Exhibit 4.6


 


LANTRONIX, INC.


 


INDUCEMENT STOCK
OPTION AGREEMENT


 


As an inducement material
to the hiring of Sanjeev Datla (the “Optionee”) as Chief Technology Officer, Lantronix, Inc., a Delaware corporation
(the “Company”), hereby grants to the Optionee an award (the “Award”) of the number of non-qualified stock
options set forth below. This Award is subject to all of the terms and conditions set forth herein and in this Inducement Stock
Option Agreement (the “Inducement Agreement”). This Award is not issued pursuant to the Company’s Amended &
Restated 2010 Stock Incentive Plan or any other equity incentive plan of the Company.


 


1.              
Grant of Option. The Company hereby grants to the Optionee an option (the “Option”) to purchase the number
of shares (the “Shares”) of the Corporation’s common stock (the “Common Stock”) set forth below,
at the exercise price per share set forth below (the “Exercise Price”), subject to the terms and conditions of this
Inducement Agreement, as follows:


 


	Grant Date:	 
	Vesting Commencement Date:	 
	Exercise Price per Share:	 
	Total Number of Shares Granted:	 
	Total Exercise Price:	 
	Type of Option:	Nonqualified Stock Option
	Term/Expiration Date:	7 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:

         

        Subject to the Optionee remaining a Service
        Provider, the shares subject to the Option (the “Shares”) shall vest such that: (i) Twenty-five Percent (25%) of the
        Shares vest on the one (1) year anniversary of the Vesting Commencement Date; and (ii) 1/48 of the Shares vest on each monthly
        anniversary of the Vesting Commencement Date thereafter, such that One Hundred Percent (100%) of the Shares will be fully vested
        on the four (4) year anniversary of the Vesting Commencement Date.

         



 


2.              
Exercise of Option.


 


(a)            
Right to Exercise. This Option is exercisable during its term in accordance with the Vesting Schedule set out in
Section 1 and the applicable provisions of this Inducement Agreement, subject to Optionee’s remaining an employee of the
Company on each vesting date.


 


(b)            
Post-Termination Exercise Period. If Optionee ceases to be an employee of the Company, then this Option may be exercised
to the extent vested as of the date of termination until the earlier of (i) ninety (90) days after the date upon which Optionee
ceases to be an employee of the Company, or (ii) the original seven-year Option term. If on the date of termination the Optionee
is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will terminate. If after
termination the Optionee does not exercise his or her Option within ninety (90) days, the Option will terminate.


 


(c)            
Death or Disability. If the Optionee ceases to be an employee of the Company as a result of the Optionee’s
death or disability, the Optionee or the Optionee’s beneficiary may exercise the Option to the extent vested as of the date
of termination within twelve (12) months following the termination of Optionee’s employment.


 


(d)            
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.


 


 


 






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(e)            
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 (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.              
Term of Option. This Option may be exercised only within the term set out in Section 1, and may be exercised during
such term only in accordance with the terms of this Inducement Agreement.


 


4.              
Administration of Award; Fair Market Value. Subject to the provisions of this Inducement Agreement, the Compensation
Committee of the Board of Directors of the Company (the “Administrator”) will have the authority, in its discretion:
(i) to construe and interpret the terms of this Inducement Agreement; (ii) to modify or amend each Award (subject to Section 11
of this Inducement Agreement); and (iii) to make all other determinations deemed necessary or advisable for administering this
Inducement Agreement. For purposes of this Agreement, “Fair Market Value” means, as of any date, the value of the Common
Stock as the Administrator may determine in good faith by reference to the price of such stock on any established stock exchange
or a national market system on the day of determination if the Common Stock is so listed on any established stock exchange or a
national market system. If the Common Stock is not listed on any established stock exchange or a national market system, the value
of the Common Stock will be determined as the Administrator may determine in good faith.


 


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 the 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)  
Withholding Requirements. Prior to the delivery of any Shares pursuant to the exercise of the Option, the Company
will have the power and the right to deduct or withhold, or require the Optionee to remit to the Company, an amount sufficient
to satisfy federal, state, local, foreign or other taxes (including the Optionee’s FICA obligation) required to be withheld
with respect to such Award (or exercise thereof).


 


(c)  
Withholding Arrangements. The Administrator, in its sole discretion and pursuant to such procedures as it may specify
from time to time, may permit the Optionee to satisfy such tax withholding obligation, in whole or in part by (without limitation)
(i) paying cash, (ii) electing to have the Company withhold otherwise deliverable cash or Shares having a Fair Market Value equal
to the minimum amount required to be withheld, (iii) delivering to the Company already-owned Shares having a Fair Market Value
equal to the amount required to be withheld, or (iv) selling a sufficient number of Shares otherwise deliverable to the Optionee
through such means as the Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to the
amount required to be withheld. The amount of the withholding requirement will be deemed to include any amount which the Administrator
agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state
or local marginal income tax rates applicable to the Optionee with respect to the Award on the date that the amount of tax to be
withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date
that the taxes are required to be withheld.


 


6.              
Payments after Death. Any distribution or delivery to be made to the Optionee under this Agreement will, if the Optionee
is then deceased, be made to the administrator or executor of the Optionee’s estate. Any such administrator or executor must
furnish the Company with (i) written notice of his or her status as transferee, and (ii) evidence satisfactory to the Company to
establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.


 


7.              
Rights as Stockholder. Neither the Optionee nor any person claiming under or through the Optionee will have any of
the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates
representing such Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and
delivered to the Optionee or Optionee’s broker.


 


8.              
Adjustments; Merger or Change in Control; Acceleration.


 


(a)            
Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities,
or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of
the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential
benefits intended to be made available under this Inducement Agreement, will adjust the number and class of Shares that may be
delivered upon exercise of the Options.


 


 


 






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(b)            
Dissolution or Liquidation. To the extent not previously settled, this Award shall terminate immediately prior to
the dissolution or liquidation of the Company.


 


(c)            
Change in Control. In the event of a Change in Control (as defined below), the Award will be treated as the Administrator
determines in accordance with the authorizations presented herein, including, without limitation, that the Award will be assumed
or an equivalent option or right substituted by the successor corporation or a parent or subsidiary of the successor corporation
(the “Successor Corporation”). In the event that the Successor Corporation does not assume or substitute for the Award,
the Option will fully vest. For the purposes of this subsection (c), an Award will be considered assumed if, following the Change
in Control, the Award confers the right to receive, for each Share subject to the Award immediately prior to the Change in Control,
the consideration (whether stock, cash, or other securities or property) received in the merger or Change in Control by holders
of the Company’s common stock for each Share held on the effective date of the transaction (and if holders were offered a
choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however,
that if such consideration received in the Change in Control is not solely common stock of the Successor Corporation, the Administrator
may, with the consent of the Successor Corporation, provide for the consideration to be received upon vesting of the Options, for
each Share subject to such Award, to be solely common stock of the Successor Corporation equal in Fair Market Value to the per
share consideration received by holders of Common Stock in the Change in Control.


 


(d)            
Definition of Change in Control. As used in this Inducement Agreement, “Change in Control” means the
occurrence of any of the following events:


 


(i)             
A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as
a group, (“Person”) acquires ownership of the stock of the Company that, together with the stock held by such Person,
constitutes more than 50% of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection
(i), the acquisition of additional stock by any one Person, who is considered to own more than 50% of the total voting power of
the stock of the Company will not be considered a Change in Control; or


 


(ii)           
A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced
during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of
the Board prior to the date of the appointment or election. For purposes of this clause (ii), if any Person is considered to effectively
control the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in
Control; or


 


(iii)         
A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person
acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person
or persons) assets from the Company that have a total gross Fair Market Value equal to or more than 50% of the total gross Fair
Market Value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that
for purposes of this subsection (iii), the following will not constitute a change in the ownership of a substantial portion of
the Company’s assets: (A) a transfer to an entity that is controlled by the Company’s stockholders immediately after
the transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer)
in exchange for or with respect to the Company’s stock, (2) an entity, 50% or more of the total value or voting power of
which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, 50% or more of the total
value or voting power of all the outstanding stock of the Company, or (4) an entity, at least 50% of the total value or voting
power of which is owned, directly or indirectly, by a Person described in this subsection (iii)(B)(3). For purposes of this subsection
(iii), gross Fair Market Value means the value of the assets of the Company, or the value of the assets being disposed of, determined
without regard to any liabilities associated with such assets.


 


For purposes of this
Section 8(d), persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction with the Company.


 


Notwithstanding the
foregoing, a transaction shall not be deemed a Change in Control unless the transaction qualifies as a change in the ownership
of the Company, change in the effective control of the Company or a change in the ownership of a substantial portion of the Company’s
assets, each within the meaning of Section 409A of the Code and any proposed or final Treasury Regulations and Internal Revenue
Service guidance that has been promulgated or may be promulgated thereunder from time to time (“Section 409A”).


 


9.              
No Effect on Employment. The Optionee’s employment with the Company is on an at-will basis only. Accordingly,
nothing in this Inducement Agreement confers upon Optionee any right with respect to continuing the Optionee’s relationship
as an employee of the Company, nor will this Inducement Agreement interfere in any way with the Optionee’s right or the Company’s
right to terminate such relationship at any time, with or without cause, to the extent permitted by applicable laws.


 


10.           
Non-Transferability of Option. This Option may not be transferred in any manner except 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 this Inducement
Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. Upon any attempt
to transfer the Award, the Award and the rights and privileges conferred hereby immediately will become null and void.


 


 


 






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11.           
Amendment. The Administrator may at any time amend this Inducement Agreement; provided, however, that no amendment
of this Inducement Agreement will impair the rights of the Optionee, unless mutually agreed otherwise between the Optionee and
the Administrator, which agreement must be in writing and signed by the Optionee and the Company.


 


12.           
Additional Conditions to Issuance of Stock. If at any time the Company will determine, in its discretion, that the
listing, registration or qualification of the Shares upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental regulatory authority is necessary or desirable as a condition to the issuance of Shares to the
Optionee (or his estate), such issuance will not occur unless and until such listing, registration, qualification, consent or approval
will have been effected or obtained free of any conditions not acceptable to the Company. The Company will make all reasonable
efforts to meet the requirements of any such state or federal law or securities exchange and to obtain any such consent or approval
of any such governmental authority.


 


13.           
Code Section 409A. Notwithstanding anything in this Inducement Agreement to the contrary, this Inducement Agreement
is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and shall be
interpreted in a manner consistent with such intention.


 


14.           
Governing Law. This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard
to its choice-of-law provisions).


 


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


 


 


	OPTIONEE	 	LANTRONIX, INC.
	Signature:	 	 	Signature:	 
	Print Name:	Sanjeev Datla	 	Print Name:	Jeremy Whitaker
	Date:	 	 	Title:	Chief Financial Officer
	 	 	 	Date:	April 4, 2016




 


 


 


 






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