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Exhibit 10.4  

 
 

IKANOS COMMUNICATIONS, INC.
  
    AMENDED AND RESTATED
  2004 EMPLOYEE STOCK PURCHASE PLAN    
    

        The following constitutes the provisions of the 2004 Employee Stock Purchase Plan of Ikanos Communications, Inc. 

        1.    Purpose.    The purpose of the Plan is to provide Employees with an opportunity to purchase Common Stock through
accumulated payroll deductions. It is the intention of the Company to have the Plan qualify as an "employee stock purchase plan" under Section 423 of the Code. The provisions of the Plan,
accordingly, will be construed so as to extend and limit Plan participation in a manner that is consistent with the requirements of that section of the Code. 

        2.    Definitions.    

        (a)   "Administrator" means the Board or any committee thereof designated by the Board in accordance with Section 14. 

        (b)   "Board" means the Board of Directors of the Company. 

        (c)   "Change of Control" means the occurrence of any of the following events: 

        (i)    Any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of
the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting
securities; or 

        (ii)   The
consummation of the sale or disposition by the Company of all or substantially all of the Company's assets; 

        (iii)  The
consummation of a merger or consolidation of the Company, with any other corporation, other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its
parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company, or such surviving entity or its parent outstanding immediately after such merger or
consolidation; or 

        (iv)  A
change in the composition of the Board, as a result of which fewer than a majority of the Directors are Incumbent Directors. "Incumbent
Directors" means Directors who either (A) are Directors as of the effective date of the Plan (pursuant to Section 23), or (B) are elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of those Directors whose election or nomination was not in connection with any transaction described in subsections (i),
(ii) or (iii) or in connection with an actual or threatened proxy contest relating to the election of Directors of the Company. 

        (d)   "Code" means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a
reference to any successor or amended section of the Code. 

        (e)   "Common Stock" means the common stock of the Company. 

        (f)    "Company" means Ikanos Communications, Inc., a Delaware corporation. 

        (g)   "Compensation" means an Employee's base straight time gross earnings, commissions (to the extent such commissions are an
integral, recurring part of compensation), overtime and shift premium, but exclusive of payments for incentive compensation, bonuses and other compensation. 

 

        (h)   "Designated Subsidiary" means any Subsidiary that has been designated by the Administrator from time to time in its sole
discretion as eligible to participate in the Plan. 

        (i)    "Director" means a member of the Board. 

        (j)    "Employee" means any individual who is a common law employee of an Employer and is customarily employed for at least
twenty (20) hours per week and more than five (5) months in any calendar year by the Employer. For purposes of the Plan, the employment relationship will be treated as continuing intact
while the individual is on sick leave or other leave of absence approved by the Employer. Where the period of leave exceeds ninety (90) days and the individual's right to reemployment is not
guaranteed either by statute or by contract, the employment relationship will be deemed to have terminated on the 91st day of such leave. The Administrator, in its discretion, from time to time may,
prior to an Enrollment Date for all options to be granted on such Enrollment Date, determine (on a uniform and nondiscriminatory basis) that the definition of Employee will or will not include an
individual if he or she: (1) has not completed at least two years of service since his or her last hire date (or such lesser period of time as may be determined by the Administrator in its
discretion), (2) customarily works not more than 20 hours per week (or such lesser period of time as may be determined by the Administrator in its discretion), (3) customarily
works not more than 5 months per calendar year (or such lesser period of time as may be determined by the Administrator in its discretion), (4) is an officer or other manager, or
(5) is a highly compensated employee under Section 414(q) of the Code. 

        (k)   "Employer" means any one or all of the Company and its Designated Subsidiaries. 

        (l)    "Enrollment Date" means the first Trading Day of each Offering Period. 

        (m)  "Exchange Act" means the Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated
thereunder. 

        (n)   "Exercise Date" means the first Trading Day on or after May 1 and November 1 of each year. The first
Exercise Date will occur on the first Trading Day on or after May 1, 2006. 

        (o)   "Fair Market Value" means, as of any date, the value of Common Stock determined as follows: 

        (i)    If
the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq
SmallCap Market of The Nasdaq Stock Market, its Fair Market Value will be the closing sales price for the Common Stock (or
the closing bid, if no sales were reported) as quoted on such exchange or system on the date of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable; 

        (ii)   If
the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value will be the mean of the closing bid
and asked prices for the Common Stock on the date of determination, as reported in The Wall Street Journal or such other source as the Administrator
deems reliable; 

        (iii)  In
the absence of an established market for the Common Stock, its Fair Market Value will be determined in good faith by the Administrator; or 

        (iv)  For
purposes of the Enrollment Date of the first Offering Period under the Plan, the Fair Market Value will be the initial price to the public as set forth in the final
prospectus deemed to be included within the registration statement on Form S-1 filed with the Securities and Exchange Commission for the initial public offering of the Common Stock
(the "Registration Statement"). 

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        (p)   "Offering Periods" means the periods of approximately twenty-four (24) months during which an option
granted pursuant to the Plan may be exercised, commencing on the first Trading Day on or after May 1 and November 1 of each year and terminating on the first Trading Day on or after the
May 1 and November 1 Offering Period commencement date approximately twenty-four (24) months later; provided, however, that the first Offering Period under the Plan
will commence with the first Trading Day on or after the date on which the Securities and Exchange Commission declares the Company's Registration Statement effective and ending on the first Trading
Day on or after the earlier of (i) November 1, 2007 or (ii) twenty-seven (27) months from the beginning of the first Offering Period; and provided, further, that the second
Offering Period under the Plan will commence on the first Trading Day on or after May 1, 2006. The duration and timing of Offering Periods may be changed pursuant to Section 4 of this
Plan. 

        (q)   "Parent" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the
Code. 

        (r)   "Plan" means this 2004 Employee Stock Purchase Plan. 

        (s)   "Purchase Period" means the approximately six (6) month period commencing on one Exercise Date and ending with the
next Exercise Date, except that the first Purchase Period of any Offering Period will commence on the Enrollment Date and end with the next Exercise Date. 

        (t)    "Purchase Price" means an amount equal to eighty-five percent (85%) of the Fair Market Value of a share of
Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower; provided however, that the Purchase Price may be adjusted by the Administrator pursuant to Section 20. 

        (u)   "Subsidiary" means a "subsidiary corporation," whether now or hereafter existing, as defined in Section 424(f) of
the Code. 

        (v)   "Trading Day" means a day on which the U.S. national stock exchanges and the Nasdaq System are open for trading. 

        3.    Eligibility.    

        (a)    First Offering Period.    Any individual who is an Employee immediately prior to the first Offering Period
under the Plan will be automatically enrolled in the first Offering Period. 

        (b)    Subsequent Offering Periods.    Any individual who is an Employee as of the Enrollment Date of any future
Offering Period will be eligible to participate in such Offering Period, subject to the requirements of Section 5. 

        (c)    Limitations.    Any provisions of the Plan to the contrary notwithstanding, no Employee will be granted an
option under the Plan (i) to the extent that, immediately after the grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Section 424(d)
of the Code) would own capital stock of the Company or any Parent or Subsidiary of the Company and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of the capital stock of the Company or of any Parent or Subsidiary of the Company, or (ii) to the extent that his or her rights to purchase stock
under all employee stock purchase plans (as defined in Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company accrues at a rate which exceeds twenty-five
thousand dollars ($25,000) worth of stock (determined at the Fair Market Value of the stock at the time such option is granted) for each calendar year in which such option is outstanding at any time. 

        4.    Offering Periods.    The Plan will be implemented by consecutive, overlapping Offering Periods with a new
Offering Period commencing on the first Trading Day on or after May 1 and November 1 

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of
each year, or on such other date as the Administrator will determine, and continuing thereafter until terminated in accordance with Section 20; provided, however, that the first Offering
Period under the Plan will commence with the first Trading Day on or after the date on which the Securities and Exchange Commission declares the Company's Registration Statement effective and ending
on the first Trading Day on or after the earlier of (i) November 1, 2007 or (ii) twenty-seven (27) months from the beginning of the first Offering Period; and provided,
further, that the second Offering Period under the Plan will commence on the first Trading Day on or after May 1, 2006. The Administrator will have the power to change the duration of Offering
Periods (including the commencement dates thereof) with respect to future offerings without stockholder approval if such change is announced prior to the scheduled beginning of the first Offering
Period to be affected thereafter. 

        5.    Participation.    

        (a)    First Offering Period.    An Employee who has become a participant in the first Offering Period under the Plan
pursuant to Section 3(a) will be entitled to continue his or her participation in such Offering Period only if he or she submits to the Company's payroll office (or its designee) a properly
completed subscription agreement authorizing payroll deductions in the form provided by the Administrator for such purpose (i) no earlier than the effective date of the filing of the Company's
Registration Statement on Form S-8 with respect to the shares of Common Stock issuable under the Plan (the "Effective Date") and
(ii) no later than ten (10) business days from the Effective Date or such other period of time as the Administrator may determine (the "Enrollment
Window"). A participant's failure to submit the subscription agreement during the Enrollment Window pursuant to this Section 5(a) will result in the automatic
termination of his or her participation in the first Offering Period under the Plan. 

        (b)    Subsequent Offering Periods.    An Employee who is eligible to participate in the Plan pursuant to
Section 3(b) may become a participant by (i) submitting to the Company's payroll office (or its designee), on or before a date prescribed by the Administrator prior to an applicable
Enrollment Date, a properly completed subscription agreement authorizing payroll deductions in the form provided by the Administrator for such purpose, or (ii) following an electronic or other
enrollment procedure prescribed by the Administrator. 

        6.    Payroll Deductions.    

        (a)   At
the time a participant enrolls in the Plan pursuant to Section 5, he or she will elect to have payroll deductions made on each payday during the Offering
Period in an amount not exceeding 15% of the Compensation which he or she receives on each such payday. 

        (b)   Payroll
deductions authorized by a participant will commence on the first payday following the Enrollment Date and will end on the last payday in the Offering Period to
which such authorization is applicable, unless sooner terminated by the participant as provided in Section 10; provided, however, that for the first Offering Period under the Plan, payroll
deductions will commence on the first payday on or following the end of the Enrollment Window. 

        (c)   All
payroll deductions made for a participant will be credited to his or her account under the Plan and will be withheld in whole percentages only. A participant may not
make any additional payments into such account. 

        (d)   A
participant may discontinue his or her participation in the Plan as provided in Section 10, or may change the rate of his or her payroll deductions during the
Offering Period by (i) properly completing and submitting to the Company's payroll office (or its designee), on or before a date prescribed by the Administrator prior to an applicable Exercise
Date, a new subscription agreement authorizing the change in payroll deduction rate in the form provided by the Administrator for such purpose, or (ii) following an electronic or other
procedure prescribed by the Administrator. If a participant has not followed such procedures to change the rate of 

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payroll
deductions, the rate of his or her payroll deductions will continue at the originally elected rate throughout the Offering Period and future Offering Periods (unless terminated as provided in
Section 10). The Administrator may, in its sole discretion, limit the nature and/or number of payroll deduction rate changes that may be made by participants during any Offering Period or
Purchase Period. Any change in payroll deduction rate made pursuant to this Section 6(d) will be effective as of the first full payroll period following five (5) business days after the
date on which the change is made by the participant (unless the Administrator, in its sole discretion, elects to process a given change in payroll deduction rate more quickly). 

        (e)   Notwithstanding
the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(c), a participant's payroll deductions
may be decreased to zero percent (0%) at any time during a Purchase Period. Payroll deductions will recommence at the rate originally elected by the participant effective as of the beginning of the
first Purchase Period which is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 10. 

        (f)    At
the time the option is exercised, in whole or in part, or at the time some or all of the Company's Common Stock issued under the Plan is disposed of, the participant
must make adequate provision for the Company's federal, state, or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Common Stock. At any
time, the Company may, but will not be obligated to, withhold from the participant's compensation the amount necessary for the Company to meet applicable withholding obligations, including any
withholding required to make available to the
Company any tax deductions or benefits attributable to the sale or early disposition of Common Stock by the Employee. 

        7.    Grant of Option.    On the Enrollment Date of each Offering Period, each Employee participating in such Offering
Period will be granted an option to purchase on each Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of shares of Common Stock determined by dividing such
participant's payroll deductions accumulated prior to such Exercise Date and retained in the participant's account as of the Exercise Date by the applicable Purchase Price; provided that in no event
will a participant be permitted to purchase during each Purchase Period more than 1,500 shares of Common Stock (subject to any adjustment pursuant to Section 19), and provided further that such
purchase will be subject to the limitations set forth in Sections 3(c) and 13. The Employee may accept the grant of such option (i) with respect to the first Offering Period under the
Plan, by submitting a properly completed subscription agreement in accordance with the requirements of Section 5(a) on or before the last day of the Enrollment Window, and (ii) with
respect to any future Offering Period under the Plan, by electing to participate in the Plan in accordance with the requirements of Section 5(b). The Administrator may, for future Offering
Periods, increase or decrease, in its absolute discretion, the maximum number of shares of Common Stock that a participant may purchase during each Purchase Period of such Offering Period. Exercise of
the option will occur as provided in Section 8, unless the participant has withdrawn pursuant to Section 10. The option will expire on the last day of the Offering Period. 

        8.    Exercise of Option.    

        (a)   Unless
a participant withdraws from the Plan as provided in Section 10, his or her option for the purchase of shares of Common Stock will be exercised
automatically on the Exercise Date, and the maximum number of full shares subject to option will be purchased for such participant at the applicable Purchase Price with the accumulated payroll
deductions in his or her account. No fractional shares of Common Stock will be purchased; any payroll deductions accumulated in a participant's account which are not sufficient to purchase a full
share will be retained in the participant's account for the subsequent Purchase Period or Offering Period, subject to earlier withdrawal by the participant as provided in Section 10. Any other
monies left over in a 

5

 

participant's
account after the Exercise Date will be returned to the participant. During a participant's lifetime, a participant's option to purchase shares hereunder is exercisable only by him or
her. 

        (b)   Notwithstanding
any contrary Plan provision, if the Administrator determines that, on a given Exercise Date, the number of shares of Common Stock with respect to which
options are to be exercised may exceed (i) the number of shares of Common Stock that were available for sale under the Plan on the Enrollment Date of the applicable Offering Period, or
(ii) the number of shares of Common Stock available for sale under the Plan on such Exercise Date, the Administrator may in its sole discretion (x) provide that the Company will make a
pro rata allocation of the shares of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a
manner as will be practicable and as it will determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and continue all
Offering Periods then in effect, or (y) provide that the Company will make a pro rata allocation of the shares of Common Stock available for purchase on such Enrollment Date or Exercise Date,
as applicable, in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such
Exercise Date, and terminate any or all Offering Periods then in effect pursuant to Section 20. The Company may make pro rata allocation of the shares of Common Stock available on the
Enrollment Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional shares of Common Stock for issuance under the Plan by the
Company's shareholders subsequent to such Enrollment Date. 

        9.    Delivery.    As soon as administratively practicable after each Exercise Date on which a purchase of shares of
Common Stock occurs, the Company will arrange the delivery to each participant, as appropriate, the shares purchased upon exercise of his or her option in a form determined by the Administrator (in
its sole discretion) and pursuant to rules established by the Administrator. No participant will have any voting, dividend, or other shareholder rights with respect to shares of Common Stock subject
to any option granted under the Plan until such shares have been purchased and delivered to the participant as provided in this Section 9. 

        10.    Withdrawal.    

        (a)   Under
procedures established by the Administrator, a participant may withdraw all but not less than all the payroll deductions credited to his or her account and not yet
used to exercise his or her option under the Plan at any time by (i) submitting to the Company's payroll office (or its designee) a written notice of withdrawal in the form prescribed by the
Administrator for such purpose, or (ii) following an electronic or other withdrawal procedure prescribed by the Administrator. All of the participant's payroll deductions credited to his or her
account will be paid to such participant as promptly as practicable after the effective date of his or her withdrawal and such participant's option for the Offering Period will be automatically
terminated, and no further payroll deductions for the purchase of shares will be made for such Offering Period. If a participant withdraws from an Offering Period, payroll deductions will not resume
at the beginning of the succeeding Offering Period unless the participant re-enrolls in the Plan in accordance with the provisions of Section 5. 

        (b)   A
participant's withdrawal from an Offering Period will not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted
by the Company or in succeeding Offering Periods which commence after the termination of the Offering Period from which the participant withdraws. 

        11.    Termination of Employment.    Upon a participant's ceasing to be an Employee, for any reason, he or she will be
deemed to have elected to withdraw from the Plan and the payroll deductions 

6

 

credited
to such participant's account during the Offering Period but not yet used to purchase shares of Common Stock under the Plan will be returned to such participant or, in the case of his or her
death, to the person or persons entitled thereto under Section 15, and such participant's option will be automatically terminated. The preceding sentence notwithstanding, a participant who
receives payment in lieu of notice of termination of employment will be treated as continuing to be an Employee for the participant's customary number of hours per week of employment during the period
in which the participant is subject to such payment in lieu of notice. 

        12.    Interest.    No interest will accrue on the payroll deductions of a participant in the Plan. 

        13.    Stock.    

        (a)   Subject
to adjustment upon changes in capitalization of the Company as provided in Section 19, the maximum number of shares of Common Stock which will be made
available for sale under the Plan will be 1,000,000 shares of Common Stock plus an annual increase to be added on the first day of the Company's fiscal year beginning in fiscal year 2006 and ending in
2014, equal to the least of (i) 2.5% of the outstanding shares of Common Stock on such date, (ii) 1,500,000 shares of Common Stock, or (iii) an amount determined by the Board. 

        (b)   Shares
of Common Stock to be delivered to a participant under the Plan will be registered in the name of the participant or in the name of the participant and his or her
spouse. 

        14.    Administration.    The Board or a committee of members of the Board who will be appointed from time to time by,
and will serve at the pleasure of, the Board, will administer the Plan. The Administrator will have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan,
to determine eligibility, to adjudicate all disputed claims filed under the Plan and to establish such procedures that it deems necessary for administration of the Plan (including, without limitation,
to adopt such procedures and sub-plans as are necessary or appropriate to permit the participation in the Plan by employees who are foreign nationals or employed outside the United
States). The Administrator, in its sole discretion and on such terms and conditions as it may provide, may delegate to one or more individuals all or any part of its authority and powers under the
Plan. Every finding, decision and determination made by the Administrator (or its designee) will, to the full extent permitted by law, be final and binding upon all parties. 

        15.    Designation of Beneficiary.    

        (a)   A
participant may designate a beneficiary who is to receive any shares of Common Stock and cash, if any, from the participant's account under the Plan in the event of
such participant's death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares and cash. In addition, a participant may designate a
beneficiary who is to receive any cash from the participant's account under the Plan in the event of such participant's death prior to exercise of the option. If a participant is married and the
designated beneficiary is not the spouse, spousal consent will be required for such designation to be effective. 

        (b)   Such
designation of beneficiary may be changed by the participant at any time. In the event of the death of a participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such participant's death, the Company will deliver such shares and/or cash to the executor or administrator of the estate of the participant, or
if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more
dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate. 

        (c)   All
beneficiary designations under this Section 15 will be made in such form and manner as the Administrator may prescribe from time to time. 

7

 

        16.    Transferability.    Neither payroll deductions credited to a participant's account nor any rights with regard
to the exercise of an option or to receive shares of Common Stock under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15) by the participant. Any such attempt at assignment, transfer, pledge or other disposition will be without effect, except that the Company may treat
such act as an election to withdraw from an Offering Period in accordance with Section 10. 

        17.    Use of Funds.    All payroll deductions received or held by the Company under the Plan may be used by the
Company for any corporate purpose, and the Company will not be obligated to segregate such payroll deductions. Until shares of Common Stock are issued under the Plan (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the Company), a participant will only have the rights of an unsecured creditor with respect to such shares. 

        18.    Reports.    Individual accounts will be maintained for each participant in the Plan. Statements of account will
be given to participating Employees at least annually, which statements will set forth the
amounts of payroll deductions, the Purchase Price, the number of shares of Common Stock purchased and the remaining cash balance, if any. 

        19.    Adjustments, Dissolution, Liquidation or Change of Control.    

        (a)    Adjustments.    In the event that any dividend or other distribution (whether in the form of cash, Common
Stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Common Stock or other securities of the Company, or other change in the corporate structure of the Company affecting the Common Stock such that an adjustment is determined
by the Administrator (in its sole discretion) to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the
Administrator will, in such manner as it may deem equitable, adjust the number and class of Common Stock which may be delivered under the Plan, the Purchase Price per share and the number of shares of
Common Stock covered by each option under the Plan which has not yet been exercised, and the numerical limits of Sections 7 and 13. 

        (b)    Dissolution or Liquidation.    In the event of the proposed dissolution or liquidation of the Company, the
Offering Period then in progress will be shortened by setting a new Exercise Date (the "New Exercise Date"), and will terminate immediately prior to the
consummation of such proposed dissolution or liquidation, unless provided otherwise by the Board. The New Exercise Date will be before the date of the Company's proposed dissolution or liquidation.
The Board will notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant's option has been changed to the
New Exercise Date and that the participant's option will be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as
provided in Section 10. 

        (c)    Change of Control.    In the event of a Change of Control, each outstanding option will be assumed or an
equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the
option, any Purchase Periods then in progress will be shortened by setting a new Exercise Date (the "New Exercise Date") and any Offering Periods then
in progress will end on the New Exercise Date. The New Exercise Date will be before the date of the Company's proposed Change of Control. The Board will notify each participant in writing, at least
ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant's option has been changed to the New Exercise Date and that the participant's option will be
exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10. 

8

  

        20.    Amendment or Termination.    

        (a)   The
Administrator may at any time and for any reason terminate or amend the Plan. Except as provided in Section 19, no such termination can affect options
previously granted under the Plan, provided that an Offering Period may be terminated by the Administrator on any Exercise Date if the Administrator determines that the termination or suspension of
the Plan is in the best interests of the Company and its stockholders. Except as provided in Section 19 and this Section 20, no amendment may make any change in any option theretofore
granted which adversely affects the rights of any participant. To the extent necessary to comply with Section 423 of the Code (or any successor rule or provision or any other applicable law,
regulation or stock exchange rule), the Company will obtain stockholder approval in such a manner and to such a degree as required. 

        (b)   Without
stockholder consent and without regard to whether any participant rights may be considered to have been "adversely affected," the Administrator will be entitled
to change the Offering Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency
other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company's processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each
participant properly correspond with amounts withheld from the participant's Compensation, and establish such other limitations or procedures as the Administrator determines in its sole discretion
advisable which are consistent with the Plan. 

        (c)   In
the event the Administrator determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Board may, in its
discretion and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting consequence including: 

          (i)  altering
the Purchase Price for any Offering Period including an Offering Period underway at the time of the change in Purchase Price; 

         (ii)  shortening
any Offering Period so the Offering Period ends on a new Exercise Date, including an Offering Period underway at the time of the Board action; and 

        (iii)  allocating
shares. 

Such
modifications or amendments will not require stockholder approval or the consent of any Plan participants. 

        21.    Notices.    All notices or other communications by a participant to the Company under or in connection with the
Plan will be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. 

        22.    Conditions Upon Issuance of Shares.    Shares of Common Stock will not be issued with respect to an option
under the Plan unless the exercise of such option and the issuance and delivery of such shares pursuant thereto will comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, including the rules and regulations promulgated thereunder, the Exchange Act and the requirements of any stock exchange upon which the
shares may then be listed, and will be further subject to the approval of counsel for the Company with respect to such compliance. 

        As
a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being
purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion 

9

 

of
counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law. 

        23.    Term of Plan.    The Plan will become effective upon the earlier to occur of its adoption by the Board or its
approval by the stockholders of the Company. It will continue in effect for a term of twenty (20) years, unless sooner terminated under Section 20. 

        24.    Automatic Transfer to Low Price Offering Period.    To the extent permitted by any applicable laws,
regulations, or stock exchange rules if the Fair Market Value of the Common Stock on any Exercise Date in an Offering Period is lower than the Fair Market Value of the Common Stock on the Enrollment
Date of such Offering Period, then all participants in such Offering Period will be automatically withdrawn from such Offering Period immediately after the exercise of their option on such Exercise
Date and automatically re-enrolled in the immediately following Offering Period. 

10

 
 
 

SAMPLE SUBSCRIPTION AGREEMENT    
    

 
 

IKANOS COMMUNICATIONS, INC.    
    
    2004 EMPLOYEE STOCK PURCHASE PLAN    
    
    SUBSCRIPTION AGREEMENT    
    

	 	 	Original Application	 	Offering Date:	 	 
	
	 	 	 	 	 	

	 	 	Change in Payroll Deduction Rate	 	 	 	 
	
	 	 	 	 	 	 
	 	 	Change of Beneficiary(ies)	 	 	 	 
	
	 	 	 	 	 	 

	1.
	                        hereby
elects to participate in the Ikanos Communications, Inc. 2004 Employee Stock Purchase Plan (the "Plan")
and subscribes to purchase shares of the Company's Common Stock in accordance with this Subscription Agreement and the Plan.

	2.
	I
hereby authorize payroll deductions from each paycheck in the amount of            % of my Compensation on each payday (from 0 to 15%) during the Offering Period in accordance
with the Plan. (Please note that no fractional percentages are permitted.)

	3.
	I
understand that said payroll deductions will be accumulated for the purchase of shares of Common Stock at the applicable Purchase Price determined in accordance with the Plan. I
understand that if I do not withdraw from an Offering Period, any accumulated payroll deductions will be used to automatically exercise my option.

	4.
	I
have received a copy of the complete Plan. I understand that my participation in the Plan is in all respects subject to the terms of the Plan. I understand that my ability to
exercise the option under this Subscription Agreement is subject to shareholder approval of the Plan.

	5.
	Shares
of Common Stock purchased for me under the Plan should be issued in the name(s) of Employee or Employee and Spouse only.

	6.
	I
understand that if I dispose of any shares received by me pursuant to the Plan within 2 years after the Offering Date (the first day of the Offering Period during which I
purchased such shares) or one year after the Exercise Date, I will be treated for federal income tax purposes as having received ordinary income at the time of such disposition in an amount equal to
the excess of the fair market value of the shares at the time such shares were purchased by me over the price which I paid for the shares. I hereby agree to notify the Company
in writing within 30 days after the date of any disposition of my shares and I will make adequate provision for Federal, state or other tax withholding obligations, if any, which arise upon the
disposition of the Common Stock. The Company may, but will not be obligated to, withhold from my compensation the amount necessary to meet any applicable withholding obligation
including any withholding necessary to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by me. If I dispose of such shares at any
time after the expiration of the 2-year and 1-year holding periods, I understand that I will be treated for federal income tax purposes as having received income only at the
time of such disposition, and that such income will be taxed as ordinary income only to the extent of an amount equal to the lesser of (1) the excess of the fair market value of the shares at
the time of such disposition over the purchase price which I paid for the shares, or (2) 15% of the fair market value of the shares on the first day of the Offering Period. The remainder of the
gain, if any, recognized on such disposition will be taxed as capital gain.

	7.
	I
hereby agree to be bound by the terms of the Plan. The effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the Plan. 

11

 
	8.
	In
the event of my death, I hereby designate the following as my beneficiary(ies) to receive all payments and/or shares due me under the Plan: 

	NAME: (Please print)	 	

	 	 	(First)                        (Middle)
                        (Last)

	    
	 	    

	Relationship	 	 
	

    
	
 	

    

	Percentage Benefit	 	(Address)
	

NAME: (please print)
                                (First)
                                (Middle)
                                (Last)
	

    
 Relationship	
 	

    

	

    
 Percentage of Benefit	
 	

    
 (Address)
	

Employee's Social

Security Number:	
 	

 
	 	 	

	Employee's Address:	 	 
	 	 	    

	 	 	    

	 	 	    

        I
UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT WILL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME. 

	Dated:	 	 	 	 
	 	 	
	 	

	 	 	 	 	Signature of Employee
	 	 	 	 	 
	 	 	 	 	

	 	 	 	 	Spouse's Signature (If beneficiary other than spouse)

12

 
 
 

SAMPLE WITHDRAWAL NOTICE    
    

 
 

IKANOS COMMUNICATIONS, INC.    
    
    2004 EMPLOYEE STOCK PURCHASE PLAN    
    
    NOTICE OF WITHDRAWAL    
    

        The undersigned participant in the Offering Period of the Ikanos Communications, Inc. 2004 Employee Stock Purchase Plan that began
on                        ,
            (the "Offering Date") hereby notifies the Company that he or she hereby withdraws from the Offering Period. He or she hereby
directs the
Company to pay to the undersigned as promptly as practicable all the payroll deductions credited to his or her account with respect to such Offering Period. The undersigned understands and agrees that
his or her option for such Offering Period will be automatically terminated. The undersigned understands further that no further payroll deductions will be made for the purchase of shares in the
current Offering Period and the undersigned will be eligible to participate in succeeding Offering Periods only by delivering to the Company a new Subscription Agreement. 

	    	Name and Address of Participant:
	

 	

	

 	

	

 	

	

 	

Signature:
	

 	

	 	Date:            
	

 	

13

QuickLinks

IKANOS COMMUNICATIONS, INC. AMENDED AND RESTATED 2004 EMPLOYEE STOCK PURCHASE PLAN

SAMPLE SUBSCRIPTION AGREEMENT

IKANOS COMMUNICATIONS, INC. 2004 EMPLOYEE STOCK PURCHASE PLAN SUBSCRIPTION AGREEMENT

SAMPLE WITHDRAWAL NOTICE

IKANOS COMMUNICATIONS, INC. 2004 EMPLOYEE STOCK PURCHASE PLAN NOTICE OF WITHDRAWALQuickLinks
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Exhibit 10.18    
    

IKANOS COMMUNICATIONS, INC.  

 CHANGE OF CONTROL AGREEMENT  

        This Change of Control Agreement (the "Agreement") is made and entered into by and between Chris Smith ("Executive") and Ikanos Communications, Inc. (the
"Company"), effective as of August 22, 2005 (the "Effective Date"). 

RECITALS  

        1.     It
is expected that the Company from time to time will consider the possibility of an acquisition by another company or other change of control. The Board believes that
it is in the best interests of the Company and its stockholders to provide Executive with certain rights following a Change of Control (as defined below). 

        2.     Certain
capitalized terms used in the Agreement are defined in Section 4 below. 

AGREEMENT  

        NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows: 

        1.    Term of Agreement.    This Agreement will terminate upon the date that all of the obligations of the parties
hereto with respect to this Agreement have been satisfied, or, if earlier, on the date prior to a Change of Control in which Executive is no longer employed by the Company. 

        2.    At-Will Employment.    The Company and Executive acknowledge that Executive's employment is and will
continue to be at-will, as defined under applicable law. 

        3.    Treatment of Options Following a Change of Control.    If within twelve (12) months following a Change of
Control: (i) Executive resigns from his employment with the Company (or any parent or subsidiary of the Company) for Good Reason or (ii) the Company (or any parent or subsidiary of the
Company) terminates Executive's employment without Cause, and Executive signs and does not revoke a release of claims with the Company in a form acceptable to the Company, then: 

        Twenty-five
percent (25%) of all unvested shares subject to Executive's then outstanding options to purchase shares of the Company's common stock, granted pursuant to the
Company's 1999 Stock Plan or other employee stock incentive arrangements approved by the Company's Board of Directors, shall become fully vested and exercisable as of the date of such termination.
Such vested options will remain exercisable following such termination for the period prescribed in the respective option agreements. 

        4.    Definition of Terms.    The following terms referred to in this Agreement will have the following meanings: 

        (a)    Cause.    "Cause" means: (i) Executive's failure to perform his assigned duties or responsibilities
after notice thereof from the Company describing Executive's failure to perform such duties or responsibilities; (ii) Executive engaging in any act of dishonesty, fraud or misrepresentation;
(iii) Executive's violation of any federal or state law or regulation applicable to the Company's business; (iv) Executive's breach of any confidentiality agreement or invention
assignment agreement between Executive and the Company; or (v) Executive being convicted of, or entering a plea of nolo contendere to, any crime
or committing any act of moral turpitude. 

1

 

        (b)    Change of Control.    a "Change of Control" means either (i) the acquisition of the Company by another
entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation or stock transfer, but excluding any such transaction
effected primarily for the purpose of changing the domicile of the Company), unless the Company's stockholders of record immediately prior to such transaction or series of related transactions hold,
immediately after such transaction or series of related transactions, at least 50% of the voting power of the surviving or acquiring entity (provided that the sale by the Company of its securities for
the purposes of raising additional funds shall not constitute a Change of Control hereunder); or (ii) a sale of all or substantially all of the assets of the Company. 

        (c)    Good Reason.    "Good Reason" shall mean in connection with a Change of Control and without Executive's express
written consent (i) a reduction of Executive's duties, position or responsibilities; (ii) a reduction by the Company in the base salary, as may be applicable, of Executive as in effect
immediately prior to such reduction; (iii) a material reduction by the Company in the kind or level of employee benefits to which Executive is entitled immediately prior to such reduction with
the result that Executive's overall benefits package is significantly reduced; or (iv) the relocation of Executive to a facility or a location more than 50 miles from Executive's then present
location. 

        5.    Successors.    

        (a)    The Company's Successors.    Any successor to the Company (whether direct or indirect and whether by purchase,
merger, consolidation, liquidation or otherwise) to all or substantially all of the Company's business and/or assets will assume the obligations under this Agreement and agree expressly to perform the
obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this
Agreement, the term "Company" will include any successor to the Company's business and/or assets which executes and delivers the assumption agreement described in this Section 5(a) or which
becomes bound by the terms of this Agreement by operation of law. 

        (b)    Executive's Successors.    The terms of this Agreement and all rights of Executive hereunder will inure to the
benefit of, and be enforceable by, Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 

        6.    Notice.    

        (a)    General.    Notices and all other communications contemplated by this Agreement will be in writing and will be
deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of Executive, mailed notices
will be addressed to him at the home address which he most recently communicated to the Company in
writing. In the case of the Company, mailed notices will be addressed to its corporate headquarters, and all notices will be directed to the attention of its President. 

        (b)    Notice of Termination.    During the twelve (12) month period following a Change of Control, any
termination of employment by the Company for Cause or by Executive for Good Reason will be communicated by a notice of termination to the other party hereto given in accordance with
Section 6(a) of this Agreement. Such notice will set forth in reasonable detail the facts and circumstances claimed to provide a basis for such termination, and will specify the termination
date (which will be not more than thirty (30) days after the giving of such notice). The failure by Executive to include in the notice any fact or circumstance which contributes to a showing of
Good Reason will not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing his rights hereunder. 

2

 

        7.    Miscellaneous Provisions.    

        (a)    Waiver.    No provision of this Agreement will be modified, waived or discharged unless the modification,
waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive). No waiver by either party of any breach of, or of compliance
with, any condition or provision of this Agreement by the other party will be considered a waiver of any other condition or provision or of the same condition or provision at another time. 

        (b)    Headings.    All captions and section headings used in this Agreement are for convenient reference only and do
not form a part of this Agreement. 

        (c)    Entire Agreement.    This Agreement constitutes the entire agreement of the parties hereto and supersedes in
their entirety all prior representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties with respect to the subject matter
hereof. 

        (d)    Choice of Law.    The validity, interpretation, construction and performance of this Agreement will be governed
by the laws of the State of California (with the exception of its conflict of laws provisions). 

        (e)    Severability.    The invalidity or unenforceability of any provision or provisions of this Agreement will not
affect the validity or enforceability of any other provision hereof, which will remain in full force and effect. 

        (f)    Counterparts.    This Agreement may be executed in counterparts, each of which will be deemed an original, but
all of which together will constitute one and the same instrument. 

[Signature
Page Follows] 

3

 

        IN
WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year set forth below. 

	COMPANY	 	IKANOS COMMUNICATIONS, INC.
	

 	
 	

By:	

/s/  RAJESH VASHIST      
 Rajesh Vashist
	

 	
 	

Title:	

President and CEO
	

EXECUTIVE	
 	

 	

/s/  CHRIS SMITH      
 Chris Smith

4

QuickLinks

Exhibit 10.18

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