LETTER AGREEMENT REGARDING EMPLOYMENT / STANG
 
 
March 24, 2000
 
Mr. Eric Stang
c/o Lexar Media, Inc.
47421 Bayside Parkway
Fremont, CA 94538
 
 
Re   Your Employment with Lexar Media, Inc.
 
Dear Mr. Stang:
 
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;
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     (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
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          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,
 
 
_____________________________       John Reimer
Eric B. Stang                       President and Chief Executive Officer
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