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EXHIBIT 10.3

 
LANTRONIX, INC.
 
2010 INDUCEMENT EQUITY INCENTIVE PLAN
 
STOCK OPTION AGREEMENT

 
Unless otherwise defined herein, the terms defined in the Lantronix, Inc. 2010
Inducement Equity Incentive Plan (the "Plan") shall have the same defined
meanings in this Stock Option Agreement (the “Option Agreement”).
 
I. 
NOTICE OF GRANT

 
[Optionee's Name and Address]
 
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
             
Grant Date
             
Vesting Commencement Date
             
Exercise Price per Share
$
           
Total Number of Shares Granted
             
Total Exercise Price
$
         
Type of Option:
Nonstatutory Stock Option
       
Term/Expiration Date:
10 Years From the Grant Date
 

 
Vesting Schedule:
 
Subject to accelerated vesting as set forth in duly authorized written
agreements by and between Optionee and the Company, this Option may be
exercised, in whole or in part, in accordance with the following schedule:
 
25% of the Shares subject to the Option shall vest twelve months after the
Vesting Commencement Date, and 1/48 of the Shares subject to the Option shall
vest each month thereafter, subject to the Optionee remaining a Service Provider
on such dates.
 
 
 

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II. 
AGREEMENT

 
 
1.
 
Grant of Option.

 
The Board hereby grants to the Optionee (the “Optionee”) named in the Notice of
Grant section of thisAgreement (the “Notice of Grant”), an option (the “Option”)
to purchase the number of Shares 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) and this Option Agreement.  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.
 
 
2.
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, subject to
Optionee’s remaining a Service Provider on each vesting date.
 
(b)           Post-Termination Exercise Period.  Subject to any extended
post-termination exercise period set forth in duly authorized written agreements
by and between Optionee and the Company,  if Optionee ceases to be a Service
Provider, then this Option may be exercised, but only to the extent vested on
the date of such cessation as a Service Provider, until the earlier of (i)
ninety days after the date upon which Optionee ceases to be a Service Provider,
or (ii) the original ten-year Option term.
 
(c)            Method of Exercise.  This option may be exercised with respect to
all or any part of any vested Shares by giving the Company or any stock option
plan administrator designated by the Company written or electronic notice of
such exercise, in the form designated by the Company or the Company’s designated
third-party stock option plan administrator, specifying the number of shares as
to which this option is exercised and 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 or any
third-party stock option plan administrator designated 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.
 
(d)           Payment of Exercise Price.  Payment of the aggregate exercise
price shall be by any of the following, or a combination thereof, at the
election of the Optionee:
 
(i)          cash; or
 
(ii)         check; or
 
 
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(iii)           delivery of a properly executed exercise notice together with
such other documentation as the Administrator and a broker, if applicable, shall
require to effect an exercise of the Option and delivery to the Company of the
sale proceeds required to pay the exercise price.
 
 
3.
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.
 
 
4.
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.
 
 
5.
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.
 
(a)         Exercising the Option.  The Optionee may incur regular federal
income tax liability upon exercise of a Nonstatutory Stock Option.  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.
 
(b)         Disposition of Shares.  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.
 
 
6.
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
California.
 
 
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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 Agreement
and fully understands all provisions of the Plan and this 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.

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

 
 
 
 
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