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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Lantronix Inc | NASDAQ:LTRX | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.06 | -1.67% | 3.54 | 3.25 | 3.55 | 3.67 | 3.43 | 3.63 | 370,716 | 01:00:00 |
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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No fee required.
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Fee paid previously with preliminary materials.
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Delaware
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1-16027
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33-0362767
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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48 Discovery, Suite 250
Irvine, California 92618
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(Address of Principal Executive Offices, including zip code)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each Class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, $0.0001 par value
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LTRX
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The Nasdaq Stock Market LLC
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Item 5.02. |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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• |
Mr. Awsare will be entitled to an annual base salary of $500,000.
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• |
Mr. Awsare will be entitled to an annual incentive bonus opportunity based on the achievement of performance criteria to be established by the Board (or a committee thereof). Mr. Awsare’s
annual target and maximum bonus opportunities will be 100% and 200%, respectively, of his base salary for the corresponding fiscal year. Mr. Awsare will be entitled to participate in the Company’s annual bonus program already in
place for fiscal 2024 on a prorated basis with a maximum incentive bonus amount of seven-twelfths of the amount Mr. Awsare would be entitled to under the annual bonus program had he been employed with the Company through the last
day of the fiscal year.
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• |
Mr. Awsare will be entitled to a one-time sign-on bonus of $136,000, which will be payable in three equal installments as follows, subject to Mr. Awsare’s continued service on such dates:
one-third will be paid with the Company’s first payroll period following the Employment Commencement Date; one-third will be paid with the Company’s first payroll period following six months after the Employment Commencement Date;
and one-third will be paid at the time the incentive bonus for fiscal 2024 is paid to the Company’s executive management team or, if no incentive bonus for fiscal 2024 is awarded, then with the next pay period after the Board (or a
committee thereof) makes such determination.
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The Company will grant Mr. Awsare a stock unit award covering a number of shares of Company common stock equal to $4,150,000 divided by the average of the closing prices for a share of the
Company’s common stock (in regular trading) on The Nasdaq Stock Market over the thirty consecutive trading days ending with the last trading day for which such closing price is known prior to the Employment Commencement Date.
$2,100,000 in value of the total number of stock units awarded will be time-based vesting stock units (“RSUs”) scheduled to vest, subject to Mr. Awsare’s continued service, over a three-year period, with one-third of the RSUs
vesting on each of November 1, 2024, November 1, 2025, and November 1, 2026. $2,050,000 in value of the total number of stock units awarded will be the “target” number of performance-based vesting stock units, with $1,050,000 of the
“target” number of performance-based vesting stock units subject to vesting based on the attainment of certain financial measures (“Financial Measure PSUs”) and the other $1,000,000 of the “target” number of performance-based
vesting stock units subject to vesting based on the Company’s relative total shareholder return (“Relative TSR PSUs”). Between 0% and 200% of the “target” number of stock units subject to the performance-based awards may become
eligible to vest based on actual performance during the applicable performance periods. The RSUs, Financial Measure PSUs and Relative TSR PSUs will be effective on the Employment Commencement Date. All such awards will be structured
to satisfy the “inducement grant” exception under applicable listing rules and, accordingly, they will not be granted under the Company’s 2020 Performance Incentive Plan.
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Additional equity awards for Mr. Awsare, commencing with awards for fiscal year 2025, will be in the sole discretion of the Board (or a committee thereof).
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Mr. Awsare will also be entitled to certain employee benefits, such as participation in the Company’s retirement and welfare benefit plans and programs, and fringe benefit plans and
programs, made available to the Company’s executive officers employed in the United States.
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To the extent Mr. Awsare decides to relocate to Orange County, California, he is authorized to incur up to $100,000 of expenses related to moving his residence, including temporary
apartment rental in Orange County. If his employment is terminated or he resigns pursuant to the terms of the Employment Agreement (other than a termination by the Company without Cause or by Mr. Awsare with Good Reason, as defined
below) within two years of the Employment Commencement Date, then Mr. Awsare shall pay to the Company promptly following his severance date 100% of the relocation expenses paid or reimbursed by the Company pursuant to the Employment
Agreement.
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Item 7.01 |
Regulation FD Disclosure.
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Item 9.01 |
Financial Statements and Exhibits.
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Exhibit
No.
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Description
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Employment Agreement, dated October 31, 2023, between Saleel Awsare and Lantronix, Inc.
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Press Release of Lantronix, Inc. issued on November 6, 2023.
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document).
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LANTRONIX, INC.
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By:
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/s/ Jeremy Whitaker
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Jeremy Whitaker
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Interim Chief Executive Officer and Chief Financial Officer
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1. |
Retention and Duties.
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1.1 |
Retention. The Company does hereby hire, engage and
employ the Executive for the Period of Employment (as such term is defined in Section 2) on the terms and conditions expressly set forth in this Agreement. The Executive does hereby accept and agree to such hiring, engagement and
employment, on the terms and conditions expressly set forth in this Agreement. Certain capitalized terms used herein are defined in Section 5.5 of this Agreement.
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1.2 |
Duties. During the Period of Employment, the
Executive shall serve the Company as its President and Chief Executive Officer and shall have the powers, authorities, duties and obligations of management usually vested in such positions with a company of a similar size and similar
nature as the Company, and such other powers, authorities, duties and obligations commensurate with such positions as the Company’s Board of Directors (the “Board”) may assign
from time to time, all subject to the directives of the Board and the corporate policies of the Company as they are in effect from time to time throughout the Period of Employment (including, without limitation, the Company’s business
conduct and ethics policies, as they may change from time to time). Promptly after the Employment Commencement Date, Executive will be presented to the Board for appointment thereon. During the Period of Employment, the Executive shall
report to the Board.
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1.3 |
No Other Employment; Minimum Time Commitment. During
the Period of Employment, the Executive shall (i) devote substantially all of the Executive’s business time, energy and skill to the performance of the Executive’s duties for the Company, (ii) perform such duties in a faithful, effective
and efficient manner to the best of the Executive’s abilities, and (iii) hold no other employment. The Executive’s service on the boards of directors (or similar body) of other business entities (for purposes of this sentence, not
including civic and charitable boards and similar bodies) is subject to the prior written approval of the Board. The Company shall have the right to require the Executive to resign from any board or similar body (including, without
limitation, any association, corporate, civic or charitable board or similar body) which the Executive may then serve if the Board reasonably determines that the Executive’s service on such board or body interferes with the effective
discharge of the Executive’s duties and responsibilities to the Company or that any business related to such service is then in direct or indirect competition with any business of the Company or any of its Affiliates, successors or
assigns.
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1.4 |
No Breach of Contract. The Executive hereby
represents to the Company and agrees that: (i) the execution and delivery of this Agreement by the Executive and the Company and the performance by the Executive of the Executive’s duties hereunder do not and shall not constitute a breach
of, conflict with, or otherwise contravene or cause a default under, the terms of any other agreement or policy to which the Executive is a party or otherwise bound or any judgment, order or decree to which the Executive is subject; (ii)
the Executive will not enter into any new agreement that would or reasonably could contravene or cause a default by the Executive under this Agreement; (iii) the Executive has no information (including, without limitation, confidential
information and trade secrets) relating to any other Person which would prevent, or be violated by, the Executive entering into this Agreement or carrying out his duties hereunder; (iv) the Executive is not bound by any consulting,
non-compete, non-solicitation, confidentiality, trade secret or similar agreement (other than this Agreement and the Confidentiality Agreement (as defined below)) with any other Person (other than (x) ongoing, customary confidentiality
obligations as to confidential information obtained from prior employers in the course of the Executive’s prior employment with them and (y) under agreements with prior employers, copies of which Executive represents and warrants he has
provided to the Board); (v) to the extent the Executive has any confidential or similar information that the Executive is not free to disclose to the Company, the Executive will not disclose or bring to the Company, including without
limitation, its premises, computer networks, communications or systems, computers or any other devices or accounts, any such information to the extent such disclosure or transmission would violate applicable law or any other agreement or
policy to which the Executive is a party or by which the Executive is otherwise bound; and (vi) the Executive understands the Company will rely
upon the accuracy and truth of the representations and warranties of the Executive set forth herein and the Executive consents to such reliance.
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1.5 |
Travel. The Executive acknowledges that the
Executive will be required to travel from time to time in the course of performing his duties for the Company.
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2. |
Period of Employment. The period of time that the
Executive is employed with the Company (the “Period of Employment”) shall be from November 21, 2023, or such other date as mutually agreed to by the parties (the “Employment Commencement Date”) and shall be without a specific term. The Company or the Executive may terminate the Executive’s employment, and the Period of Employment, pursuant to
Section 5 of this Agreement.
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3. |
Compensation.
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3.1 |
Base Salary. During the Period of Employment, the
Company shall pay the Executive a base salary (the “Base Salary”), which shall be paid in accordance with the Company’s regular payroll practices in effect from time to time but
not less frequently than in monthly installments. The Executive’s Base Salary shall be at an annualized rate of Five Hundred Thousand Dollars ($500,000).
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3.2 |
Incentive Bonus. The Executive shall be eligible to
receive an incentive bonus for each fiscal year of the Company that occurs during the Period of Employment (“Incentive Bonus”) subject to the terms and conditions of the
Company’s Annual Bonus Program. Notwithstanding the foregoing and except as otherwise expressly provided in this Agreement, the Executive must be employed by the Company at the time the Company pays incentive bonuses to employees
generally with respect to a particular fiscal year in order to earn and be eligible for an Incentive Bonus for that year (and, if the Executive is not so employed at such time, in no event shall the Executive have been considered to have
“earned” any Incentive Bonus with respect to the fiscal year). The Executive’s target Incentive Bonus amount for a particular fiscal year of the Company shall equal One Hundred Percent (100%) of the Executive’s Base Salary paid by the
Company to the Executive for that fiscal year (“Target Amount”); provided that the Executive’s actual Incentive Bonus amount for a particular fiscal year may range from zero to
Two Hundred Percent (200%) of the Target Amount as may be determined by the Board (or a committee thereof) in its sole discretion, based on performance objectives (which may include corporate, business unit or division, financial,
strategic, individual or other objectives) established with respect to that particular fiscal year by the Board (or a committee thereof). The Board (or a committee thereof) shall use good faith efforts to establish objectives for the
applicable year prior to the commencement of the first fiscal quarter of such year, but need not establish such objectives prior to the commencement of the applicable fiscal year; provided that Company management has timely provided its
draft business plan and objectives to the Board in good faith prior to the fourth quarter of the prior fiscal year, to allow the Board a reasonable opportunity to review and deliberate regarding such proposal before the commencement of
such first quarter. The Executive shall participate in the Company’s Annual Bonus Program already in place for the fiscal 2024 on a
prorated basis and the maximum Incentive Bonus amount the Executive shall be eligible to receive is seven-twelfths (7/12) of the amount the Executive would be entitled to under the Annual Bonus Program had he been employed with the
Company through the last day of the fiscal year. A copy of the Annual Bonus Program for fiscal 2024 has been provided to the Executive by the Company.
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3.3 |
Sign-On Bonus. The Executive shall receive a
one-time sign-on bonus of One Hundred Thirty-Six Thousand Dollars ($136,000) (“Sign-On Bonus”), which shall be subject to standard deductions and withholdings as required by law and payable in three (3) equal installments based on the
following schedule: (i) one-third (1/3) will be paid with the Company’s first payroll period following the Employment Commencement Date, (ii) one-third (1/3) will be paid with the Company’s first payroll period following six (6) months
after the Employment Commencement Date, and (iii) one-third (1/3) will be paid at the time the Incentive Bonus for fiscal 2024 is paid to the Company’s executive management team or, if no Incentive Bonus for fiscal 2024 is awarded, then
with the next pay period after the Board (or a committee thereof) makes such determination. Notwithstanding the foregoing and except as otherwise expressly provided in this Agreement, the Executive must be employed by the Company at the
time the Company pays each installment of the Sign-On Bonus in order to earn and be eligible for such installment of the Sign-On Bonus (and, if the Executive is not so employed at such time, in no event shall the Executive have been
considered to have “earned” any Sign-On Bonus with respect to that installment).
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3.4 |
Initial Equity Awards. The Company will grant the
Executive an award of Company stock units, with the total number of stock units awarded equal to Four Million One Hundred and Fifty Thousand Dollars ($4,150,000) divided by the average of the closing price for a share of the Company’s
common stock (in regular trading) on The Nasdaq Stock Market over the thirty consecutive trading days ending with the last trading day for which such closing price is known prior to the Employment Commencement Date (the “Award”).
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3.5 |
Annual Equity Awards. Additional equity awards for
the Executive during the Period of Employment, commencing with awards for fiscal year 2025, will be in the sole discretion of the Board (or a committee thereof).
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4. |
Benefits.
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4.1 |
Retirement, Welfare and Fringe Benefits. During the
Period of Employment, the Executive shall be entitled to participate in all employee retirement and welfare benefit plans and programs, and fringe benefit plans and programs, made available by the Company to the Company’s executive
officers employed in the United States generally, in accordance with the eligibility and participation provisions of such plans and as such plans or programs may be in effect from time to time. During the Period of Employment, the
Executive shall also be entitled to reimbursement of an amount not to exceed Two-Thousand Five Hundred dollars ($2,500) for an annual physical.
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4.2 |
Reimbursement of Business Expenses. The Executive
is authorized to incur reasonable expenses in carrying out the Executive’s duties for the Company under this Agreement and shall be entitled to reimbursement for all reasonable business expenses the Executive incurs during the Period of
Employment in connection with carrying out the Executive’s duties for the Company, subject to the Company’s expense reimbursement policies and any pre-approval policies in effect from time to time. The Executive agrees to promptly submit
and document any reimbursable expenses in accordance with the Company’s expense reimbursement policies to facilitate the timely reimbursement of such expenses. The Company’s policy for business travel is “coach class” for domestic travel
and “business class” for international travel.
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4.3 |
Relocation Expenses. To the extent the Executive
decides to relocate to Orange County, California, the Executive is authorized to incur up to One Hundred Thousand Dollars ($100,000) of expenses related to moving his residence to Orange County, California, including temporary apartment
rental in Orange County. If the employment is terminated or the Executive resigns pursuant to the terms of this Agreement (other than a terminated described in Section 5.3(b)) within two (2) years of the Employment Commencement Date, then
the Executive shall pay to the Company (promptly following Executive’s Severance Date (as defined below) one hundred percent (100%) of the relocation expenses paid or reimbursed by the Company pursuant to this Section 4.3. The Executive
must incur all claims for reimbursement of relocation expenses during 2024, and promptly submit to the Company customary documentation of such expenses so that they can be pair or reimbursed by the Company not later than December 31,
2024. The Executive agrees to reasonably cooperate with the Company regarding such expenses, including in connection with vendor selection.
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4.4 |
Holidays and Leave. The Executive shall be entitled
to holiday and leave in accordance with Company applicable policies.
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5. |
Termination.
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5.1 |
Termination by the Company or the Executive. During
the Period of Employment, the Executive shall be an employee “at-will,” meaning that the Executive or the Company may terminate the employment relationship at any time, with or without Cause, and with or without advance notice and for any
reason or no particular reason.
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5.2 |
Reserved.
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5.3 |
Benefits upon Termination. If the Executive’s
employment by the Company is terminated for any reason by the Company or by the Executive (the date that the Executive’s employment by the Company terminates is referred to as the “Severance
Date”), the Company shall have no further obligation to make or provide to the Executive, and the Executive shall have no further right to receive or obtain from the Company, any payments or benefits except as follows:
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5.4 |
Release; Resignations; No Other Severance; Leave.
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5.5 |
Certain Defined Terms.
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(i) |
The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty percent (30%) or more of either (1) the then-outstanding shares of common stock of the Company
(the “Outstanding Company Common Stock”) or (2) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that, for purposes of this paragraph (i), the following acquisitions shall not constitute a Change in
Control Event; (A) any acquisition directly from the Company or an Affiliate, (B) any acquisition by the Company or an Affiliate, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or
any Affiliate of the Company or a successor, or (D) any acquisition by any entity pursuant to a transaction that complies with Sections (iii)(1), (2) and (3) below; further provided that if such an acquisition of 30% or more of the
Outstanding Company Common Stock and/or Outstanding Company Voting Securities was specifically approved in advance by the Board, the reference to “30%” in this clause (i) shall instead be “50%”;
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(ii) |
A change in the Board or its members such that individuals who, as of the Employment Commencement Date, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Employment Commencement Date whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (including for these purposes, the new members whose election or nomination was so approved, without counting the member and
his predecessor twice) shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;
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(iii) |
Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company or any corporation or other entity a majority of whose
outstanding voting stock or voting power is beneficially owned directly or indirectly by the Company (a “Subsidiary”), a sale or other disposition of all or substantially all of
the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its Subsidiaries (each, a “Business Combination”), in each case unless,
following such Business Combination, (1) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all
of the Company’s assets directly or through one or more subsidiaries (a “Parent”)), in substantially the same proportions as their ownership immediately prior to such Business
Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding any entity resulting from such Business Combination or a Parent or any employee benefit plan (or
related trust) of the Company or such entity resulting from such Business Combination or Parent) beneficially owns, directly or indirectly, thirty percent (30%) or more
of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such entity, except to the extent that the
ownership in excess of thirty percent (30%) existed prior to the Business Combination, and (3) at least a majority of the members of the board of directors or trustees
of the entity resulting from such Business Combination or a Parent were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or
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(iv) |
Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company other than in the context of a transaction that does not constitute a Change in Control Event
under clause (iii) above;
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(i) |
a material reduction by the Company of the Executive’s duties, title, position or responsibilities relative to the Executive’s duties, title, position or responsibilities in effect immediately
prior to such reduction;
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(ii) |
a reduction by the Company of the Executive’s rate of Base Salary or target level of Incentive Bonus as in effect immediately prior to such reduction, unless such reduction is part of an
across-the-board reduction in the salary level of all other executive officers of the Company employed in the United States by the same percentage amount; or
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(iii)
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a material breach by the Company of this Agreement;
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5.6. |
Notice of Termination; Employment Following Expiration of Period of Employment. Any termination of the Executive’s employment under this Agreement shall be communicated by written notice of termination from the terminating party to the other party. This notice of termination must be
delivered in accordance with Section 18 and must indicate the specific provision(s) of this Agreement (e.g., with Cause, without Cause, with Good Reason, or without Good Reason) relied upon in effecting the termination.
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5.7 |
Limitation on Benefits.
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6. |
Confidentiality and Indemnification Agreements.
Concurrently herewith, the Executive shall execute and deliver to the Company a Confidential Information, and Invention Assignment Agreement in the form attached hereto as Exhibit B
(the “Confidentiality Agreement”). No later than on the Employment Commencement Date, the Company shall also offer the Executive the opportunity to enter into the Company’s
standard form of Amended and Restated Indemnification Agreement for Directors and Executive Officers (“Indemnification Agreement”).
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7. |
Withholding Taxes. Notwithstanding anything else
herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such federal, state and local income, employment, or other
taxes as may be required to be withheld pursuant to any applicable law or regulation. Except for such withholding rights, the Executive is solely responsible for any and all tax liability that may arise with respect to the compensation
provided under or pursuant to this Agreement.
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8. |
Successors and Assigns.
(a) This
Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive’s legal representatives.
(b) This
Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. Without limiting the generality of the preceding sentence, the Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume this Agreement. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and
any successor or assignee, as applicable, which assumes and agrees to perform this Agreement by operation of law or otherwise.
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9. |
Number and Gender; Examples. Where the context
requires, the singular shall include the plural, the plural shall include the singular, and any gender shall include all other genders. Where specific language is used to clarify by example a general statement contained herein, such
specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates.
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10. |
Section Headings. The section headings of, and
titles of paragraphs and subparagraphs contained in, this Agreement are for the purpose of convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation thereof.
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11. |
Governing Law. This Agreement will be governed by
and construed in accordance with the laws of the state of California, without giving effect to any choice of law or conflicting provision or rule (whether of the state of California or any other jurisdiction) that would cause the laws of
any jurisdiction other than the state of California to be applied. In furtherance of the foregoing, the internal law of the state of California will control the interpretation and construction of this Agreement, even if under such
jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.
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12. |
Severability. It is the desire and intent of the
parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision
of this Agreement shall be adjudicated by a court of competent jurisdiction or determined by an arbitrator pursuant to Section 16 to be invalid, prohibited or unenforceable under any present or future law, and if the rights and
obligations of any party under this Agreement will not be materially and adversely affected thereby, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in any other jurisdiction, and to this end the provisions of this Agreement are declared to be severable; furthermore, in lieu of such invalid or unenforceable provision there
will be added automatically as a part of this Agreement, a legal, valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible. Notwithstanding the foregoing, if such provision could
be more narrowly drawn (as to geographic scope, period of duration or otherwise) so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.
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13. |
Entire Agreement. This Agreement, the
Confidentiality Agreement and the Indemnification Agreement (together, the “Integrated Agreement”) embody the entire agreement of the parties hereto respecting the matters within
its scope. The Integrated Agreement supersedes all prior and contemporaneous agreements of the parties hereto that directly or indirectly bears upon the subject matter hereof. Any prior negotiations, correspondence, agreements,
proposals or understandings relating to the subject matter hereof shall be deemed to have been merged into the Integrated Agreement, and to the extent inconsistent herewith, such negotiations, correspondence, agreements, proposals, or
understandings shall be deemed to be of no force or effect. There are no representations, warranties, or agreements, whether express or implied, or oral or written, with respect to the subject matter hereof, except as expressly set forth
in the Integrated Agreement.
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14. |
Modifications. This Agreement may not be amended,
modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to this Agreement, which agreement is executed by both of the parties hereto.
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15. |
Waiver. Neither the failure nor any delay on the
part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect
to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.
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16. |
Arbitration. Except as provided in Section 17 and
in the Confidentiality Agreement, any non-time barred, legally actionable controversy or claim arising out of or relating to this Agreement, its enforcement, arbitrability or interpretation, or because of an alleged breach, default, or
misrepresentation in connection with any of its provisions, or any other non-time barred, legally actionable controversy or claim arising out of or relating to the Executive’s employment or association with the Company or termination of
the same, including, without limiting the generality of the foregoing, any alleged violation of state or federal statute, common law or constitution, shall be submitted to individual, final and binding arbitration, to be held in Orange County, California, before a single arbitrator selected from Judicial Arbitration and Mediation Services, Inc. (“JAMS”),
in accordance with the then-current JAMS Arbitration Rules and Procedures for employment disputes, as modified by the terms and conditions in this Section (which may be found at www.jamsadr.com under the Rules/Clauses tab). The parties
will select the arbitrator by mutual agreement or, if the parties cannot agree, then by obtaining a list of nine qualified arbitrators supplied by JAMS from their labor and employment law panel, with each party confidentially submitting a
“rank and strike” list that ranks in order of priority six arbitrators and strikes three arbitrators, and the most favored arbitrator based on the cumulative rankings who was not struck by either party shall be appointed arbitrator.
Final resolution of any dispute through arbitration may include any remedy or relief that is provided for through any applicable state or federal statutes, or common law. Statutes of limitations shall be the same as would be applicable
were the action to be brought in court. The arbitrator selected pursuant to this Agreement may order such discovery as is necessary for a full and fair exploration of the issues and dispute, consistent with the expedited nature of
arbitration. At the conclusion of the arbitration, the arbitrator shall issue a written decision that sets forth the essential findings and conclusions upon which the arbitrator’s award or decision is based. Any award or relief granted
by the arbitrator under this Agreement shall be final and binding on the parties to this Agreement and may be enforced by any court of competent jurisdiction. The Company will pay those arbitration costs that are unique to arbitration,
including the arbitrator’s fee (recognizing that each side bears its own deposition, witness, expert and attorneys’ fees and other expenses to the same extent as if the matter were being heard in court). If, however, any party prevails
on a statutory claim, which affords the prevailing party attorneys’ fees and costs, then the arbitrator may (to the extent required by law in order for this arbitration provision to be enforceable) award reasonable fees and costs to the
prevailing party. The arbitrator may not award attorneys’ fees to a party that would not otherwise be entitled to such an award under the applicable statute (for clarity, the arbitrator may not award attorneys’ fees for contractual
claims). The arbitrator shall resolve any dispute as to the reasonableness of any fee or cost. Except as provided in the Confidentiality Agreement, the parties
acknowledge and agree that they are hereby waiving any rights to trial by jury or a court in any action or proceeding brought by either of the parties against the other in connection with any matter whatsoever arising out of or in any
way connected with this Agreement or the Executive’s employment.
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17. |
Remedies. Each of
the parties to this Agreement and any Person granted rights hereunder whether or not such person or entity is a signatory hereto shall be entitled to enforce its rights under this Agreement specifically to recover damages and costs for
any breach of any provision of this Agreement and to exercise all other rights existing in its favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that each party (as well as each other Person granted rights hereunder) may in its sole discretion obtain permanent injunctive or equitable relief in any arbitration filed pursuant to Section 16 and enforce any such relief
awarded by the arbitrator in any court of competent jurisdiction. In addition, each party may also apply to any court of law or equity of competent jurisdiction for provisional injunctive or equitable relief, including a temporary
restraining or preliminary injunction (without any requirement to post any bond or deposit), to ensure that the relief sought in arbitration is not rendered ineffectual by interim harm. Each party shall be responsible for paying its own
attorneys’ fees, costs and other expenses pertaining to any such legal proceeding and enforcement regardless of whether an award or finding or any judgment or verdict thereon is entered against either party.
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18. |
Notices. Any notice provided for in this Agreement
must be in writing and must be either personally delivered by first class mail (postage prepaid and return receipt requested) or sent by reputable overnight courier service (charges prepaid) to the recipient at the address below indicated
or at such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Notices will be deemed to have been given hereunder and received when delivered
personally, when received if transmitted via telecopier, five days after deposit in the U.S. mail and one day after deposit with a reputable overnight courier service.
|
19. |
Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one
or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. Photographic copies of such signed counterparts may be used in lieu of the originals for
any purpose.
|
20. |
Legal Counsel; Mutual Drafting. Each party
recognizes that this is a legally binding contract and acknowledges and agrees that they have had the opportunity to consult with legal counsel of their choice. Each party has cooperated in the drafting, negotiation and preparation of
this Agreement. Hence, in any construction to be made of this Agreement, the same shall not be construed against either party on the basis of that party being the drafter of such language. The Executive agrees and acknowledges that he
has read and understands this Agreement, is entering into it freely and voluntarily, and has been advised to seek counsel prior to entering into this Agreement and has had ample opportunity to do so.
|
21. |
Clawback Policy. Any amounts awarded or payable
pursuant to this Agreement are subject to the terms of the Company’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain
circumstances require repayment or forfeiture of awards or other compensation (or cash, shares or other property received pursuant to awards, or value received from a disposition or such shares or other property). The Executive agrees to
comply with, and promptly repay to the Company any amounts that are required to be repaid pursuant to, such policy.
|
22. |
Section 409A.
|
“COMPANY”
|
||
Lantronix, Inc.,
|
||
a Delaware corporation
|
||
By:
|
/s/ Jeremy Whitaker
|
|
Name:
|
Jeremy Whitaker
|
|
Title:
|
Interim Chief Executive Officer and Chief Financial Officer
|
|
“EXECUTIVE”
|
||
/s/ Saleel Awsare
|
||
Saleel Awsare
|
“EXECUTIVE”
|
|
Saleel Awsare
|
“COMPANY”
|
||
LANTRONIX, INC.
|
||
By:
|
||
[Name]
|
||
[Title]
|
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