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EXHIBIT 10.1
 
Fiscal Year 2012
PERFORMANCE AWARD AGREEMENT

In consideration of your performance and service with Lantronix, Inc., a
Delaware corporation (the “Company), this Agreement is entered into as of this
____ day of _____, 2011 (“Effective Date”) by and between the Company and
[EMPLOYEENAME] (the “Grantee” or “Employee”) pursuant to the terms of this
Performance Award Agreement and Exhibits A and B attached hereto (collectively
the “Agreement”).

This Agreement is the entire agreement between the Company and Grantee regarding
the subject matter of this Agreement and supersedes and replaces any prior or
existing discussions, negotiations, or agreements between the Grantee and the
Company regarding any incentive bonus, project bonus, or discretionary bonus;
not to include any Long Term Incentive Plan Agreement(s).

1.  
Eligibility.  The Performance Award (as defined below) is designed to provide
performance-based incentive compensation for all eligible employees during the
two six-month grant periods commencing on July 1, 2011 and ending on December
31, 2011 (“Grant Period A”) and the period commencing on January 1, 2012 and
ending on June 30, 2012 (“Grant Period B”).  The Compensation Committee of the
Company’s Board of Directors (the “Committee”) has the sole authority to
determine eligibility to receive Performance Awards.  Grantees are selected by
the Committee to receive a Performance Award.  In order to be eligible to
receive any  portion of the Performance Award, Grantee must satisfy all of the
following:

 
(a)
Grantee must have been employed by the Company, or any subsidiary of the
Company, by September 30, 2011 in respect of Grant Period A, and April 1, 2012
in respect of Grant Period B, respectively, to be eligible for pro-rated awards
and by July 1, 2011 and January 1, 2012 for Grant Periods A and B respectively,
to be eligible for full awards;

 
(b)
Grantee must have a satisfactory performance rating as of the last day of the
applicable Grant Period; and

 
(c)
Grantee must have continued employment with the Company, or any subsidiary of
the Company, as of the last day of the applicable Grant Period to receive any
portion of the award.

 
 

2.  
Performance Award.  Subject to, and contingent upon, those conditions set forth
in Section 3 below, and compliance with the requirements of this Agreement, by
this Agreement, you are hereby eligible to be granted a target performance award
as set forth in the applicable Exhibit which may be paid in either a cash award,
or Company Common Stock through the grant of Restricted Stock Units under the
terms and conditions of the Plan, or a combination of the two, at the discretion
of the Committee.  Total number of Restricted Stock Units will be determined
based on the fair market value of Company Common Stock as of, and immediate
vesting will occur as of, the date that the Committee certifies Company
performance for the applicable Grant Period, or as otherwise determined by the
Committee or the Board of Directors.

   
 
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3.  
Conditions to Receipt of Performance Award.

    

 
(a)
The granting of any award hereunder by the Company shall be contingent upon the
prior occurrence of each of the following:

  
(i)   
The performance metrics contained in the applicable attached Exhibit must be
attained for a Performance Award to be earned.

(ii)   
The availability of an adequate number of authorized shares available for grant
under the Plan.

    
The Committee and Board of Directors shall have the exclusive and final
discretionary authority to determine: whether or not to issue the award,
satisfaction of the contingencies set forth above, the form of any award (i.e.,
Restricted Stock Units vs. cash awards), and the frequency of the award on
either an annual or semi-annual basis.

 
(b)
Performance Awards granted under the Agreement will be made through the form of
either cash payment or the issuance of Company Common Stock or a combination of
the two (the “Performance Award”) through the grant of Restricted Stock Units,
under the terms and conditions of the Plan.  The award will be based on
Employee’s job grade level, EBITDA and Revenue according to the then current
Fiscal Year 2012 Annual Operating Plan and stretch plan, and Management by
Objectives (MBOs), as defined in the applicable Exhibit.  If you meet the
eligibility criteria set forth in Section 1 above, you will receive the
Performance Award as set forth on the schedule in the applicable Exhibit.  To
the extent that any Performance Award is granted hereunder, such Performance
Award shall be granted to you at a time (to be determined by the Committee
and/or the Board of Directors in their sole discretion) following the end of the
applicable Grant Period but in no event later than March 15 of the year
following the end of the applicable Grant Period.

   
4.  
Tax Obligations.  As a condition of the granting of the Performance Award, the
Grantee agrees that the Company may withhold cash and/or a number of the shares
subject to the Performance Award to meet tax withholding obligations, as may be
necessary to discharge the Company’s obligations with respect to any tax,
assessment, or other governmental charge imposed on property or income received
by the Grantee pursuant to this Agreement and the Performance Award.

5.  
No Assignment.  This Agreement, and the benefits provided hereunder, may not be
assigned by the Grantee by operation of law or otherwise.

6.  
Governing Law.  This Agreement and the legal relations between the parties shall
be governed and construed in accordance with the internal laws of the State of
Delaware, without effect to the conflicts of laws principles thereof.

  
 
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7.  
Key Definitions

    

 
(a)
“Annual Operating Plan (AOP)” means the plan that serves to lay out planned
activities and corresponding monetary resources for the fiscal year, measured on
a quarterly basis, including, but not limited to, Revenue and EBITDA.   The AOP
may be revised in the discretion of the Company’s Board of Directors.

 
(b)
“EBITDA” means earnings before interests, taxes, depreciation, amortization,
stock based compensation, and other one-time events at the discretion of the
Company’s Board of Directors.

 
(c)
“Disability” means total and permanent disability as defined in Section 22(e)(3)
of the Internal Revenue Code of 1986, as amended.

 
(d)
“Plan” means the 2010 Stock Incentive Plan as may be amended pursuant to
applicable laws, Company articles or Company bylaws.

 
(e)
“Revenue” means the total amount of money received by the Company for goods sold
or services provided during a certain time period.

    
8.  
Notices.  Any notice required or permitted under this Agreement shall be deemed
given when delivered personally, or when deposited in a United States Post
Office, postage prepaid, addressed, as appropriate, to the Grantee at the last
address specified in Grantee’s employment records, or such other address as the
Grantee may designate in writing to the Company.

9.  
Amendments.  This Agreement may be terminated, amended or modified at any time
by an instrument in writing from the Company, in its sole discretion.  The
Company reserves the right to administer, modify, or terminate the Agreement
with or without notice.

10.  
Authority.  Except as otherwise set forth in this Agreement, the Committee shall
administer the Agreement and shall have the exclusive and final discretionary
authority and power to determine employee eligibility to participate and receive
payment under this Agreement, to determine the amount of payment under this
Agreement, to construe terms and provisions of this Agreement, and to exercise
all other powers specified in this Agreement or which may be implied from the
provisions of this Agreement.  The Committee also reserves the right, it its
sole discretion, to determine individual Grantee eligibility under this
Agreement.

The Committee has the authority, in its discretion to amend and rescind any of
this Agreement’s terms or provisions, terminate this Agreement, and to make all
determinations necessary for the administration of this Agreement.

11.  
Employment At-Will.  The employment of all employees of the Company, or any
subsidiary of the Company, is terminable at any time by either party, with or
without cause being shown or advance notice by either party.  The Plans and this
Agreement shall not be construed to create a contract of employment for a
specified period of time between the Company and any Grantee.

12.  
Rights as a Stockholder.  The Grantee shall have no rights as a stockholder of
the Company with respect to any share of Common Stock of the Company underlying
or relating to any Performance Award until the issuance of a stock certificate
to the Grantee in respect of such Performance Award.

13.  
Headings.  The headings in the Agreement are inserted for convenience only and
shall not be deemed to constitute a part hereof nor to affect the meaning
thereof.

  
14.  
Severability.  The invalidity or unenforceability of any provision or provisions
of this Agreement will not affect the validity or enforceability of any other
provision hereof, which will remain in full force and effect.

  
 
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IN WITNESS WHEREOF, this Agreement is made as of the Effective Date.

Lantronix, Inc.

By: ____________________________
Printed Name:
Tile:
Date:

ACKNOWLEDGED AND AGREED:

By: ____________________________
Printed Name:
Date:
 
 
 
 
 
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EXHIBIT A

GRANT PERIOD A

 
 
 
 
 
 
 
 
 

 
 
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EXHIBIT B

GRANT PERIOD B
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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