PERFORMANCE AWARD AGREEMENT
Exhibit 10.1
DATE
In
consideration of your performance and service with Lantronix, Inc., a Delaware
corporation (the “Company), this Agreement is entered into by and between the
Company and [EMPLOYEE NAME] (the “Grantee” or
“Employee”) pursuant to the terms of this Performance Award Agreement and Exhibit A
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, discretionary bonus, or
future stock option incentive plans.
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1.
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Eligibility. The
Performance Award (as defined below) is designed to provide
performance-based incentive compensation for all eligible
employees. 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:
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(a)
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Grantee
must have been employed by the Company, or any subsidiary of the Company,
as of December 31, 2008;
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(b)
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Grantee
must have a satisfactory fiscal year-end performance rating;
and
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(c)
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Grantee
must be employed by the Company, or any subsidiary of the Company, as of
June 30, 2009.
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2.
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Performance
Award. By this Agreement, you are hereby granted a
target performance award equivalent to {$ } of Company Common
Stock. Total number of shares of Company Common Stock will be
determined, and immediate vesting will occur as of the date that the
Committee certifies FY’09 Company
performance.
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3.
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Conditions to Receipt
of Performance Award. The performance metrics contained
in Exhibit
A must be attained for a Performance Award to be
earned. The Committee and Board of Directors shall have the
exclusive and final discretionary authority to issue the award on either
an annual or biannual basis.
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(a)
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Performance
Awards granted under the Agreement will be made through the form of
issuance of Company Common Stock (the “Performance Award”) through the
grant of Stock Purchase Rights with a per share purchase price equal to
the par value of a share of Company Common Stock and deemed paid through
the provision of services, under the Company’s 2000 Stock Plan, which is
incorporated herein by reference. A copy of the prospectus for
the Stock Plan is attached hereto. The award will vest as shown
on Exhibit
A, based on Employee’s job grade level, Non-GAAP Net Income,
Revenue according to the fiscal year 2009 Annual Operating Plan, and
Management by Objectives (MBOs), as defined below. If you are
employed on June 30, 2009, you will vest in this Award based on Exhibit
A.
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4.
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Tax
Obligations. As a condition of the granting of the
Performance Award, the Grantee agrees that the Company may withhold 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.
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5.
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No
Assignment. This Agreement, and the benefits provided
hereunder, may not be assigned by the Grantee by operation of law or
otherwise.
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6.
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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.
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Key
Definitions
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(a)
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“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
Non-GAAP Net Income.
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(b)
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“Disability”
means total and permanent disability as defined in Section 22(e)(3) of the
Internal Revenue Code of 1986, as
amended.
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(c)
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“Revenue”
means the total amount of money received by the Company for goods sold or
services provided during a certain time
period.
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(d)
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“Non-GAAP
Net Income” means operating profit adjusted for stock based compensation,
amortization, depreciation, performance incentives, and other one-time
events at the discretion of the Company’s Board of
Directors.
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8.
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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.
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9.
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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.
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10.
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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.
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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.
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11.
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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.
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12.
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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.
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13.
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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.
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14.
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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 effective as of the date first above
written.
Lantronix,
Inc.
By:_______________________________
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EXHIBIT
A
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