As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 4/13/06  Lexar Media Inc                   10-K/A     12/31/05    4:160K                                   RR Donnelley

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K/A      Amendment to Form 10-K                              HTML    134K 
 2: EX-31.1     Certification per Sarbanes-Oxley Act (Section 302)  HTML     12K 
 3: EX-31.2     Certification per Sarbanes-Oxley Act (Section 302)  HTML     12K 
 4: EX-32.1     Certification per Sarbanes-Oxley Act (Section 906)  HTML      8K 

Commission file number 000-31103

Securities registered pursuant to Section 12(b) of the Act:

      Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     Yes o          No þ

      We are filing this Amendment No. 2 to our Annual Report on Form 10-K for the year ended December 31, 2005, which was originally filed with the Securities and Exchange Commission (the “SEC”) on March 16, 2006 (the “Annual Report”), as amended by Amendment No. 1 to our Annual Report on Form 10-K filed with the SEC on April 10, 2006, in order to correct three typographical errors in the table included in the section entitled “Aggregated Option Exercises in Fiscal 2005 and Fiscal Year-End Option Values” in Item 11 of Amendment No. 1. In accordance with Rule 12b-15 of the Securities Exchange Act of 1934, we are required to include in this Amendment No. 2 the entire Item 11 in which the typographical errors occurred. In addition, this Amendment No. 2 includes updated certifications of our principal executive officer and principal financial officer, which have been re-executed and re-filed as of the date of this Amendment No. 2.

      The following table presents information about the compensation awarded to, earned by or paid to (1) our Chief Executive Officer, and (2) our three other executive officers as of December 31, 2005 whose salary and bonus for fiscal 2005 was more than $100,000. We do not grant stock appreciation rights and have no long-term compensation benefits other than stock options.

      The following table sets forth grants of stock options made during 2005 to each executive officer named in the Summary Compensation Table. In accordance with SEC rules, the table sets forth the hypothetical gains or “option spreads” that would exist for the options at the end of their respective terms based on assumed annual rates of compound stock price appreciation of 5% and 10% from the dates the options were granted to the end of the respective option terms. The 5% and 10% assumed annual rates of stock price appreciation do not reflect our estimate or projections of future stock price growth. Actual gains, if any, on option exercises depend on the future performance of our common stock and overall market conditions. The potential realizable values shown in this table may never be achieved.

      Specifically, potential realizable values are calculated by:

      The following table sets forth for each executive officer named in the Summary Compensation Table: (1) the number of shares covered by both exercisable and unexercisable stock options as of December 30, 2005 and (2) the value

      All of our employees are at-will employees, which means that either we or our employees may terminate the employment relationship at any time for any reason.

      Eric B. Stang. We entered into an employment offer letter on November 8, 1999 with Eric B. Stang, our President and Chief Executive Officer and former Chief Operating Officer. This letter established Mr. Stang’s initial annual base salary at $200,000 and his eligibility for a bonus based upon his achievement of specified performance goals. Mr. Stang’s annual base salary for 2005 was $400,000. The offer letter also provided for Mr. Stang’s election to the board of directors.

      Following Mr. Stang’s appointment as our President and Chief Executive Officer on July 19, 2001, we entered into a retention agreement with Mr. Stang on October 22, 2001 that was effective as of September 1, 2001. Pursuant to the terms of this retention agreement, if we terminate Mr. Stang’s employment without cause or if he voluntarily resigns following a constructive termination event in the absence of a change in control, we must continue to pay his base salary and medical and life insurance benefits for twelve months. In addition, we must pay him his annual target bonus of 50% of his salary, pro-rated up to the date of termination, provided that he would have earned such bonus absent his termination. Additionally, all stock options or restricted stock granted to or purchased by him on or before September 1, 2001 will vest immediately, followed by a 12 month period during which the options may be exercised. With respect to any stock options granted after September 2, 2001, Mr. Stang will receive an additional 24 months of vesting, followed by a 12 month period during which the options may be exercised. Mr. Stang will also be entitled to retain any cellular phone, notebook computer and camera equipment as then currently provided to him immediately prior to his termination. Finally, Mr. Stang will have 18 months within which to repay any outstanding notes that he entered into with us.

      The retention agreement also provides that, in the event of a change in control of Lexar, Mr. Stang will receive a cash bonus of $260,000. In addition, 25% of all unvested stock options and restricted stock granted to or purchased by Mr. Stang prior to the change in control will vest immediately and shall remain exercisable (1) for six months following such acceleration or (2) pursuant to the terms of the original grant agreement, whichever period is greater. The remaining 75% of such unvested stock options and restricted stock shall vest nine months after the change in control and shall remain exercisable (1) for six months following such acceleration or (2) pursuant to the terms of the original grant agreement, whichever period is greater. In addition, if, during the period commencing one month prior to the change in

      Petro Estakhri. We entered into an employment agreement on September 19, 1996 with Petro Estakhri, our Chief Technology Officer and Executive Vice President, Engineering. This agreement established Mr. Estakhri’s initial annual base salary at $125,000. Mr. Estakhri’s annual base salary for 2005 was $400,000.

      On November 9, 2001, we entered into a retention agreement with Mr. Estakhri that was effective as of September 1, 2001. Pursuant to the terms of this retention agreement, if we terminate Mr. Estakhri’s employment without cause or if he voluntarily resigns following a constructive termination event in the absence of a change in control, we must continue to pay his base salary and medical and life insurance benefits for 12 months. In addition, we must pay him his annual target bonus of 50% of his salary, pro-rated up to the date of termination, provided that he would have earned such bonus absent his termination. Additionally, all stock options granted to him on or before September 1, 2001 will vest immediately, followed by a 12 month period during which the options may be exercised. With respect to any stock options granted after September 2, 2001, Mr. Estakhri will receive an additional 18 months of vesting, followed by a 12 month period during which the options may be exercised. Mr. Estakhri will also be entitled to retain any cellular phone and notebook computer as then currently provided to him immediately prior to his termination. Finally, Mr. Estakhri will have 18 months within which to repay any outstanding notes that he entered into with Lexar.

      The retention agreement also provides that, in the event of a change in control of Lexar, Mr. Estakhri will receive a cash bonus of $325,000. In addition, 25% of all unvested stock options and restricted stock granted to or purchased by Mr. Estakhri prior to the change in control will vest immediately and shall remain exercisable (1) for six months following such acceleration or (2) pursuant to the terms of the original grant agreement, whichever period is greater. The remaining 75% of such unvested stock options and restricted stock shall vest nine months after the change in control and shall remain exercisable (1) for six months following such acceleration or (2) pursuant to the terms of the original grant agreement, whichever period is greater. In addition, if, during the period commencing one month prior to the change in control of Lexar and continuing for 18 months thereafter, Mr. Estakhri is terminated without cause or voluntarily resigns following a constructive termination event, he will receive his base salary for 15 months and medical and life insurance benefits for 12 months. In addition, he will receive his annual target bonus of 50% of his salary, pro-rated up to the date of termination, regardless of whether he would have earned any such bonus prior to his termination. Additionally, all stock options granted to or purchased by him before or after the change in control and all restricted stock purchased by him after the change in control will vest immediately, followed by a six-month period during which the options may be exercised. Mr. Estakhri will also be entitled to retain any cellular phone and notebook computer as then currently provided to him immediately prior to his termination. Furthermore, Mr. Estakhri will have 18 months within which to repay any outstanding notes that he executed with Lexar. Finally, in the event that any portion of the amounts payable to Mr. Estakhri is subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, we will pay him the amount, not to exceed $150,000, necessary to place him in the same after-tax position as he would have been in had no excise tax been imposed.

      Brian T. McGee. We entered into an employment offer letter on April 21, 2003 with Mr. McGee for him to serve as our Vice President, Finance and Chief Financial Officer. This employment offer letter established Mr. McGee’s initial annual base salary at $200,000 and his eligibility for a bonus based upon his achievement of specified performance goals. Mr. McGee’s annual salary for 2005 was $240,000. The terms of this offer letter provided that, if we terminate Mr. McGee’s employment without cause, we must continue to pay his base salary for six months. The offer letter also provides that, in the event of a change in control of Lexar, 50% of all unvested stock options granted to Mr. McGee will vest upon the earlier to occur of (1) Mr. McGee’s termination without cause following a change in control or (2) the nine month anniversary of the change in control.

      On January 16, 2006, in connection with the transition of Mr. McGee from Vice President, Finance and Chief Financial Officer to Vice President, Corporate Development, we entered into an amendment to Mr. McGee’s offer letter. Pursuant to the terms of this amendment, if we terminate Mr. McGee’s employment without cause before August 1, 2006 or if he voluntarily resigns between May 1, 2006 and August 1, 2006, we must continue to pay his base salary and medical and life insurance benefits for six months. In addition, we must pay him six months of his annual target bonus of 40% of his salary. Additionally, the stock option granted to him on May 20, 2003 will vest immediately, followed by a three-month period during which the option may be exercised.

      Mr. McGee’s employment with us terminated on March 24, 2006.

      Eric S. Whitaker. We entered into an employment offer letter on December 17, 1999 with Eric S. Whitaker for him to serve as our Assistant General Counsel and Director of Legal Affairs. Mr. Whitaker has served as our General Counsel and Corporate Secretary since April 2000, our Vice President, Technology Licensing from November 2000 to January 2005 and our Executive Vice President, Corporate Strategy since January 2005. This offer letter established Mr. Whitaker’s initial annual base salary at $125,000 and his eligibility for a bonus based upon his achievement of specified performance goals. Mr. Whitaker’s annual base salary for 2005 was $300,000.

      On October 22, 2001, we entered into a retention agreement with Mr. Whitaker that was effective as of September 1, 2001. Pursuant to the terms of this retention agreement, if we terminate Mr. Whitaker’s employment without cause or if he voluntarily resigns following a constructive termination event in the absence of a change in control, we must continue to pay his base salary and medical and life insurance benefits for six months. In addition, we must pay him his annual target bonus of 40% of his salary, pro-rated up to the date of termination, provided that he would have earned such bonus absent his termination. Additionally, with respect to all stock options or restricted stock granted to or purchased by Mr. Whitaker as of the date of his termination, he will be granted an additional twelve months of vesting, followed by a 12 month period during which the options may be exercised. Mr. Whitaker will also be entitled to retain any cellular phone, notebook computer and camera equipment as then currently provided to him immediately prior to his termination. Finally, Mr. Whitaker will have 18 months within which to repay any outstanding notes that he entered into with Lexar.

      The retention agreement also provides that, in the event of a change in control of Lexar, Mr. Whitaker will receive a cash bonus of $125,000. In addition, 25% of all unvested stock options and restricted stock granted to or purchased by Mr. Whitaker prior to the change in control will vest immediately and shall remain exercisable (1) for six months following such acceleration or (2) pursuant to the terms of the original grant agreement, whichever period is greater. The remaining 75% of such unvested stock options and restricted stock shall vest nine months after the change in control and shall remain exercisable (1) for six months following such acceleration or (2) pursuant to the terms of the original grant agreement, whichever period is greater. In addition, if, during the period commencing one month prior to the change in control of Lexar and continuing for 18 months thereafter, Mr. Whitaker is terminated without cause or voluntarily resigns following a constructive termination event, he will receive his base salary and medical and life insurance benefits for 12 months. In addition, he will receive his annual target bonus of 40% of his salary, pro-rated up to the date of termination, regardless of whether he would have earned any such bonus prior to his termination. Additionally, all stock options or restricted stock granted to or purchased by him as of the date of his termination will vest immediately, followed by a six-month period during which the options may be exercised. Mr. Whitaker will also be entitled to retain any cellular phone and notebook computer as then currently provided to him immediately prior to his termination. Furthermore, Mr. Whitaker will have 18 months within which to repay any outstanding notes that he entered into with us. Finally, in the event that any portion of the amounts payable to Mr. Whitaker is subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, we will pay him the amount, not to exceed $150,000, necessary to place him in the same after-tax position as he would have been in had no excise tax been imposed.

      On January 17, 2006, we entered into an amendment to the retention agreement with Mr. Whitaker. In exchange for Mr. Whitaker’s agreement to remain an employee of Lexar and to provide at least 100 hours of consulting services to Lexar for a six-month period following his resignation, if Mr. Whitaker voluntarily resigns following June 1, 2006, we will provide him the same benefits to which he would otherwise be entitled under his retention agreement for involuntary termination without cause or his voluntary resignation after a constructive termination event.

      Michael P. Scarpelli. We entered into an employment offer letter on December 22, 2005 with Michael P. Scarpelli for him to serve as our Executive Vice President, Finance and Chief Financial Officer. This employment offer letter established Mr. Scarpelli’s initial annual base salary at $260,000 and his eligibility for a bonus based upon his achievement of specified performance goals.

      Pursuant to the terms of this offer letter, if we terminate Mr. Scarpelli’s employment without cause, we must continue to pay his base salary for six months. In addition, if we terminate Mr. Scarpelli’s employment without cause absent a change in control of Lexar, 50% of all unvested stock options granted to Mr. Scarpelli will vest as of the date of his termination.

      The offer letter also provides that, at the effective time of a change in control of Lexar, and provided that Mr. Scarpelli continues in the employment of the acquiring company, as set forth in the 2000 Equity Incentive Plan, 25% of the unvested portion of the options to purchase 250,000 shares of Lexar common stock granted to Mr. Scarpelli in accordance with the offer letter will accelerate and become immediately exercisable. If Mr. Scarpelli is terminated without cause within one year of the effective time of the change in control, an additional 25% of the unvested shares subject to such stock option (making 50% in total) will accelerate and become immediately exercisable. In addition, if the effective time of the change in control is before January 16, 2007 (Mr. Scarpelli’s one-year anniversary with Lexar) and Mr. Scarpelli’s vested options at the effective time of the change in control do not represent at least $200,000 of gain to him, Mr. Scarpelli will receive a cash payment equal to the amount required to provide him with a total gain of $200,000.

      Mark W. Adams. We entered into an employment offer letter on December 14, 2005 with Mark W. Adams for him to serve as our Chief Operating Officer. This employment offer letter established Mr. Adams’ initial annual base salary at $250,000 and his eligibility for a bonus based upon his achievement of specified performance goals.

      Pursuant to the terms of this offer letter, if we terminate Mr. Adams’ employment without cause, we must continue to pay his base salary for nine months, or until he commences full time employment, whichever comes first.

      The offer letter also provides that, at the effective time of a change in control of Lexar, and provided that Mr. Adams continues in the employment of the acquiring company, as set forth in the 2000 Equity Incentive Plan, 25% of the unvested portion of the options to purchase 300,000 shares of Lexar common stock granted to Mr. Adams in accordance with the offer letter will accelerate and become immediately exercisable. If Mr. Adams is terminated without cause within one year of the effective time of the change in control, an additional 25% of the unvested shares subject to such stock option (making 50% in total) will accelerate and become immediately exercisable. In addition, if the effective time of the change in control is before January 4, 2007 (Mr. Adams’ one-year anniversary with Lexar) and Mr. Adams’ vested options at the effective time of the change in control do not represent at least $200,000 of gain to him, Mr. Adams will receive a cash payment equal to the amount required to provide him with a total gain of $200,000.

      Option Plans. In addition to the employment arrangements described above, our 2000 Equity Incentive Plan also provides for accelerated vesting upon a change in control of Lexar. Under the 2000 Equity Incentive Plan, upon a change in control, 25% of all unvested stock options and restricted stock granted pursuant to such plan automatically vest in full, and the remaining options outstanding under the Plan will continue to vest in equal monthly installments over the remaining original vesting term. Further, pursuant to the stock option agreements under our 2000 Equity Incentive Plan for three of our executive officers, Eric B. Stang, Petro Estakhri and Eric S. Whitaker, in the event of the termination of such executive officer without cause, or if the executive officer terminates his employment for good reason, within one year of the effective time of a change in control of Lexar, all unvested stock options granted to the executive officer pursuant to the 2000 Equity Incentive Plan will become 100% vested.

      Our non-employee directors receive cash compensation for their services as directors and are reimbursed for their reasonable and necessary expenses in attending board and committee meetings. In 2005, each non-employee director received the following cash compensation:

      In addition, each non-employee director is eligible to receive automatic and non-discretionary grants under our 2000 Equity Incentive Plan. Each non-employee director who becomes a member of our board of directors will be granted an option to purchase 50,000 shares of our common stock as of the date the director becomes a member of the board. Immediately after each annual meeting of our stockholders, each non-employee director will automatically be granted an additional option to purchase a certain number of shares of our common stock if the director has served continuously as a member of our board since the date of the director’s initial grant and for a period of at least one year before the annual meeting. On February 10, 2006, our board of directors amended the 2000 Equity Incentive Plan to reduce this number of shares from 25,000 shares to 20,000 shares. The board may also make discretionary supplemental grants to a non-employee director who has served for less than one year from the date of such director’s initial grant; provided that no such director may receive options to purchase more than a certain number of shares of our common stock in any calendar year pursuant to the above-described provisions of our 2000 Equity Incentive Plan. On February 10, 2006, our board of directors amended the 2000 Equity Incentive Plan to reduce this number of shares from 75,000 shares to 70,000 shares. Each option granted to a director under our 2000 Equity Incentive Plan has a 10 year term and will terminate three months after the date the director ceases to be a director or consultant for any reason except death, disability or cause, 12 months if the termination is due to death or disability or immediately if the termination is for cause. The options will vest and become exercisable as to 25% of the shares on the one-year anniversary of the date of grant and as to 2.0833% of the shares each month thereafter, so long as the non-employee director remains a director or consultant. In the event of our liquidation or dissolution or a change in control transaction, the options granted to each non-employee director under this plan will become fully vested and exercisable, followed by a three-month period during which the options may be exercised. Any options not exercised within such three-month period will expire.

      In June 2005, upon completion of our 2005 annual meeting of stockholders, we granted each of William T. Dodds, Robert C. Hinckley, Brian D. Jacobs, Charles E. Levine and Mary Tripsas a nonqualified stock option to purchase 25,000 shares of our common stock at an exercise price of $5.68 per share, which grant was automatically made pursuant to the terms of our 2000 Equity Incentive Plan.

      The compensation committee currently consists of Brian D. Jacobs, Charles E. Levine and Mary Tripsas. During fiscal 2005, William T. Dodds and John A. Rollwagen also served as members of our compensation committee. Each is, or was during his or her term on the compensation committee, a non-employee director within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934 and an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code. None of these directors has at any time since our formation (1) been one of our officers or employees nor

      (a) The following documents are filed as part of this report:

      (b) Exhibits

           See Item 15(a)(3) above.

      (c) Financial Statement Schedules

           See Item 15(a)(2) above.

      Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.