SCHEDULE 14A
                                 (RULE 14A-101)
                     INFORMATION REQUIRED IN PROXY STATEMENT
                            SCHEDULE 14A INFORMATION

                PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate  box:

[ ] Preliminary proxy statement

[X] Definitive proxy statement
                                [ ] Confidential, For Use of the Commission Only
                                   (as permitted by 14a-6(e)(2))

[ ] Definitive additional materials 

[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12


                               LANTRONIX,  INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

Payment of filing fee (Check the appropriate box):

[X]  No  fee  required

[ ]  Fee  computed  on  table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

     (1)  Title  of  each  class  of  securities  to  which transaction applies:

     (2)  Aggregate  number  of  securities  to  which  transaction  applies:

     (3)  Per  unit  price  or  other  underlying  value of transaction computed
          pursuant  to Exchange Act Rule 0-11 (set forth the amount on which the
          filing  fee  is  calculated  and  state  how  it  was  determined):

     (4)  Proposed  maximum  aggregate  value  of  transaction:

     (5)  Total  fee  paid:

[ ]       Check box if any part of the fee is offset as provided by Exchange Act
          Rule  0-11(a)(2)  and identify the filing for which the offsetting fee
          was  paid  previously.  Identify  the  previous filing by registration
          statement  number, or the form or schedule and the date of its filing.

     (1)  Amount  previously  paid:

     (2)  Form,  schedule  or  registration  statement  no.:

     (3)  Filing  party:

     (4)  Date  filed:





                                 LANTRONIX, INC.
                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                         TO BE HELD ON NOVEMBER 18, 2004
                             9:00 A.M. PACIFIC TIME

TO  THE  STOCKHOLDERS  OF  LANTRONIX,  INC.:

     NOTICE  IS  HEREBY  GIVEN  that  the  Annual  Meeting  of  Stockholders  of
Lantronix,  Inc.,  a  Delaware  corporation  (the  "Company"),  will  be held on
THURSDAY,  NOVEMBER  18,  2004,  at  9:00  a.m.,  Pacific Time, at the corporate
headquarters  of  Lantronix,  Inc. at 15353 Barranca Parkway, Irvine, CA  92618,
for  the  following  purposes:

1.   To  elect  two  (2)  directors  to  serve  until the 2007 Annual Meeting of
     Stockholders  (notwithstanding  item  3);

2.   To  replenish  the  Lantronix,  Inc. 2000 Employee Stock Purchase Plan with
     750,000  shares  of  common  stock;

3.   To  declassify  the  board of directors to allow for annual election of all
     directors  and  amend  the  Lantronix,  Inc.  Certificate  of Incorporation
     accordingly;

4.   To  ratify  the  appointment of Ernst & Young LLP as independent registered
     public  accountants  of  the Company for the year ending June 30, 2005; and

5.   To  transact such other business as may properly come before the meeting or
     any  adjournment(s)  thereof.

     The  foregoing  business  items  are  more fully described in the following
pages  which  are made part of this Notice.  Stockholders of record at the close
of  business  on  Friday,  September 24, 2004, may attend and vote at the Annual
Meeting.  If  you  will  not  be attending the meeting, we request you vote your
shares  as  promptly  as possible.  You may be eligible to vote your shares in a
number  of  ways.  You  may  mark your votes, date, sign and return the Proxy or
voting  instruction  form  in  the  postage-prepaid  envelope  enclosed for that
purpose.  Any  stockholder attending the meeting may vote in person, even if he,
she  or  it  has  already  returned  a  Proxy.

H.K.  Desai
Chairman
Board  of  Directors

Irvine,  California
October  18,  2004


IMPORTANT:  WHETHER  YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO
PROMPTLY  COMPLETE,  SIGN,  DATE,  AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE
PROVIDED.





                                 LANTRONIX, INC.
                             CORPORATE HEADQUARTERS
                             15353 BARRANCA PARKWAY
                            IRVINE, CALIFORNIA 92618
                                 (949) 453-3990
                                WWW.LANTRONIX.COM

                              _____________________

             PROXY STATEMENT FOR 2004 ANNUAL MEETING OF STOCKHOLDERS
                              _____________________

     The  enclosed  Proxy  is  solicited  on  behalf  of  Lantronix,  Inc.  (the
"Company")  for use at the Annual Meeting of Stockholders (the "Annual Meeting")
to  be held on Thursday, November 18, 2004, at 9:00 a.m., local time, and at any
adjournment(s)  thereof,  for  the  purposes  set  forth  herein  and  in  the
accompanying  Notice  of Annual Meeting of Stockholders. The Annual Meeting will
be  held  at  the corporate office of Lantronix, Inc. at 15353 Barranca Parkway,
Irvine,  CA  92618.

     These  proxy  solicitation  materials,  which  include the Proxy Statement,
Proxy,  and  Form 10-K/A, were first mailed on or about October 18, 2004, to all
stockholders  entitled  to  vote  at  the  Annual  Meeting.

                 INFORMATION CONCERNING SOLICITATION AND VOTING

RECORD  DATE

     Stockholders  of record at the close of business on September 24, 2004 (the
"Record  Date")  are entitled to notice of the Annual Meeting and to vote at the
Annual  Meeting.  Presence  in person or by Proxy of a majority of the shares of
common  stock outstanding on the Record Date is required for a quorum. As of the
close  of  business  on  the Record Date, 58,447,146 Shares of Common Stock, par
value  of $0.0001 per share, were issued and outstanding and were the only class
of  voting  securities  outstanding.

REVOCABILITY  OF  PROXIES

     Properly  executed  and  unrevoked  proxies received by the Company will be
voted  at  the Annual Meeting in accordance with the instructions thereon. Where
no  instructions  are  specified,  the  proxies  will  be  voted in favor of all
proposals  set  forth  in  the  Notice  of  Meeting.

     Any person giving a proxy in response to this solicitation has the power to
revoke  it  at any time before it is voted. Proxies may be revoked by any of the
following  actions:

-    filing  a  written notice of revocation with our Secretary at our principal
     executive  office  (15353  Barranca  Parkway,  Irvine,  California  92618);

-    filing with our Secretary at our principal executive office (15353 Barranca
     Parkway,  Irvine,  California  92618)  a  properly executed proxy showing a
     later  date;  or

-    attending  the  meeting  and  voting  in  person  by  ballot.


                                        1



OUR  VOTING  RECOMMENDATIONS

     The  Board  of  Directors  recommends  that  you  vote:

-    "FOR"  the  Nominees to serve as directors until the 2007 Annual Meeting of
     Stockholders  (notwithstanding  the  third  item);

-    "FOR" the replenishment of the Lantronix, Inc. 2000 Employee Stock Purchase
     Plan  with  750,000  shares  of  Lantronix  common  stock;

-    "FOR"  amendment  of  the  Lantronix,  Inc. Certificate of Incorporation to
     effect  the  declassification of the board of directors to allow for annual
     election  of  all  directors;  and

-    "FOR"  the  ratification  of  the  appointment  of  Ernst  &  Young  LLP as
     independent  registered  public  accountants  of the Company for the fiscal
     year  ending  June  30,  2005.

VOTING  AND  SOLICITATION

     Each  share of Common Stock outstanding on the Record Date of September 24,
2004,  will  be  entitled  to  one  vote  on all matters presented at the Annual
Meeting.  Stockholders  do  not  have  the  right to cumulate their votes in the
election  of  directors.

     By  signing  and  returning  the  proxy  card  according  to  the  enclosed
instructions,  you  are  enabling  Marc  Nussbaum,  Chief  Executive Officer and
Vincent  J.  Roth,  Deputy  General  Counsel, who are named on the proxy card as
"proxy  holders," to vote your shares at the meeting in the manner you indicate.
We  encourage  you  to sign and return the proxy card even if you plan to attend
the  meeting.  In  this way, your shares will be voted even if you are unable to
attend  the  meeting.

     Shares  of  Common  Stock  represented  by  properly  dated,  executed, and
returned  Proxies  will,  unless  such  Proxies have been previously revoked, be
voted  in  accordance with the instructions indicated thereon. In the absence of
specific  instructions to the contrary, properly executed proxies will be voted:
(i)  FOR the election of each of the Company's nominee(s) for director; and (ii)
"FOR" the replenishment of the Lantronix, Inc. 2000 Employee Stock Purchase Plan
with  750,000  shares  of  Lantronix  common  stock;  and  (iii)  "FOR"  the
declassification  of  the board of directors to allow for annual election of all
directors;  and  (iv) "FOR" the ratification of the appointment of Ernst & Young
LLP  as  independent registered public accountants of the Company for the fiscal
year  ending  June  30,  2005.  No  business  other  than  that set forth in the
accompanying Notice of Annual Meeting of Stockholders is expected to come before
the  Annual  Meeting.  Should  any other matter requiring a vote of stockholders
properly  arise,  the persons named in the enclosed form of proxy will vote such
proxy  in  accordance  with  the  recommendation  of  the  Board  of  Directors.

     We  will  pay  the costs of soliciting Proxies from stockholders, including
the preparation, assembly, printing and mailing of proxy solicitation materials.
We  will  provide  copies  of solicitation materials to banks, brokerage houses,
fiduciaries  and  custodians  holding  in  their  names  shares  of Common Stock
beneficially owned by others to forward these materials to the beneficial owners
of  Common  Stock.  We  may  reimburse  brokerage  firms  and other such persons
representing  beneficial owners of Common Stock for their expenses in forwarding
solicitation  materials  to  such beneficial owners. Proxies may be solicited by
certain  of  the  directors,  officers  and  employees  of  the Company, without
additional  compensation,  personally  or  by  telephone,  telegram,  letter  or
facsimile.

HOUSEHOLDING

     In  an  effort  to  reduce printing costs and postage fees, the Company has
adopted  a  practice  approved by the Securities and Exchange Commission ("SEC")
called  "householding."  Under  this  practice,  stockholders  who have the same
address  and  last  name  and do not participate in electronic delivery of proxy
materials will receive only one copy of the Company's proxy materials unless one
or  more  of  these stockholders notifies the Company that they wish to continue


                                        2



receiving  individual  copies. Stockholders who participate in householding will
continue  to  receive  separate  proxy  cards.

     If  you share an address with another stockholder and received only one set
of  proxy materials and would like to request a separate copy of these materials
and/or  future  proxy  materials,  please send your request to: Lantronix, Inc.,
15353 Barranca Parkway, Irvine, California 92618, Attention: Investor Relations,
or  visit  the  Company's website at www.lantronix.com. You may also contact the
                                     -----------------
Company  if you received multiple copies of the proxy materials and would prefer
to  receive  a  single  copy  in  the  future.

QUORUM;  ABSTENTIONS;  BROKER  NON-VOTES

     The  required  quorum for the transaction of business at the Annual Meeting
is  a  majority  of the votes eligible to be cast by holders of shares of Common
Stock  issued  and  outstanding on the Record Date. Shares that are voted "FOR,"
"WITHHELD  FROM,"  "ABSTAIN," or "AGAINST" a matter are treated as being present
at  the  meeting  for  purposes of establishing a quorum and are also treated as
shares entitled to vote at the Annual Meeting (the "Votes Cast") with respect to
such  matter.

     Although  the  law  in  Delaware  is  unclear as to the proper treatment of
abstentions,  the  Company  believes  that  abstentions  should  be  counted for
purposes  of  determining  both  (i) the presence or absence of a quorum for the
transaction  of business and (ii) the total number of Votes Cast with respect to
a proposal (other than the election of directors). In the absence of controlling
precedent  to  the  contrary,  the  Company intends to treat abstentions in this
manner. Accordingly, abstentions will have the same effect as a vote against the
proposal.

     Under  the  rules  that  govern brokers who have record ownership of shares
that  are held in "street name" for their clients, who are the beneficial owners
of  the  shares, brokers have discretion to vote these shares on routine matters
but  not  on  non-routine  matters.  Thus, if you do not otherwise instruct your
broker,  the  broker  may  turn in a proxy card voting your shares "FOR" routine
matters  but  expressly instructing that the broker is NOT voting on non-routine
matters. A "broker non-vote" occurs when a broker expressly instructs on a proxy
card  that  it is not voting on a matter, whether routine or non-routine. Broker
non-votes  are counted for the purpose of determining the presence or absence of
a  quorum  but  are  not counted for determining the number of Votes Cast for or
against  a  proposal.


                  DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS

     Requirements  for  Stockholder  Proposals to be Considered for Inclusion in
our  2005  Proxy  Materials. Stockholders may submit proposals that they believe
should  be  voted upon at the Annual Meeting or nominate persons for election to
our Board of Directors. Pursuant to Rule 14a-8 under the Securities Exchange Act
of  1934,  as amended ("Rule 14a-8"), some stockholder proposals may be eligible
for  inclusion  in our 2005 Proxy Statement. Any such stockholder proposals must
be  submitted  in  writing  to  the attention of the Secretary, Lantronix, Inc.,
15353 Barranca Parkway, Irvine, California 92618, no later than June 13, 2005 or
the date which is 120 calendar days prior to the anniversary of the mailing date
of  this  Proxy Statement. Stockholders interested in submitting such a proposal
are  advised  to contact knowledgeable legal counsel with regard to the detailed
requirements  of  applicable  securities  laws.  The submission of a stockholder
proposal  does  not  guarantee  that  it  will  be  included  in  our 2005 Proxy
Statement.

     Requirements  for  Stockholder  Proposals  to  be Brought Before the Annual
Meeting.  Under our Bylaws, a proposal or a nomination that the stockholder does
not  seek  to  include in our 2005 Proxy Statement pursuant to Rule 14a-8 may be
submitted  in writing to the Secretary, Lantronix, Inc., 15353 Barranca Parkway,
Irvine,  California  92618,  for  the  2005 Annual Meeting of Stockholders. Such
proposal  or  nomination  must  be  delivered  to  or mailed and received at the
principal  executive  offices of the Company not less than 60 days nor more than
120  days  prior  to the date of the 2005 Annual Meeting. Note, however, that in
the  event  we  provide  less  than 70 days notice or prior public disclosure to
stockholders of the date of the 2005 Annual Meeting, any stockholder proposal or
nomination  not  submitted  pursuant  to  Rule 14a-8 must be submitted to us not
later  than  the  close  of business on the tenth day following the day on which
notice  of  the  date of the 2005 Annual Meeting was mailed or public disclosure
was  made.  For  example,  if  we  provide  notice of our 2005 Annual Meeting on
September  18,  2005,  for  a 2005 Annual Meeting on November 17, 2005, any such


                                        3



proposal  or  nomination  will  be  considered untimely if submitted to us after
September  28, 2005. As described in our Bylaws, the stockholder submission must
include certain specified information concerning the proposal or nominee, as the
case  may  be,  and  information as to the stockholder's ownership of our common
stock.  If  a  stockholder  gives  notice  of  such  proposal after the deadline
computed  in  accordance with our Bylaws (the "Bylaw Deadline"), the stockholder
will  not be permitted to present the proposal to the stockholders for a vote at
the  2005  Annual  Meeting.

     The  rules of the SEC also establish a different deadline for submission of
stockholder  proposals  that  are  not  intended  to  be  included  in our Proxy
Statement  with  respect  to  discretionary  voting  (the  "Discretionary  Vote
Deadline").  The  Discretionary  Vote  Deadline  for  the 2005 Annual Meeting is
August  27, 2005, or the date which is 45 calendar days prior to the anniversary
of  the  mailing  date of this Proxy Statement. If a stockholder gives notice of
such a proposal after the Discretionary Vote Deadline, our Proxy holders will be
allowed  to  use  their  discretionary  voting  authority  to  vote  against the
stockholder  proposal  when and if the proposal is raised at the Annual Meeting.

     Because  the  Bylaw  Deadline  is  not capable of being determined until we
publicly  announce the date for our 2005 Annual Meeting, it is possible that the
Bylaw  Deadline may occur after the Discretionary Vote Deadline. In such a case,
a  proposal  received after the Discretionary Vote Deadline but before the Bylaw
Deadline  would  be  eligible  to be presented at the 2005 Annual Meeting and we
believe  that  our  Proxy  holders  at  such meeting would be allowed to use the
discretionary  authority  granted  by  the Proxy to vote against the proposal at
such  meeting  without  including  any  disclosure  of the proposal in the Proxy
Statement  relating  to  such  meeting.

     We  have  not been notified by any stockholder of his, her or its intent to
present  a  stockholder  proposal from the floor at the 2004 Annual Meeting. The
enclosed  Proxy  grants the Proxy holders discretionary authority to vote on any
matter  properly  brought  before  the  2004  Annual  Meeting,  including  any
stockholder  proposals received between the date of this Proxy Statement and the
Bylaw  Deadline  for  the 2004 Annual Meeting, which is October 21, 2004, or the
date  which  is ten calendar days after the date this Proxy Statement is mailed.

     If  a  stockholder  wishes  to  nominate  a  candidate  for  director,  the
stockholder's  notice  shall  also  include  the  following  information for the
candidate: (i) name, age, business address and residence address, (ii) principal
occupation  or  employment  of such nominee, (iii) class and number of shares of
our  stock  beneficially  owned  by  such  nominee,  (iv)  any other information
required by the 1934 Act, and such candidate's written consent to being named in
the  proxy  statement  as a nominee and to serving as a director if elected. The
stockholder giving notice shall also include his/her/its (i) name and address as
they  appear  on  the  Company's  books, (ii) the class and number of our shares
which  such stockholder owns on the date of such notice, and (iii) a description
of  all arrangements between the stockholder and the nominee. A copy of the full
text  of  our  bylaws  is  available  from  our  Secretary upon written request.

NOMINATION  OF  DIRECTOR  CANDIDATES

     The  Corporate Governance and Nominating Committee considers candidates for
board  membership  that  our  Board  of  Directors,  management  or stockholders
suggest.  It  is the policy of the Corporate Governance and Nominating Committee
to  consider  recommendations  for  candidates  to  our  Board of Directors from
stockholders.  The  Corporate  Governance and Nominating Committee will consider
persons  recommended  by  our  stockholders  in  the  same  manner  as a nominee
recommended  by  our Board of Directors, individual board members or management.
The  Corporate  Governance  and  Nominating  Committee  assesses the appropriate
skills and characteristics of a nominee based on the composition of the board as
a  whole  and  in such other areas as a nominee's qualification as independence,
diversity,  skills,  age  and  experience  in such areas as operations, finance,
marketing  and  sales.

     In  addition,  a stockholder may nominate a person directly for election to
our  Board  of  Directors at an annual meeting of our stockholders provided they
meet  the  requirements set forth in our bylaws and the rules and regulations of
the  Securities  and  Exchange  Commission related to stockholder proposals. The
process  for properly submitting a stockholder proposal, including a proposal to
nominate  a  person for election to our Board of Directors at an annual meeting,
is  described above in the section entitled "Deadline for Receipt of Stockholder
Proposals."


                                        4



STOCKHOLDER  COMMUNICATIONS  WITH  OUR  BOARD  DIRECTORS

     Stockholders  may  communicate  directly  with  our  Board  of Directors by
writing  to them c/o Lantronix, Inc., 15353 Barranca Parkway, Irvine, California
92618.  Unless  the  communication  is marked "confidential," our Secretary will
monitor  these  communications and provide appropriate summaries of all received
messages  to  the  chairperson  of  our  Corporate  Governance  and  Nominating
Committee. Any stockholder communication marked "confidential" will be logged as
"received,"  but  will  not  be  reviewed  by  the  Secretary. Such confidential
correspondence will be immediately forwarded to the Chairperson of the Corporate
Governance  and Nominating Committee for appropriate action. Where the nature of
a  communication  concerns  questionable accounting or auditing matters directed
directly  to  the Audit Committee, our Secretary will log the date of receipt of
the  communication  as  well  as  the  identity  of  the  correspondent,  for
non-confidential  communications,  in  the  Company's stockholder communications
log.

CERTAIN  FINANCIAL  INFORMATION  AND  CERTIFICATIONS

     Please  take  note  that  the  Company's  financial  statements and related
information,  as  well as the required certifications as promulgated pursuant to
the  Sarbanes-Oxley  Act  of 2002, are as set forth in its Annual Report on Form
10-K/A  filed  with  the Securities and Exchange Commission on October 12, 2004,
and  are  incorporated  herein by this reference. A copy of the Annual Report on
Form  10-K/A  is  enclosed  with  this  Proxy  Statement.


                                        5



                                  PROPOSAL ONE

                              ELECTION OF DIRECTORS

NOMINEES

     Our  Board  of  Directors  is  currently  composed of four (4) members. Our
Certificate  of  Incorporation  and  Bylaws  provide that the Board of Directors
shall  be  divided  into  three  classes,  with  each  class  serving  staggered
three-year  terms.  The  first class consists of two directors, the second class
consists of one director and the third class consists of one director. Directors
HOWARD  T. SLAYEN and H.K. DESAI are the Class I directors whose terms expire at
the  2004 Annual Meeting of Stockholders. Director Thomas W. Burton is the Class
II  director  whose  term  expires  at  the 2005 Annual Meeting of Stockholders.
Director Kathryn Braun Lewis is the Class III director whose term expires at the
2006  Annual  Meeting.  Thus,  Howard T. Slayen and H.K. Desai are nominated for
reelection  (the  "Nominees").  All  of  the  directors,  including  the Class I
Nominees,  are  incumbent directors. There are no family relationships among any
directors  or  executive  officers,  including  the  Nominees.

     The  term  of  each  class of directors expires at the third annual meeting
following  the  date of expiration described above. A director elected to fill a
vacancy  (including a vacancy created by an increase in the size of the Board of
Directors) will serve for the remainder of the term of the class of directors in
which  the  vacancy  occurred  and  until  his  or  her successor is elected and
qualified.  If  elected  at the Annual Meeting, the Class I Nominees would serve
until  the  2007  annual  meeting  and  until  his  successor is elected and has
qualified,  or  until his earlier death, resignation or removal, or as otherwise
modified  by  Proposal  Three  below.

     Unless otherwise instructed, the holders of Proxies solicited by this Proxy
Statement  will  vote  the  Proxies  received  by them for the Class I Nominees.
Directors  are  elected  by  a  plurality  (excess  of  Votes Cast over opposing
nominees) of the votes present in person or represented by proxy and entitled to
vote  at  the  meeting.  Shares  represented by signed proxies will be voted, if
authority to do so is not withheld, for the election of the nominee named below.
In  the  event  that any nominee is unable or declines to serve as a director at
the  time  of  the  Annual  Meeting,  the  Proxy holders will vote for a nominee
designated  by  the  present  Board of Directors to fill the vacancy. We are not
aware of any reason that the Nominees will be unable or will decline to serve as
directors.  The  Board  of Directors recommends a vote "FOR" the election of the
Nominees.

     The  names  of the members of our Board of Directors, including the Class I
Nominees,  their  ages  as  of September 24, 2004, and certain information about
them,  are  set  forth  below.


Name                     Age     Position
-----------------------  ---     ---------------------------------------
H.  K.  Desai  (1)        58     Chairman  of  the  Board  of  Directors
Thomas  W.  Burton        58     Director
Kathryn  Braun  Lewis     53     Director
Howard  T.  Slayen  (1)   57     Director

(1)     Denotes  Nominees  for  election  at 2004 Annual Meeting of Stockholders


     H. K. Desai was elected Chairman of the Board of Directors on May 29, 2002.
He  has  served  as a director on the Board of Directors since October 2000. Mr.
Desai  is currently the Chief Executive Officer of QLogic Corporation, a company
that  provides  end-to-end  connectivity for storage area networks. From 1995 to
1996,  Mr.  Desai  was the President and Chief Technical Officer of QLogic. From
2000 to 2003, Mr. Desai served on the board of Microsemi Corporation, a supplier
of  analog  integrated  circuits  and  power and signal discrete semiconductors.


                                        6



     Thomas  W.  Burton  has  been  a member of our Board of Directors since our
inception  in  1989.  Mr.  Burton  is  an  attorney and has operated his own law
office,  Thomas  W. Burton, PLC since June 1999. From January 1994 to June 1999,
Mr.  Burton  served  with  the  law  firm  of  Cummins  &  White,  LLP.

     Kathryn  Braun Lewis was elected to the Board of Directors in October 2002.
She  currently  serves  on  the Board of Directors of Share Our Selves and THINK
Together, both Orange County charities. She has also served as a director of two
other  public  companies  since  1994. Ms. Lewis retired from Western Digital in
1998.  During her eighteen-year tenure at Western Digital, she was promoted from
various  management  and  executive  positions  to President and Chief Operating
Officer  of  the  Personal  Storage  Division  (PSD) and was responsible for the
worldwide  operations  including  research  and  development, manufacturing, and
marketing  of  the  world's  second largest supplier of hard drives for personal
computers.

     Howard  T.  Slayen  was  elected to the Board of Directors in August  2000.
From  June  2001 to present, Mr. Slayen has been providing independent financial
consulting  services  to various organizations and clients.  From September 1999
to May 2001, Mr. Slayen was Executive Vice President and Chief Financial Officer
of  Quaartz  Inc., a web-hosted communications business.  From 1971 to September
1999,  Mr.  Slayen  held various positions with PricewaterhouseCoopers/Coopers &
Lybrand  including  his  last  position  as  Corporate  Finance  Partner.

BOARD  MEETINGS  AND  COMMITTEES

     The  Board  of  Directors  of the Company held a total of five (5) meetings
during  the  fiscal  year  ended  June  30,  2004.  Our  Board  of Directors has
determined that each member of the Board of Directors is independent as per Rule
4200(a)(15)  of  the  National  Association  of  Securities  Dealers'  listing
standards.  Each  member  of  the committees meets the independence standards of
Rule 4200(a)(15) of the Nasdaq National market. Certain matters were approved by
the  Board  of Directors, or a Committee of the Board of Directors, by unanimous
written consent. The Board of Directors has three standing committees, the Audit
Committee,  the  Compensation  Committee  and  the  Corporate  Governance  and
Nominating Committee. Each Committee has a written charter approved by the Board
of  Directors.






NAME OF COMMITTEE          FUNCTIONS OF THE COMMITTEE       NUMBER OF MEETINGS IN THE FISCAL
AND MEMBERS                                                    YEAR ENDING JUNE 30, 2004
                                                      
AUDIT COMMITTEE         *Selects independent registered                                    5
Howard Slayen, Chair     public accountants
Thomas Burton           *Reviews scope and results of
Kathryn Braun Lewis      year-end audit with management
                         and independent registered
                         public accountants
                        *Reviews Company's accounting
                         principals and system of internal
                         accounting controls
                        *Determines investment policy
                         and oversees its implementation

COMPENSATION COMMITTEE  *Reviews and approves salaries,                                    4
Thomas Burton, Chair     bonuses, and other benefits
H.K. Desai               payable to the Company's
Howard Slayen            executive officers
Kathryn Braun Lewis     *Oversees the Company's
                         equity incentive plans
                        *Reviews and recommends general
                         policies relating to
                         compensation and benefits


                                        7



NAME OF COMMITTEE          FUNCTIONS OF THE COMMITTEE       NUMBER OF MEETINGS IN THE FISCAL
AND MEMBERS                                                    YEAR ENDING JUNE 30, 2004

CORPORATE GOVERNANCE    *Oversees Chief Executive Officer                                  3
AND NOMINATING           and senior management
COMMITTEE               *Ensures directors take a
H.K. Desai, Chair        proactive, focused approach to
Thomas Burton            their positions
Howard Slayen           *Sets the highest standards of
                         responsibility and ethics
                        *Recommends nomination of
                         board members
                        *Assists with succession planning
                         for executive management
                         positions
                        *Oversees and evaluates board
                         evaluation process
                        *Evaluates composition,
                         organization and governance of
                         board and its committees


     Each  director is expected to attend each meeting of the Board of Directors
and  those  Committees  on  which  such  director  serves.  All of our directors
attended  at  least  75%  of  the  meetings  of  the  Board of Directors and any
applicable  committee  on  which such person served, held during the fiscal year
ending  June  30,  2004.




PRIMARY  FUNCTIONS  OF  THE  BOARD  OF  DIRECTORS

     The  Board of Directors, which is elected by our stockholders, oversees the
conduct  of  our  business  by  management and reviews our financial objectives,
major  corporate  plans, strategies, actions and major capital expenditures. Our
directors  are  expected  to  promote  the best interests of our stockholders in
terms  of corporate governance, fiduciary responsibilities, compliance with laws
and  regulations,  and  maintenance  of  accounting  and financial controls. Our
directors  participate  in  the  selection,  evaluation  and, where appropriate,
replacement  of our chief executive officer. Directors also provide input to our
CEO  for  the  evaluation  and  recruitment  of our principal senior executives.

AUDIT  COMMITTEE

     Our Board of Directors adopted a written charter for the Audit Committee on
May  18, 2000, which was amended on August 27, 2003 and on September 30, 2004. A
copy  of  the  Audit  Committee  charter  is attached to this proxy statement as
Appendix  A.  Our Board of Directors has determined that Mr. Howard Slayen is an
"audit  committee  financial  expert," as defined in the rules of the Securities
and  Exchange  Commission. All members of the Audit Committee are "independent,"
as that term is used in Item 7(d)(3)(iv) of Schedule 14A under the 1934 Act. Mr.
Slayen  serves  as  chairman  of our Audit Committee. For additional information
regarding  the  Audit Committee, see "Audit Committee Report Year Ended June 30,
2004"  in  this  Proxy  Statement.

COMPENSATION  COMMITTEE

     Our  Board  of  Directors  adopted  a  written charter for the Compensation
Committee  May  18,  2000.  Our Compensation Committee currently consists of Mr.
Thomas  Burton,  Mr.  H.K. Desai, Ms. Kathryn Braun Lewis and Mr. Howard Slayen,
each  of  whom  is a non-management member of our Board of Directors. Mr. Burton
serves  as  chairman  of our Compensation Committee.  For additional information
regarding  the  Compensation  Committee,  see "Compensation Committee Report" in
this  Proxy  Statement.


                                        8



CORPORATE  GOVERNANCE  AND  NOMINATING  COMMITTEE

     Our  Board  of  Directors  formed  a  Corporate  Governance  and Nominating
Committee on August 16, 2002 and adopted its written charter on October 1, 2002.
Our  Corporate  Governance  and  Nominating  Committee currently consists of Mr.
Thomas Burton, Mr. H.K. Desai and Mr. Howard Slayen. None of the current members
of the Corporate Governance and Nominating Committee is an employee of Lantronix
and  each  is  independent under the listing requirements of the Nasdaq National
Market.  Mr.  H.K.  Desai  serves  as  chairman  of the Corporate Governance and
Nominating  Committee.

CODE  OF  ETHICS  AND  COMPLAINT  PROCEDURES

     Our  Board  of Directors adopted a Code of Conduct and Business Ethics that
is  applicable  to all employees, executive officers and members of the Board of
Directors.  This  code  is intended to promote and require ethical conduct among
our directors, executive officers and employees. A copy of the code is available
upon  request,  without  charge,  to  the  Secretary, at 15353 Barranca Parkway,
Irvine, California 92618, and complies with the rules of the SEC and the listing
standards of the Nasdaq Stock Market.  Concerns relating to accounting, internal
controls  or  auditing  matters  are brought to the attention of a member of our
senior  management  or  the  Audit  Committee,  as  appropriate,  and handled in
accordance  with  procedures  established by the Audit Committee with respect to
such  matters.

DIRECTOR  COMPENSATION

     Each  director  receives  $24,000  cash  compensation  annually for his/her
services  as  a  director.  The  Chair  of  the Compensation Committee, instead,
receives  $26,000  annually.  The  Chair of the Audit Committee instead receives
$28,000 and the Chair of the Board instead receives $35,000 annually. The annual
retainers  are  based  on  four  (4)  in-person  meetings  per year, one (1) per
quarter.  Directors  also  receive $1,000 for each additional full-day in-person
meeting in excess of 1 meeting per quarter or $500 for a meeting that lasts less
than  four  hours.

     Members  of the Board of Directors who are not employees of the Company, or
any parent or subsidiary of the Company ("Non-Employee Directors"), are eligible
to  participate  in  the  Company's  2000 Stock Plan. Under the 2000 Stock Plan,
Non-Employee  Directors  receive  annual, automatic, non-discretionary grants of
nonstatutory stock options. Each Non-Employee Director automatically receives an
option to purchase 25,000 shares of the Company's common stock on the date he or
she  first  becomes  a  Non-Employee  Director.  Thereafter,  each  Non-Employee
Director  automatically  receives  an  option  to  purchase 25,000 shares of the
Company's  common  stock  following  each  annual  meeting  of  the  Company's
stockholders,  if  immediately  after  such  meeting, he or she will continue to
serve  on  the  Board  and  has served on the Board for at least the preceding 6
months. The exercise price for these options is 100% of the fair market value of
the  Shares  on the date of grant. Also, these options have a term of ten years,
provided,  however,  that  they  will  terminate  earlier depending on different
circumstances. Twelve months after the date of grant, 50% of these options vest.
The  balance  of 50% vests 1/24 per month each month thereafter, until vested in
full,  provided,  however,  the optionee continues to serve on the Board on such
dates.  In  addition,  all  directors  are  eligible  to  receive  additional
discretionary  grants  of  nonstatutory stock options under the 2000 Stock Plan.

     Except  as described above, directors do not receive any other compensation
for  their  services  as directors of the Company or as members of committees of
the  Board of Directors. There are no family relationships between directors and
executive  officers  of  the  Company.

VOTE  REQUIRED;  RECOMMENDATION  OF  BOARD  OF  DIRECTORS

     Each  nominee  receiving  a  majority  of  affirmative  votes cast shall be
elected as a director. Votes withheld from any director are counted for purposes
of  determining  the  presence  or  absence  of  a quorum for the transaction of
business,  but  have  no  other  legal  effect  under  Delaware  law.

           THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
                          THE NOMINEES SET FORTH ABOVE


                                        9



                                  PROPOSAL TWO

             REPLENISHMENT OF THE 2000 EMPLOYEE STOCK PURCHASE PLAN

GENERAL

     We seek your approval to amend and restate our 2000 Employee Stock Purchase
Plan (the "Plan") to increase the number of shares of our common stock available
for  issuance  under the Plan by 750,000 shares. The Board of Directors approved
this  increase  in  June 2004. The Plan provides our employees an opportunity to
increase their stake in the success of our business by purchasing our stock at a
discount  from  the fair market value through convenient payroll deductions. The
Plan  is  an  important  component  of  our  employee  compensation  package and
approximately  50%  of  our  employees  participated in the Plan during the most
recent  purchase  period.

     The  Board  of  Directors  originally  approved  the  Plan  in May 2000 and
stockholders  approved  it  in  June  2000.  The  Plan provides our employees an
opportunity  to  purchase  shares  of common stock at a discount through payroll
deductions.  The  number  of  shares  of  common  stock  previously reserved for
issuance  under  the  Plan  was  750,000  with  an  "evergreen"  provision  that
automatically  adds  150,000 shares of common stock to the Plan at the beginning
of  each  fiscal  year.  Since its inception, the share reserve for the Plan has
been  increased  by  600,000  shares  of  common  stock through operation of the
"evergreen"  provision,  to reach a total of 1,350,000 shares.  As of August 31,
2004,  participants  had  contributions  to  purchase  295,681  shares, but only
257,942  of  the  1,350,000  shares  remained.  Had  the  Board not approved the
increase,  the  Plan would have been short 37,741 shares for the August 31, 2004
purchase  and the Plan would have no shares available for the next purchase.  On
the  August  31,  2004  purchase,  the  Company distributed to participants on a
pro-rata  basis  the  remaining shares under the Plan, but has not yet delivered
the  37,741  shares, which will be delivered if stockholders approve the 750,000
share  increase.  If  the  increase  is  approved,  we  may  incur  a  non-cash
stock-based compensation charge equal to the difference between the market value
of  our  common  stock  on  the  date  of  shareholder approval and the employee
purchase  price  for  the  37,741 undelivered shares.  Furthermore, the Plan was
suspended  and  all offering periods terminated immediately following the August
31  purchase.

     We  will  recommence  offering periods under the Plan beginning December 1,
2004 if the stockholders ratify the Board's approval of this share increase.  If
this  increase  is not approved, the Plan will be terminated, we will refund the
contributions  for  the 37,741 shares and cancel these shares.  We are therefore
asking  stockholders  to approve an additional 750,000 shares for issuance under
the Plan.  This will allow us to continue to offer this valuable and competitive
employee  program.  If  stockholders do not approve this share increase, we will
lose  this  valuable  tool  in  attracting  and  retaining  key employees in the
extremely  competitive  markets  in  which  we  compete.

     Earlier  this  year,  the  Financial  Accounting  Standards  Board proposed
accounting  rule  changes  applicable  to  employee equity programs, such as the
Plan.  If  those rules are adopted as currently proposed, the Company will incur
an  accounting  charge  in connection with the Plan.  We are currently reviewing
the  Plan in the context of those proposed rule changes and may modify it should
those rules become effective.  The essential terms of the Plan are summarized as
follows:

     Administration.    The  Compensation  Committee  administers  the Plan. The
Plan, and the right of participants to make purchases thereunder, is intended to
qualify  under  the  provisions  of Sections 421 and 423 of the Internal Revenue
Code.  All questions of interpretation or application of the Plan are determined
by  the  Board  of  Directors or Compensation Committee, and their decisions are
final,  conclusive  and  binding  upon  all  participants.

     Eligibility  and  Participation.    Currently,  all U.S. employees who work
more than 20 hours per week for more than five months per calendar year, and are
employed  by  us  or  one of our subsidiaries are eligible to participate in the
Plan,  unless  the  employee  would  own 5% or more of the total combined voting
power of our stock at the start of an offering period. Participation in the Plan
is voluntary. Currently, 97% of our employees are eligible to participate in the
Plan.


                                       10



     Offering  Dates.    The  Plan  generally  has  a  series  of  consecutive,
overlapping  24  month offering periods, with each offering period consisting of
four  six-month  purchase  periods.  However,  to  avoid  potentially  adverse
accounting  consequences  that  might result from a shortage of shares under the
Plan,  the  board  shortened  all then outstanding offering periods so that they
expired  immediately  following  the  purchase  on  August  31,  2004.  Assuming
stockholders  approve  this Proposal Two, all eligible employees will be able to
participate  in  the offering period set to begin on the first trading day on or
after  December  1,  2004.  Subsequent  offering periods will begin on the first
trading  day  on  or  after March 1 and September 1 of each year.  Under certain
circumstances,  the  board  of  directors may alter the duration of the offering
periods,  including  the  commencement  dates,  without  stockholder  approval.

     Purchase  Price.    The purchase price per share is 85% of the lower of (a)
the  closing  price per share on the last trading day before the commencement of
the  applicable  offering  period,  or (b) the closing price of the stock on the
last  trading day of the purchase period. If the fair market value of the shares
on  any  purchase  date  is less than the fair market value of the shares on the
first  day  of  the  offering  period, then those participants are automatically
withdrawn  and  re-enrolled  in a new offering period based on that lower price.

     Payroll  Deductions;  Payment of Purchase Price.    Employees may authorize
payroll deductions in 1% multiples of cash compensation for each purchase period
they  complete  within  an  offering  period,  up  to  a maximum of 15%, and the
deductions are made from each pay period during the relevant purchase period. An
employee  may  discontinue  his or her participation in the Plan at any time and
may  increase  or  decrease the rate of payroll deduction during open enrollment
and  once  during  any  purchase  period.

     Purchase  of  Stock.    By  executing  an  enrollment  form, an employee is
entitled  to purchase shares on the last day of the purchase period. The maximum
number of shares that may be purchased during a purchase period is 25,000 shares
for  each participant. Unless the employee's participation is discontinued prior
to  such  purchase  date,  his  or  her  purchase  of  the  shares  will  occur
automatically  at  the  end  of  the  purchase  period  at the applicable price.

      Notwithstanding  the foregoing, no participant may participate in the Plan
if  immediately  after  such  election to participate, the participant would own
stock  and/or outstanding options to purchase stock possessing 5% or more of the
total  combined  voting  power  of  our  stock.  In  addition, no participant is
permitted to purchase stock with a value in excess of $25,000 (determined at the
fair  market  value  of the stock as of the beginning of the applicable offering
period)  in  any  calendar  year.

     Withdrawal.    Generally,  a  participant  may  withdraw  from  an offering
period at any time by written notice without affecting his or her eligibility to
participate  in  future  offering periods. However, once a participant withdraws
from a particular offering period, that participant may not participate again in
the  same  offering  period. To participate in a subsequent offering period, the
participant  must  deliver  a  new subscription agreement during open enrollment
prior  to  the  commencement  of  the  next  applicable  purchase  period.

     Termination of Employment.    Termination of a participant's employment for
any  reason,  including disability or death, cancels his or her participation in
the  Plan  immediately.  In  such  event, the payroll deductions credited to the
participant's  account  will be returned to him or her or, in the case of death,
to  the  person  or  persons  entitled  thereto  as  provided  in  the  Plan.

     Changes in Capitalization.    The number of shares reserved under the Plan,
the  purchase period share purchase limit and relevant accumulation and offering
period  purchase  price  per share provisions under the Plan are proportionately
adjusted for any increase or decrease in the number of outstanding shares of our
common  stock  resulting  from  a  subdivision or consolidation of shares or the
payment  of  a  stock  dividend,  any  other increase or decrease in such shares
effected  without receipt or payment of consideration by us, the distribution of
the  shares of a subsidiary to our stockholders or a similar event. The Board of
Directors  makes such adjustment and its determination in that respect is final,
binding  and  conclusive.

     Change  of Control, Merger or Consolidation.    In the event of a change of
control  (as  defined  in  the  Plan),  the Board of Directors shall shorten any
purchase  periods and offering periods then in progress to end immediately prior


                                       11



to  the  effective  time  of  the change in control. In the event of a merger or
consolidation  which  does  not  constitute  a change of control, the Plan shall
continue  unless  the  plan  of  merger  or  consolidation  provides  otherwise.

     Amendment and Termination of the Plan.    The Board of Directors may at any
time  terminate  or amend the Plan.  If such amendment would require stockholder
approval  in  order  to comply with Section 423 of the Code, then such amendment
shall  be  effective once the holders of a majority of the Votes Cast approve it
at  a  duly  held  stockholders'  meeting.

     In  the  event the Board of Directors determines that the ongoing operation
of  the  Plan  may  result in unfavorable financial accounting consequences, the
Board of Directors may, in its discretion, modify or amend the Plan to reduce or
eliminate  such accounting consequences, including, but not limited to, altering
the  purchase  price  for  any  offering  period,  including  an offering period
underway  at  the time of the change, shortening any offering period so that the
offering  period  ends  on  a  new  exercise  date, including an offering period
underway  at  the  time,  and  allocating  shares,  or  terminate  the  Plan.

      Incorporation by Reference.    The foregoing is only a summary of the Plan
and is qualified in its entirety by reference to its full text, a copy of which,
as  amended  and  restated,  is  attached  hereto  as  Appendix  B.

FEDERAL  INCOME  TAX  CONSEQUENCES

     The  proposed  amendment  will  have no effect upon the tax consequences to
participants  or  us.

     The  following  brief summary of the effect of federal income taxation upon
the  participant and us with respect to the shares purchased under the Plan does
not  purport  to  be  complete,  and  does not discuss the tax consequences of a
participant's  death  or  the income tax laws of any state or foreign country in
which  the  participant  may  reside.

     The  Plan,  and  the right of participants to make purchases thereunder, is
intended  to  qualify  under the provisions of Sections 421 and 423 of the Code.
Under  these  provisions, no income is taxable to a participant until the shares
purchased  under  the  Plan  are  sold or otherwise disposed. Upon sale or other
disposition  of  the  shares,  the participant is generally subject to tax in an
amount  that  depends  upon how long the participant has held the shares. If the
shares  are sold or otherwise disposed of more than two years from the first day
of  the  applicable  offering  period  and  one year from the applicable date of
purchase,  the participant will recognize ordinary income measured as the lesser
of  (a)  the  excess  of the fair market value of the shares at the time of such
sale  or  disposition  over the purchase price, or (b) an amount equal to 15% of
the  fair  market  value  of  the  shares  as of the first day of the applicable
offering  period.  Any  additional gain is treated as long-term capital gain. If
the  shares  are  sold  or  otherwise disposed of before the expiration of these
holding  periods,  the  participant  will  recognize  ordinary  income generally
measured  as  the  excess of the fair market value of the shares on the date the
shares  are  purchased  over  the purchase price. Any additional gain or loss on
such  sale  or disposition will be long-term or short-term capital gain or loss,
depending  on  the  holding period. We generally are not entitled to a deduction
for  amounts taxed as ordinary income or capital gain to a participant except to
the  extent  of  ordinary  income  recognized  by  participants  upon  a sale or
disposition  of  shares prior to the expiration of the holding periods described
above.

PARTICIPATION  IN  THE  PLAN

     Participation  in  the  Plan  is  voluntary  and dependent on each eligible
employee's  election to participate and his or her determination as to the level
of  payroll  deductions.  Accordingly,  we  are  unable to predict the amount of
benefits  that  will  be  received by or allocated to any particular participant
under  the  Plan.  The following table sets forth the number of shares purchased
under  the  Plan  during  calendar  year 2004 by each of (i) the Named Executive
Officers (as defined by Regulation S-K; (ii) all current executive officers as a
group;  and  (iii)  all  other  employees,  including  all  officers who are not
currently  executive  officers,  who  participated  in  the  Plan  as  a  group.
Non-employee  directors  are  not  eligible  for  participation  in  the  Plan.


                                       12






                                                            NUMBER OF SHARES  WEIGHTED AVERAGE
NAME OF INDIVIDUAL OR IDENTITY OF GROUP AND POSITION           PURCHASED       PURCHASE PRICE
                                                                        
Marc H. Nussbaum, Chief Executive Officer. . . . . . . . .            30,400  $          0.69

James W. Kerrigan, Chief Financial Officer . . . . . . . .            45,414  $          0.69

Michael S. Oswald, General Counsel and Corporate Secretary             6,928  $          0.69

Curtis Brown, Executive VP Research & Development                          0              ---

David Schafer, Executive VP World Wide Sales . . . . . . .             8,524  $          0.91

All executive officers as a group. . . . . . . . . . . . .            91,266  $          0.71

All employees and all non-executive officers as a group. .           518,266  $          0.77




VOTE  REQUIRED;  RECOMMENDATION  OF  THE  BOARD  OF  DIRECTORS

     If  a  quorum  is  present, the affirmative vote of a majority of the Votes
Cast  will  be required to approve the amendment of the Plan. Votes withheld and
broker  non-votes  will  be  counted for purposes of determining the presence or
absence  of  a quorum, but will not be counted as Votes Cast on this subject. If
approved  by  the  stockholders, the proposed Amended and Restated 2000 Employee
Stock  Purchase  Plan  will  become  effective  immediately.

    THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL


                                       13



                                 PROPOSAL THREE

                   DECLASSIFICATION OF THE BOARD OF DIRECTORS

GENERAL

     We seek your approval to amend and restate our certificate of incorporation
to  declassify  our  board  of directors to allow for the annual election of all
directors.  The board of directors approved the amendment and restatement of our
certificate of incorporation to effect such declassification in August 23, 2004.

REASONS  FOR  THE  PROPOSAL

     The  election  of  directors  is  an  important  means  for stockholders to
exercise  influence over Lantronix and its policies. A classified board does not
permit stockholders to elect all directors on an annual basis and may discourage
proxy contests in which stockholders have an opportunity to vote for a competing
slate  of  nominees.  Accumulations of large stockholder positions are sometimes
followed  by  proxy contests and related change-in-control transactions in which
stockholders receive a premium for their shares over the current market price of
such  shares.

     If  the  board  of directors is declassified, the entire board of directors
could  be  removed  in  any  single year, which could make it more difficult for
Lantronix  to discourage persons from engaging in proxy contests or from seeking
control  of  Lantronix on terms that the board of directors does not believe are
in the best interests of Lantronix and its stockholders. In addition, classified
boards  of  directors  may  increase the long-term stability and continuity of a
board  of  directors  and  the  company  the  board serves. Lantronix's board of
directors,  however,  believes  that long-term stability and continuity also may
result  from  the annual election of directors, which provides stockholders with
the opportunity to evaluate the performance of all directors on an annual basis.

     The  board of directors believes that the foregoing reasons for maintaining
a  classified  board  of  directors  are  outweighed  by the goals of maximizing
management  accountability  to  stockholders  that  would  be  served  by
declassification.

DECLASSIFICATION  OF  BOARD  OF  DIRECTORS

     The  following  summarizes  the  amendment  to  the  current certificate of
incorporation  that is subject to this Proposal Three. This summary is qualified
in  its  entirety  by  the  complete  text of the proposed amendment in the form
attached  to  this  proxy  statement  as  Appendix  C.

     The  proposed amendment would amend Article VIII of the current certificate
of  incorporation  to  provide for the annual election of directors beginning at
the 2005 annual meeting of stockholders. Article VIII of the current certificate
of  incorporation  requires  that  the  Board of Directors be divided into three
classes,  with  each  class as equal in number as possible. The three classes of
directors  have  staggered  terms, so that the term of only one class expires at
each  annual meeting of stockholders, and each class is elected for a three-year
term.

     If  stockholders  approve this Proposal Three, the amended provision of the
certificate of incorporation relating to the election of directors would read as
follows:

                                      VIII.
     A  director  shall  hold  office from the effective date of such director's
election  until  the  next  annual  meeting of stockholders and until his or her
successor  shall be elected and shall qualify, subject, however, to prior death,
resignation, retirement or removal from office. The term of each director who is
serving  as  a  director  on  the  effective  date  of this amended and restated
certificate  of  incorporation  shall  expire  at  the  next  annual  meeting of
stockholders  after  such  date  and upon the election and qualification of such
director's  successor,  or  upon such director's earlier resignation or removal,
notwithstanding  that  such  director  may  have  been  elected  for a term that
extended  beyond  the  date  of  such  next  annual  meeting  of  stockholders.


                                       14



EFFECT  OF  APPROVAL.

     If  stockholders  approve  this  Proposal  Three and the proposed amendment
becomes  effective,  the terms for all Lantronix directors would end at the 2005
annual  meeting  of stockholders, and all directors would stand for election for
one-year  terms  at  the  2005  annual  meeting.

VOTE  REQUIRED;  RECOMMENDATION  OF  BOARD  OF  DIRECTORS

     Approval  of  this  Proposal Three will require the affirmative vote of the
holders  of at least two-thirds of the shares of common stock outstanding on the
record  date  for  the  annual  meeting.

     The  Board  of Directors recommends that stockholders vote FOR the proposal
to  amend or repeal takeover defensive provisions of the restated certificate of
incorporation  as  described  in  this  Proposal  Three.

     If  you  believe, as we do, that the Company should declassify its Board of
Directors  and  require that all directors be elected annually, then we urge you
to  support  our  proposal  to  declassify  the  Board.

    THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL


                                       15



                                  PROPOSAL FOUR

    RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

     In  accordance  with  its charter, the Audit Committee has selected Ernst &
Young  LLP  as  the  independent  registered  public  accountants  to  audit our
financial  statements  for  the  fiscal  year  ending June 30, 2005 and with the
endorsement  of  the  Board  of  Directors  recommends to stockholders that they
ratify  that appointment. Ernst & Young LLP served in this capacity for the year
ended  June  30,  2004. A representative of Ernst & Young LLP will be present at
the  annual  meeting  and will have the opportunity to make a statement if he or
she  desires  to  do  so  and  be available to answer any appropriate questions.

AUDIT  AND  RELATED  FEES

     The  following table is a summary of the fees billed to us by Ernst & Young
LLP  for  professional  services  for the years ended June 30, 2004 and June 30,
2003:


FEE CATEGORY                      2004 FEES    2003 FEES
--------------------------------  ----------   -----------
Audit Fees                        $  596,532   $  712,000
Audit-Related Fees                    10,278      105,651
Tax Compliance & Consulting Fees     272,649      257,218
All Other Fees                             0            0
--------------------------------  ----------   ----------
Total Fees                        $  879,459   $1,074,869


     Audit  Fees. Consists of fees billed for professional services rendered for
the  audit  of our consolidated financial statements and review of our quarterly
interim consolidated financial statements, as well as services that are normally
provided  by  Ernst  &  Young  LLP  in  connection with statutory and regulatory
filings  or  engagements.

     Audit-Related  Fees.  Consists of fees billed for acquisition-related work,
audits required by statute in certain locations outside the US where the Company
has  operations  and  accounting  consultations.

     Tax  Compliance  Fees.  Consists  of  fees billed for professional services
including  assistance  regarding federal, state and international tax compliance
and  related  services.

     Tax  Consulting Fees. Consists of fees billed for professional services for
tax  advice  and  tax  planning.

     All Other Fees. There were no fees for this category during the fiscal year
ending  June  30,  2004.

     Before  selecting  and  prior to determining to continue its engagement for
2005  with  Ernst  & Young LLP, the Audit Committee carefully considered Ernst &
Young  LLP's  qualifications  as independent registered public accountants. This
included  a  review  of  the  qualifications of the engagement team, the quality
control  procedures  the  firm  has  established,  as well as its reputation for
integrity  and  competence  in  the fields of accounting and auditing. The Audit
Committee's  review included inquiry concerning any litigation involving Ernst &
Young  LLP  and any proceeding by the SEC against the firm. In this respect, the
Audit  Committee  has concluded that the ability of Ernst & Young LLP to perform
services  for  Lantronix  is  in no way adversely affected by such litigation or
investigation. The Audit Committee's review also included matters required to be
considered  under  the  Securities  and  Exchange  Commission's rules on auditor
independence,  including  the nature and extent of non-audit services, to ensure
that  the  auditors'  independence  will  not  be  impaired. The Audit Committee
pre-approves  all audit and non-audit services provided by Ernst & Young LLP, or
subsequently  approves  non-audit  services  in  those  circumstances  where  a
subsequent  approval  is necessary and permissible. All of the services provided
by  Ernst  & Young LLP described under "Audit-Related Fees," "Tax Compliance and
Consulting  Fees" and "All Other Fees" were pre-approved by the Audit Committee.
The  Audit Committee of our Board of Directors has determined that the provision
of  services  by  Ernst  &  Young  LLP  other than for audit related services is
compatible  with  maintaining  the  independence  of  Ernst  &  Young LLP as our
independent  registered  public  accountants.


                                       16



REQUIRED  VOTE;  RECOMMENDATION  OF  THE  BOARD  OF  DIRECTORS

     Stockholder  ratification  of  the  selection  of Ernst & Young, LLP as our
independent registered public accountants is not required by our bylaws or other
applicable  legal requirement. However, our Board of Directors is submitting the
selection of Ernst & Young, LLP to the stockholders for ratification as a matter
of  good  corporate  practice. If the stockholders fail to ratify the selection,
our  Audit  Committee  and  Board of Directors will reconsider whether or not to
retain  that firm. Even if the selection is ratified, the Audit Committee at its
discretion may direct the appointment of a different independent accounting firm
at  any time during the year if it determines that such a change would be in our
best  interests  and  in  the  best  interests  of  our  stockholders.

     The  affirmative  vote  of  a  majority  of  the Votes Cast is necessary to
approve  this  proposal. Assuming a quorum is present, abstentions will have the
effect  of  a  vote  "against"  this proposal, and broker non-votes will have no
effect  on  the  outcome  of  the  vote.  Our Board of Directors has unanimously
approved  this  proposal  and  recommends  that  stockholders  vote  "FOR"  the
ratification  of  the  selection of Ernst & Young, LLP as independent registered
public  accountants.

    THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL


                                       17



                    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                              OWNERS AND MANAGEMENT

     The  following  table  sets  forth  certain  information  with  respect  to
beneficial  ownership of the Company's Common Stock as of September 24, 2004 by:
(i)  each person known by the Company to be the beneficial owner of more than 5%
of the Company's Common Stock, (ii) by each director, (iii) by each of our named
executive  officers  and  (iv)  all directors and executive officers as a group.
Except  as  otherwise  indicated,  the address for each person is 15353 Barranca
Parkway,  Irvine,  California  92618.  Beneficial  ownership  is  determined  in
accordance  with  the  rules  of the SEC and includes voting or investment power
with  respect  to the securities. Except as otherwise indicated in the footnotes
to  the  table,  and  subject  to community property laws, where applicable, the
persons  and  entities  identified  in  the  table  below  have  sole voting and
investment  power  with  respect to all shares beneficially owned. The number of
shares  of  Common Stock outstanding used in calculating the percentage for each
listed  person  includes  shares  of common stock underlying options or warrants
held  by  such  person that are exercisable within 60 calendar days of September
24,  2004,  but  excludes  shares of common stock underlying options or warrants
held  by  any  other  person.  Percentage  of  beneficial  ownership is based on
58,447,146  shares  of  common  stock  outstanding  as  of  September  24, 2004.





                                                                                BENEFICIAL OWNERSHIP (1)
                                                                                ------------------------
BENEFICIAL OWNER NAME                                                            NUMBER OF   PERCENTAGE
                                                                                   SHARES     OWNERSHIP
                                                                                       
HOLDERS OF 5% OR MORE OF LANTRONIX STOCK
Bernhard Bruscha, Waldhoernlestr. 18, 72072 Tuebingen, Germany                   20,303,220        34.7%
Heartland Advisors, Inc./William J. Nasgovitz, 789 N. Water St., Milwaukee, WI    5,500,000         9.4%
Scott A. Fine/Peter J. Richards, 1 Gorham Island, Westport, CT  06880             3,453,350         5.9%
DIRECTORS AND OFFICERS
Thomas W.  Burton, Director (2)                                                     143,750           * 
Howard T. Slayen, Director (3)                                                      156,250           * 
H. K. Desai, Director (4)                                                            81,250           * 
Kathryn Braun Lewis, Director (5)                                                    52,520           * 
Marc Nussbaum, Chief Executive Officer  (6).                                        641,506         1.1%
James Kerrigan, Chief Financial Officer (7)                                         391,680           * 
Michael Oswald, General Counsel, Vice President and Corporate Secretary (8)          53,709           * 
Curtis Brown, Executive VP Research & Development (9)                               158,479           * 
David Schafer, Executive VP World Wide Sales (10)                                   106,041           * 
All executive officers and directors as a group (9 persons) (11)                  1,785,185         3.1%


*  Represents  beneficial  ownership  of  less  than  1%  of  the  outstanding  shares of common stock.

(1)     Beneficial  ownership  is  determined  in  accordance  with  the Rules of the SEC and generally
includes  voting  and  investment  power with respect to securities.  Beneficial ownership also includes
shares  subject  to  options  currently  exercisable  within  60  days  of  this  table.

(2)     Shares  beneficially  owned  by  Mr. Burton include 43,750 shares of common stock issuable upon
exercise  of  stock  options  exercisable  within  60  days  of  September  24,  2004.

(3)     Shares  beneficially  owned  by  Mr. Slayen include 81,250 shares of common stock issuable upon
exercise  of  stock  options  exercisable  within  60  days  of  September  24,  2004.

(4)     All shares beneficially owned by Mr. Desai are shares of common stock issuable upon exercise of
stock  options  exercisable  within  60  days  of  September  24,  2004.

(5)     Shares  beneficially  owned  by  Ms.  Lewis include 50,520 shares of common stock issuable upon
exercise  of  stock  options  exercisable  within  60  days  of  September  24,  2004.

(6)     Shares  beneficially owned by Mr. Nussbaum include 181,250 shares of common stock issuable upon
exercise  of  stock  options  exercisable  within  60  days  of  September  24,  2004.

(7)     Shares  beneficially  owned by Mr. Kerrigan include 79,167 shares of common stock issuable upon
exercise  of  stock  options  exercisable  within  60  days  of  September  24,  2004.

(8)     Shares  beneficially  owned  by  Mr. Oswald include 48,117 shares of common stock issuable upon
exercise  of  stock  options  exercisable  within  60  days  of  September  24,  2004.

(9)     All shares beneficially owned by Mr. Brown are shares of common stock issuable upon exercise of
stock  options  exercisable  within  60  days  of  September  24,  2004.


                                       18



(10)     Shares  beneficially  owned  by Mr. Shafer include 81,250 shares of common stock issuable upon
exercise  of  stock  options  exercisable  within  60  days  of  September  24,  2004.

(11)     Includes  an  aggregate  of  805,033  shares issuable upon exercise of stock options within 60
calendar  days  of  September  24,  2004.




                 EXECUTIVE COMPENSATION AND RELATED INFORMATION

SUMMARY  COMPENSATION  TABLE

     The  following  table sets forth information regarding compensation we paid
during the last three fiscal years to our Chief Executive Officer and four other
most  highly  compensated  employees  who  earned  more than $100,000 during the
fiscal  year  ended June 30, 2004. All option grants during the fiscal year were
made  under  our  2000  Stock  Plan.





                                                                               LONG-TERM
                                             ANNUAL COMPENSATION              COMPENSATION
                                       -------------------------------   ---------------------------
NAME AND PRINCIPAL POSITION   FISCAL   SALARY    BONUS    OTHER ANNUAL   SECURITIES     ALL OTHER
                               YEAR                       COMPENSATION   UNDERLYING    COMPENSATION
                                                              (1)        OPTIONS (#)       (2)
                                                                    
Marc Nussbaum (3)               2004  $277,731    -----  $      21,269       180,000  $       5,175 
Chief Executive Officer         2003  $301,154    -----  $      17,327       300,000  $       3,407 
                                2002     -----    -----          -----         -----          ----- 

James Kerrigan (4)              2004  $189,231    -----  $      19,219        90,000          ----- 
Chief Financial Officer         2003  $197,308    -----  $      12,280       175,000          ----- 
                                2002  $ 26,923    -----          -----         -----          ----- 

Michael Oswald (5)              2004  $186,577    -----  $       5,923        52,500  $       5,775 
General Counsel, Vice           2003  $176,077  $17,502  $       7,000         -----  $       6,017 
President and Secretary         2002  $ 85,481    -----          -----        42,825  $       1,212 

Curtis Brown (6)                2004  $230,769    -----  $      27,681       160,500  $       6,027 
Executive Vice President        2003  $247,115    -----  $       6,135         -----  $       6,898 
Research & Development          2002  $250,000  $45,000          -----        87,699  $       2,096 

David Schafer (7)               2004  $244,231    -----  $      13,944        47,000  $       5,216 
Executive Vice President        2003  $187,500    -----  $       8,825       150,000  $       3,867 
World Wide Sales                2002     -----    -----          -----         -----          ----- 


(1)     Excludes  certain  perquisites  and  other  amounts  that, for any executive officer, in the
aggregate  did not exceed the lesser of $50,000 or 10% of the total annual salary and bonus for such
executive  officer.

(2)     Represents  amounts paid by us as a matching contribution to each employee's 401(k) account.

(3)     Marc  Nussbaum  started  with the Company on May 30, 2002 and received no compensation as of
the  fiscal year ended June 30, 2002.  Consequently, his compensation for the fiscal year ended June
30,  2003 includes payment for services rendered in fiscal year ended June 30, 2002.  His annualized
base  compensation  is  $290,000  with a bonus level to be determined based on performance goals and
company  performance.

(4)     James Kerrigan started with the Company on May 6, 2002 and thus compensation for fiscal year
ended  June  30,  2002  is  only  for  a  partial  year;  his  base  salary  annualized is $200,000.

(5)     Michael  Oswald started with the Company on January 2, 2002 and thus compensation for fiscal
year  ended  June  30,  2002  is  only  for  a partial year; his base salary annualized is $192,500.

(6)     Curtis  Brown started with the Company on June 4, 2001 and thus compensation for fiscal year
ended June 30, 2001 is only for a partial year; his base salary annualized is $250,000.  Mr. Brown's
stock option grants for fiscal year ended June 30, 2004 include an option to purchase 112,500 shares
of  Lantronix  common  stock  issued pursuant to a stock option exchange program conducted in fiscal
year  ended  June  30,  2003  under which participants voluntarily exchanged previously issued stock
options  at  a  1:0.75  exchange  rate,  and  thus  this  grant  is an exchange of a previous grant.

(7)     David  Schafer  started  with  the  Company  on September 18, 2002 and thus compensation for
fiscal  year ended June 30, 2003 is only for a partial year; his base salary annualized is $250,000.




                                       19



EXECUTIVE  OFFICERS

     Set  forth  below  is  certain  information regarding the current executive
officers  of the Company.  Officers are appointed by and serve at the discretion
of  the  Board  of  Directors.

     Marc  H.  Nussbaum,  forty-eight,  has  served  as  our President and Chief
Executive  Officer  since May 2002.  From April 2000 to March 2002, Mr. Nussbaum
served  as  Senior Vice President and Chief Technical Officer for MTI Technology
Corporation,  a  developer  of enterprise storage solutions.  From April 1981 to
November  1998,  Mr.  Nussbaum  served  in  various positions at Western Digital
Corporation, a manufacturer of PC components, communication controllers, storage
controllers  and hard drives.  Mr. Nussbaum lead business development, strategic
planning and product development activities, serving as Western Digital's Senior
Vice  President,  Chief  Technical Officer from 1995 to 1998 and Vice President,
Storage  Technology and Product Development from 1988 through 1995. Mr. Nussbaum
holds  BA  in  physics  from  the  State  University  of  New  York.

     James  W.  Kerrigan, sixty-eight, has served as our Chief Financial Officer
since  May 2002. From March 2000 to October 2000, he was Chief Financial Officer
of  Motiva,  a  privately-owned  company  that  developed,  marketed  and  sold
collaboration software systems. From January 1998 to February 1999, he was Chief
Financial  Officer  of  Who?Vision  Systems,  Inc.,  an  incubator  company that
developed  biometric  fingerprint devices and software. From April 1995 to March
1997,  he was Chief Financial Officer of Artios, Inc., a privately-owned company
that  designs,  manufactures, and sells prototyping hardware and software to the
packaging  industry.  Previously,  Mr.  Kerrigan  has  served as Chief Financial
Officer  for several other larger, public companies. He holds an engineering and
MBA  degree  from  Northwestern  University.

     Michael  S.  Oswald, forty-nine, has served as our General Counsel and Vice
President  since  December  2001 and as Secretary since May 2002. From June 2001
through  December 2001, he provided legal services for clients as an independent
consultant.  From  September 1999 to June 2001, he was General Counsel and Chief
Administrative  Officer  at  NowDocs,  Inc.,  a private company located in Aliso
Viejo,  California.  From December 1996 to November 1999, he was General Counsel
to  Acuity  Corp.  in  Austin,  Texas.  Mr. Oswald holds a J.D. from Santa Clara
University  School  of  Law,  and  a  B.A.  from the University of California at
Riverside.  Mr. Oswald resigned from his offices effective August 25, 2004, with
employment  to  end  on  or  before  November  12,  2004.

     Katherine  H.  McDermott,  forty-four,  has served as our Vice President of
Finance  since  March  2001  and  our Secretary since August 2004. Ms. McDermott
joined  Lantronix in March 2000 as Corporate Controller. From 1988 through 1999,
Ms. McDermott served in a number of senior level finance positions with Bausch &
Lomb,  Inc.,  a  global  health care company. Her most recent positions included
Corporate  Audit  Manager,  Plant  Controller,  and Controller of a wholly owned
subsidiary. From 1982 to 1988, Ms. McDermott held various financial positions at
a  division  of  General  Motors.  Ms.  McDermott holds a BBA degree in Business
Administration  from St. Bonaventure University in New York, where she graduated
cum  laude.  She  also  earned a MBA degree, with a concentration in Finance and
Economics, from the Simon School of Business Administration at the University of
Rochester.

EMPLOYMENT  AGREEMENTS

     There  is  no  written agreement between the Company and Marc Nussbaum. Mr.
Nussbaum's compensation is set forth above and he is eligible for other benefits
offered  to other Company employees such as medical, dental, life and disability
insurance and participation in incentive programs and the Company's 401(k) plan.

     There  is  no written agreement between the Company and James Kerrigan. Mr.
Kerrigan's compensation is set forth above and he is eligible for other benefits
offered  to other Company employees such as medical, dental, life and disability
insurance and participation in incentive programs and the Company's 401(k) plan.

     In  December 2001, the Company entered into an at-will employment agreement
with  Michael  Oswald  to  serve as General Counsel and Secretary with an annual
base  salary  of  $175,000,  a severance pay of six months salary, and an annual
target  bonus  of  up  to  $43,750.  Mr.  Oswald received 10,000 incentive stock
options  and  20,000  nonstatutory  stock  options.  He  was  eligible for other
benefits  offered  to  other Company employees such as medical, dental, life and
disability  insurance  and participation in incentive programs and the Company's
401(k)  plan.


                                       20



     There  is no written agreement between the Company and Katherine McDermott.
Ms.  McDermott  receives  an annual salary of $162,000 and is eligible for other
benefits  offered  to  other Company employees such as medical, dental, life and
disability  insurance  and participation in incentive programs and the Company's
401(k)  plan.

OPTION  GRANTS  IN  LAST  FISCAL  YEAR

     The  following  table  shows  all  grants of stock options to the executive
Officers  and  highly  compensated  employees listed in the Summary Compensation
Table  during fiscal year ended June 30, 2004. No stock appreciation rights were
granted  during  fiscal  year  ended  June 30, 2004. These grants are options to
purchase  the  common  stock  of  the  Company.






                                 OPTION GRANTS IN LAST FISCAL YEAR
                                        (INDIVIDUAL GRANTS)

                   NUMBER OF   PERCENT OF TOTAL                           POTENTIAL REALIZABLE VALUE AT
                   SECURITIES  OPTIONS GRANTED                            ASSUMED ANNUAL RATES OF
                   UNDERLYING  TO EMPLOYEES IN   EXERCISE OR              STOCK PRICE APPRECIATION
                   OPTIONS     YEAR ENDED JUNE   BASE PRICE   EXPIRATION  FOR 10 YEAR OPTION TERM (3)
NAME               GRANTED     30, 2004(1)           (2)         DATE         5%           10%
-----------------  -------     ----------------  -----------  ----------  ----------    ---------
                                                                      
Marc Nussbaum.     180,000          6.4%              $1.26   12/16/13    $142,633      $361,461 
James Kerrigan      90,000          3.2%              $1.26   12/16/13    $ 71,317      $180,730 
Michael Oswald(4)   22,500          0.8%              $0.81   02/10/05    $ 11,462      $ 29,046 
                    30,000          1.1%              $1.26   02/10/05    $ 23,772      $ 60,243 
Curtis Brown       112,500          4.0%              $0.81   07/28/13    $ 57,308      $145,230 
                    48,000          1.7%              $1.26   12/16/13    $ 38,036      $  96390 
David Schafer.      47,000          1.7%              $1.26   12/16/13    $ 37,243      $ 94,381 



(1)  Based  on  an  aggregate  of 2,812,399 options granted by us in the year ended June 30,
2004  to  our  employees,  directors  and  consultants, including the executive officers and
highly  compensated  employees  listed  in  the  Summary  Compensation  Table.

(2)  Options were granted at an exercise price equal to the fair market value on the date of
grant as determined pursuant to the closing price of our common stock on the Nasdaq National
Market  on  the  trading  day  immediately  preceding  the  date  of  grant.

(3)  The  potential  realizable value is calculated based on the term of the ten-year option
and  assumed  rates of stock appreciation of 5% and 10%, compounded annually.  These assumed
rates  comply  with  the  rules of the SEC and do not represent our estimate of future stock
prices.  Actual  gains,  if  any,  on stock option exercises will be dependent on the future
performance  of  our  common  stock.

(4)  Mr.  Oswald's  options  will  expire  on  or  before  February  10,  2005,  ninety (90)
days after termination of employment.





     The following table provides information concerning option exercises during
fiscal  2003  and  the exercisable and unexercisable options held as of June 30,
2004,  by  the executive officers and highly compensated employees listed in the
Summary  Compensation  Table:


AGGREGATED  OPTION  EXERCISES  IN  LAST  FISCAL  YEAR AND FISCAL YEAR-END OPTION
VALUES






                 NUMBER OF
                  SHARES                  NUMBER OF SECURITIES
                ACQUIRED ON   VALUE      UNDERLYING UNEXERCISED    VALUE OF UNEXERCISED IN-THE-
NAME             EXERCISE    REALIZED      OPTIONS AT 6/30/04      MONEY OPTIONS AT 6/30/04 (1)
                                       --------------------------  ----------------------------
                                       EXERCISABLE  UNEXERCISABLE   EXERCISABLE  UNEXERCISABLE
--------------  -----------  --------  -----------  -------------   -----------  -------------
                                                               
Marc Nussbaum           ---       ---      181,250        298,750   $   136,313  $         0
James Kerrigan          ---       ---       79,167        152,500        46,875       34,375
Michael Oswald          ---       ---       48,117         47,208         6,850        3,094
Curtis Brown            ---       ---      158,479         89,720        34,031       15,469
David Schafer           ---       ---       81,250        115,750        61,750       52,250


(1)  This  number  is calculated by subtracting the option price from the closing price of common
stock as reported by the Nasdaq  Stock Market on June 30, 2004 ($1.25)  to get the "average value
per option," and multiplying  the average value per option  by  the  number  of  exercisable  and


                                       21



unexercisable options.  The amounts in this column may not represent amounts actually realized by
the executive officers listed in the Summary Compensation  Table.



OPTION  REPRICING

     In  January  2003, we completed a stock option exchange program in which we
offered  domestic employees the opportunity to exchange outstanding options with
exercise  prices greater than $3.01 for new stock options at a ratio of 0.75 for
each  shares  underlying  the option exchanged.  The new grant bears an exercise
price equal to the fair market value of our common stock at the end of the offer
period.  Executive  officers,  directors,  and  consultants were not eligible to
participate  in  this program.  We implemented the stock option exchange program
because  the  options eligible to be exchanged had exercise prices significantly
higher  than  the  market  price of our common stock, and we believed that those
options  were unlikely to be exercised in the near future and were not providing
proper  incentives to our employees. The replacement stock options vest over two
years  and  six  months  and  expire  ten  years  from  the  date  of  grant.

     The  following  table  shows  certain  information concerning the exchanged
options issued to the executive officers and highly compensated employees listed
in  the  Summary  Compensation  Table  during  the  last  ten  years.






                                         TEN YEAR OPTION REPRICINGS

                                                                                                LENGTH OF
                                                                                                ORIGINAL
                                      NUMBER OF                                                OPTION TERM
                                     SECURITIES    MARKET PRICE                               REMAINING AT
                                     UNDERLYING     OF STOCK AT   EXERCISE PRICE      NEW        DATE OF
                                       OPTIONS        TIME OF       AT TIME OF     EXERCISE     EXCHANGE
NAME                        DATE    EXCHANGED (#)    EXCHANGE        EXCHANGE        PRICE     (IN MONTHS)
                                                                            

Marc Nussbaum
Chief Executive Officer       ---            ---             ---              ---        ---            ---

James Kerrigan
Chief Financial Officer       ---            ---             ---              ---        ---            ---

Michael Oswald
General Counsel, Vice
President and Secretary       ---            ---             ---              ---        ---            ---

Curtis Brown
Executive Vice President  7/28/03        112,500   $        0.81  $          9.00  $    0.81            101
Research and Development      (1)            (2)

David Schafer
Executive Vice President
World Wide Sales              ---            ---             ---              ---        ---            ---




(1)  The  original grant of an option to purchase 150,000 shares of the Company's common stock was tendered
and  cancelled on January 27, 2003.  The new grant of an option to purchase 112,500 shares of the Company's
common  stock  was  granted  on  July  28,  2003.

(2)  Options were replaced at a ratio of 1 to 0.75, and thus the number of securities underlying the option
the  participant  received  represent  0.75  of  that  tendered  for  cancellation.



EQUITY  COMPENSATION  PLANS

The  following  table  summarizes  our  equity compensation plans as of June 30,
2004:




EQUITY  COMPENSATION  PLANS

     The following table summarizes our equity compensation plans as of June 30, 2002:

                          NUMBER OF SECURITIES      WEIGHTED-       NUMBER OF SECURITIES
                           TO BE ISSUED UPON    AVERAGE EXERCISE   REMAINING AVAILABLE FOR
                              EXERCISE OF           PRICE OF        FUTURE ISSUANCE UNDER
PLAN                      OUTSTANDING OPTIONS      OUTSTANDING       EQUITY COMPENSATION
                                                     OPTIONS                PLAN
------------------------  --------------------  -----------------  -----------------------
                                                          
Equity compensation plan
approved by stockholders
                                5,573,986            $1.81               14,844,908




                                       22



SECTION  16(A)  BENEFICIAL  OWNERSHIP  REPORTING  COMPLIANCE

     Section  16(a) of the Securities Exchange Act of 1934, as amended, requires
the  Company's  directors, executive officers, and persons who own more than ten
percent  (10%)  of  a  registered class of the Company's equity securities ("10%
Stockholders")  to  file with the Securities and Exchange Commission (the "SEC")
reports  of ownership on Form 3 and reports on changes in ownership on Form 4 or
Form  5.  Such  executive  officers,  directors,  and  10% Stockholders are also
required  by  SEC  rules to furnish the Company with copies of all Section 16(a)
forms  that  they  file.  Lantronix  believes  all  reporting requirements under
Section  16(a) for the fiscal year ended June 30, 2004 were met by its executive
officers,  Board  members  and  greater  than  ten-percent  stockholders.

RELATED  PARTY  TRANSACTIONS

     One  international  customer,  transtec AG, which is a related party due to
common  ownership by our largest stockholder and former Chairman of our Board of
Directors,  Bernhard  Bruscha,  accounted for approximately 3%, 4% and 5% of our
net revenues for the years ended June 30, 2004, 2003 and 2002, respectively.  We
also  had  an  agreement with transtec AG for the provision of technical support
services  at  the  rate  of  $7,500  per  month,  which has now been terminated.
Included  in  selling,  general  and  administrative expenses is $90,000 for the
fiscal  year  ended  June  30,  2002.  No similar expenses were recorded for the
fiscal  years  ended  June  30,  2004  or  June  30,  2003.

     Each director, Mr. Desai, Mr. Slayen, Mr. Burton, and Ms. Lewis received an
option  to  purchase  25,000 shares of the Company's common stock at an exercise
price  of  $0.48  per  share  on  November  12, 2002 pursuant to the 2002 Annual
Meeting  of  Stockholders as partial compensation for services being rendered in
each  director's  capacity  as  a  director  as more fully set forth above under
"Director  Compensation."  Also  during the fiscal year ended June 30, 2004, Ms.
Lewis received an option to purchase 25,000 shares of the Company's common stock
at  an  exercise  price  of  $0.41  per share on October 1, 2002 pursuant to her
election  to  the Board as partial compensation for services as a director, also
as  more  fully  set  forth above under "Director Compensation." Each grant is a
non-statutory  stock  option  with  a one-year cliff vesting for the first fifty
percent  (50%)  of  the  options under the grant and the remaining fifty percent
(50%)  vesting  monthly  over  the  following  twenty-four  (24)  months.

     Howard  Slayen,  a member  of our  Board of  Directors  also  serves as our
nominee to the Xanboo Board of  Directors.  As of June 30, 2004, we held a 14.9%
ownership  interest in Xanboo, a privately-held company that develops technology
that  allows  users to control, command and view their home or business remotely
over the Internet.  Marc  Nussbaum our Chief  Executive Officer also served as a
nominee  to  the  Xanboo  Board  of Directors  prior to his resignation from the
Xanboo  board  in  August  2003.

     Our Certificate of Incorporation and Bylaws provide that we shall indemnify
our  directors  and officers to the fullest extent permitted by Delaware law. We
have  also  entered  into  indemnification  agreements  with  our  officers  and
directors  containing  provisions  that  may  require us, among other things, to
indemnify  our  officers  and  directors  against  liabilities that may arise by
virtue  of their status or service as directors or officers and to advance their
expenses  incurred  as  a result of any proceeding against them as to which they
could  be  indemnified.  We  are  currently  involved  in litigation under which
indemnification  claims  might  be  made.

INDEBTEDNESS

      Thomas  W.  Burton, a director on the Board of Directors and current Chair
of  the  Compensation  Committee,  currently has a non-recourse promissory note,
dated  April  16,  2001,  with  a current aggregate principal amount owed to the
Company  of  $94,000  and  interest payable of $17,000 as of June 30, 2004.  The
note  bears an interest rate of 5.19% per annum, compounded annually. Mr. Burton
executed  the  note for a loan from the Company for Mr. Burton to pay income tax
liabilities  he  incurred  as  a result of various exercises of stock options to
purchase our common stock.  No impairment has been recorded as it relates to the
note  receivable  from  Mr.  Burton.


                                       23



                          COMPENSATION COMMITTEE REPORT

     The  Company's  executive  compensation  program  is  administered  by  the
Compensation  Committee  of  the Board of Directors. The Compensation Committee,
which  is  composed  of Non-Employee Directors, is responsible for approving and
reporting  to  the  Board  on  all  elements  of  compensation for the executive
officers  of the Company. The Compensation Committee has furnished the following
report  on  executive compensation for the fiscal year ended June 30, 2004.  The
Compensation  Committee  held  four  (4)  meetings  during  Fiscal  Year  2004.

     As  part  of  its  duties,  the Compensation Committee reviews compensation
levels  of  the  executive officers to confirm that compensation is in line with
performance  and  industry practices. The goal of the Committee is to ensure the
compensation  practices of the Company are sufficient to: (i) enable the Company
to  attract, retain and motivate the most qualified talent who contribute to the
long-term  success  of  the  Company;  (ii)  align  compensation  with  business
objectives  and  performance;  and (iii) align incentives for executive officers
with  the  interest of stockholders in maximizing stockholder value. The Company
emphasizes  performance-based  compensation  that  is  competitive  with  the
marketplace, and the importance of clearly communicating performance objectives.
The  Company  intends  to  review  its  compensation  practices,  as  needed, by
comparing them to surveys of relevant competitors and set objective compensation
parameters  based  on  this  review.  Compensation  policies  also  reflect  the
competition  for  executive  talent  and the unique challenges and opportunities
facing  the  Company  in  the  networking  device  markets.

     The Company's compensation program for all employees includes both cash and
equity-based  elements.  Because  it  is  directly linked to the interest of our
stockholders,  equity-based  compensation  is  emphasized  in  the design of the
Company's  compensation  programs.  Consistent  with  competitive practices, the
Company utilizes a cash bonus plan based on achievement of financial performance
objectives.

CASH  COMPENSATION

     Salary.  The  Company  sets a base salary range for each executive officer,
including  the  Chief  Executive  Officer,  by  reviewing  the  base  salary for
comparable  positions of a broad peer group, including companies similar in size
and  business  that compete with the Company in the recruitment and retention of
senior  personnel.  Individual salaries for each executive officer are set based
on experience, performance and contribution to the Company's results, as well as
our  financial  performance.

     Cash  Bonuses.  Selected  employees  and executive officers are eligible to
participate  in  the  Company's cash bonus plan, with executive employee bonuses
determined  by  the  Compensation Committee of the Board of Directors. This plan
provides cash awards for meeting certain performance goals, based on a matrix in
which  100% or more of target may be achieved only if the Company's results meet
targets.  Individual bonus amounts are determined by company performance and the
employee's  direct  responsibilities  and their impact on the Company's results.
The  corporate  financial goals are based on the approved operating plan and any
periodic  updates  thereto.

EQUITY-BASED  COMPENSATION

     Initial  or  "new-hire" options are granted to executive officers when they
first  join  the  Company.  In addition, restricted stock may be sold to certain
executive  officers when they first join the Company. Thereafter, options may be
granted  and restricted stock may be sold to each executive officer annually and
from  time  to  time based on performance. To enhance retention, options granted
and  restricted  stock  sold  to  executive  officers  are  subject  to  vesting
restrictions  that generally lapse over four years. The amount of actual options
granted  depends  on  the  individual's  level of responsibility and a review of
stock  option  grants  of  positions  at  a  broad  peer  group.

COMPENSATION  OF  THE  CHIEF  EXECUTIVE  OFFICER

     When setting the Chief Executive Officer's compensation, the Committee does
so without such person's attendance. The Chief Executive Officer's salary, bonus
and  equity  grants  follow  the  policies  set  forth above. In determining Mr.
Nussbaum's compensation package, the Committee considered compensation practices
at  other  high  tech  companies  with  which Lantronix competes for talent. The
Committee  uses other industries for comparable measures, which have some of the
same  marketing,  sales,  research  and  development  and operations challenges.


                                       24



     In  May 2002, the Company hired Marc Nussbaum to serve as the Interim Chief
Executive Officer. In February 2003, the Company eliminated the interim capacity
and  Mr.  Nussbaum  now  serves  as the Chief Executive Officer. The annual base
salary  for Mr. Nussbaum for the fiscal year ended June 30, 2004 is $290,000 and
a  monthly  automobile  allowance  of  $750.

     For  the  fiscal year ended June 30, 2004, Mr. Nussbaum did not receive any
bonus  because  we  did  not  meet  our  corporate  financial goals based on the
approved  operating  plan  and any periodic updates thereto for the fiscal year.

POLICY  REGARDING  DEDUCTIBILITY  OF  COMPENSATION

     We  are  required  to  disclose  our  policy regarding qualifying executive
compensation for deductibility under Section 162(m) of the Internal Revenue Code
of  1986,  as  amended,  which provides that, for purposes of the regular income
tax,  the  otherwise  allowable  deduction for compensation paid or accrued with
respect to the chief executive officer and the next four most highly compensated
executive officers of a publicly-held company is limited to $1 million per year,
unless  such  compensation  is  performance-based  within the meaning of Section
162(m)  and  the  regulations  thereunder.

     The Committee intends to continue to utilize performance-based compensation
in  order  to  minimize  the  effect of the limits imposed by Section 162(m) and
seeks to assure the maximum tax deductibility of all compensation it authorizes.
However,  the Committee believes that its primary responsibility is to provide a
compensation  program  that will attract, retain and reward the executive talent
necessary  to the Company's success. Consequently, the Committee recognizes that
the  loss  of  a  tax  deduction  may  be  necessary  in  some  circumstances.

     Submitted  by:

     Compensation  Committee
     Thomas  W.  Burton,  Chair
     H.K.  Desai
     Howard  T.  Slayen
     Kathryn  Braun  Lewis


         COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
                             COMPENSATION DECISIONS

     The  members  of  the Compensation Committee are set forth in the preceding
section. No interlocking relationships existed during the fiscal year ended June
30,2004  between  our  Board  of Directors or our Compensation Committee and the
board  of  directors  and  compensation  committee  of  any  other  company.


                                       25



                 AUDIT COMMITTEE REPORT YEAR ENDED JUNE 30, 2004

     The  Audit Committee of our Board of Directors serves as the representative
of  our Board of Directors for the general oversight of our financial accounting
and  reporting  process,  systems  of  internal  control,  audit process and the
process  for  monitoring  compliance  with  laws and regulations and our Code of
Business  Conduct  and Ethics.  The Audit Committee members are not professional
auditors,  and  their  functions are not intended to duplicate or to certify the
activities of management and the independent registered public accountants.  The
Audit  Committee  oversees  Lantronix's financial reporting process on behalf of
the Board of Directors.  Our management has primary responsibility for preparing
our  financial  statements  and  our  financial  reporting  process,  including
Lantronix's  system  of internal controls.  Our independent accountants, Ernst &
Young  LLP,  are  responsible for expressing an opinion on the conformity of our
audited  financial  statements to generally accepted accounting principles.  The
audit  committee  meets  periodically  with  the  independent  registered public
accountants,  with and without management present, to discuss the results of the
independent  registered  public  accountants'  examinations  and  evaluations of
Lantronix's  internal controls, and the overall quality of Lantronix's financial
reporting.

     For  the  fiscal year ended June 30, 2004, the Committee met in person five
(5)  times  and  met  via telephone conference calls an additional 4 times.  The
members  of  the  Audit  Committee  took the following actions in fulfilling its
oversight  responsibilities:

(i)  reviewed  and  discussed  the  annual  audited financial statements and the
     quarterly  results  of operation with management, including a discussion of
     the  quality  and  the acceptability of Lantronix's financial reporting and
     controls as well as the clarity of disclosures in the financial statements;
(ii) discussed  with  the independent registered public accountants their review
     of  the  Company's  quarterly  financial  statements for the quarters ended
     September  30,  2003,  December  31,  2003,  March  31,  2004;
(iii) discussed  with the independent registered public accountants  the matters
     required to be discussed by Statement SAS 61 (Codification on Statements on
     Auditing  Standard,  AU  380);
(iv) received  from  the  independent  registered  public  accountants  written
     disclosures  and  the  letter  from  the  independent  registered  public
     accountants  required  by  Independence  Standards  Board  Standard  No.  1
     (Independence Standards Board Standard No. 1, Independence Discussions with
     Audit  Committees)  and  discussed  with  the independent registered public
     accountants  their  independence;  and
(iv) based  on the above, recommended to the Board of Directors that the audited
     financials  be included in the Company's Annual Report on Form 10-K for the
     fiscal  year  ended  June  30,  2004,  for  filing  with  the  SEC.

     Following  the  termination  of our Chief Financial Officer on May 3, 2002,
the  Audit  Committee  engaged  counsel and independent accountants to conduct a
special  investigation of certain matters.  During the year ended June 30, 2004,
one  or  more  members  of  the  Audit  Committee  continued  to  be  engaged in
supervision  of and discussions with outside legal counsel regarding the ongoing
SEC  investigation  related  to  the  Company's  restatement  of prior earnings.

     For  the fiscal year ended June 30, 2004, the Company's Audit Committee has
consisted of Thomas W. Burton, Howard T. Slayen and Kathryn Braun Lewis. Each of
the  directors  who  serves  on  the Audit Committee is "independent" within the
meaning of the rules of the Nasdaq Stock Market and meets the financial literacy
and  expertise  requirements  of  the  Nasdaq  Stock  Market  and  regulations
promulgated  by  the SEC. The Audit Committee updated and revised its charter on
June  30,  2004,  a  copy  of  which  is  attached  hereto  as  Appendix  A.

     This  report  of  the  Audit  Committee shall not be deemed incorporated by
reference  by  any  general  statement  incorporating  by  reference  this Proxy
Statement  into  any filing under the Securities Act of 1933, as amended, or the
Securities  Act  of  1934, as amended, except to the extent that we specifically
incorporate  this  information  by  reference, and shall not otherwise be deemed
filed  under  such  acts.

Submitted  by:
Audit  Committee
Howard  T.  Slayen,  Chair
Thomas  W.  Burton
Kathryn  Braun  Lewis


                                       26



                          STOCK PRICE PERFORMANCE GRAPH

     The graph below compares the cumulative total return to stockholders on our
common  stock  with  the  cumulative  total  return  on  the NASDAQ Stock Market
Index-U.S.  ("NASDAQ  US  Index") and the Research Data Group ("RDG") Technology
Composite  for  the period commencing on August 4, 2000, the date of the initial
public  offering of the Company's common stock, and ending on June 30, 2004. The
following graph assumes the investment of $100 in the Company's Common Stock and
in  the  two  other  indices,  and  reinvestment  of  all  dividends.

     The comparisons shown in the graph below are based upon historical data. We
consistently  caution  that the stock price performance shown in the graph below
is not indicative of, nor intended to forecast, the potential future performance
of  our  common  stock.





LANTRONIX  INC


                                                  Cumulative  Total  Return

                            8/4/00   9/00   12/00  3/01    6/01   9/01   12/01  3/02   6/02   9/02   12/02  3/03   6/03   9/03
                                                                                
LANTRONIX, INC.. . . . . .  100.00   95.00  63.75  50.31  103.00  61.00  63.20  25.90   8.50   3.80   7.00   7.70   7.40   9.10
NASDAQ STOCK MARKET (U.S.)  100.00  102.85  60.94  41.47   39.91  36.18  32.15  32.47  33.89  31.61  29.43  26.57  32.61  37.52
RDG TECHNOLOGY COMPOSITE .  100.00   95.25  65.56  46.35   52.62  34.73  47.62  44.49  32.80  24.44  29.82  29.57  35.38  39.33

                            12/03  3/04   6/04
                                 
LANTRONIX, INC.. . . . . .  11.70  13.80  12.50
NASDAQ STOCK MARKET (U.S.)  42.01  44.32  44.47
RDG TECHNOLOGY COMPOSITE .  45.56  47.33  48.42



     Notwithstanding  anything  to the contrary set forth in any of our previous
or  future  filings  under the Securities Act of 1933 or the Securities Exchange
Act  of  1934 that might incorporate this proxy statement or future filings made
by  us  under  those  statutes,  the  Compensation  Committee  Report  and stock
performance graph shall not be deemed filed with the SEC and shall not be deemed
incorporated  by  reference  into  any of those prior filings or into any of our
future  filings.

                                  OTHER MATTERS

     The  2004  Annual  Meeting is called for the specific purposes set forth in
the  Notice  of  Annual  Meeting as discussed above, and also for the purpose of
transacting  such other business as may properly come before the Annual Meeting.
At  the date of this Proxy Statement the only matters that management intends to
present,  or  is  informed or expects that others will present for action at the
2004  Annual Meeting, are those matters specifically referred to in such Notice.
We  have  not  been  notified by any stockholder of his, her or its intention to
present  a  stockholder  proposal from the floor at the 2004 Annual Meeting, and
the  Bylaw  Deadline for the 2004 Annual Meeting occurred on September 19, 2004,
the date 60 days prior to the 2004 Annual Meeting. The enclosed proxy grants the
proxy  holders  discretionary  authority  to vote on any matter properly brought
before  the  2004  Annual  Meeting.

BY  ORDER  OF  THE  BOARD  OF  DIRECTORS

Irvine,  California
October  18,  2004


                                       27



                       WHERE YOU CAN FIND MORE INFORMATION

     The  Company files reports, proxy statements and other information with the
SEC  under  the Exchange Act.  You may obtain copies of this information by mail
from the Public Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024,
Washington,  D.C.  20549,  at  prescribed  rates.  Further  information  on  the
operation of the SEC's Public Reference Room in Washington, D.C. can be obtained
by  calling  the  SEC  at  1-800-SEC-0330.

     The  SEC  also  maintains  an  Internet  site  that contains reports, proxy
statements  and  other  information about issuers, such as the Company, who file
electronically  with  the  SEC.  The address of that site is http://www.sec.gov.

     You  can also inspect reports, proxy statements and other information about
the  Company  at  the  offices  of the Nasdaq Stock Market, 1735 K Street, N.W.,
Washington,  DC  20006.

     The SEC allows us to "incorporate by reference" information into this Proxy
Statement.  This  means  that  we  can  disclose important information to you by
referring  you  to  another  document  filed  separately  with  the  SEC.  The
information  incorporated  by  reference  is  deemed  to  be  part of this Proxy
Statement.  This  document  incorporates  by reference the Annual Report on Form
10-K  for  fiscal  year  ended  June  30,  2004 filed with the SEC and mailed in
conjunction  with  this  Proxy  Statement.  This  document  contains  important
information  about  the  Company  and  its  finances.

     You  can  obtain  any  documents  incorporated  by  reference in this Proxy
Statement  from  the  Company, or from the SEC through the SEC's web site at the
address described above.  Documents incorporated by reference are available from
the Company without charge, excluding any exhibits to those documents unless the
exhibit  is  specifically  incorporated by reference as an exhibit in this Proxy
Statement.  Requests  should  be  sent  to the Secretary, Lantronix, Inc., 15353
Barranca  Parkway,  Irvine,  CA  92618.

     YOU  SHOULD  RELY  ONLY  ON  THE  INFORMATION  CONTAINED OR INCORPORATED BY
REFERENCE  IN THIS PROXY STATEMENT TO VOTE ON THE PROPOSALS. THE COMPANY HAS NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS
CONTAINED  IN  THIS  PROXY  STATEMENT.

     THIS PROXY STATEMENT IS DATED OCTOBER 18, 2004.  YOU SHOULD NOT ASSUME THAT
THE  INFORMATION  CONTAINED  IN  THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE
OTHER  THAN  SUCH  DATE,  AND THE MAILING OF THIS PROXY STATEMENT TO THE COMPANY
STOCKHOLDERS  SHALL  NOT  CREATE  ANY  IMPLICATION  TO  THE  CONTRARY.


                                       28



                                                                      APPENDIX A

CHARTER - AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF LANTRONIX, INC., AMENDED
                               SEPTEMBER 30, 2004

     ORGANIZATION

     This  charter governs the operations of the Audit Committee of the Board of
Directors. The committee shall review and reassess the charter at least annually
and  obtain  the  approval  of  the  board  of directors. The committee shall be
appointed by the board of directors and shall comprise at least three directors,
each  of  whom  is  independent  of  management  and the Company. Members of the
committee  shall be considered independent if they have no relationship that may
interfere  with  the  exercise  of  their  independence  from management and the
Company.  All  committee members shall be financially literate, and at least one
member  shall  have  accounting  or  related  financial  management  expertise.

STATEMENT  OF  POLICY

     The  audit  committee shall provide assistance to the board of directors in
fulfilling  their  oversight  responsibility  to  the  shareholders,  potential
shareholders,  the  investment  community,  and others relating to the Company's
financial  statements  and  the  financial  reporting  process,  the  systems of
internal  accounting and financial controls, the annual independent audit of the
Company's  financial statements, and the legal compliance and ethics programs as
established  from  time  to time by management and the board. In so doing, it is
the  responsibility  of  the  committee  to maintain free and open communication
between the committee, independent registered public accountants, and management
of the Company. In discharging its oversight role, the committee is empowered to
investigate  any  matter brought to its attention with full access to all books,
records,  facilities,  and  personnel  of  the  Company.  The audit committee is
empowered  to  retain  outside  counsel,  accounting, or other experts to obtain
advice  and  assistance.

RESPONSIBILITIES  AND  PROCESSES

     The  primary  responsibility  of  the  audit  committee  is  to oversee the
Company's  financial  reporting  process  on  behalf of the board and report the
results  of  their  activities  to  the board. While the audit committee has the
responsibilities and powers set forth in this Charter, it is not the duty of the
audit  committee  to  plan  or conduct audits or to determine that the Company's
financial  statements  are  complete  and  accurate  and  are in accordance with
generally  accepted  accounting  principles.  Management  is  responsible  for
preparing  the  Company's  financial  statements, and the independent registered
public  accountants  are  responsible  for  auditing those financial statements.

     The  committee  in  carrying out its responsibilities believes its policies
and  procedures  should  remain  flexible,  in  order  to best react to changing
conditions  and  circumstances. The committee should take appropriate actions to
set the overall corporate "tone" for quality financial reporting, sound business
risk  practices,  and  ethical  behavior.

     The  following  shall  be  the  principal  recurring processes of the audit
committee  in carrying out its oversight responsibilities. The processes are set
forth  as  a guide with the understanding that the committee may supplement them
as  appropriate.

     The  committee  shall  have  a  clear understanding with management and the
independent registered public accountants that the independent registered public
accountants  are ultimately accountable to the audit committee and the board, as
representatives  of  the  Company's  shareholders.  The committee shall have the
ultimate  authority  and responsibility to appoint, compensate, oversee the work
of  the  independent  registered  public  accountants  (including  resolving
disagreements  between  management  and  the  independent  registered  public
accountants  regarding  financial  reporting)  for  the  purpose of preparing or
issuing  an  audit  report  or  related work and, where appropriate, replace the
independent  registered public accountants. The committee shall actively discuss
with  the  independent  registered  public  accountants  their independence from
management and the Company and obtain a formal written statement delineating all
relationships  between  the  independent  registered  public accountants and the
Company,  as  well  as  other matters in the written disclosures required by the


                                      A-1



Independence  Standards  Board.  The  committee  shall  also  consider  the
compatibility  of  nonaudit  services  with  the  independent  registered public
accountants'  independence  and shall pre-approve any nonaudit services provided
to  the  Company by the independent registered public accountants. Annually, the
committee  shall  review  and select the Company's independent registered public
accountants.

     The  committee  shall  discuss  with  the  independent  registered  public
accountants  the  overall  scope and plans for their respective audits including
the  adequacy  of  staffing  and  compensation  for  services rendered and shall
pre-approve  all  auditing  services.  Also,  the  committee  shall evaluate and
discuss  with  management  and the independent registered public accountants the
adequacy  and  effectiveness of the accounting and financial controls, including
the  Company's system to monitor and manage business risk, and legal and ethical
compliance  programs.  Further,  the  committee  shall  meet separately with the
independent  registered public accountants, with and without management present,
to  discuss  the  results  of  their  examinations  and  will provide sufficient
opportunity  for the independent registered public accountants to meet privately
with  the  members  of  the  committee.

     The  committee  shall  review  and  approve  in  advance  any related-party
transactions and will establish procedures for receiving, retaining and treating
complaints  received  by  the  Company regarding accounting, internal accounting
controls  or  auditing  matters  and  procedures for the confidential, anonymous
submission  by  employees  of  concerns  regarding  questionable  accounting  or
auditing  matters.

     The committee shall review the interim financial statements with management
and  the  independent  registered  public accountants prior to the filing of the
Company's  Quarterly  Report on Form 10-Q. Also, the committee shall discuss the
results  of  the  quarterly  review  and  any  other  matters  required  to  be
communicated  to  the committee by the independent registered public accountants
under  generally  accepted  auditing  standards.  The chair of the committee may
represent  the  entire  committee  for  the  purposes  of  this  review.

     The  committee  shall review with management and the independent registered
public  accountants  the  financial  statements  to be included in the Company's
Annual  Report  on Form 10-K or the annual report to shareholders if distributed
prior  to  the  filing of Form 10-K, including their judgment about the quality,
not  just  acceptability,  of  accounting  principles,  the  reasonableness  of
significant  judgments,  and  the  clarity  of  the disclosures in the financial
statements.  Also,  the  committee shall discuss the results of the annual audit
and  any  other  matters  required  to  be  communicated to the committee by the
independent  registered  public  accountants  under  generally accepted auditing
standards.


                                      A-2




                                                                      APPENDIX B

                                 LANTRONIX, INC.

             AMENDED AND RESTATED 2000 EMPLOYEE STOCK PURCHASE PLAN

     The  following  constitute  the provisions of the Amended and Restated 2000
Employee  Stock  Purchase  Plan  of  Lantronix.

1.     Purpose.  The  purpose of the Plan is to provide employees of the Company
       -------
and  its Designated Subsidiaries with an opportunity to purchase Common Stock of
the  Company  through accumulated payroll deductions. It is the intention of the
Company  to  have  the  Plan  qualify as an "Employee Stock Purchase Plan" under
Section  423 of the Internal Revenue Code of 1986, as amended. The provisions of
the  Plan,  accordingly,  shall  be  construed  so  as  to  extend  and  limit
participation  in  a  manner consistent with the requirements of that section of
the  Code.

2.     Definitions.
       -----------

(a)     "Board"  shall  mean  the  Board  of  Directors  of  the  Company or any
         -----
committee  thereof  designated  by  the  Board  of  Directors  of the Company in
accordance  with  Section  14  of  the  Plan.

(b)     "Code"  shall  mean  the  Internal  Revenue  Code  of  1986, as amended.
         ----

(c)     "Common  Stock"  shall  mean  the  common  stock  of  the  Company.
         -------------

(d)     "Company"  shall  mean  Lantronix  and  any Designated Subsidiary of the
         -------
Company.

(e)     "Compensation"  shall  mean  all  base  straight  time  gross  earnings,
         ------------
bonuses,  commissions,  and  overtime  payments,  but  exclusive  of  incentive
compensation,  incentive  payments,  and  other  compensation.

(f)     "Designated  Subsidiary"  shall  mean  any  Subsidi-ary  that  has  been
         ----------------------
designated  by the Board from time to time in its sole discretion as eligible to
participate  in  the  Plan.

(g)     "Employee"  shall  mean any individual who is an Employee of the Company
         --------
for tax purposes whose customary employment with the Company are at least twenty
(20)  hours  per  week  and more than five (5) months in any calendar year.  For
purposes of the Plan, the employment relationship shall be treated as continuing
intact  while the individual is on sick leave or other leave of absence approved
by  the Company.  Where the period of leave exceeds 90 days and the individual's
right  to  reemployment  is not guaranteed either by statute or by contract, the
employment  relationship  shall  be deemed to have terminated on the 91st day of
such  leave.

(h)     "Enrollment  Date"  shall  mean  the  first Trading Day of each Offering
         ----------------
Period.

(i)     "Exercise Date" shall mean the last Trading Day of each Purchase Period.
         -------------

(j)     "Fair  Market  Value"  shall  mean,  as of any date, the value of Common
         -------------------
Stock  determined  as  follows:

     (i)  If  the  Common Stock is listed on any established stock exchange or a
national  market system, including without limitation the Nasdaq National Market
or  The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value
shall be the closing sales price for such stock (or the closing bid, if no sales
were  reported) as quoted on such exchange or system for the last market trading
day  prior  to the date of determination, as reported in The Wall Street Journal
or  such  other  source  as  the  Board  deems  reliable;


                                      B-1



     (ii)  If  the  Common  Stock is regularly quoted by a recognized securities
dealer  but  selling prices are not reported, its Fair Market Value shall be the
mean  of the closing bid and asked prices for the Common Stock prior to the date
of determination, as reported in The Wall Street Journal or such other source as
the  Board  deems  reliable;

     (iii)  In  the  absence  of an established market for the Common Stock, the
Fair  Market  Value  thereof  shall be determined in good faith by the Board; or

     (iv) For purposes of the Enrollment Date of the first Offering Period under
the  Plan, the Fair Market Value shall be the initial price to the public as set
forth in the final prospectus included within the registration statement in Form
S-1  filed  with  the  Securities and Exchange Commission for the initial public
offering  of  the  Company's  Common  Stock  (the  "Registration  Statement").

(k)     "Offering  Periods"  shall mean the periods of approximately twenty-four
         -----------------
(24)  months  during  which  an  option  granted  pursuant  to  the  Plan may be
exercised, commencing on the first Trading Day on or after August 1 and February
1  of  each  year  and terminating on the last Trading Day in the periods ending
twenty-four  months  later;  provided,  however,  that the first Offering Period
under the Plan shall commence with the first Trading Day on or after the date on
which the Securities and Exchange Commission declares the Company's Registration
Statement  effective  and  ending  on the last Trading Day on or before July 30,
2002.  The  duration  and  timing of Offering Periods may be changed pursuant to
Section  4  of  this  Plan.

(l)     "Plan" shall mean this Amended and Restated 2000 Employee Stock Purchase
         ----
Plan.

(m)     "Purchase  Period"  shall  mean  the  approximately  six  month  period
         ----------------
commencing  after  one  Exercise  Date  and  ending with the next Exercise Date,
except  that  the first Purchase Period of any Offering Period shall commence on
the  Enrollment  Date  and  end  with  the  next  Exercise  Date.

(n)     "Purchase  Price"  shall mean 85% of the Fair Market Value of a share of
         ---------------
Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower;
provided  however, that the Purchase Price may be adjusted by the Board pursuant
to  Section  20.

(o)     "Reserves"  shall  mean  the number of shares of Common Stock covered by
         --------
each  option  under the Plan which have not yet been exercised and the number of
shares  of  Common  Stock which have been authorized for issuance under the Plan
but  not  yet  placed  under  option.

(p)     "Subsidiary" shall mean a corporation, domestic or foreign, of which not
         ----------
less  than  50%  of  the  voting shares are held by the Company or a Subsidiary,
whether or not such corporation now exists or is hereafter organized or acquired
by  the  Company  or  a  Subsidiary.

(q)     "Trading Day" shall mean a day on which national stock exchanges and the
         -----------
Nasdaq  System  are  open  for  trading.

3.     Eligibility.
       -----------

(a)     Any  Employee who shall be employed by the Company on a given Enrollment
Date  shall  be  eligible  to  participate  in  the  Plan.

(b)     Any  provisions of the Plan to the contrary notwithstanding, no Employee
shall  be  granted  an option under the Plan (i) to the extent that, immediately
after  the  grant,  such  Employee  (or  any  other  person whose stock would be
attributed  to  such  Employee pursuant to Section 424(d) of the Code) would own
capital  stock  of  the Company and/or hold outstanding options to purchase such
stock possessing five percent (5%) or more of the total combined voting power or
value  of  all classes of the capital stock of the Company or of any Subsidiary,
or  (ii)  to  the  extent  that  his  or  her rights to purchase stock under all
employee  stock  purchase plans of the Company and its subsidiaries accrues at a
rate  which  exceeds  twenty-five  thousand  dollars  ($25,000)  worth  of stock


                                      B-2



(determined  at  the  fair market value of the shares at the time such option is
granted) for each calendar year in which such option is outstanding at any time.

4.     Offering  Periods.  The  Plan  shall  be  implemented  by  consecutive,
       -----------------
overlapping  Offering Periods with a new Offering Period commencing on the first
Trading  Day  on or after March 1 and September 1 of each year, or on such other
date as the Board shall determine, and continuing thereafter until terminated in
accordance  with  Section  20 hereof; provided, however, that the first Offering
Period  under the Plan shall commence with the first Trading Day on or after the
date  on  which  the  Securities  and Exchange Commission declares the Company's
Registration Statement effective and ending on the last Trading Day on or before
August  31,  2002.  The  Board  shall  have  the power to change the duration of
Offering  Periods  (including  the  commencement  dates thereof) with respect to
future  offerings  without  shareholder  approval if such change is announced at
least  five  (5)  days  prior  to  the scheduled beginning of the first Offering
Period  to  be  affected  thereafter.

5.     Participation.
       -------------
(a)     An  eligible Employee may become a participant in the Plan by completing
a subscription agreement authorizing payroll deductions in the form of Exhibit A
     to  this  Plan and filing it with the Company's payroll office prior to the
applicable  Enrollment  Date.

(b)     Payroll deductions for a participant shall commence on the first payroll
following  the Enrollment Date and shall end on the last payroll in the Offering
Period  to  which  such authorization is applicable, unless sooner terminated by
the  participant  as  provided  in  Section  10  hereof.

6.     Payroll  Deductions.
       -------------------

(a)     At the time a participant files his or her subscription agreement, he or
     she  shall elect to have payroll deductions made on each pay day during the
Offering  Period  in  an  amount  not  exceeding  fifteen  percent  15  % of the
Compensation  which  he  or  she  receives  on  each pay day during the Offering
Period.

(b)     All  payroll  deductions made for a participant shall be credited to his
or  her  account under the Plan and shall be withheld in whole percentages only.
A  participant  may  not  make  any  additional  payments  into  such  account.

(c)     A  participant  may  discontinue his or her participation in the Plan as
provided  in  Section  10 hereof, or may increase or decrease the rate of his or
her  payroll  deductions during the Offering Period by completing or filing with
the  Company  a  new  subscription  agreement  authorizing  a  change in payroll
deduction  rate.  The  Board  may,  in  its  discretion,  limit  the  number  of
participation rate changes during any Offering Period.  The change in rate shall
be effective with the first full payroll period following five (5) business days
after the Company's receipt of the new subscription agreement unless the Company
elects to process a given change in participation more quickly.  A participant's
subscription  agreement  shall  remain in effect for successive Offering Periods
unless  terminated  as  provided  in  Section  10  hereof.

(d)     Notwithstanding  the  foregoing,  to the extent necessary to comply with
Section  423(b)(8)  of the Code and Section 3(b) hereof, a participant's payroll
deductions  may  be decreased to zero percent (0%) at any time during a Purchase
Period.  Payroll  deductions  shall  recommence  at  the  rate  provided in such
participant's  subscription  agreement  at  the  beginning of the first Purchase
Period  which  is  scheduled  to  end  in  the  following  calendar year, unless
terminated  by  the  participant  as  provided  in  Section  10  hereof.

(e)     At the time the option is exercised, in whole or in part, or at the time
some  or all of the Company's Common Stock issued under the Plan is disposed of,
the  participant  must make adequate provision for the Company's federal, state,
or  other  tax withholding obligations, if any, which arise upon the exercise of
the  option  or  the  disposition of the Common Stock.  At any time, the Company
may, but shall not be obligated to, withhold from the participant's compensation
the amount necessary for the Company to meet applicable withholding obligations,


                                      B-3



including  any  withholding  required  to  make available to the Company any tax
deductions or benefits attributable to sale or early disposition of Common Stock
by  the  Employee.

7.     Grant  of  Option.  On  the Enrollment Date of each Offering Period, each
       -----------------
eligible  Employee  participating  in  such  Offering Period shall be granted an
option  to  purchase  on  each Exercise Date during such Offering Period (at the
applicable  Purchase  Price)  up  to  a number of shares of the Company's Common
Stock  determined  by  dividing  such  Employee's payroll deductions accumulated
prior  to such Exercise Date and retained in the Participant's account as of the
Exercise  Date by the applicable Purchase Price; provided that in no event shall
an  Employee  be  permitted  to  purchase  during each Purchase Period more than
25,000  shares of the Company's Common Stock (subject to any adjustment pursuant
to  Section 19), and provided further that such purchase shall be subject to the
limitations set forth in Sections 3(b) and 12 hereof.  The Board may, for future
     Offering  Periods,  increase  or  decrease, in its absolute discretion, the
maximum  number of shares of the Company's Common Stock an Employee may purchase
during  each  Purchase  Period  of such Offering Period.  Exercise of the option
shall  occur  as  provided  in  Section  8  hereof,  unless  the participant has
withdrawn  pursuant  to  Section 10 hereof.  The option shall expire on the last
day  of  the  Offering  Period.

8.     Exercise  of  Option.
       --------------------

(a)     Unless  a  participant withdraws from the Plan as provided in Section 10
hereof,  his  or  her  option  for  the  purchase  of  shares shall be exercised
automatically  on  the  Exercise  Date,  and  the  maximum number of full shares
subject  to  option  shall  be  purchased for such participant at the applicable
Purchase  Price  with  the accumulated payroll deductions in his or her account.
No fractional shares shall be purchased; any payroll deductions accumulated in a
     participant's  account  which  are  not sufficient to purchase a full share
shall  be  retained  in  the  participant's  account for the subsequent Purchase
Period  or  Offering Period, subject to earlier withdrawal by the participant as
provided  in  Section  10 hereof.  Any other monies left over in a participant's
account  after the Exercise Date shall be returned to the participant.  During a
participant's  lifetime,  a participant's option to purchase shares hereunder is
exercisable  only  by  him  or  her.

(b)     If  the  Board  determines that, on a given Exercise Date, the number of
shares  with  respect  to  which  options are to be exercised may exceed (i) the
number  of shares of Common Stock that were available for sale under the Plan on
the  Enrollment  Date  of  the applicable Offering Period, or (ii) the number of
shares available for sale under the Plan on such Exercise Date, the Board may in
its  sole  discretion  (x)  provide  that  the  Company  shall  make  a pro rata
allocation  of  the  shares  of  Common  Stock  available  for  purchase on such
Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall
be  practicable and as it shall determine in its sole discretion to be equitable
among  all  participants  exercising  options  to  purchase Common Stock on such
Exercise  Date, and continue all Offering Periods then in effect, or (y) provide
that  the  Company  shall make a pro rata allocation of the shares available for
purchase  on such Enrollment Date or Exercise Date, as applicable, in as uniform
a  manner  as  shall  be  practicable  and  as  it  shall  determine in its sole
discretion to be equitable among all participants exercising options to purchase
Common  Stock  on  such Exercise Date, and terminate any or all Offering Periods
then  in  effect  pursuant  to Section 20 hereof.  The Company may make pro rata
allocation  of  the  shares  available  on the Enrollment Date of any applicable
Offering  Period  pursuant  to  the  preceding  sentence,  notwithstanding  any
authorization  of additional shares for issuance under the Plan by the Company's
shareholders  subsequent  to  such  Enrollment  Date.

9.     Delivery.  As  promptly as practicable after each Exercise Date, on which
       --------
a  purchase  of  shares  occurs,  the Company shall arrange the delivery to each
participant,  as appropriate, of a certificate representing the shares purchased
upon  exercise  of  his  or  her  option.

10.     Withdrawal.
        ----------
(a)     A  participant  may  withdraw  all  but  not  less  than all the payroll
deductions  credited  to  his or her account and not yet used to exercise his or
her option under the Plan at any time by giving written notice to the Company in
     the  form  of  Exhibit  B  to  this Plan.  All of the participant's payroll
deductions  credited  to  his  or  her account shall be paid to such participant
promptly after receipt of notice of withdrawal and such participant's option for


                                      B-4



the  Offering  Period  shall be automatically terminated, and no further payroll
deductions  for  the  purchase of shares shall be made for such Offering Period.
If a participant withdraws from an Offering Period, payroll deductions shall not
resume at the beginning of the succeeding Offering Period unless the participant
delivers  to  the  Company  a  new  subscription  agreement.

(b)     A  participant's  withdrawal  from an Offering Period shall not have any
effect  upon his or her eligibility to participate in any similar plan which may
hereafter  be  adopted  by  the  Company or in succeeding Offering Periods which
commence after the termination of the Offering Period from which the participant
withdraws.

11.     Termination  of  Employment.
        ---------------------------

     Upon  a  participant's ceasing to be an Employee, for any reason, he or she
shall  be  deemed  to  have  elected  to  withdraw from the Plan and the payroll
deductions credited to such participant's account during the Offering Period but
not yet used to exercise the option shall be returned to such participant or, in
the  case  of  his or her death, to the person or persons entitled thereto under
Section  15  hereof,  and  such  participant's  option  shall  be  automatically
terminated.  The  preceding sentence notwithstanding, a participant who receives
payment  in  lieu  of  notice  of  termination of employment shall be treated as
continuing to be an Employee for the participant's customary number of hours per
week of employment during the period in which the participant is subject to such
payment  in  lieu  of  notice.

12.     Interest.  No  interest  shall  accrue  on  the  payroll deductions of a
        --------
participant  in  the  Plan.

13.     Stock.
        -----

(a)     Subject  to  adjustment upon changes in capitalization of the Company as
provided  in  Section  19  hereof, the maximum number of shares of the Company's
Common  Stock  which  shall  be  made available for sale under the Plan shall be
1,500,000  shares  plus  an  annual increase to be added on the first day of the
Company's fiscal year beginning in Year 2001, equal to the lesser of (i) 150,000
     shares,  (ii)  2%  of the outstanding shares on such date or (iii) a lesser
amount  determined  by  the  Board.  The  Plan was initially funded with 750,000
shares  of  the  Company's  Common  Stock  .  By  operation  of the provision in
Section  13(a)(i),  shares  have  been  added  to  the  Plan  on  four  separate
occasions, such that a total of 600,000 shares were added to the Plan before the
shareholders  approved  amending  and  restating  the  Plan to add an additional
750,000  shares  effective  as  of  November  18,  2004.

(b)     The participant shall have no interest or voting right in shares covered
by  his  option  until  such  option  has  been  exercised.

(c)     Shares  to  be  delivered  to  a  participant  under  the  Plan shall be
registered  in the name of the participant or in the name of the participant and
his  or  her  spouse.

14.     Administration.  The  Plan  shall  be  administered  by  the  Board or a
        --------------
committee  of  members  of  the  Board appointed by the Board.  The Board or its
committee  shall  have  full  and exclusive discretionary authority to construe,
interpret  and  apply  the  terms  of  the Plan, to determine eligibility and to
adjudicate  all  disputed  claims filed under the Plan.  Every finding, decision
and  determination  made by the Board or its committee shall, to the full extent
permitted  by  law,  be  final  and  binding  upon  all  parties.

15.     Designation  of  Beneficiary.
        ----------------------------

(a)     A  participant may file a written designation of a beneficiary who is to
receive  any  shares  and cash, if any, from the participant's account under the
Plan  in the event of such participant's death subsequent to an Exercise Date on
which  the option is exercised but prior to delivery to such participant of such
shares and cash.  In addition, a participant may file a written designation of a
     beneficiary who is to receive any cash from the participant's account under
the  Plan  in  the  event  of  such participant's death prior to exercise of the


                                      B-5



option.  If  a  participant is married and the designated beneficiary is not the
spouse,  spousal consent shall be required for such designation to be effective.

(b)     Such designation of beneficiary may be changed by the participant at any
time  by  written notice.  In the event of the death of a participant and in the
absence  of a beneficiary validly designated under the Plan who is living at the
time  of  such participant's death, the Company shall deliver such shares and/or
cash to the executor or administrator of the estate of the participant, or if no
such  executor  or  administrator  has  been  appointed (to the knowledge of the
Company), the Company, in its discretion, may deliver such shares and/or cash to
the  spouse or to any one or more dependents or relatives of the participant, or
if  no spouse, dependent or relative is known to the Company, then to such other
person  as  the  Company  may  designate.

16.     Transferability.  Neither payroll deductions credited to a participant's
        ---------------
account  nor  any  rights with regard to the exercise of an option or to receive
shares  under  the  Plan  may  be  assigned,  transferred,  pledged or otherwise
disposed of in any way (other than by will, the laws of descent and distribution
or  as  provided  in  Section 15 hereof) by the participant. Any such attempt at
assignment,  transfer,  pledge  or  other  disposition  shall be without effect,
except that the Company may treat such act as an election to withdraw funds from
an  Offering  Period  in  accordance  with  Section  10  hereof.

17.     Use  of  Funds.  All  payroll deductions received or held by the Company
        --------------
under  the  Plan  may  be used by the Company for any corporate purpose, and the
Company  shall  not  be  obligated  to  segregate  such  payroll  deductions.

18.     Reports.  Individual  accounts  shall be maintained for each participant
        -------
in the Plan.  Statements of account shall be given to participating Employees at
least  annually,  which  statements  shall  set  forth  the  amounts  of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash  balance,  if  any.

19.     Adjustments  Upon  Changes  in Capitalization, Dissolution, Liquidation,
        ------------------------------------------------------------------------
Merger  or  Asset  Sale.
  ---------------------

(a)     Changes  in  Capitalization.  Subject  to  any  required  action  by the
        ---------------------------
shareholders  of  the  Company,  the Reserves, the maximum number of shares each
participant  may  purchase each Purchase Period (pursuant to Section 7), as well
as  the price per share and the number of shares of Common Stock covered by each
option  under the Plan which has not yet been exercised shall be proportionately
adjusted  for  any increase or decrease in the number of issued shares of Common
Stock  resulting  from  a  stock  split,  reverse  stock  split, stock dividend,
combination  or  reclassification  of the Common Stock, or any other increase or
decrease  in  the  number  of shares of Common Stock effected without receipt of
consideration  by  the  Company;  provided,  however,  that  conversion  of  any
convertible securities of the Company shall not be deemed to have been "effected
without  receipt  of consideration." Such adjustment shall be made by the Board,
whose  determination  in  that  respect  shall be final, binding and conclusive.
Except  as  expressly  provided  herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the  number  or  price  of  shares  of  Common  Stock  subject  to  an  option.

(b)     Dissolution or Liquidation.  In the event of the proposed dissolution or
        --------------------------
liquidation  of  the  Company,  the  Offering  Period  then in progress shall be
shortened  by  setting  a new Exercise Date (the "New Exercise Date"), and shall
terminate  immediately prior to the consummation of such proposed dissolution or
liquidation,  unless  provided  otherwise  by  the Board.  The New Exercise Date
shall  be  before the date of the Company's proposed dissolution or liquidation.
The  Board  shall notify each participant in writing, at least ten (10) business
days  prior  to  the  New  Exercise  Date,  that  the  Exercise  Date  for  the
participant's  option  has  been  changed  to the New Exercise Date and that the
participant's  option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as  provided  in  Section  10  hereof.

(c)     Merger  or  Asset  Sale.  In  the  event  of  a  proposed sale of all or
        -----------------------
substantially  all  of  the  assets of the Company, or the merger of the Company
with or into another corporation, each outstanding option shall be assumed or an
equivalent  option  substituted  by  the  successor  corporation  or a Parent or
Subsidiary  of  the  successor  corporation.  In  the  event  that the successor
corporation refuses to assume or substitute for the option, any Purchase Periods


                                      B-6



then  in  progress  shall  be shortened by setting a new Exercise Date (the "New
Exercise  Date")  and any Offering Periods then in progress shall end on the New
Exercise  Date.  The New Exercise Date shall be before the date of the Company's
proposed sale or merger.  The Board shall notify each participant in writing, at
least  ten  (10) business days prior to the New Exercise Date, that the Exercise
Date  for the participant's option has been changed to the New Exercise Date and
that  the  participant's  option  shall  be  exercised  automatically on the New
Exercise  Date, unless prior to such date the participant has withdrawn from the
Offering  Period  as  provided  in  Section  10  hereof.

20.     Amendment  or  Termination.
        --------------------------

(a)     The Board of Directors of the Company may at any time and for any reason
     terminate  or  amend the Plan.  Except as provided in Section 19 hereof, no
such  termination  can  affect  options  previously  granted,  provided  that an
Offering Period may be terminated by the Board of Directors on any Exercise Date
if  the Board determines that the termination of the Offering Period or the Plan
is  in  the  best  interests  of  the  Company  and its shareholders.  Except as
provided  in  Section  19  and this Section 20 hereof, no amendment may make any
change  in  any option theretofore granted which adversely affects the rights of
any participant.  To the extent necessary to comply with Section 423 of the Code
(or  any  successor rule or provision or any other applicable law, regulation or
stock  exchange  rule),  the Company shall obtain shareholder approval in such a
manner  and  to  such  a  degree  as  required.

(b)     Without  shareholder  consent  and  without  regard  to  whether  any
participant  rights  may  be  considered  to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period,  establish  the  exchange  ratio  applicable  to  amounts  withheld in a
currency  other  than  U.S. dollars, permit payroll withholding in excess of the
amount  designated by a participant in order to adjust for delays or mistakes in
the  Company's processing of properly completed withholding elections, establish
reasonable  waiting  and  adjustment  periods  and/or  accounting  and crediting
procedures  to  ensure  that amounts applied toward the purchase of Common Stock
for  each  participant  properly  correspond  with  amounts  withheld  from  the
participant's  Compensation,  and establish such other limitations or procedures
as  the  Board  (or  its  committee) determines in its sole discretion advisable
which  are  consistent  with  the  Plan.

(c)     In the event the Board determines that the ongoing operation of the Plan
may  result  in unfavorable financial accounting consequences, the Board may, in
its  discretion  and,  to the extent necessary or desirable, modify or amend the
Plan  to  reduce  or  eliminate  such  accounting consequence including, but not
limited  to:

     (i)  altering  the  Purchase  Price  for  any  Offering Period including an
Offering  Period  underway  at  the  time  of  the  change  in  Purchase  Price;

     (ii)  shortening  any Offering Period so that Offering Period ends on a new
Exercise  Date,  including  an Offering Period underway at the time of the Board
action;  and

     (iii)  allocating  shares.

     Such  modifications or amendments shall not require stockholder approval or
the  consent  of  any  Plan  participants.

21.     Notices.  All  notices  or  other communications by a participant to the
        -------
Company  under  or in connection with the Plan shall be deemed to have been duly
given  when received in the form specified by the Company at the location, or by
the  person,  designated  by  the  Company  for  the  receipt  thereof.

22.     Conditions  Upon  Issuance  of  Shares.  Shares shall not be issued with
        --------------------------------------
respect  to  an  option  unless the exercise of such option and the issuance and
delivery  of  such  shares  pursuant  thereto  shall  comply with all applicable
provisions  of  law,  domestic  or  foreign,  including, without limitation, the
Securities  Act  of  1933,  as  amended, the Securities Exchange Act of 1934, as


                                      B-7



amended,  the rules and regulations promulgated thereunder, and the requirements
of  any  stock  exchange  upon which the shares may then be listed, and shall be
further  subject to the approval of counsel for the Company with respect to such
compliance.

     As  a  condition  to the exercise of an option, the Company may require the
person  exercising  such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present  intention  to  sell  or  distribute  such  shares if, in the opinion of
counsel  for  the  Company,  such  a  representation  is  required by any of the
aforementioned  applicable  provisions  of  law.

23.     Term of Plan.  The Plan shall become effective upon the earlier to occur
        ------------
     of  its  adoption  by  the  Board  of  Directors  or  its  approval  by the
shareholders of the Company.  It shall continue in effect for a term of ten (10)
years  unless  sooner  terminated  under  Section  20  hereof.

24.     Automatic  Transfer  to  Low  Price  Offering  Period.  To  the  extent
        -----------------------------------------------------
permitted  by  any  applicable laws, regulations, or stock exchange rules if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is  lower  than the Fair Market Value of the Common Stock on the Enrollment Date
of  such Offering Period, then all participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of  their  option  on  such  Exercise  Date and automatically re-enrolled in the
immediately  following  Offering  Period  as  of  the  first  day  thereof.


                                      B-8



                                    EXHIBIT A
                                    ---------

                                 LANTRONIX, INC.
             AMENDED AND RESTATED 2000 EMPLOYEE STOCK PURCHASE PLAN
                             SUBSCRIPTION AGREEMENT

_____  Original  Application     Enrollment  Date:___________
_____  Change  in  Payroll  Deduction  Rate
_____  Change  of  Beneficiary(ies)

1.     ____________________  hereby  elects  to  participate  in  the  Lantronix
Employee  Stock  Purchase  Plan  (the  "Employee  Stock  Purchase  Plan")  and
sub-scribes  to purchase shares of the Company's Common Stock in accordance with
this  Sub-scription  Agreement  and  the  Employee  Stock  Purchase  Plan.

2.     I hereby authorize payroll deductions from each paycheck in the amount of
____%  of  my  Compensation  on  each payday (from 0 to 15%) during the Offering
Period  in  accordance with the Employee Stock Purchase Plan.  (Please note that
no  fractional  percentages  are  permitted.)

3.     I  understand  that  said payroll deductions shall be accumulated for the
purchase  of  shares of Common Stock at the applicable Purchase Price determined
in  accordance with the Employee Stock Purchase Plan.  I understand that if I do
not withdraw from an Offering Period, any accumulated payroll deductions will be
used  to  automatically  exercise  my  option.

4.     I  have  received a copy of the complete Employee Stock Purchase Plan.  I
understand  that  my participation in the Employee Stock Purchase Plan is in all
respects  subject  to  the  terms  of the Plan.  I understand that my ability to
exercise the option under this Subscription Agreement is subject to share-holder
approval  of  the  Employee  Stock  Purchase  Plan.

5.     Shares  purchased for me under the Employee Stock Purchase Plan should be
issued  in  the  name(s)  of  (Employee  or  Employee  and  Spouse  only).

6.     I  understand  that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Enrollment Date (the first day of the Offering
Period  during  which  I  purchased  such shares) or one year after the Exercise
Date,  I  will  be  treated  for  federal income tax purposes as having received
ordinary income at the time of such disposition in an amount equal to the excess
of the fair market value of the shares at the time such shares were purchased by
me  over  the  price  which I paid for the shares.  I hereby agree to notify the
                                                    ----------------------------
Company in writing within 30 days after the date of any disposition of my shares
--------------------------------------------------------------------------------
and  I  will make adequate provision for Federal, state or other tax withholding
--------------------------------------------------------------------------------
obligations,  if any, which arise upon the disposition of the Common Stock.  The
--------------------------------------------------------------------------
Company  may,  but  will  not be obligated to, withhold from my compensation the
amount  neces-sary  to  meet any applicable withholding obligation including any
withholding  necessary  to  make  available to the Company any tax deductions or
benefits  attributable to sale or early disposition of Common Stock by me.  If I
dispose of such shares at any time after the expiration of the 2-year and 1-year
holding  periods,  I  understand  that  I will be treated for federal income tax
purposes  as  having  received  income only at the time of such disposition, and
that  such  income  will  be  taxed  as ordinary income only to the extent of an
amount  equal  to  the  lesser of (1) the excess of the fair market value of the
shares  at the time of such disposition over the purchase price which I paid for
the  shares,  or (2) 15% of the fair market value of the shares on the first day


                                      B-9



of  the  Offering Period.  The remainder of the gain, if any, recognized on such
disposition  will  be  taxed  as  capital  gain.

7.     I  hereby  agree  to be bound by the terms of the Employee Stock Purchase
Plan.  The  effectiveness  of  this  Subscription Agreement is dependent upon my
eligibility  to  participate  in  the  Employee  Stock  Purchase  Plan.

8.     In  the  event  of  my  death,  I  hereby  designate  the following as my
beneficiary(ies)  to  receive  all payments and shares due me under the Employee
Stock  Purchase  Plan:

NAME:  (Please  print)_____________________________________________________
                         (First)               (Middle)          (Last)
     _________________________
     Relationship

                              (Address)
     Employee's  Social
     Security  Number:        ____________________________________
     Employee's  Address:     ____________________________________
                              ____________________________________
                              ____________________________________

(1)     I  UNDERSTAND  THAT  THIS  SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT
THROUGHOUT  SUCCESSIVE  OFFERING  PERIODS  UNLESS  TERMINATED  BY  ME.

Dated:_________________    ____________________________________
                           Signature  of  Employee

                           ____________________________________
                           Spouse's Signature (If beneficiary other than spouse)


                                      B-10



                                    EXHIBIT B
                                    ---------

                                 LANTRONIX, INC.
             AMENDED AND RESTATED 2000 EMPLOYEE STOCK PURCHASE PLAN
                              NOTICE OF WITHDRAWAL

     The  undersigned  participant  in  the  Offering  Period  of  the Lantronix
Employee  Stock  Purchase  Plan  which  began  on  ____________,  ______  (the
"Enrollment  Date")  hereby notifies the Company that he or she hereby withdraws
from  the  Offering  Period.  He or she hereby directs the Company to pay to the
undersigned  as  promptly  as practicable all the payroll deductions credited to
his  or  her  account  with  respect  to  such  Offering Period. The undersigned
understands  and  agrees that his or her option for such Offering Period will be
automatically  terminated.  The  undersigned understands further that no further
payroll  deductions  will  be  made  for  the  purchase of shares in the current
Offering  Period  and  the  undersigned  shall  be  eligible  to  participate in
succeeding Offering Periods only by delivering to the Company a new Subscription
Agreement.

Name  and  Address  of  Participant:
________________________________
________________________________
________________________________

Signature:
________________________________
Date:___________________________


                                      B-11



                                                                      APPENDIX C

                              AMENDED AND RESTATED
                 CERTIFICATE OF INCORPORATION OF LANTRONIX. INC.

                                       I.

     The  name  of  this  corporation  is  Lantronix,  Inc. (the "Corporation").

                                       II.

     The address of the Corporation's registered office in the State of Delaware
is 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801.
The  name  of  its  registered  agent  at  such address is The Corporation Trust
Company.

                                      III.

     The  purpose of this Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of the
State  of  Delaware.

                                       IV.

     The  Corporation  is  authorized  to  issue  two  classes  of  shares to be
designated  respectively  Common Stock, par value $0.0001 per share (the "Common
Stock"),  and  Preferred  Stock,  par  value  $0.0001  per share (the "Preferred
Stock").  The  total number of shares of Common Stock the Corporation shall have
authority  to  issue  shall  be  200,000,000  and  the total number of shares of
Preferred  Stock  the  Company  shall  have  the  authority  to  issue  shall be
5,000,000.

     The relative rights, preferences, privileges and restrictions granted to or
imposed  on the respective classes of the shares of capital stock or the holders
thereof  are  as  follows:

1.     Voting  Rights:
       --------------

(a)     Except  as  otherwise  required  by  law  or  by  this  Certificate  of
Incorporation,  the  holder of each share of Common Stock issued and outstanding
shall  have  one  vote  and the holder of each share of Preferred Stock shall be
entitled  to  the  number of votes equal to the number of shares of Common Stock
into  which  such share of Preferred Stock could be converted at the record date
for  determination  of the stockholders entitled to vote on such matters, or, if
no  such  record  date  is  established,  at  the date such vote is taken or any
written  consent of stockholders is solicited, such votes to be counted together
with  all  other  shares of stock of the Corporation having general voting power
and not separately as a class. Holders of Common Stock and Preferred Stock shall
be entitled to notice of any stockholders' meeting in accordance with the Bylaws
of  the  Corporation.  Functional  votes by the holders of Preferred Stock shall
not,  however,  be  permitted  and  any  fractional  voting  rights shall (after
aggregating  all shares into which shares of Preferred Stock held by each holder
could  be  converted)  be  rounded  to  the  nearest  whole  dollar.

(b)     The  holders  of  the  Preferred  and  Common  Stock  shall vote for the
Corporation's  Board of Directors as follows: all members elected by the holders
of  the  Preferred  and  Common  Stock, voting together as a class. Any director
designated  under  this  Section  1(b) may be removed from the Board only at the
written request of the holders which designated such director in accordance with
Section 1(b). In the event of death, resignation, removal, or inability to serve
of  any  designees,  the  resulting  vacancy  on the Board shall be filled by an
individual  designated  by  the  holders  who  designated the vacating director.

                                       V.

     To the fullest extent permitted by the General Corporation Law of the State
of  Delaware  as the same exists or may hereafter be amended, no director of the
Corporation  shall  be  personally liable to the Corporation or its stockholders
for  monetary  damages  for  breach  of  fiduciary  duty  as  a  director.


                                      C-1



     Neither  any  amendment,  modification  nor repeal of this Article, nor the
adoption  of any provision of the Certificate of Incorporation inconsistent with
this  Article,  shall  eliminate,  reduce  or  adversely  affect,  any  right or
protection  of  a director of the Corporation existing hereunder with respect to
any  act  or omission occurring prior to such amendment, modification, repeal or
adoption  of  an  inconsistent  provision.

                                       VI.

     Effective  upon  the  closing  of  a  firm  commitment  underwritten public
offering  of  Common  Stock  of  the  Corporation, no action that is required or
permitted  to  be  taken by the stockholders of the Corporation at any annual or
special  meeting  of  stockholders  may  be  effected  by  written  consent  of
stockholders  in  lieu  of  a  meeting  of  stockholders.

                                      VII.

     Effective  upon  the  closing  of  a  firm  commitment  underwritten public
offering of Common Stock of the Corporation, no stockholder will be permitted to
cumulate  any  votes  at  any  election  of  directors.

                                      VIII.

     A  director  shall  hold  office from the effective date of such director's
election  until  the  next  annual  meeting of stockholders and until his or her
successor  shall be elected and shall qualify, subject, however, to prior death,
resignation, retirement or removal from office. The term of each director who is
serving  as  a  director  on  the  effective  date  of this amended and restated
certificate  of  incorporation  shall  expire  at  the  next  annual  meeting of
stockholders  after  such  date  and upon the election and qualification of such
director's  successor,  or  upon such director's earlier resignation or removal,
notwithstanding  that  such  director  may  have  been  elected  for a term that
extended  beyond  the  date  of  such  next  annual  meeting  of  stockholders.

                                       XI.

     The Board of Directors of the Corporation is expressly authorized to adopt,
amend,  or  repeal  the Bylaws of the Corporation, but the stockholders may make
additional by-laws and may alter or repeal any by-law whether adopted by them or
otherwise.

     Notwithstanding  any  other provision of this Certificate of Incorporation,
the  Bylaws  of  the  Corporation  or any provision of law which might otherwise
permit  a lesser vote or no vote, but in addition to any affirmative vote of the
holders  of  any particular class or series of stock of the Corporation required
by  law,  this  Certificate of Incorporation or any Preferred Stock designation,
the affirmative vote of sixty-six and two-thirds percent (66-2/3%) of the voting
power  of  the  then  outstanding  shares of the voting stock of the Corporation
entitled  to  vote  generally in the election of directors, voting together as a
single  class,  shall  be  required for the modification, amendment or repeal of
Section  2.2  (Annual  Meeting),  Section  2.3  (Special  Meeting),  Section 2.5
(Advance  Notice  of Stockholder Nominees and Stockholder Business), Section 3.3
(Election  and  Term  of  Office of Directors), and Section 3.4 (Resignation and
Vacancies)  of  the Bylaws of the Corporation or of Article VIII or this Article
IX  of  this  Certificate  of  Incorporation.

                                       X.

     Elections  of  directors  need  not  be by written ballot except and to the
extent  provided  in  the  Bylaws  of  the  Corporation.

                                       XI.

     The  Corporation  is  to  have  perpetual  existence.


                                      C-2



                                      XII.

     The  number  of  directors which constitute the whole Board of Directors of
the  Corporation  shall  be  designated  in  the  Bylaws  of  the  Corporation.

                                      XIII.

     Advance  notice  of  new business at stockholders' meetings and stockholder
proposals  and  stockholder  nomination  for  the election of directors shall be
given in the manner and to the extent provided in the Bylaws of the Corporation.

                                      XIV.

     Meetings  of  stockholders  may  be  held  within  or  without the State of
Delaware,  as  the  Bylaws may provide. The books of the Corporation may be kept
(subject  to  any  provision  contained  in  the  laws of the State of Delaware)
outside  the State of Delaware at such place or places as may be designated from
time  to  time  by  the  Board of Directors or in the Bylaws of the Corporation.

                                       XV.

     The  Corporation  reserves  the right to amend, alter, change or repeal any
provision  contained  in this Certificate of Incorporation, in the manner now or
hereafter  prescribed  by  the  laws  of  the  State of Delaware, and all rights
conferred  herein  are  granted  subject  to  this  reservation.

     The undersigned incorporator hereby acknowledges that the above Certificate
of  Incorporation  of  Lantronix,  Inc.,  is her act and deed and that the facts
stated  therein  are  true.

Dated:  __________


     __________________________________
     Secretary


                                      C-3