Document:

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                                                                   Exhibit 10.3

                               [VIXEL LETTERHEAD]

August 20, 1998

Mr. Kurtis Adams
[Address]

Dear Kurtis,

I'm pleased to offer you the position of Vice President, Finance and Chief
Financial Officer, reporting to me. All of the people who participated in your
interviews share my enthusiasm for your capabilities and potential for your
success at Vixel.

The following compensation package has been structured to reflect the
contributions we believe you have to offer in making Vixel Corporation an
extraordinary success.

-       BASE SALARY - An annualized rate of $140,000, payable at such times as
        Vixel payroll obligations are normally met, which is currently every two
        weeks. Your salary will be reviewed annually.

-       EQUITY PARTICIPATION - Vixel management will recommend that you be
        granted an option to purchase 200,000 shares of common stock at the
        first Board meeting after you have started employment with the Company.
        This grant will be subject to Board approval.

-       VESTING - Upon the Grant Date of your options, your options will vest
        per the attached schedule.

-       ACCELERATED VESTING --During the first year of your employment with
        Vixel, upon the occurrence of both of (I) a change in control and (ii)
        your termination without cause and/or a significant change in your
        responsibilities by an acquiring entity, then the one year cliff in
        vesting of your options shall be waived plus one year of subsequent
        unvested options shall immediately vest. In addition, after you have
        completed one year of employment with Vixel, upon the occurrence of both
        of (I) a change in control and (ii) your termination without cause
        and/or a significant change in your responsibilities by an acquiring
        entity, then the greater of half of your unvested options or one year of
        your unvested options shall immediately vest.

-       EARLY EXERCISE - Subject to Board approval, you will have the
        opportunity to early exercise all of your options. At your request,
        Vixel will accept a full recourse Promissory Note for the full exercise
        price and the interest which will accrue at 5.75% per annum to avoid
        imputed interest.

-       VACATION - You will receive twelve days of vacation during your first
        year, plus holidays.

-       LIFE INSURANCE - Vixel shall maintain, at the Company's expense, term
        life insurance for the benefit of your elected beneficiaries in the
        amount of two times your annual salary at a maximum of $350,000.

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-       HEALTH INSURANCE - Vixel provides group medical and dental insurance
        through the Mutual of Omaha Company at no cost for its employees. The
        premium for the dependent coverage is currently $50.00 per month.

-       LONG TERM DISABILITY - Vixel will maintain a long term disability plan
        for you with benefits up to 66 2/3% of pre-disability earnings to a
        maximum of $10,000 per month.

-       401(K) - You will be eligible to enroll in the 40l(k) plan after six
        months of employment. As the enrollment period is at the beginning of
        each quarter, you will be able to enroll April 1, 1999 if you begin
        employment with the Company before September 30,1998. Currently, Vixel
        matches up to 6% on a quarterly basis.

As a condition of employment you will be required to sign the Company standard
at will Employment Agreement, which contains a customary covenant not to
compete, assignment of rights, and an agreement to keep company information
confidential.

We believe that the challenges we face at Vixel will be exciting to you. We look
forward to your acceptance of our offer by returning one signed copy to me. Our
objective is to close this discussion this week and to have you begin full-time
employment with Vixel by September 21 or earlier. If you have any additional
questions or require clarification on any points, please feel free to give me a
call at your convenience

Very truly yours,

/s/ Greg Olbright

Greg Olbright
President and CEO

I hereby accept employment with Vixel Corporation under the terms stated in this
letter.

/s/ Kurtis L. Adams                                          8/20/98
---------------------------                         ---------------------------
Name                                                           Date

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                                Vesting Schedule

<TABLE>
<CAPTION>
                           Amount                  Cumulative
   Month                   Vesting                Vested Amount
   -----                   -------                -------------
<S>                       <C>                    <C>
   1-11                         0                         0
     12                    43,750                    43,750
     13                     3,646                    47,396
     14                     3,646                    51,042
     15                     3,646                    54,688
     16                     3,646                    58,334
     17                     3,646                    61,980
     18                     3,646                    65,626
     19                     3,646                    69,272
     20                     3,646                    72,918
     21                     3,646                    76,564
     22                     3,646                    80,210
     23                     3,646                    83,856
     24                     3,646                    87,502
     25                     3,646                    91,148
     26                     3,646                    94,794
     27                     3,646                    98,440
     28                     3,646                   102,086
     29                     3,646                   105,732
     30                     3,646                   109,378
     31                     3,646                   113,024
     32                     3,646                   116,670
     33                     3,646                   120,316
     34                     3,646                   123,962
     35                     3,646                   127,608
     36                     3,646                   131,254
     37                     5,729                   136,983
     38                     5,729                   142,712
     39                     5,729                   148,441
     40                     5,729                   154,170
     41                     5,729                   159,899
     42                     5,729                   165,628
     43                     5,729                   171,357
     44                     5,729                   177,086
     45                     5,729                   182,815
     46                     5,729                   188,544
     47                     5,729                   194,273
     48                     5,727                   200,000
</TABLE><PAGE>   1

                                                                   Exhibit 10.4

                               [VIXEL LETTERHEAD]

March 21, 2000

Mr. Thomas Hughes
[Address]

Dear Tom:

I'm pleased to offer you the position of Vice President, Product Development,
reporting to Jim McCluney, President and Chief Executive Officer. All of the
people who have interviewed with you share my enthusiasm for your capabilities
and potential for your success at Vixel. We would like you to begin your
employment on or before March 21, 2000.

Vixel offers a dynamic work environment that encourages excellent performance.
We hope that you will join us as we build a successful company seeking to make
its mark in the fibre channel industry by assembling a talented team of
employees dedicated to providing quality products.

The following compensation package has been structured to reflect the
contributions we believe you have to offer in making Vixel Corporation an
extraordinary success.

1.      BASE SALARY - An annualized rate of $200,000 payable at such times as
        Vixel payroll obligations are normally met, which is currently every two
        weeks.

2.      EQUITY PARTICIPATION - Vixel will grant you an option to purchase
        250,000 shares of Vixel's Common Stock. The option grant is subject to
        approval of the Board of Director's Compensation Committee, which will
        review the request at the first meeting after you begin employment. The
        exercise price of the option will be the fair market value of the
        Company's Common Stock on the date the grant is approved. Your options
        will vest over a four-year period, with 25% occurring one year after the
        Grant Date and 1/16th vesting quarterly thereafter until fully vested.

3.      CHANGE IN CONTROL. During the first year of your employment with Vixel,
        upon the occurrence of both (i) a change in control and (ii) your
        termination without cause or a significant change in your
        responsibilities by an acquiring entity, then one year of

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Thomas Hughes
March 21, 2000
Page 2

        subsequent unvested options shall immediately vest. After you have
        completed one year of employment with Vixel, upon the occurrence of both
        (i) a change in control and (ii) your termination without cause or a
        significant change in your responsibilities by an acquiring entity, then
        the greater of half of your unvested options or one year of your
        unvested options shall immediately vest.

4.      SIGN-ON BONUS - A one time sign-on bonus of $30,000 will be payable in
        four equal payments of $7,500, beginning with the first payroll after
        your start date and subsequently with the first payroll after the end of
        each of the next three calendar quarters. You must be employed at the
        time each payment is due in order to be eligible to receive such
        payment.

5.      INCENTIVE BONUS PLAN - For your first year of employment, you will be
        eligible for an incentive bonus of up to $45,000. The incentive bonus
        will be earned in four equal quarterly amounts of $11,250 each,
        beginning with the second fiscal quarter of 2000 and ending with the
        first fiscal quarter of 2001. The bonuses will be based on the
        successful completion of goals and objectives to be determined by you
        and Jim McCluney. The goals and objectives for the second fiscal quarter
        of 2000 will be agreed to by April 28, 2000. Subsequent quarterly goals
        and objectives will be established prior to the end of the first month
        of such quarter. You must be employed at the end of the quarter in order
        to be eligible to earn that quarter's bonus.

6.      RELOCATION - Normal provisions for relocation, including commissions,
        mortgage origination fees, taxes, physical relocation costs and
        incidental moving expenses, subject to documentation, up to a maximum of
        $75,000. Items for which the relocation allowance can be used include
        costs to relocate your household goods and motor vehicles to Washington,
        costs to physically move you and your family members to Washington, and
        normal costs incurred as a result of the sale of your current primary
        residence. The $75,000 relocation allowance will first be used to cover
        the physical move of your household goods, motor vehicles and family
        members to Washington. Any remaining amount of the allowance can then be
        used to cover the normal costs incurred as a result of the sale of your
        current primary residence. The Company will provide federal tax gross up
        on any relocation reimbursements included in the $75,000 that are not
        deductible for federal income tax purposes.

7.      BENEFITS - As an employee, once you meet certain eligibility
        requirements, you will be eligible to participate in Vixel's current
        benefit programs, which are generally available to other Vixel
        employees. These benefit programs currently include medical, dental,
        vision, life, short and long term disability insurance. Additionally,
        Vixel offers employees a 401(k) plan and an Employee Stock Purchase
        Plan.

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Thomas Hughes
March 21, 2000
Page 3

8.      TERMINATION WITHOUT CAUSE. Vixel shall have the right to terminate your
        employment with Vixel at any time without cause. In the event your
        employment is terminated by Vixel without cause or there is a
        significant change in your responsibilities, benefits, or working
        location, and you resign as a result of such significant changes, Vixel
        shall pay you severance equal to six months base salary at the rate in
        effect at the time of termination less all required deductions and,
        payable in the normal payroll cycle. Vixel will also pay for your COBRA
        medical/dental coverage for the severance period. In consideration for
        such Severance Benefits, you agree to execute a General Release that
        releases Vixel from liability for any and all claims, known or unknown
        that you may have at the time of the termination.

9.      TEMPORARY LIVING EXPENSES AND FLIGHTS TO CONNECTICUT - We agree that you
        will move to Washington three months prior to your family moving. Vixel
        will assist you in locating and securing temporary housing in the
        Bothell area. We will cover temporary living expenses in an amount not
        to exceed $2,000 per month for a period of up to three months.

        Vixel will reimburse you, via your expense report, one trip to
        Connecticut every other week during the three months of temporary
        living. It is understood that you will book your round trip flights far
        enough in advance to secure the most competitive price.

As a condition of employment you will be required to sign the Company standard
Proprietary Information and Inventions Agreement and the Prior Inventions
document, both of which are enclosed. Please sign and return them with this
letter. As an employee, you are also expected to comply with Company policies as
determined from time to time by Vixel's Board of Directors and/or Management.

The Federal Immigration and Naturalization Services requires Vixel to certify
that each of its employees is lawfully authorized to work in the United States.
In this regard, enclosed is an Employment Eligibility Verification form that
requires your signature and details the documents that must be reviewed by Vixel
at the time you commence employment. Please read this form and bring the
appropriate documentation with you on your first day.

Except as otherwise described in this offer letter, Vixel Corporation employs
its employees at will, which permits the company to change the terms and
conditions of employment with or without notice, with or without cause,
including, but not limited to termination, demotion, transfer, compensation,
benefits, duties, and location of work. If you have any additional questions or
require clarification on any points, please feel free to give me a call at your
convenience.

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Thomas Hughes
March 21, 2000
Page 4

If this letter correctly states our understanding and you agree to begin working
on the date shown above, please sign below and return this letter, along with
the Proprietary Information and Inventions Agreement and the Prior Inventions
document to Human Resources in the enclosed self-addressed envelope. A copy of
this letter is enclosed for your records.

This offer is valid for a period of five business days from the date hereof and
subject to favorable references.

This is an exciting time for all of us at Vixel. We are confident that you will
find your work here stimulating and rewarding. We look forward to hearing from
you soon. Please feel free to contact me if you have any questions or concerns.

Sincerely,

/s/ Kurtis L. Adams

Kurtis L. Adams
Chief Financial Officer

Enclosures

CR/ms

I hereby accept employment with Vixel Corporation based on the terms and
conditions outlined in this letter. I understand and agree that this letter and
the related Proprietary Information and Inventions Agreement set forth the
entire understanding of my employment with Vixel and supersede all prior oral
and written agreements related to such employment. I understand and agree that
my employment is "at will" as indicated previously in this letter.

/s/ Thomas Hughes                                             21 March 00
----------------------------                        ----------------------------
Thomas Hughes                                                    Date

My anticipated start date will be             21 March 00
                                 -----------------------------------

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