Exhibit
10.1


SEVERANCE
AGREEMENT AND RELEASE


RECITALS


This Severance Agreement
and Release (“Agreement”) is made
by and between Rajesh Vashist (“Employee”)
and Ikanos Communications (“Company”)
(collectively referred to as the “Parties”):


WHEREAS, Employee was
employed by the Company;


WHEREAS, the Company and
Employee entered into a Employee Inventions and Proprietary Rights Assignment
Agreement (the “Confidentiality Agreement”);


WHEREAS, WHEREAS, the
Company granted Employee options to purchase the Company’s common stock (the “Options”) under one or several of the
Company’s stock option plans (the “Plans”)
and each such Option is evidenced by an option agreement executed by Employee
and the Company (the “Option Agreements”)


WHEREAS, the Company and Employee entered into the Vashist Employment
Agreement dated August 31, 2005 (the “Employment Agreement”);


WHEREAS, Employee’s
employment with Company and status as a member of the Board of Directors
terminated on October 24, 2006 (the “Termination
Date”);


WHEREAS, the Parties, and
each of them, wish to resolve any and all disputes, claims, complaints,
grievances, charges, actions, petitions and demands that the Employee may have
against the Company as defined herein, including, but not limited to, any and
all claims arising or in any way related to Employee’s employment with, or
separation from, the Company;


NOW THEREFORE, in
consideration of the promises made herein, the Parties hereby agree as follows:


COVENANTS


1.             Resignation
from the Board of Directors.  Employee
hereby resigns as a member of the Company’s Board of Directors effective as of
the Termination Date.


2.             Consideration.


(a)           Severance.  Pursuant to the terms of the
Employment Agreement, upon the Effective Date of this Agreement, Employee will
be entitled to the severance payments and benefits set forth in Section 7(a) of
the Employment Agreement; provided, however, that (i) the Parties agree that in
partial consideration for the Parties entering into the Consulting Agreement
and the consideration to be provided thereunder as set forth in Section 2(b),
(1) the amount of the severance payment to be provided under clause (B) of
Section 7(a) of the Employment Agreement relating to the target bonus will
equal $67,000, which will be paid at the times and in the manner set forth in









 



clause (ii) below, and (2) the provision of continuing benefits under
the Benefit Plans (as defined in the Employment Agreement) under clause (E) of
Section 7(a) of the Employment Agreement will commence following the
termination of the Consulting Agreement, (ii) the severance payments to be made
pursuant to clauses (A) and (B) of Section 7(a) of the Employment Agreement
will be paid in equal installments in accordance with the Company’s normal
payroll policies commencing with the first pay date on or after January 1, 2007
and completing on the last pay date prior to March 15, 2007, and
(iii) Employee will have the right at any time prior to January 1, 2007 to
designate an exercise schedule with respect to any unexercised options to purchase
Company Common Stock, provided such election may not provide for exercise of
any such option beyond October 24, 2007. 
For purposes of clarification, the Parties acknowledge that the one year
period in which Employee will have to exercise his outstanding stock options or
similar rights to acquire Company common stock under clause (D) of Section 7(a)
of the Employment Agreement will commence on the Termination Date and all of
Executive’s equity awards granted by the Company will cease vesting as of Termination
Date, except as set forth in the Consulting Agreement, and any unvested portion
of the Employee’s equity awards (after taking into account any acceleration of
vesting set forth in the Consulting Agreement) will terminate effective as of
the Termination Date and Employee will have no further rights with respect
thereto.


(b)           Consulting.  Commencing on the Termination Date and
subject to this Agreement becoming effective (as set forth in Section 24),
Employee will make himself available to serve as a consultant to the Company
through December 31, 2006, pursuant to the written consulting agreement (the “Consulting Agreement”), attached hereto as Exhibit
A.


3.             Confidential
Information and Non-solicitation. 
Employee will continue to maintain the confidentiality of all
confidential and proprietary information of the Company and will continue to
comply with the terms and conditions of the Confidentiality Agreement between
Employee and the Company, including, without limitation, the non-solicitation
provisions of Section 14 of the Confidentiality Agreement.  Employee will return all of the Company’s
property and confidential and proprietary information in his possession to the
Company on the Effective Date of this Agreement.


4.             Payment
of Salary.  Employee acknowledges and
represents that the Company has paid all salary, wages, bonuses, accrued
vacation, commissions and any and all other benefits due to Employee once the
above noted payments and benefits are received.


5.             Release
of Claims. Employee agrees that the foregoing consideration represents
settlement in full of all outstanding obligations owed to Employee by the
Company and its officers, managers, supervisors, agents and employees.  Employee, on his own behalf, and on behalf of
his respective heirs, family members, executors, agents, and assigns, hereby
fully and forever releases the Company and its officers, directors, employees,
agents, investors, shareholders, administrators, affiliates, divisions,
subsidiaries, predecessor and successor corporations, and assigns (the “Releasees”), from, and agree not to sue concerning, any
claim, duty, obligation or cause of action relating to any matters of any kind,
whether presently known or unknown, suspected or unsuspected, that Employee may
possess arising from any omissions, acts or facts that have occurred up until
and including the Effective Date of this Agreement including, without
limitation:



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(a)           any and all claims
relating to or arising from Employee’s employment relationship with the Company
and the termination of that relationship;


(b)           any and all claims
relating to, or arising from, Employee’s right to purchase, or actual purchase
of shares of stock of the Company, including, without limitation, any claims
for fraud, misrepresentation, breach of fiduciary duty, breach of duty under
applicable state corporate law, and securities fraud under any state or federal
law;


(c)           any and all claims
under the law of any jurisdiction including, but not limited to, wrongful
discharge of employment; constructive discharge from employment; termination in
violation of public policy; discrimination; harassment; retaliation; breach of
contract, both express and implied; breach of a covenant of good faith and fair
dealing, both express and implied; promissory estoppel; negligent or
intentional infliction of emotional distress; negligent or intentional
misrepresentation; negligent or intentional interference with contract or
prospective economic advantage; unfair business practices; defamation; libel;
slander; negligence; personal injury; assault; battery; invasion of privacy;
false imprisonment; and conversion;


(d)           any and all claims for
violation of any federal, state or municipal statute, including, but not
limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of
1991, the Age Discrimination in Employment Act of 1967, the Americans with
Disabilities Act of 1990, the Fair Labor Standards Act, the Employee Retirement
Income Security Act of 1974, The Worker Adjustment and Retraining Notification
Act, Older Workers Benefit Protection Act; the Family and Medical Leave Act;
the California Family Rights Act; the California Fair Employment and Housing
Act, and the California Labor Code, including, but not limited to California
Labor Code Sections 1400-1408;


(e)           any and all claims for
violation of the federal, or any state, constitution;


(f)            any and all claims
arising out of any other laws and regulations relating to employment or
employment discrimination;


(g)           any claim for any loss,
cost, damage, or expense arising out of any dispute over the non-withholding or
other tax treatment of any of the proceeds received by Employee as a result of
this Agreement; and


(h)           any and all claims for
attorneys’ fees and costs.


The Company and
Employee agree that the release set forth in this section will be and remain in
effect in all respects as a complete general release as to the matters
released.  Notwithstanding the previous sentence, the Parties
agree that Employee will continue to be covered by the terms and conditions of
the Indemnification Agreement entered into between Employee and the Company
(the “Indemnity Agreement”) and the terms of
the Company’s D&O insurance policy for claims against Employee that arise
out of matters or events that occurred prior to the Termination Date.  This release does not extend to any severance
benefits due Employee under the Employment Agreement or any rights to
indemnification Employee may have under the Indemnification Agreement or the
Company’s D&O insurance policy.



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6.             Acknowledgement
of Waiver of Claims Under ADEA. 
Employee acknowledges that he is waiving and releasing any rights he may
have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and release is
knowing and voluntary.  Employee and the
Company agree that this waiver and release does not apply to any rights or
claims that may arise under ADEA after the Effective Date of this
Agreement.  Employee acknowledges that
the consideration given for this waiver and release Agreement is in addition to
anything of value to which Employee was already entitled.  Employee further acknowledges that he has been
advised by this writing that:


(a)           he should consult with
an attorney prior to executing this Agreement;


(b)           he has up to twenty-one
(21) days within which to consider this Agreement;


(c)           he has seven (7) days
following his execution of this Agreement to revoke this Agreement;


(d)           this Agreement will not
be effective until the revocation period has expired; and,


(e)           nothing in this
Agreement prevents or precludes Employee from challenging or seeking a
determination in good faith of the validity of this waiver under the ADEA, nor
does it impose any condition precedent, penalties or costs for doing so, unless
specifically authorized by federal law.


7.             Civil
Code Section 1542.  The Parties
represent that they are not aware of any claim by either of them other than the
claims that are released by this Agreement. 
Employee acknowledges that he had the opportunity to seek the advice of
legal counsel and is familiar with the provisions of California Civil Code
Section 1542, which provides as follows:


A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.


Employee, being aware of said code section, agrees to
expressly waive any rights he may have thereunder, as well as under any other
statute or common law principles of similar effect.


8.             No
Pending or Future Lawsuits.  Employee
represents that he has no lawsuits, claims, or actions pending in his name, or
on behalf of any other person or entity, against the Company or any other
person or entity referred to herein. 
Employee also represents that he does not intend to bring any claims on his
own behalf or on behalf of any other person or entity against the Company or
any other person or entity referred to herein.


9.             No
Cooperation.  Employee agrees he will
not act in any manner that might damage the business of the Company.  Employee agrees that he will not counsel or
assist any attorneys or



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their clients in the presentation or prosecution of
any disputes, differences, grievances, claims, charges, or complaints by any
third party against the Company and/or any officer, director, employee, agent,
representative, shareholder or attorney of the Company, unless under a subpoena
or other court order to do so.  Employee
further agrees both to immediately notify the Company upon receipt of any court
order, subpoena, or any legal discovery device that seeks or might require the
disclosure or production of the existence or terms of this Agreement, and to
furnish, within three (3) business days of its receipt, a copy of such subpoena
or legal discovery device to the Company.


10.           Non-Disparagement.  Employee agrees to refrain from any
defamation, libel or slander of the Releasees or tortious interference with the
contracts and relationships of the Releasees. 
All inquiries by potential future employers of Employee will be directed
to the Vice President of Human Resources of the Company.  Upon inquiry, the Company will only state the
following: Employee’s last position and dates of employment


11.           No
Admission of Liability.  The Parties
understand and acknowledge that this Agreement constitutes a compromise and
settlement of disputed claims.  No action
taken by the Parties hereto, or either of them, either previously or in
connection with this Agreement will be deemed or construed to be: (a) an
admission of the truth or falsity of any claims heretofore made or (b) an
acknowledgment or admission by either party of any fault or liability
whatsoever to the other party or to any third party.


12.           No
Knowledge of Wrongdoing.  Employee
represents that he has no knowledge of any wrongdoing involving improper or
false claims against a federal or state governmental agency, or any other
wrongdoing that involves Employee or other present or former Company employees.


13.           Costs.  The Parties will each bear their own costs,
expert fees, attorneys’ fees and other fees incurred in connection with this
Agreement.


14.           Indemnification.  Employee agreed to indemnify and hold
harmless the Company from and against any and all loss, costs, damages or
expenses, including, without limitation, attorneys’ fees or expenses incurred
by the Company arising out of the breach of this Agreement by Employee, or from
any false representation made herein by Employee, or from any action or
proceeding which may be commenced, prosecuted or threatened by Employee or for
Employee’s benefit, upon Employee’s initiative, or with Employee’s aid or
approval, contrary to the provisions of this Agreement.  Employee further agrees that in any such
action or proceeding, this Agreement may be pled by the Company as a complete
defense, or may be asserted by way of counterclaim or cross-claim.


15.           Arbitration.  The Parties agree that any and all disputes
arising out of, or relating to, the terms of this Agreement, their
interpretation, and any of the matters herein released, will be subject to
binding arbitration in Santa Clara County before the American Arbitration
Association under its National Rules for the Resolution of Employment
Disputes.  The Parties agree that the
prevailing party in any arbitration will be entitled to injunctive relief in
any court of competent jurisdiction to enforce the arbitration award.  The Parties agree that the prevailing party
in any arbitration will be awarded its reasonable attorneys’ fees and
costs.  The Parties
hereby agree to waive their right to have any dispute between them resolved in
a court of law by a judge or jury.  This
section will not prevent either party from seeking injunctive relief (or any
other



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provisional remedy) from any court having jurisdiction
over the Parties and the subject matter of their dispute relating to Employee’s
obligations under this Agreement and the agreements incorporated herein by
reference.


16.           Authority.  The Company represents and warrants that the
undersigned has the authority to act on behalf of the Company and to bind the
Company and all who may claim through it to the terms and conditions of this
Agreement.  Employee represents and
warrants that he has the capacity to act on his own behalf and on behalf of all
who might claim through him to bind them to the terms and conditions of this
Agreement.  Each party warrants and
represents that there are no liens or claims of lien or assignments in law or
equity or otherwise of or against any of the claims or causes of action
released herein.


17.           No
Representations.  Each Party
represents that it has had the opportunity to consult with an attorney, and has
carefully read and understands the scope and effect of the provisions of this
Agreement.  Neither Party has relied upon
any representations or statements made by the other Party hereto which are not
specifically set forth in this Agreement.


18.           Severability.  In the event that any provision hereof
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement will continue in full force and effect
without said provision so long as the remaining provisions remain intelligible
and continue to reflect the original intent of the Parties.


19.           Entire Agreement. This Agreement represents the entire
agreement and understanding between the Company and Employee concerning the
subject matter of this Agreement and Employee’s relationship with the Company,
and supersedes and replaces any and all prior agreements and understandings
between the Parties concerning the subject matter of this Agreement and
Employee’s relationship with the Company, with the exception of the Confidentiality
Agreement, the Plans, the Option Agreements, Sections 7 and 8 of the Employment
Agreements and the Consulting Agreement.


20.           No
Waiver.  The failure of any party to
insist upon the performance of any of the terms and conditions in this
Agreement, or the failure to prosecute any breach of any of the terms and
conditions of this Agreement, will not be construed thereafter as a waiver of
any such terms or conditions.  This
entire Agreement will remain in full force and effect as if no such forbearance
or failure of performance had occurred.


21.           No
Oral Modification.  Any modification
or amendment of this Agreement, or additional obligation assumed by either
party in connection with this Agreement, will be effective only if placed in
writing and signed by both Parties or by authorized representatives of each
party.


22.           Governing
Law.  This Agreement will be deemed
to have been executed and delivered within the State of California, and it will
be construed, interpreted, governed, and enforced in accordance with the laws
of the State of California, without regard to conflict of law principles.  To the extent that either party seeks
injunctive relief in any court having jurisdiction for any claim relating to
the alleged misuse or misappropriation of trade secrets or confidential or
proprietary information, each party hereby consents to personal and exclusive
jurisdiction and venue in the state and federal courts of the State of
California.



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23.           Attorneys’
Fees.  In the event that either Party
brings an action to enforce or effect its rights under this Agreement, the
prevailing party will be entitled to recover its costs and expenses, including
the costs of mediation, arbitration, litigation, court fees, plus reasonable
attorneys’ fees, incurred in connection with such an action.


24.           Effective
Date.  This Agreement is effective
after it has been signed by both parties and after seven (7) days have passed
since Employee has signed the Agreement (the “Effective
Date”), unless revoked by Employee within seven (7) days after the
date the Agreement was signed by Employee.


25.           Counterparts.  This Agreement may be executed in
counterparts, and each counterpart will have the same force and effect as an
original and will constitute an effective, binding agreement on the part of
each of the undersigned.


26.           Voluntary
Execution of Agreement.  This
Agreement is executed voluntarily and without any duress or undue influence on
the part or behalf of the Parties hereto, with the full intent of releasing all
claims.  The Parties acknowledge that:


(a)           They have read this
Agreement;


(b)           They have been
represented in the preparation, negotiation, and execution of this Agreement by
legal counsel of their own choice or that they have voluntarily declined to
seek such counsel;


(c)           They understand the
terms and consequences of this Agreement and of the releases it contains; and


(d)           They are fully aware of
the legal and binding effect of this Agreement.


IN WITNESS WHEREOF, the
Parties have executed this Agreement on the respective dates set forth below.


	
  

  	
  IKANOS COMMUNICATIONS

  
	
   

  	
   

  
	
  Dated: October
  24, 2006

  	
  By

  	
  /s/ G. Venkatesh

  	
   

  
	
   

  	
   

  	
  G. Venkatesh

  
	
   

  	
   

  	
  Executive
  Chairman of the Board of Directors of

  
	
   

  	
   

  	
  Ikanos Communications, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RAJESH VASHIST, an individual

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: October
  24, 2006

  	
  /s/ Rajesh Vashist

  	
   

  
	
   

  	
  Rajesh Vashist

  



 



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