Email Letter-marc Nussbaum, Interim Ceo

December 19, 2002


Voluntary Stock Option Exchange Program -------------------------------------------


IMPORTANT ANNOUNCEMENT-PLEASE READ IMMEDIATELY AND TAKE ACTION BEFORE 9:00 PM PST on January 20, 2003.


I am pleased to announce that we will be offering a voluntary stock option exchange program (the "Offer") which, under the terms set forth in the attached documents, allows eligible U.S.-based employees to exchange certain existing stock options for new options to be granted under the existing Lantronix 2000 Stock Plan. The options eligible for replacement must have an exercise price of $3.01 per share or greater.


Due to the complexity of corporate securities laws outside of the U.S., we are able to offer this stock option exchange program only to employees who are based in the U.S. We are working on a different plan that will provide comparable benefits to non-U.S. employees who hold stock options priced above $3.01. We will provide details to non-U.S. affected employees in Fiscal Q3.


Our stock price will always react to internal and external forces. I realize that many of you have put years of hard work into making Lantronix a success, only to see the Company's stock price drop significantly. We put this Offer together to provide you with the opportunity to hopefully, significantly improve your chances of reward for all the hard work you've invested in building Lantronix. I am pleased to say that I believe the company is well positioned for future success. Each of you deserves to reap the rewards of your labor. It is management's intention that the people who make a difference in our ...