the Company’s request.

9.           Non-Competition.  You covenant and agree that, during the period of Your employment and for six months after the termination of Your employment, You shall not compete with the Company in any way, directly or indirectly, without the prior written consent of the Company, including but not limited to 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 percent 5% of any class of outstanding securities) or in any other representative or individual capacity, engage in or render any services to any person and/or business that provides, sells, distributes, or markets any products or services that compete with the Company in the data communications, telecommunications, media, entertainment or high tech consulting business (the “Restricted Business Area”) within any geographic areas in which the Company conducts or has conducted business or provides or has provided products or service.

10.           Non-Solicitation.  You covenant and agree that, during the period of Your employment and for six months following termination of Your employment by either You or the Company, You will not, either directly or indirectly, for Yourself or for any third party, except as otherwise agreed to in writing by the Company (a) employ or hire any person who is employed by the Company (whether as an employee or as an independent contractor) with any business or other entity that is engaged in the industry or any other segment of the industry in which, during Your employment with the Company, the Company is involved, may become involved in, or is considering becoming involved in; (b) solicit, induce, recruit, or cause (or attempt to solicit, induce, recruit, or cause) any other person who is employed by the Company (whether as an employee or as an independent contractor) to terminate their employment for the purpose of joining, associating, or becoming employed with any business or other entity that is engaged in the industry or any other segment of the industry in which, during Your employment with the Company, the Company is involved, may become involved in, or is considering becoming involved in; or (c) solicit, induce, recruit, or do business with (or attempt to solicit, induce, recruit, or do business with) any entity or individual that was/is a customer/client of the Company during the twelve month period prior to the termination of your employment and/or a prospective customer/client of the Company during the six-month period prior to the termination of your employment.

Cartesian – Woodward Employment Agreement

June 3, 2015

Page 4 of 7

11.           Remedies for Breach of Covenants.  Regarding paragraphs 7-10 of this Agreement:

a.           The Company and You specifically acknowledge and agree that the foregoing covenants in paragraphs 7-10 are reasonable in content and scope and are given by You knowingly, willingly, voluntarily, and for adequate and valid consideration.  The Company and You further acknowledge and agree that, if any court of competent jurisdiction or other appropriate authority disagrees with the parties' foregoing agreement as to reasonableness, then such court or other authority shall reform or otherwise modify the foregoing covenants of You in paragraphs 7-10 only so far as necessary to be enforceable as reasonable, notwithstanding and regardless of any law or authority to the contrary.

b.           The covenants set forth in paragraphs 7-10 of this Agreement shall continue to be binding upon You notwithstanding the termination of Your employment with the Company for any reason.  Such covenants shall be deemed and construed as separate agreements independent of any other provisions of this Agreement and any other agreement between You and the Company.  The existence of any claim or cause of action by You against the Company shall not constitute a defense to the enforcement by the Company of any or all such covenants.  You expressly agree that the remedy at law for the breach of any such covenant is inadequate, that You shall not defend against any claim by the Company on the basis of an adequate remedy of law, that injunctive relief and specific performance shall be available to prevent the breach or any threatened breach thereof, that the party bringing the claim shall not be required to post bond in pursuit of such claim, and that the prevailing party shall on any such claim be entitled to recover attorneys’ fees, expert witness fees, and costs incurred in pursuit of such claim, notwithstanding and regardless of any law or authority to the contrary.

c.           Nothing herein contained is intended to waive or to diminish any right the Company or You may have at law or in equity at any time to protect and defend legitimate property interests, including business relationships with third parties, the foregoing provisions being intended to be in addition to and not in derogation or limitation of any other right the Company or You may have at law or in equity.

12.           Termination.  This Agreement (other than paragraphs 7-10 hereof, which shall survive any termination hereof for any reason) may be terminated as follows:

(a)           In the event of Your death or Disability (as defined herein) during the Term, this Agreement shall terminate and You (or Your estate) shall be entitled to any compensation earned by You through the date of such death/Disability and to any standard benefits then provided by the Company to employees at Your level for such death/Disability.  In addition, the Company shall reimburse You or Your estate for expenses accrued and payable under Section 6 hereof and provide all other vested accrued benefits to which You are entitled under any agreements between You and the Company and any applicable Company plans, programs, policies or arrangements, including without limitation any Incentive Compensation Agreement.  For purposes of this Agreement, “Disability” shall mean Your physical or mental disability so as to render You substantially incapable – as determined by the Company in its sole and exclusive discretion – of carrying out the essential functions of Your employment as defined by the Company for a period of 45 consecutive days or more or for more than 90 days in a twelve month period.

Cartesian – Woodward Employment Agreement

June 3, 2015

Page 5 of 7

(b)           You may terminate this Agreement and Your employment hereunder at any time upon thirty (30) days written notice to the Company, for which notice period You shall receive Your Base Salary even if the Company relieves You of Your duties during such period, as it is entitled to do.  In addition, the Company shall reimburse You or Your estate for expenses accrued and payable under Section 6 hereof and provide all other vested accrued benefits to which You are entitled under any agreements between You and the Company and any applicable Company plans, programs, policies or arrangements, including without limitation any Incentive Compensation Agreement.

(c)           The Company may terminate this Agreement at any time upon thirty (30) days written notice to You.  If the Company terminates this Agreement then You shall receive Your Base Salary and accrued but unused vacation time through such date of termination.  In addition, the Company shall reimburse You or Your estate for expenses accrued and payable under Section 6 hereof and provide all other vested accrued benefits to which You are entitled under any agreements between You and the Company and any applicable Company plans, programs, policies or arrangements, including without limitation any Incentive Compensation Agreement.

(d)           Upon termination for any reason, You (i) agree to provide reasonable cooperation to the Company at the Company’s expense in winding up Your work for the Company and transferring that work to other individuals as designated by the Company, and (ii) agree reasonably to cooperate with the Company in litigation as requested by the Company.

13.           Notices.  Any notices to be given hereunder by either party to the other may be effected either by personal delivery in writing or by mail, registered or certified, postage prepaid, with return receipt requested.  Mailed notices shall be addressed as follows:

(a)	If to the Company:
		Cartesian, Inc. 7300 College Boulevard – Suite 302 Overland Park, KS  66210
(b)	If to You:
		Peter Woodward ____________________ ____________________

Cartesian – Woodward Employment Agreement

June 3, 2015

Page 6 of 7

Either party may change its address for Notice by giving written notice to the other.

14.           General Provisions:

a.           Governing law and Consent to Jurisdiction.  This Agreement and all disputes relating to Your employment with the Company shall be subject to, governed by, and construed in accordance with the laws of the State of Kansas, irrespective of any choice of law and/or of the fact that one or both of the parties now is or may become a resident of a different state.  You hereby expressly submit and consent to the exclusive personal jurisdiction and exclusive venue of the federal and state courts of competent jurisdiction in the State of Kansas, notwithstanding any applicable law to the contrary.

b.           Assignability.  This Agreement, including but not limited to paragraphs 7-10, shall be binding upon and inure to the benefit of the Company, its respective successors, heirs, and assigns.  Except as expressly set forth herein, this Agreement may not be assigned by You without the express written consent of the Company.

c.           Invalid Provisions.  If any provision of this Agreement is held to be illegal, invalid, or unenforceable, then such provision shall be fully severable, and this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part hereof; and the remaining provisions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance herefrom.  Furthermore, in lieu of such illegal, invalid, or unenforceable provision there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and still be legal, valid or enforceable.

d.           Construction of Agreement.  This Agreement sets forth the entire understanding of the parties and supersedes all prior agreements or understandings, whether written or oral, with respect to the subject matter hereof.  No terms, conditions or warranties, other than those contained herein, and no amendments or modifications hereto shall be binding unless made in writing and signed by the parties hereto.  This Agreement shall not be strictly construed against either party.

e.           Waiver.  The waiver by either party hereto of a breach of any term or provision of this Agreement shall not operate or be construed as a waiver of a subsequent breach of the same provision by any party or of the breach of any other term or provision of this Agreement.

f.           Titles.  Titles of the paragraphs herein are used solely for convenience and shall not be used for interpretation or construing any work, clause, paragraph or provision of this Agreement.

Cartesian – Woodward Employment Agreement

June 3, 2015

Page 7 of 7

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

If the foregoing terms meet with our understanding, please sign this Agreement where indicated below.

Very truly yours,
CARTESIAN, INC.
By:	/s/ Reza Jafari
	Reza Jafari
	Chairman, Compensation Committee

Confirmed as of the date first written above:

 /s/ Peter Woodward 

Peter Woodward

EX-10.4

Form of Stock Option Grant

June 16, 2015

CARTESIAN, INC.

EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

Unless otherwise defined herein, the terms defined in the Cartesian, Inc. Equity Incentive Plan (the "Plan") shall have the same defined meanings in this Option Agreement.

I.           NOTICE OF STOCK OPTION GRANT

Name

Address 1

Address 2

You have been granted an option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows:

Grant Number
Date of Grant
Exercise Price per Share	$
Total Number of Shares Subject to Option
Total Exercise Price	$
Type of Option:
Term/Expiration Date:

Vesting Schedule:

Subject to accelerated vesting as set forth below, this Option may be exercised, in whole or in part, in accordance with the following schedule:

[Insert Vesting Schedule]

Termination Period:

[Insert Post-Termination Exercise Period]

II.           AGREEMENT

A. Grant of Option.

The Plan Administrator of the Company hereby grants to the Optionee named in the Notice of Grant attached as Part I of this Agreement (the “Optionee”) an option (the “Option”) to purchase the number of Shares, as set forth in the Notice of Grant, at the exercise price per share set forth in the Notice of Grant (the “Exercise Price”), subject to the terms and conditions of the Plan, which is incorporated herein by reference.  Subject to Section 15(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Option Agreement, the terms and conditions of the Plan shall prevail.

If designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this Option is intended to qualify as an Incentive Stock Option under Section 422 of the Code.  However, if this Option is intended to be an Incentive Stock Option, to the extent that it exceeds the $100,000 rule of Code Section 422(d) it shall be treated as a Nonstatutory Stock Option (“NSO”).

B. Exercise of Option.

(a)           Right to Exercise.  This Option is exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Grant and the applicable provisions of the Plan and this Option Agreement.

(b)           Method of Exercise.  This Option is exercisable by delivery of an exercise notice, in the form attached as Exhibit A (the “Exercise Notice”), which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan.  The Exercise Notice shall be completed by the Optionee and delivered to the Company.  The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares.  This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by such aggregate Exercise Price.

No Shares shall be issued pursuant to the exercise of this Option unless such issuance and exercise complies with Applicable Laws.  Assuming such compliance, for income tax purposes the Exercised Shares shall be considered transferred to the Optionee on the date the Option is exercised with respect to such Exercised Shares.

C. Method of Payment.

Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee:

1.           cash; or

2.           check; or

3.           consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan, including a "net exercise" arrangement as permitted under the Plan.

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D. Non-Transferability of Option.

This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by the Optionee.  The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

E. Term of Option.

This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Option Agreement.

F. Tax Consequences.

Some of the federal tax consequences relating to this Option, as of the date of this Option, are set forth below.  THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.  THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

G. Exercising the Option.

1.           Nonstatutory Stock Option.  The Optionee may incur regular federal income tax liability upon exercise of a NSO.  The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Exercised Shares on the date of exercise over their aggregate Exercise Price.  If the Optionee is an Employee or a former Employee, the Company will be required to withhold from his or her compensation or collect from Optionee and pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise.

2.           Incentive Stock Option.  If this Option qualifies as an ISO, the Optionee will have no regular federal income tax liability upon its exercise, although the excess, if any, of the Fair Market Value of the Exercised Shares on the date of exercise over their aggregate Exercise Price will be treated as an adjustment to alternative minimum taxable income for federal tax purposes and may subject the Optionee to alternative minimum tax in the year of exercise.  In the event that the Optionee ceases to be an Employee but remains a Service Provider, any Incentive Stock Option of the Optionee that remains unexercised shall cease to qualify as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option on the date three (3) months and one (1) day following such change of status.

3.           Disposition of Shares.

(a)           NSO.  If the Optionee holds NSO Shares for at least one year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes.

3

(b)           ISO.  If the Optionee holds ISO Shares for at least one year after exercise and two years after the grant date, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes.  If the Optionee disposes of ISO Shares within one year after exercise or two years after the grant date, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the excess, if any, of the lesser of (A) the difference between the Fair Market Value of the Shares acquired on the date of exercise and the aggregate Exercise Price, or (B) the difference between the sale price of such Shares and the aggregate Exercise Price.  Any additional gain will be taxed as capital gain, short-term or long-term depending on the period that the ISO Shares were held.

(c)           Notice of Disqualifying Disposition of ISO Shares.  If the Optionee sells or otherwise disposes of any of the Shares acquired pursuant to an ISO on or before the later of (i) two years after the grant date, or (ii) one year after the exercise date, the Optionee shall immediately notify the Company in writing of such disposition.  The Optionee agrees that he or she may be subject to income tax withholding by the Company on the compensation income recognized from such early disposition of ISO Shares by payment in cash or out of the current earnings paid to the Optionee.

H. Entire Agreement; Governing Law.

The Plan is incorporated herein by reference.  The Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee's interest except by means of a writing signed by the Company and Optionee.  This agreement is governed by the internal substantive laws, but not the choice of law rules, of Kansas.

I. NO GUARANTEE OF CONTINUED SERVICE.

OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS [A SERVICE PROVIDER] [AN EMPLOYEE] AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER).  OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS [A SERVICE PROVIDER] [AN EMPLOYEE] FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

By your signature and the signature of the Company's representative below, you and the Company agree that this Option is granted under and governed by the terms and conditions of the Plan and this Option Agreement.  Optionee has reviewed the Plan and this Option Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement and fully understands all provisions of the Plan and Option Agreement.  Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan and Option Agreement.  Optionee further agrees to notify the Company upon any change in the residence address indicated below.

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OPTIONEE:	CARTESIAN, INC.
Signature	By
Print Name	Title
Residence Address

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EXHIBIT A

CARTESIAN, INC.

EQUITY INCENTIVE PLAN

EXERCISE NOTICE

Cartesian, Inc.

7300 College Blvd., Suite 302

Overland Park, KS 66210

1.           Exercise of Option.  Effective as of today, ________________, _____, the undersigned (“Purchaser”) hereby elects to purchase ______________ shares (the “Shares”) of the Common Stock of Cartesian, Inc. (the “Company”) under and pursuant to the Cartesian, Inc. Equity Incentive Plan (the “Plan”) and the Stock Option Agreement dated, _____ (the “Option Agreement”).  The purchase price for the Shares shall be $_____, as required by the Option Agreement.

2.           Delivery of Payment.  Purchaser herewith delivers to the Company the full purchase price for the Shares.

3.           Representations of Purchaser.  Purchaser acknowledges that Purchaser has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions.

4.           Rights as Shareholder.  Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option.  The Shares so acquired shall be issued to the Optionee as soon as practicable after exercise of the Option.  No adjustment will be made for a dividend or other right for which the record date is prior to the date of issuance, except as provided in Section 13 of the Plan.

5.           Tax Consultation.  Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser's purchase or disposition of the Shares.  Purchaser represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

6.           Entire Agreement; Governing Law.  The Plan and Option Agreement are incorporated herein by reference.  This Agreement, the Plan and the Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Purchaser with respect to the subject matter hereof, and may not be modified adversely to the Purchaser's interest except by means of a writing signed by the Company and Purchaser.  This agreement is governed by the internal substantive laws, but not the choice of law rules, of Kansas.

Submitted by	Accepted by:
PURCHASER:	CARTESIAN, INC.
Signature	By
Print Name
Address:	Address:
	CARTESIAN, INC.
	7300 College Blvd. Suite 302
	Overland Park, KS  66210
	Date Received

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