EXHIBIT 10.24
March 24, 2000
Xx. Xxxx Xxxxx
c/o Lexar Media, Inc.
00000 Xxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Re Your Employment with Lexar Media, Inc.
Dear Xx. Xxxxx:
This letter will serve to clarify and add to certain provisions of previously
executed agreements regarding your employment with Lexar Media, Inc. ("LEXAR
MEDIA") In the event of any conflict between this letter and such previously
executed documents, the provisions contained in this letter shall prevail.
1. PAYMENTS AND BENEFITS AFTER INVOLUNTARY TERMINATION OF EMPLOYMENT IN THE
ABSENCE OF A CORPORATE TRANSACTION
Except as provided in Section 2 below, following involuntary termination of your
employment by LEXAR MEDIA you will receive:
(a) Your salary in effect at the time of such termination continued
according to LEXAR MEDIA's payroll schedule for six (6) months;
(b) Medical insurance and life insurance at the levels in effect at the
time of such termination for six (6) months;
(c) An immediate additional twelve (12) months of vesting of any stock
options granted to you or restricted stock sold to you by LEXAR MEDIA,
followed by a 90 day period during which such options may be
exercised;
(d) No further continuance of other benefits such as vacation, sick leave,
and employee stock purchase plan participation, unless specified
herein.
Notwithstanding any provisions in this Section 1 to the contrary, you shall not
be entitled to the payments and benefits under subsection (a), (b) and (c) above
unless you (i) have executed a general release (in a form prescribed by LEXAR
MEDIA) of all known and unknown claims that you may then have against LEXAR
MEDIA or persons affiliated with LEXAR MEDIA and (ii) have agreed not to
prosecute any legal action or other proceeding based upon any of such claims.
2. PAYMENTS AND BENEFITS AFTER TERMINATION OF EMPLOYMENT FOLLOWING A CORPORATE
TRANSACTION
If at any time after the commencement of the Post Transaction Period as defined
below your employment is terminated or if a Constructive Termination Event as
defined below occurs and you voluntarily terminate your employment, then you
will receive:
(a) Your salary in effect at the time of such termination continued
according to the normal payroll cycle for twelve (12) months;
(b) Medical and life insurance at the levels in effect at the time of
termination for twelve (12) months;
(c) Your annual target bonus paid as a lump sum and prorated up to the
date of termination for the period you were eligible for any such
bonus;
(d) All stock options or restricted stock which have been granted to you
or purchased by you as of the date of such termination shall become
100% vested, followed by a 90 day period during which such options may
be exercised;
(e) No further continuance of other benefits such as vacation, sick leave,
and employee stock purchase plan participation, unless specified
herein.
3. DEFINITIONS
For purposes of this letter, the following definitions shall apply:
(a) A "Corporate Transaction" is defined as (i) a merger or acquisition in
which LEXAR MEDIA is not the surviving entity (except for a merger of
LEXAR MEDIA into a wholly-owned subsidiary, and except for a
transaction the purpose of which is to change the State in which LEXAR
MEDIA in incorporated), (ii) the sale, transfer or other disposition
of all or substantially all of the assets of LEXAR MEDIA, or (iii) any
other corporate reorganization or business combination in which the
beneficial ownership of 50% or more of LEXAR MEDIA's outstanding
voting stock is transferred.
(b) The "Post Transaction Period" is defined as commencing on the date of
closing or effectiveness of a Corporate Transaction.
(c) A "Constructive Termination Event" will be deemed to have occurred at
the close of business on the fourteenth (14th) day after any of the
following action(s) are taken by LEXAR MEDIA or the surviving entity
of a Corporate Transaction and such action(s) are not reversed in full
by LEXAR MEDIA or the surviving entity of a Corporate Transaction
within such fourteen-day period unless prior to the expiration of such
fourteen-day period you have otherwise agreed to the specific relevant
event in writing: (i) your aggregate benefits are materially reduced
(as such reduction and materiality are determined by customary
practice within the high technology industry within the State of
California) below those in effect immediately prior to the effective
date of such Constructive Termination Event, and/or (ii) your duties
and/or authority are materially decreased or increased from those in
effect immediately prior to the effective date of such Constructive
Termination Event, in a way that is adverse to you, as determined by
customary practice within the high technology industry within the
State of California, such duties and authority including but not
limited to (a) direct management responsibility for all corporate
sales, marketing, operations, quality and product development
functions as an officer of the surviving entity; (b) reporting into
the Chief Executive Officer of the surviving entity; and/or (iii) you
are required to perform your employment obligations (other than
routine travel consistent with that prior to the effective date of
such Constructive Termination Event) at a location more than twenty-
five (25) miles away from your principal place of work
as was in effect immediately prior to the effective date of such
Constructive Termination Event.
4. MISCELLANEOUS
(a) Under any termination of employment from LEXAR MEDIA or the surviving
entity of a Corporate Transaction, whether voluntary, involuntary, or
through a Constructive Termination Event, LEXAR MEDIA or the surviving
entity of a Corporate Transaction shall, with respect to unvested
stock options and restricted stock not accelerated pursuant to Section
1(c) and Section 2(d) above, within 5 business days of any such
termination, exercise its Repurchase Right as defined in Section D of
your Stock Purchase Agreement with LEXAR MEDIA, INC. dated December
27, 1999 notwithstanding any provision in such Stock Purchase
Agreement to the contrary.
(b) Notwithstanding any provisions in this letter and any other agreement
between you and LEXAR MEDIA to the contrary, in the event of a
termination of your employment by LEXAR MEDIA, the principal and
interest due and payable under any promissory notes evidencing
indebtedness by you to LEXAR MEDIA must be paid in full within forty-
five (45) days of your termination date.
(c) As LEXAR MEDIA's relationship with employees are at-will, either you
or LEXAR MEDIA may terminate the employment relationship at any time
for any reason, with or without notice.
(d) In the event of a dispute arising under or related to this letter,
including any termination of your employment under this letter, you or
LEXAR MEDIA may initiate for arbitration under the arbitration under
the administration of the American Arbitration Association ("AAA").
Any Arbitration hearing will be held in the vicinity of the LEXAR
MEDIA location where you last performed services and will be held in
accordance with the Employee Dispute Resolution rules of the AAA,
within 60 calendar days of such filing or as may be extended upon the
consent of the parties or their counsel. The arbitration shall be
binding on both parties and may be entered as a judgment in any court
of competent jurisdiction. Each party shall bear its own costs of
arbitration including attorneys fees, unless you prevail in whole or
in part, in which case LEXAR MEDIA will pay your costs of arbitration
including reasonable attorney fees, pro-rated to the extent you
prevail, and such shall be part of the award in the arbitration.
(e) The provisions of this letter will be governed and construed with the
laws of the State of California.
Agreed and Accepted: Sincerely,
_____________________________ Xxxx Xxxxxx
Xxxx X. Xxxxx President and Chief Executive Officer
