Exhibit 10.2.1

November 28, 2006

Nick Shamlou

47669 Fremont Blvd.

Fremont, CA 94538, USA

Re: Letter Agreement Regarding Offer Letter

Dear Nick:

Reference is made to the offer letter, dated as of September 8, 2006 (the “Offer
Letter”), by and among you and Ikanos Communications, Inc. (the “Company”).
Capitalized terms used in this letter have the same meaning they have in the
Offer Letter unless otherwise defined herein.

As we have recently discussed in connection Rajesh Vashist stepping down as the
Company’s Chief Executive Officer and Dan Atler being appointed as his interim
replacement, the Company expects to conduct a search to find a permanent
replacement for Mr. Vashist. The purpose of this letter (“Letter Agreement”) is
to provide you with additional protection in the event your employment with the
Company is terminated without Cause within the thirty-month period following the
hiring of Mr. Vashist’s permanent replacement as Chief Executive Officer of the
Company. This Letter Agreement confirms our mutual agreement that,
notwithstanding anything contained in the Offer Letter to the contrary, and for
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by both parties hereto, the parties have agreed as follows:

1. Termination Without Cause Within Eighteen Months Following the Hiring of the
Company’s Permanent Chief Executive Officer.

If the Company terminates your employment with the Company without Cause within
the eighteen-month period following the date the Company hires Mr. Vashist’s
permanent replacement as Chief Executive Officer of the Company (it being
understood that the appointment of Mr. Atler as the interim Chief Executive
Officer is not the hiring of a permanent replacement for Mr. Vashist, but in the
event the Company and Mr. Atler were to agree that his status as Chief Executive
Officer of the Company were to change from an interim position to a permanent
one, then the date the Company and Mr. Atler enter into such agreement would be
the date from which such eighteen-month period would be measured), then, subject
to your signing and not revoking the separation agreement and release of claims
attached hereto as Exhibit A, you will be entitled to the following severance
benefits in lieu of any severance benefits to which you would otherwise be
entitled under the Offer Letter (whether prior to or following a Change of
Control):

(a) Continued Base Salary. You will receive continuing payments of severance pay
at a rate equal to your base salary rate, as then in effect, for twelve
(12) months from the date of such termination in accordance with the Company’s
normal payroll policies; provided, however, that in the event that all of the
continuing payments have not been paid as of the last payroll date prior to
March 15 of the year following the year during which the termination occurs, the
Company will pay all remaining amounts in a lump sum on such payroll date such
that no payments to be made pursuant to this Section 1(a) will be made after
March 15 of the year following the year during which the termination occurs.

(b) Commission. You will be entitled to receive an amount equal to 100% of your
target commission for the year in which the termination occurs (as if earned at
100% of target) to be paid in equal installments over the twelve (12)-month
period from the date of such termination in accordance with the Company’s normal
payroll policies; provided, however, that in the event that all of such payments
have not been paid as of the last payroll date prior to March 15 of the year
following the year during which the termination occurs, the Company will pay all
remaining amounts in a lump sum on such payroll date such that no payments to be
made pursuant to this Section 1(b) will be made after March 15 of the year
following the year during which the termination occurs.

 

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(c) Car Allowance. You will be entitled to receive an amount equal to the car
allowance you were receiving at the time of your termination for a period of
twelve (12) months from the date of such termination to be paid on the same
schedule you would have otherwise received such allowance had you remained
employed with the Company through the twelve-month period following your
termination and in accordance with the Company’s normal payroll policies;
provided, however, that in the event that all of the such payments have not been
paid as of the last payroll date prior to March 15 of the year following the
year during which the termination occurs, the Company will pay all remaining
amounts in a lump sum on such payroll date such that no payments to be made
pursuant to this Section 1(c) will be made after March 15 of the year following
the year during which the termination occurs.

(d) Benefits. The Company will reimburse your premiums under Title X of the
Consolidated Budget Reconciliation Act of 1985, as amended (“COBRA”) after you
have properly elected continuation coverage under COBRA (for which you will be
solely responsible for electing such coverage for you and your eligible
dependents) through the earlier of (i) the twelve (12)-month period following
such termination, or (ii) the date you and your eligible dependents become
covered under similar plans.

(e) Accelerated Vesting of Equity Awards. Your restricted stock unit awards will
immediately vest and become payable as to an aggregate number of units equal to
fifty percent (50%) of the aggregate number of your then unvested restricted
stock units plus the number of shares subject to your then unvested options to
purchase shares of Company common stock (the “Number of Aggregate Unvested
Equity Awards”). In the event the number of restricted stock units which vest
pursuant to the previous sentence is less than fifty percent (50%) of the Number
of Aggregate Unvested Equity Awards, your outstanding options to purchase Common
Stock will immediately vest and become exercisable as to an aggregate number of
shares equal to fifty percent (50%) of the Number of Aggregate Unvested Equity
Awards, less the number of restricted stock units that vest pursuant to the
foregoing provisions of this paragraph. The vesting acceleration provided for in
this Section 1(d) will be applied as provided for in Section 3.

2. Termination Without Cause On or After Eighteen Months Following the Hiring of
the Company’s Permanent Chief Executive Officer Up to and Through Thirty Months
Following the Hiring of the Company’s Permanent Chief Executive Officer.

If the Company terminates your employment with the Company without Cause on or
after the eighteen-month period following the date the Company hires
Mr. Vashist’s permanent replacement as Chief Executive Officer of the Company
(it being understood that the appointment of Mr. Atler as the interim Chief
Executive Officer is not the hiring of a permanent replacement for Mr. Vashist,
but in the event the Company and Mr. Atler were to agree that his status as
Chief Executive Officer of the Company were to change from an interim position
to a permanent one, then the date the Company and Mr. Atler enter into such
agreement would be the date from which such eighteen and thirty-month periods
would be measured) up to and through thirty (30) months following hiring of such
replacement, then, subject to your signing and not revoking the separation
agreement and release of claims attached hereto as Exhibit A, you will be
entitled to the following severance benefits in lieu of any severance benefits
to which you would otherwise be entitled under the Offer Letter (whether prior
to or following a Change of Control):

(a) Continued Base Salary. You will receive continuing payments of severance pay
at a rate equal to your base salary rate, as then in effect, for six (6) months
from the date of such termination in accordance with the Company’s normal
payroll policies; provided, however, that in the event that all of the
continuing payments have not been paid as of the last payroll date prior to
March 15 of the year following the year during which the termination occurs, the
Company will pay all remaining amounts in a lump sum on such payroll date such
that no payments to be made pursuant to this Section 2(a) will be made after
March 15 of the year following the year during which the termination occurs.

(b) Commission. You will be entitled to receive an amount equal to fifty percent
(50%) of your target commission for the year in which the termination occurs (as
if earned at 100% of target) to be paid in equal installments over the six
(6)-month period from the date of such termination in accordance with the
Company’s normal payroll policies; provided, however, that in the event that all
of

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such payments have not been paid as of the last payroll date prior to March 15
of the year following the year during which the termination occurs, the Company
will pay all remaining amounts in a lump sum on such payroll date such that no
payments to be made pursuant to this Section 2(b) will be made after March 15 of
the year following the year during which the termination occurs.

(c) Car Allowance. You will be entitled to receive an amount equal to the car
allowance you were receiving at the time of your termination for a period of six
(6) months from the date of such termination to be paid on the same schedule you
would have otherwise received such allowance had you remained employed with the
Company through the six-month period following your termination and in
accordance with the Company’s normal payroll policies; provided, however, that
in the event that all of the such payments have not been paid as of the last
payroll date prior to March 15 of the year following the year during which the
termination occurs, the Company will pay all remaining amounts in a lump sum on
such payroll date such that no payments to be made pursuant to this Section 2(c)
will be made after March 15 of the year following the year during which the
termination occurs.

(d) Benefits. The Company will reimburse your premiums under Title X of the
Consolidated Budget Reconciliation Act of 1985, as amended (“COBRA”) after you
have properly elected continuation coverage under COBRA (for which you will be
solely responsible for electing such coverage for you and your eligible
dependents) through the earlier of (i) the six (6)-month period following such
termination, or (ii) the date you and your eligible dependents become covered
under similar plans.

(e) Accelerated Vesting of Equity Awards. Your restricted stock unit awards will
immediately vest and become payable as to an aggregate number of units equal to
twenty-five percent (25%) of the Number of Aggregate Unvested Equity Awards. In
the event the number of restricted stock units which vest pursuant to the
previous sentence is less than twenty-five percent (25%) of the Number of
Aggregate Unvested Equity Awards, your outstanding options to purchase Common
Stock will immediately vest and become exercisable as to an aggregate number of
shares equal to twenty-five percent (25%) of the Number of Aggregate Unvested
Equity Awards, less the number of restricted stock units that vest pursuant to
the foregoing provisions of this paragraph. The vesting acceleration provided
for in this Section 2(d) will be applied as provided for in Section 3.

3. Application of Accelerated Vesting. In the event you become entitled to
accelerated vesting of your restricted stock unit and/or stock option awards
pursuant to Sections 1(d) or 2(d), respectively, and there are multiple types of
awards, such acceleration will be applied on a pro-rata basis based on the
number of units and/or shares subject to an award versus the total number of
units and/or shares subject to the same types of awards you hold.

By way of example only, assume you have the following unvested restricted stock
unit and stock option awards at the time of your termination:

 

Unvested Restricted Stock Units

  

Unvested Stock Options

30,000    80,000 20,000    60,000 10,000    20,000

In this example, the Number of Aggregate Unvested Equity Awards would equal
220,000.

In applying the vesting acceleration provisions of Section 1(d), the aggregate
number of units and shares that could vest would equal 110,000 (i.e., 50% of
220,000). All of the unvested restricted stock units

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would vest in full (a total of 60,000 restricted stock units) and the option
covering 80,000 unvested shares would vest as to an additional 25,000 shares,
the option covering 60,000 unvested shares would vest as to an additional 18,750
shares and the option covering 20,000 unvested shares would vest as to an
additional 6,250 shares (with the result that an aggregate of 50,000 shares
subject to the options would vest).

In applying the vesting acceleration provisions of Section 2(d), the total
number of units and shares that could vest pursuant to Section 2(d) would equal
55,000 (i.e., 25% of 220,000). In applying the vesting acceleration pursuant to
Section 2(d), the restricted stock unit award covering 30,000 unvested units
would vest as to 27,500 units, the restricted stock unit covering 20,000
unvested units would vest as to 18,333 units and the restricted stock unit
covering 10,000 unvested units would vest as to 9,167 unvested units and no
shares subject to any outstanding options would vest.

4. Section 409A. Notwithstanding anything to the contrary in this Letter
Agreement or the Offer Letter, any cash severance payments otherwise due to you
pursuant to Sections 1 or 2 or otherwise on or within the six-month period
following your termination will accrue during such six-month period and will
become payable in a lump sum payment on the date six (6) months and one (1) day
following the date of your termination, provided, that such cash severance
payments will be paid earlier, at the times and on the terms set forth in the
applicable provisions of Sections 1 or 2, if the Company and you mutually agree
that the imposition of additional tax under Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”), will not apply to an earlier payment of
such cash severance payments. In addition, this Letter Agreement will be deemed
amended to the extent necessary to avoid imposition of any additional tax or
income recognition prior to actual payment to you under Code Section 409A and
any temporary or final Treasury Regulations and guidance promulgated thereunder
and the parties agree to cooperate with each other and to take reasonably
necessary steps in this regard.

This Letter Agreement will in no way effect the “at-will” status of your
employment with the Company (consistent with the Offer Letter) and the Company
or you may terminate such employment at any time with or without cause or
notice.

Both you and the Company acknowledge that the Letter Agreement has been entered
into after the execution of the Offer Letter and accordingly agree that, to the
extent this Letter Agreement is inconsistent with any provisions in the Offer
Letter, the Letter Agreement will supercede the Offer Letter.

This Letter Agreement, together with the Offer Letter, to the extent not amended
hereby, represents the entire agreement and understanding between the parties as
to the subject matter herein and supersedes all prior or contemporaneous
agreements whether written or oral. No waiver, alteration, or modification of
any of the provisions of this Letter Agreement will be binding unless in writing
and signed by duly authorized representatives of the parties hereto.

This Letter Agreement may be signed in counterparts, each of which will be an
original, with the same effect as if the signature thereto were upon the same
Letter Agreement. This Letter Agreement will be governed by the laws of the
State of California (with the exception of its conflict of laws provisions).

Please sign below to indicate your agreement to the terms of this Letter
Agreement.

Sincerely,

 

IKANOS COMMUNICATIONS, INC. By:  

/s/ Daniel K. Atler

Name:   Daniel K. Atler Its:   CEO

AGREED TO AND ACCEPTED:

 

NICK SHAMLOU

/s/ Nick Shamlou

Nick Shamlou