Document:

Exhibit 10.2

 

 

July 30, 2018 (Revises
letter dated July 27, 2018)

 

Fathi Hakam

16 Fayette Circle

Ladera Ranch, CA
92694

 

 

Dear Fathi:

 

This letter ("Agreement")
will confirm our understanding and agreement regarding your employment with Lantronix, Inc. ("Lantronix" or the "Company"),
commencing August 7, 2018 ("Commencement Date").

 

POSITION EXCLUSIVITY:

 

The Company hereby agrees
to employ you as its Vice President, Engineering, reporting to Jeff Benck, President and Chief Executive Officer of the Company ("CEO").
Your primary office will be located at the Lantronix corporate headquarters in Irvine, CA. During your employment with Lantronix, you
will not render any services to any other person or entity, whether for compensation or otherwise, or engage in any business activities
competitive with or adverse to the Company's business or welfare, whether alone, as an employee, as a partner, as a member, or as a shareholder,
officer or director of any other corporation, or as a trustee, fiduciary or in any other similar representative capacity of any other
entity, without the prior written consent of the CEO.

 

BASE SALARY:

 

The Company
shall pay you a bi-weekly base salary of $9,615.384 ($250,000 on an annualized basis), less applicable withholdings and deductions, paid
on the Company's regular bi-weekly payroll dates. Your salary will be reviewed at the time executive salaries are reviewed periodically,
and the Company may in its sole discretion, adjust it to reflect Company performance, your performance, market conditions and other factors
deemed relevant by the Company.

 

BONUS:

 

You will be eligible
to participate in the Fiscal 2019 Lantronix Performance Bonus Plan at a rate of 40% of your base salary. For the 1st half plan period,
which has a performance period of July 1, 2018 through December 31, 2018, you will participate on a pro-rated basis due to you not being
an employee for the entire plan period. The 1st half bonus is typically paid in February. A full year target is $100,000. Lantronix reserves
the right to change or discontinue the plan at any time.

 

RESTRICTED STOCK
UNITS:

 

You will
receive the following one-time restricted stock unit (RSU) grant of 100,000 shares of the Company's common stock that shall vest according
to the following schedule: 25% (25,000) of the RSUs shall vest on September 30, 2019. The remaining RSUs will vest ratably each quarter
for a period of 12 quarters subject to your remaining a Service Provider to the Company through such dates (as defined in the Company's
2010 Stock Plan).

 

 

 

Initials: 

 

    	 	1	 

     

    

 

BENEFITS:

 

You will be
eligible to participate in the employee benefit plans and programs generally available to the Company's employees, including group medical,
dental, vision and life insurance, and disability benefits, subject to the terms and conditions of such plans and programs. You will be
entitled to paid time off for vacation leave per our Lantronix vacation accrual schedule. The Company reserves the right to amend, modify
or terminate any of its benefit plans or programs at any time and for any reason. A summary of our benefits is included in this letter

 

EXPENSES:

 

You shall be
entitled to reimbursement for all reasonable and necessary out-of-pocket business, entertainment and
travel expenses incurred by you in connection with the performance of your duties hereunder in accordance with the Company's expense reimbursement
policies and procedures, including reimbursement for economy travel on domestic flights and for international flights.

 

WITHHOLDING:

 

All forms of compensation
paid to you as an employee of the Company shall be less all applicable withholdings.

 

CONFIDENTIAL
INFORMATION:

 

As
an employee of Lantronix, you will have access to certain Company confidential information and you may, in the course of your employment,
develop certain information or inventions, which will be the property of the Company, To protect the interests of the Company, you will
be required to sign the Company's Employment, Confidential Information, and Invention Assignment Agreement as a condition of employment.
We wish to impress upon you that we do not want you to bring with you any confidential or proprietary information from a previous employer
or violate any obligation you may have to that employer.

 

NON SOLICITATION:

 

In consideration
of the promises and covenants contained in this letter, you agree 'that for a period of one (1) year following your effective date of
termination or resignation, you will not, either directly or indirectly, either on your own behalf or on behalf of any other person,
recruit or solicit for hire any individual who is then employed by the Company. You acknowledge and agree that the restrictions contained
in this section are reasonable and appropriate. You further acknowledge and agree that the restrictions contained in this section will
not preclude you from engaging in any trade, business or profession that you are qualified to engage in.

 

AT-WILL EMPLOYMENT:

 

Your employment with the Company will be for no specific period of time. Rather, your employment will be at-will, meaning
that you or the Company may terminate the employment relationship at any time, with or without cause, and with or without notice and
for any reason or no particular reason. Although your compensation and benefits may change from time to time, the at-will nature of your
employment may only be changed by an express written agreement signed by an authorized officer of the Company.

 

 

 

Initials: 

 

    	 	2	 

     

    

 

SEVERANCE:

 

If your employment
with the Company is terminated by you for Good Reason or by the Company without Cause within two years of the Commencement Date, then
subject to your execution and non-revocation of a release of claims in a form provided by the Company, then in addition to any base salary
earned through the termination date, any earned but as-yet unpaid bonuses, unpaid expense reimbursements and vested benefits to which
you are entitled under the terms of any Company employee benefit plan (which compensation and benefits will be paid to you or your estate
in connection with your ceasing to be employed without regard to the reason for such cessation), you will be entitled to the following:

 

You will be entitled
to receive severance pay in a total amount equal to the sum of (i) six (6) months of your then current Base Salary, plus (ii) an amount
equal to fifty percent (50%) of Bonus amounts you earned over the previous twelve (12) months (collectively, the "Severance Payment"),
The Severance Payment shall be less required tax deductions and withholdings and shall be paid in a lump sum on the 53rd day
following your date of termination or such later date as is required to avoid potentially adverse taxation under Internal Revenue Code
Section 409A pursuant to section under the caption "Section 409A" below.

 

For purposes of
this letter, 'Cause" shall mean: (i) gross negligence or willful misconduct in the performance of your duties to the Company; (ii)
intentional and continual failure to substantially perform your reasonably assigned duties for the Company; (iii) intentional conduct
that is demonstrably and materially injurious to the Company, including but not limited to committing or cooperating in an act of fraud,
theft, or dishonesty against the Company; (iv) your breach of a fiduciary duty to the Company or its shareholders; (v) your conviction
for, or plea of guilty or nolo contendre to, the commission of any felony or any crime involving deceit, material dishonesty, fraud,
embezzlement, theft, any crime that results in or is intended to result in personal enrichment at the expense of the Company, any crime
that involves the use or sale of a controlled substance, or any other offense that will adversely affect in any material respect the
Company's reputation or your ability to perform your obligations or duties to the Company; or (vi) your violation of a material written
policy of the Company or breach of a written agreement with Company, including but not limited to a breach of the Employment, Confidential
Information, and Invention Assignment Agreement. Notwithstanding the foregoing, Cause shall not exist under (i), (ii), (iii), (iv) or
(v) unless the Company provides you with written notice of the existence of one or more of the actions, conditions or events set forth
above in such definition of Cause, and if such action, event or condition is curable, you fail to cure such action, event or condition
within thirty (30) days after receipt of such notice.

 

For the sake of
clarity, termination of your employment in connection with your death or disability will not be considered "termination by the Company
without Cause" hereunder. For purposes of this letter, you shall be considered disabled if you have been physically or mentally
unable to perform your job duties hereunder for a continuous period of at least one hundred twenty (120) days or a total of one hundred
fifty (150) days during any one hundred and eighty (180) day period, and you have not recovered and returned to the full time performance
of your duties within thirty (30) days after written notice is given to you by the Company following such 120 day period or 180 day period,
as applicable.

 

For purposes of
this letter, "Good Reason" shall mean your resignation within one hundred and twenty (120) days after the Company has taken
any of the following actions without your express written consent: (i) a material reduction in your base salary, your target annual bonus
opportunity or benefits (unless, outside of a Change in Control context, such reduction is in connection with a salary or benefit reduction
program of general application at the senior level executives of the Company); (ii) a material breach by the Company of any written agreement
with you, including the Company's failure to obtain an agreement from any successor to the Company to assume and agree to perform the
obligations under this letter in the same manner and to the same extent that the Company would be required to perform, except where such
assumption occurs by operation of law; (iii) a material adverse change in your title, duties or responsibilities (other than temporarily
while you are disabled or as otherwise permitted by applicable law); or (iv) relocation of your principal workplace by more than 45 miles,
which change results in a material increase in your one-way commute, Notwithstanding the foregoing, Good Reason shall not exist unless
you provide the Company written notice of the existence of the one or more of the actions, conditions or events set forth above in this
definition of Good Reason within ninety (90) days after the initial existence or occurrence of such action, condition or event, and if
such action, event or condition is curable, the Company fails to cure such action, event or condition within thirty (30) days after its
receipt of such notice.

 

 

 

Initials: 

 

    	 	3	 

     

    

 

CONTINGENT OFFER:

 

This offer is contingent
upon:

 

(a) Verification of
your right to work in the United States, as demonstrated by your completion of an 1-9 form upon hire and your submission of acceptable
documentation (as noted on the 1-9 form) verifying your identity and work authorization within three days of your Start Date.

 

(b) Satisfactory
completion of a background investigation,

 

This offer is valid
until August 3, 2018 and will be withdrawn if any of the above conditions are not satisfied.

 

REPRESENTATIONS:

 

By
accepting this offer, you represent that you are able to accept this job and carry out the work that it would involve without breaching
any legal restrictions on your activities, such as noncompetition, non-solicitation or other work-related restrictions imposed by a current
or former employer. You also represent that you will inform the Company about any such restrictions and provide the Company with as much
information about them as possible, including any agreements between you and your current or former employer describing such restrictions
on your activities. You further confirm that you will not remove or take any documents or proprietary data or materials of any kind,
electronic or otherwise, with you from your current or former employer to the Company without written authorization from your current
or former employer, nor will you use or disclose any such confidential information during the course and scope of your employment with
the Company, If you have any questions about the ownership of particular documents or other information, you should discuss such questions
with your former employer before removing or copying the documents or information.

 

ARBITRATION:

 

To the
fullest extent allowed by law, any controversy, claim or dispute between you and the Company (and/or any of its affiliates, owners, shareholders,
directors, officers, employees, volunteers or agents) relating to or arising out of your employment or cessation of that employment will
be submitted to final and binding arbitration as provided in Attachment A hereto.

 

ACCEPTANCE:

 

To indicate your
acceptance of this offer, please initial each page, and complete and sign the At-Will Acceptance Statement.

 

The offer letter
and attachments need to be returned via email to the Company's Vice President, Human Resources at tom.morton@lantronix.com.

 

We are excited at
the prospect of you joining our team. If you have any questions about the above details, please call me immediately.

 

Very truly yours,

 

LANTRONIX, INC.

 

 

/s/ Jeff Benck

Jeff Benck

President
& Chief Executive Officer

 

 

 

Initials: 

 

    	 	4	 

     

    

 

At-Will Acceptance
Statement

 

I, M. Fathi Hakam, do hereby accept the above employment offer,
and agree with the terms as outlined above. I understand that there are no other terms expressed or implied. My expected start date will
be August 7th, 2018.

 

I understand that Lantronix is an "At-Will Employer,"
and agree that my employment is for no definite period and may, regardless of the date of payment of wages and salary, be terminated
by me or by Lantronix at any time without any previous notice. Subject to the rights under the section entitled "Severance,"
I also understand and agree that Lantronix may hire, fire, demote, promote, and change or alter any terms of my employment at any time.

 

	 	 	 
	/s/ Fathi Hakam	 	July 31st, 2018
	Signature	 	Date
	 	 	 

 

 

Nondisclosure of
Former Employer's Trade Secret Information

 

 

I understand
and agree that the Company expects me to respect any trade secret information of any of my former employers, business associates, or
others. I agree to respect the Company's express direction to me not to disclose to the Company, its officers, or employees, any
such trade secret information so long as it remains confidential. In addition, I also represent to the Company that my commencement
of work for the Company does not (a) conflict with any other contractual commitments on my part to any former employer or third
party, (b) result in the misappropriation of trade secrets of any former employer or third party, or (c) otherwise violate or
interfere with any rights of any third party

 

	 	 	 
	/s/ Fathi Hakam	 	July 31st, 2018
	Signature	 	Date
	 	 	 

 

 

 

Initials: 

 

    	 	5	 

     

    

 

ATTACHMENT A

 

MUTUAL AGREEMENT TO ARBITRATE

 

To the fullest extent allowed
by law, any controversy, claim or dispute between Executive and the Company (and/or any of its affiliated, subsidiary, or related entities,
owners, directors, officers, employees, volunteers or agents) relating to or arising out of this Agreement or Executive's employment
(or the cessation thereof), will be submitted to final and binding arbitration in Orange County, California, for determination in accordance
with the American Arbitration Association's ("AAA") Employment Arbitration Rules as the exclusive remedy for such controversy,
claim or dispute, In any such arbitration, the parties may conduct discovery to the same extent as would be permitted in a court of law.
The arbitrator shall issue a reasoned, written decision, and shall have full authority to award all remedies which would be available
in court. The Company shall pay the arbitrator's fees and any AAA administrative expenses. Any judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. Possible disputes covered by the above include (but are not limited
to) unpaid wages, breach of contract (including this Agreement), torts, violation of public policy, discrimination, harassment, or any
other employment-related claims under laws including, but not limited to, Title Vll of the Civil Rights Act of 1964, the Americans With
Disabilities Act, the California Labor Code, the California Fair Employment and Housing Act, the Age Discrimination in Employment Act,
the Americans with Disabilities Act, and any other statutes or laws relating to Executive's relationship with the Company regardless
of whether such dispute is initiated by Executive or the Company. Thus, this bilateral arbitration agreement fully applies to any and
all claims that the Company may have against Executive, including but not limited to claims for misappropriation of Company property,
disclosure of proprietary information or trade secrets, interference with contracts, trade libel, gross negligence, or any other claim
for alleged wrongful conduct or breach of the duty of loyalty. However, claims for workers' compensation benefits, unemployment insurance
and those arising under the National Labor Relations Act (or any other claims where mandatory arbitration is prohibited by law) are not
covered by this arbitration agreement, and such claims may be presented to the appropriate court or government agency. BY AGREEING TO
THIS BINDING ARBITRATION PROVISION, BOTH YOU AND THE COMPANY GIVE UP ALL RIGHTS TO TRIAL BY JURY.

 

This mutual arbitration agreement
is to be construed as broadly as is permissible under applicable law.

 

 

 

 

 

 

 

    	 	6	 

     

    

 

BENEFITS SUMMARY

 

 

INSURANCE:

 

Lantronix recognizes the
need for financial protection in the event of illness or injury that may result in medical expenses, Therefore, the Company offers group
insurance plans designed to meet those needs to all active regular full-time employees.

 

Regular full-time employees
are eligible to enroll in group insurance benefits on the first of the month following their first day of employment. Based on your hire
date of August 7, 2018, you will be eligible for benefits on September 1, 2018. If your start date is extended, it may
affect the date you will be eligible for benefits.

 

Group medical, dental
and prescription coverage is presently offered through Aetna. You have a choice among these medical and dental plan
options: PPO and HMO (California employees only). Vision coverage is offered through VSP. The Company currently pays a
significant portion of the premium, with the employee contributing the difference through a bi-weekly payroll deduction.

 

Lantronix has in place a
FSA (Flexible Spending Account) Plan that allows pre-tax deductions for dependent care costs, eligible un-reimbursed medical expenses,
and health insurance premiums.

 

Basic Life and Accidental
Death & Dismemberment coverage is provided by Guardian Insurance at the rate of two time's annual total targeted compensation,
up to a maximum $500,000. Voluntary Life insurance can be purchased by the employee. Supplemental life insurance can also be purchased
by the employee to cover spouse and children.

 

Short-term Disability
for CA residents is provided through the State. Benefit coverage is up to a maximum of 52 weeks. Benefits amount vary depending on
the employee's weekly base or wage rate, Maximum benefit is $840 per week. To qualify you must be unable to perform your duties for 8
consecutive days. To claim a disability, please call 800-480-3287 for plan requirements, restrictions, and forms.

 

Long-term Disability
is provided by Guardian Insurance and provides up to 60% of your basic monthly earnings (not to exceed $12,500) when you meet
the disability requirements. Benefits can be paid out as early as 90 days after you have been declared disabled. California employees
would become eligible when the state disability payments cease (typically 12 months).

 

PROGRAMS:

 

EAP

 

Lantronix offers an
Employee Assistance Program to provide you with support when you need guidance or information regarding Management resources, Conflict
management, Financial or Legal issues,
Child or Dependent care, Relationship issues, Co-dependency and many other issues involving modern life.

 

Tuition Reimbursement

 

Lantronix
believes in education and will reimburse employees for their efforts when a course of study is related to their job. Undergraduate and
Certificate programs are reimbursed at the rate of $500 per course, up to 6 courses per calendar year. Graduate programs are reimbursed
at the rate of $1,500 per course, up to 6 courses per calendar year. Employees do have to obtain approval to participate in the plan
before they enroll at an Institution of higher learning in order to be eligible.

 

 

 

    	 	7	 

     

    

 

Company Events

 

Lantronix offers fun
themed events at least 5+ times per year. They range from taco parties to having the In-N-Out truck for lunch.

 

HOLIDAYS:

 

Lantronix offers an average
of 11 paid holidays per year.

 

VACATION:

 

Vacation is accrued on a
bi-weekly bases on the following schedule: two (2.0) weeks per year for the first three (3) years of service; three (3.0) weeks per year
after three (3) years of service; three and one-half (3.5) weeks after five (5) years of service; four (4) weeks after eight (8) years
of service; and five (5.0) weeks after ten (10) years of service. Per your discussion with Jeff, you will begin an accrual rate
of 3 weeks per year.

 

401(K) PLAN:

 

Lantronix offers a 401K
plan to full time employees. The Plan allows employees to contribute any whole percentage of their salary on a pre-tax basis, not to
exceed the annual maximum set by the IRS. The company matches 25% of the first 6% of employee contributions, Employees are eligible
to enroll in the 401K program, effective the first of the month following completion of 30 days of employment. Employees who have a
401K plan through a prior employer may rollover their funds into Lantronix Plan immediately, however, they may not begin making
contributions to the Plan until their enrollment eligibility date. Lantronix reserves the right to change the plan at any time.

 

EMPLOYEE STOCK PURCHASE
PLAN

 

Provides you with the opportunity
to acquire Lantronix, Inc. stock at a discount through payroll deductions. 15% discount on the stock price. Potential for a discount
greater than 15% if the stock price on the exercise date is greater than the stock price on the enrollment date. There are potential
tax advantages if holding periods are met. Lantronix reserves the right to change the plan at any time.

 

 

 

Initials: 

 

    	 	8Exhibit 10.3

 

LANTRONIX
FORM OF CHANGE IN CONTROL AGREEMENT

 

 

Fathi Hakam

Vice President, Engineering

 

 

Re: Change
In Control Agreement

 

Dear Fathi:

 

In connection with your employment
at Lantronix, Inc (the “Lantronix” or “Company”) the undersigned parties hereby agree on the following provisions
relating to a Change in Control of the Company.

 

CHANGE IN CONTROL: 

 

In the event your
employment with the Company is terminated by you for Good Reason or by the Company without Cause within 60 days prior to or 12
months following a Change in Control (as defined below), then subject to your execution and non-revocation of a release of claims in
a form provided by the Company, in keeping with past practice, and resignation from any Company affiliated board positions, all
unvested Company equity awards that you then hold shall fully vest and be settled or become exercisable, as applicable, and you will
be entitled to receive (as applicable, the “Change-in-Control Severance Payment”):

 

(a)          In
the event of a Change in Control where the transaction results in Lantronix shareholders receiving at closing consideration with a value
of less than a value of $5 per share on a fully diluted basis, in lieu of any other severance benefits, you will be entitled to receive
severance pay in a total amount equal to the sum of (i) six (6) months of your then current Base Salary, plus (ii) an amount equal to
fifty percent (50%) of your previous 12 months bonus. The Company will also provide you, your spouse and your eligible dependents with
continued group health, dental and vision coverage pursuant to the provisions of COBRA at the level in effect and upon substantially
the same terms and conditions as existed under applicable insurance plans immediately prior to the date of termination of your employment
(including without limitation contributions required by you, if any, for such benefits), for the first six (6) months following the date
of termination your employment without Cause or for Good Reason or until you become eligible for comparable benefits from another employer.

 

(b)          In
the event of a Change in Control where the transaction results in Lantronix shareholders receiving at closing consideration with a value
of $5 per share or greater on a fully diluted basis, in lieu of any other severance benefits, you will be entitled to receive severance
pay in a total amount equal to the sum of (i) twelve (12) months of your then current Base Salary, plus (ii) an amount equal to one hundred
percent (100%) of your then current target bonus. The Company will also provide you, your spouse and your eligible dependents with continued
group health, dental and vision coverage pursuant to the provisions of COBRA at the level in effect and upon substantially the same terms
and conditions as existed under applicable insurance plans immediately prior to the date of termination of your employment (including
without limitation contributions required by you, if any, for such benefits), for the first twelve (12) months following the date of
termination your employment without Cause or for Good Reason or until you become eligible for comparable benefits from another employer.

 

Any Change-of-Control
Severance Payments shall be less required tax deductions and withholdings and shall be paid in a lump sum on the 53rd day following
your date of termination or such later date as is required to avoid potentially adverse taxation under Internal Revenue Code Section 409A
as described under the caption “Section 409A” below. Change-of-Control Severance Payments may also be subject to reduction
required to avoid potentially adverse taxation under Internal Revenue Code Section 280G as described under the caption “Section
280G” below.

 

 

 

    	 	1	 

     

    

 

For purposes of this
letter, “Change in Control” shall mean the occurrence of any of the following events: (i)  any “person” (as such
term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than
the TL Parties, becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or, more of the total voting power represented by the Company’s
then outstanding voting securities; or (ii) the consummation of the sale or disposition by the Company of all or substantially all of
the Company’s assets, other than to the TL Parties; (iii) the consummation of a merger or consolidation of the Company with any
other corporation, other than (A) a merger or consolidation with the TL Parties or (B) a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or
consolidation; or (iv) a majority of the members of the Board are replaced during any twelve-month period by directors whose appointment
or election is not endorsed by a majority of the Board or the TL Parties before the date of appointment or election. In no event shall
a “Change in Control” be deemed to have occurred for purposes of this letter solely because the Company engages in an internal
reorganization, which may include a transfer of assets to, or a merger or consolidation with, one or more affiliates.

 

For purposes of this
letter, “TL Parties” shall mean, either individually or collectively, Bernhard Bruscha, TL Investments.

 

SECTION 409A: 

 

This letter is intended
to comply with Section 409A of the Internal Revenue Code (“Section 409A”) or an exemption thereunder and shall be construed
and administered in accordance with Section 409A. Notwithstanding any other provision of this offer letter, payments provided under this
letter may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this
letter that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term
deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each instalment payment provided
under this letter shall be treated as a separate payment. Any payments to be made under this letter upon a termination of employment shall
only be made upon a “separation from service” under Section 409A. Notwithstanding the foregoing, the Company makes no representations
that the payments and benefits provided under this letter comply with Section 409A and in no event shall the Company be liable for all
or any portion of any taxes, penalties, interest or other expenses that may be incurred by you on account of noncompliance with Section
409A.

 

Notwithstanding any
other provision of this letter, if any payment or benefit provided to you in connection with termination of employment is determined to
constitute “nonqualified deferred compensation” within the meaning of Section 409A and you are determined to be a “specified
employee” as defined in Section 409A(a)(2)(b)(i), then such payment or benefit shall not be paid until the first payroll date to
occur following the six-month anniversary of your termination date (the “Specified Employee Payment Date”) or, if earlier,
on the date of your death. The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date
shall be paid to you in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without
delay in accordance with their original schedule. To the extent necessary to avoid application of any tax under Section 409A applying
to any compensation or benefit included herein that constitutes nonqualified deferred compensation, the definition of “Change in
Control” shall be reformed such that a transaction will only qualify as a Change in Control if it also constitutes a “change
in control event” as defined under Section 409A.

 

SECTION 280G: 

 

Notwithstanding any
other provision of this letter or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided
or to be provided by the Company or its affiliates to you or for your benefit pursuant to the terms of this letter or otherwise (“Covered
Payments”) constitute parachute payments (“Parachute Payments”) within the meaning of Section 280G of the Internal Revenue
Code (“Section 280G”) and would, but for this section be subject to the excise tax imposed under Section 4999 of the Internal
Revenue Code (or any successor provision thereto) (“Section 4999”) or any similar tax imposed by state or local law or any
interest or penalties with respect to such taxes (collectively, the “Excise Tax”), then prior to making the Covered Payments,
a calculation shall be made comparing (i) the Net Benefit (as defined below) to you of the Covered Payments after payment of the Excise
Tax to (ii) the Net Benefit to you if the Covered Payments are limited to the extent necessary to avoid being subject to the Excise Tax.
Only if the amount calculated under (i) above is less than the amount under (ii) above will the Covered Payments be reduced to the minimum
extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax (that amount, the “Reduced Amount”).
“Net Benefit” shall mean the present value of the Covered Payments net of all federal, state, local, foreign income, employment,
and excise taxes.

 

 

 

    	 	2	 

     

    

 

Any such reduction
shall be made in accordance with Section 409A and the following: (i) the Covered Payments which do not constitute nonqualified
deferred compensation subject to Section 409A shall be reduced first; and (ii) all other Covered Payments shall then be reduced as
follows: (A) cash payments shall be reduced before non-cash payments; and (B) payments to be made on a later payment date shall be
reduced before payments to be made on an earlier payment date.

 

Any determination required
under this section shall be made in writing in good faith by the accounting firm that was the Company’s independent registered public
accounting firm immediately before the change in control (the “Accountants”), which shall provide detailed supporting calculations
to the Company and you as requested by the Company or you. The Company and you shall provide the Accountants with such information and
documents as the Accountants may reasonably request in order to make a determination under this section. For purposes of making the calculations
and determinations required by this section, the Accountants may rely on reasonable, good faith assumptions and approximations concerning
the application of Section 280G and Section 4999. The Accountants’ determinations shall be final and binding on the Company and
you. The Company shall be responsible for all fees and expenses incurred by the Accountants in connection with the calculations required
by this section.

 

This Agreement shall
expire on May 31, 2024. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Any
dispute hereunder, including with respect to validity, construction and breach shall be resolved exclusively by arbitration, before a
single arbitrator appointed by the Judicial Arbitration Mediation Service (“JAMS”) in accordance with the JAMS Streamlined
Arbitration Rules. The Arbitration shall be conducted in Orange County and if that venue is not available than at a nearest JAMS facility.

 

Please indicate your
acceptance of this Agreement by executing a copy of this Agreement at the space provided below and returning the same to our attention.

 

 

 

LANTRONIX, INC.

	 	 	 	 
	 	 	 	 
	By:	/s/ Jeremy Whitaker	 	04 / 25 / 2021
	 	Jeremy Whitaker	 	Date
	 	Chief Financial Officer	 	 

 

 

 

 

ACCEPTED AND
AGREED TO:

	 	 	 	 
	 	 	 	 
	By:	/s/ Mohammed Fathi Hakam	 	04 / 23 / 2021
	 	Fathi Hakam	 	Date
	 	   	 	 

 

 

 

 

 

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Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00350-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00350-of-00352.parquet"}]]