Lantronix Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Leadership Update, Other Events, Financial Statements and Exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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FORM
CURRENT REPORT
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| Item 1.01. | Entry into a Material Definitive Agreement. |
Lantronix, Inc. (the “Company”) has entered into a cooperation agreement (the “Agreement”) with 180 Degree Capital Corp. (“180 Degree Capital”), dated August 9, 2024, pursuant to which the Company has agreed, among other things, to (i) take all necessary action as promptly as practicable to nominate Narbeh Derhacobian and Kevin Palatnik (each a “New Director,” and collectively, the “New Directors”) for election to the Company’s Board of Directors (the “Board”) at the Company’s 2024 Annual Meeting of Stockholders (the “2024 Annual Meeting”) and recommend, support and solicit proxies for the election of the New Directors at the 2024 Annual Meeting in the same manner as for the Company’s other nominees at the 2024 Annual Meeting, and (ii) ensure that two directors serving on the Board as of the date preceding the date of the Agreement will not stand for re-election at the 2024 Annual Meeting.
If any of the New Directors is unable or unwilling to serve as a director for any reason, resigns as a director or is removed as a director during the term of the Agreement, the Agreement includes certain procedures for the parties to identify and appoint a replacement person or persons (each, a “Replacement Appointee”). The Company’s obligations with respect to the appointment of such Replacement Appointees are subject, among other things, to 180 Degree Capital beneficially owning at least 1% of the Company’s then outstanding common stock at such time. During the term of the Agreement, the size of the Board shall be no greater than six members except with the approval of the Board which includes the approval or abstention of both New Directors.
During the term of the Agreement, 180 Degree Capital will vote all of its shares of the Company (i) in favor of the election of each person nominated by the Board for election as a director; (ii) against the election as director of any person that is not approved and recommended by the Board for election at any stockholder meeting; (iii) against any proposals or resolutions to remove any member of the Board; and (iv) in accordance with the recommendation of the Board on all other proposals or business that may be the subject of stockholder action at any stockholder meeting, except that 180 Degree Capital may vote in its sole discretion with respect to any publicly announced proposals required in connection with certain business combination or extraordinary transactions involving the Company, and if either Institutional Shareholder Services Inc. or Glass Lewis & Co., LLC recommends against the Board’s recommendation for a proposal (other than with respect to director elections), 180 Degree Capital may follow such alternative recommendation.
The Agreement also includes customary standstill obligations and mutual non-disparagement provisions during the term of the Agreement. During the term of the Agreement, 180 Degree Capital is prohibited from, among other things, acquiring, in the aggregate, beneficial ownership of more than 9.9% of the outstanding shares of common stock of the Company; seeking representation on the Board or to remove any member of the Board, or submitting any proposal for consideration by stockholders of the Company at any annual or special meeting of stockholders; entering into a voting trust, arrangement or agreement, or subjecting any securities of the Company to any voting trust, arrangement or agreement, other than in accordance with the Agreement; making any public disclosure or statement regarding intent, purpose, plan or proposal with respect to the Board or the Company’s management, governance, corporate structure, affairs or policies; or effecting, proposing, participating in or facilitating any tender or exchange offer, merger, sale or acquisition of material assets or other extraordinary transaction involving the Company or any of its subsidiaries, subject to certain exceptions.
The initial term of the Agreement will end on the earlier of the date that is fifteen days prior to the deadline for the submission of stockholder nominations for the Company’s 2025 annual meeting of stockholders (the “2025 Annual Meeting”) and the date that is one hundred twenty days prior to the first anniversary of the 2024 Annual Meeting, provided, however, that the term of the Agreement will be extended until the date that is the earlier of the date that is fifteen days prior to the deadline for the submission of stockholder nominations for the Company’s 2026 (or such later year in the case of successive renewals) annual meeting of stockholders and the date that is one hundred twenty days prior to the first anniversary of the 2025 Annual Meeting (or such later year in the case of successive renewals) if the Company notifies 180 Degree Capital ten days prior to the originally scheduled termination date that it has irrevocably offered the New Directors to re-nominate such New Directors (including any Replacement Appointee) at the 2025 Annual Meeting and recommend, support and solicit proxies for the election of such New Directors at the 2025 Annual Meeting in the same manner as for the Company’s other nominees at such annual meeting, unless both of the New Directors resign from the Board prior to the originally scheduled termination date, in which event the Company will not be obligated to re-nominate, recommend, support or solicit proxies for the New Directors and the term of the Agreement will end of the originally scheduled termination date.
The foregoing summary of the Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Agreement, which is filed as Exhibit 10.1 and incorporated herein by reference.
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| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Effective as of the date of the Agreement, Jason Cohenour and Phu Hoang have agreed not to stand for re-election at the 2024 Annual Meeting in order to ensure the Company’s compliance with the Agreement. Mr. Cohenour’s and Mr. Hoang’s decision not to stand for re-election at the 2024 Annual Meeting was not a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
| Item 8.01. | Other Events. |
The Company issued a press release on August 12, 2024, announcing the entry into the Agreement. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
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Exhibit No. |
Description | |
| 10.1 | Cooperation Agreement, dated August 9, 2024, between the Company and 180 Degree Capital Corp. | |
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99.1 104 |
Press Release of the Company dated August 12, 2024. Cover Page Interactive Data File (embedded within the Inline XBRL document). |
Important Additional Information Regarding Proxy Solicitation
We intend to file a proxy statement and proxy card with the Securities and Exchange Commission (the “SEC”) in connection with the solicitation of proxies for our 2024 Annual Meeting (the “Proxy Statement”). The Company, our directors and certain of our executive officers are participants in the solicitation. Information regarding such participants, including their direct or indirect interests, by security holdings or otherwise, will be included in the Proxy Statement for the 2024 Annual Meeting and other relevant documents to be filed with the SEC.
Additional information regarding the participants and their respective interests in the Company by security holdings or otherwise is set forth under the captions “Corporate Governance and Board Matters”, “Executive Compensation” and “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” in our proxy statement for the 2023 Annual Meeting of stockholders, filed with the SEC on October 2, 2023 (the “2023 Proxy Statement”) and available at https://www.sec.gov/Archives/edgar/data/1114925/000114036123046348/ny20009953x1_def14a.htm.
To the extent holdings of such participants in our securities have changed since the amounts described in the 2023 Proxy Statement, such changes have been reflected on Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC. Details concerning the nominees of our Board for election at the 2024 Annual Meeting will be included in the Proxy Statement. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND STOCKHOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH OR FURNISHED TO THE SEC, INCLUDING THE COMPANY’S DEFINITIVE PROXY STATEMENT, THE ACCOMPANYING PROXY CARD AND ANY AMENDMENTS AND SUPPLEMENTS THERETO BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. These documents, including the definitive Proxy Statement (and any amendments or supplements thereto) and other documents filed by us with the SEC, are available for no charge at the SEC’s website at http://www.sec.gov and at our investor relations website at https://www.lantronix.com/investor-relations/sec-filings.
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SIGNATURES
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.
| LANTRONIX, INC. | |||
| By: | /s/ Jeremy Whitaker | ||
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Jeremy Whitaker Chief Financial Officer | |||
Date: August 12, 2024
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