SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 28, 2020
(Exact Name of Registrant as Specified in Charter)
|(State or other jurisdiction
|(Commission File Number)||(IRS Employer|
|7535 Irvine Center Drive, Suite 100|
Irvine, California 92618
|(Address of Principal Executive Offices, including zip code)|
|Registrant’s telephone number, including area code: (949) 453-3990|
|(Former name or former address, if changed since last report)|
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
|Title of each Class||Trading Symbol||Name of each exchange on which registered|
|Common Stock, $0.0001 par value||LTRX||The Nasdaq Stock Market LLC|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
|Item 5.02||Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.|
Effective August 28, 2020, Martin Hale, Jr. resigned from his position as director of Lantronix, Inc. (the “Company”). At the time of his resignation, Mr. Hale was a member of the Company’s Compensation Committee. In written correspondence to the Company, a copy of which is attached as Exhibit 17.1 to this Current Report on Form 8-K and is incorporated herein by reference, Mr. Hale stated that his resignation was due to his disagreement with the Company’s policies and practices with regard to compensation philosophy.
|Item 9.01||Financial Statements and Exhibits.|
|17.1||Letter of Resignation from Martin Hale, Jr., dated August 28, 2020.|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|Chief Financial Officer|
Date: August 31, 2020
August 28, 2020
Nominating and Governance Committee
7535 Irvine Center Drive, Suite 100
Irvine, CA 92618
Dear Committee Members,
I’d like to state at the start of this letter that I believe our management team is executing well and that management and my fellow board members are talented people who genuinely believe they have the company’s best interests in mind. I have enjoyed working with this board and management team and believe we have made tremendous progress making Lantronix a more successful company. I am optimistic about the future of this company and the continued growth of shareholder value.
With that said, I hereby tender my resignation to the Lantronix Board of Directors given my disagreement with the majority of the board members over the company’s governance policies and practices with regard to compensation philosophy given what I view as an insufficient focus on shareholder alignment. While our work together has improved alignment, it has been a difficult process. I would like to see faster change, including adoption of balance sheet and capital efficiency compensation metrics (such as return on invested capital), given our aggressive acquisition program (which for clarity I support). These metrics, which were supposed to be used last year in the long term compensation plan, were shelved. They were also promised this year, but shelved again. Including such metrics would in my view lead to much better shareholder alignment.
Over my 23 years of professional investment experience, I have served on approximately 22 boards, including 10 public companies and chaired 5 public company compensation committees. During this time, I have been lucky to have worked with exceptionally creative, energetic and talented management teams and boards that have generated substantial shareholder value. I count the Lantronix board and management in this group of people. I expect we will see tremendous value creation ahead provided the company embraces both aligning management compensation with cumulative per share economic profit generated for shareholders and making sure the return on invested capital well exceeds its cost of capital.
/s/ Martin Hale Jr.
Martin Hale Jr.
|cc:||Bernhard Bruscha, Chairman of the Board|
Paul Pickle, CEO