Exhibit 10.1
IXIA
AMENDED AND RESTATED
NON-EMPLOYEE DIRECTOR EQUITY INCENTIVE PLAN
SECTION I. PURPOSE
     The purpose of the Ixia Amended and Restated Non-Employee Director Equity
Incentive Plan (this “Plan”) is to provide an incentive which will motivate and
reward “Non-Employee Directors” of the Company and promote the best interests
and long-term performance of the Company by encouraging the ownership of the
Company’s stock by such “Non-Employee Directors.” None of the Options granted
pursuant to this Plan will qualify as an Incentive Stock Option, as defined in
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).
SECTION II. CERTAIN DEFINITIONS
     A. “1933 Act” shall mean the Securities Act of 1933, as amended from time
to time.
     B. “2004 Restatement” means the Original Plan, as amended, restated and
approved by the shareholders of the Company at the Company’s 2004 Annual Meeting
of Shareholders held on May 13, 2004.
     C. “2004 Restatement Effective Date” means May 13, 2004.
     D. “2007 Restatement Effective Date” means May 25, 2007, provided that this
Plan is approved by the shareholders of the Company at the 2007 Annual Meeting
of Shareholders of the Company on such date. If this Plan is not so approved by
the shareholders of the Company, then this Plan will not become effective, the
2004 Restatement shall remain in full force and effect, and the Company may
continue to make grants pursuant to the terms of the 2004 Plan Restatement.
     E. “Annual Meeting of Shareholders” shall mean an Annual Meeting of
Shareholders of the Company.
     F. “Award” means any Option or Restricted Stock Unit granted pursuant to
the provisions of the Plan.
     G. “Award Agreement” means any written agreement, contract or other
instrument or document evidencing and reflecting the terms of any Award granted
pursuant to the provisions of the Plan.
     H. “Board” or “Board of Directors” means the Board of Directors of the
Company.
     I. “Common Stock” means the shares of the Common Stock, without par value,
of the Company.
     J. “Committee” means the Committee appointed by the Board in accordance
with Section XII.C. of the Plan, if one is appointed.

 

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     K. “Company” means Ixia, a California corporation, or any successor
thereto.
     L. “Disability” means the inability of the Participant to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than 12 months.
     M. “Dividend Equivalents” means any right granted under Section VIII.C. of
the Plan.
     N. “Fair Market Value,” as of a given date, means the fair market value of
one share of Common Stock, determined as follows:
          (i) If the Common Stock is listed on any established stock exchange or
on a national market system, including without limitation the Nasdaq Global
Select Market or the Nasdaq Global Market of The Nasdaq Stock Market, the fair
market value per share shall be the closing sales price (or the closing bid
price, if no sales were reported) on such exchange or system on the date of
grant of the Award or other applicable date (or, if such date is not a trading
day, on the last trading day preceding such date), as such closing sales price
(or closing bid price) is reported in such source as the Board deems reliable;
          (ii) If the Common Stock is regularly quoted by a recognized
securities dealer but sales prices are not reported, the fair market value per
share shall be the average of the closing bid and asked prices of the Common
Stock on the date of grant or other applicable date (or, if there are no such
prices for such date, on the last trading day preceding such date on which there
were such reported prices) as reported in such source as the Board deems
reliable; or
          (iii) If there is no public market for the Common Stock, the fair
market value per share shall be determined by the Board in good faith.
     O. “Non-Employee Director” means a person who is a member of the Board of
Directors but who is not an employee of the Company or any subsidiary of the
Company.
     P. “Option” means a stock option to purchase Common Stock granted to a
Participant pursuant to the Plan.
     Q. “Original Plan” means the Ixia Director Stock Option Plan adopted by the
Board on September 1, 2000 in effect prior to the 2004 Restatement.
     R. “Participant” means a Non-Employee Director who is granted an Award.
     S. “Plan” means this Ixia Amended and Restated Non-Employee Director Equity
Incentive Plan, as adopted by the Board on April 23, 2007.
     T. “Restricted Stock Unit” means any unit granted under Section VI of this
Plan evidencing the right to receive one Share of Common Stock at some future
date.

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     U. “Shares” means shares of the Common Stock, any shares into which such
Shares may be converted in accordance with Section IX of the Plan.
SECTION III. EFFECTIVENESS OF PLAN
     This Plan restatement shall become effective as of the date of approval of
the shareholders of the Company at the Annual Meeting of Shareholders scheduled
to be held on May 25, 2007 (the “2007 Annual Meeting”). No Awards will be
granted under this Plan prior to obtaining approval of the shareholders of the
Company at the 2007 Annual Meeting. If this Plan is not so approved by the
shareholders of the Company at the 2007 Annual Meeting, then (i) this Plan will
not become effective for any purpose, and (ii) the 2004 Restatement shall remain
in full force and effect and the Company may continue to make grants pursuant to
the terms and conditions of the 2004 Restatement, including without limitation
any grants to be made on the date of the 2007 Annual Meeting.
SECTION IV. STOCK
     The maximum aggregate number of shares of Common Stock which may be
reserved for issuance under this Plan is 400,000 or the number of shares of
stock to which such Shares shall be adjusted as provided in Section IX of the
Plan. Shares subject to, but not sold or issued under, any Award terminating,
expiring, forfeited or canceled for any reason prior to issuance of such Shares
shall again become available for Awards thereafter granted under the Plan and
the same shall not be deemed an increase in the number of Shares reserved for
issuance under the Plan.
SECTION V. ELIGIBILITY
     Awards may be granted under the Plan only to Non-Employee Directors.
SECTION VI. INITIAL AWARD; ANNUAL AWARDS
     A. Initial Award upon Election for the First Time as a Non-Employee
Director. Each Non-Employee Director who is elected or appointed for the first
time to the Board, whether through election by the shareholders of the Company
or through appointment by the Board, shall automatically be granted, effective
as of the date of such election or appointment, an Award as determined in
accordance with this Section VI.A.; provided, however, that any director who is
an employee of the Company and who ceases to be an employee but remains a
director shall not be eligible to receive any Award pursuant to this
Section VI.A. upon such change in status. The Award granted to a Non-Employee
Director pursuant to this Section VI.A. shall be as follows:
          (i) If the Non-Employee Director is elected or appointed for the first
time on or after the 2007 Restatement Effective Date, the number of Restricted
Stock Units equal to the sum of 10,000 plus (1) if the Non-Employee Director is
elected or appointed for the first time on the date of an Annual Meeting of
Shareholders, the number of Restricted Stock Units (as set forth in
Section VI.B.(i) below) issuable to Non-Employee Directors re-elected on such
date, or (2) if the Non-Employee Director is elected or appointed for the first
time on a date other than the date of an Annual Meeting of Shareholders, the
number of

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Restricted Stock Units obtained by multiplying (a) the number of Restricted
Stock Units (as set forth in Section VI.B.(i) below) issuable to Non-Employee
Directors at the most recent Annual Meeting of Shareholders preceding such date
by (b) a fraction, the numerator of which is equal to 12 minus the number of
full months that have elapsed since the most recent Annual Meeting of
Shareholders and the denominator of which is 12.
          (ii) If the Non-Employee Director is elected or appointed for the
first time on or after the 2004 Restatement Effective Date but prior to the 2007
Restatement Effective Date, an Option to purchase a sum of 25,000 shares of
Common Stock plus (1) 10,000 shares of Common Stock, if the Non-Employee
Director is elected or appointed for the first time on the date of an Annual
Meeting of Shareholders of the Company or (2) if the Non-Employee Director is
elected or appointed for the first time on a date other than the date of an
Annual Meeting of Shareholders, the product obtained by multiplying 10,000 by a
fraction, the numerator of which is equal to 12 minus the number of full months
that have elapsed since the most recent Annual Meeting of Shareholders and the
denominator of which is 12.
          (iii) If the Non-Employee Director is elected or appointed for the
first time prior to the 2004 Restatement Effective Date, an Option to purchase
10,000 shares of Common Stock.
     B. Annual Awards upon Re-Election as a Non-Employee Director. Each
Non-Employee Director shall automatically be granted an Award, as determined in
accordance with this Section VI.B., on the date of each Annual Meeting of
Shareholders at which the Non-Employee Director is re-elected to the Board of
Directors; provided, however, that prior to the 2004 Restatement Effective Date,
a Non-Employee Director shall be entitled to receive a re-election grant under
this Section VI.B. only if he or she has been a director of the Company for at
least six months preceding the Award date. The Award granted to a Non-Employee
Director pursuant to this Section VI.B. shall be as follows:
          (i) If the Non-Employee Director is re-elected on or after the 2007
Restatement Effective Date, the number of Restricted Stock Units set forth below
for the applicable calendar year during which the grant is made:

      Year of Annual Meeting   Number of Restricted Stock Units
2007
  4,000
2008
  4,200
2009
  4,410
2010
  4,630

          (ii) If the Non-Employee Director is re-elected on or after the 2004
Restatement Effective Date but prior to the 2007 Restatement Effective Date, an
Option to purchase 10,000 shares of Common Stock.

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          (iii) If the Non-Employee Director is re-elected prior to the 2004
Restatement Effective Date, an Option to purchase 5,000 shares of Common Stock.
SECTION VII. TERMS AND CONDITIONS OF OPTIONS
     A. Option Exercise Price. The exercise price of the Common Stock subject to
all Options granted hereunder shall be 100% of the Fair Market Value of the
Common Stock on the date of the grant of such Options.
     B. Term and Vesting of Options.
          (i) Each Option granted pursuant to Sections VI.A. and VI.B. shall
have a term of seven years, subject to earlier termination pursuant to
Section IX.B. of the Plan.
          (ii) Each Option granted on or after 2004 Restatement Effective Date
pursuant to Section VI.A. shall vest and become exercisable in eight equal
quarterly installments commencing on the last day of the calendar quarter in
which the Option is granted and continuing on the last day of each of the seven
calendar quarters thereafter, as long as the optionee continues to serve as a
Non-Employee Director on such vesting dates.
          (iii) Each Option granted prior to the 2004 Restatement Effective Date
pursuant to Section VI.A. shall vest and become exercisable in four equal
quarterly installments commencing on the last day of the calendar quarter in
which the Option is granted and continuing on the last day of each of the three
calendar quarters thereafter, as long as the optionee continues to serve as a
Non-Employee Director on such vesting dates; provided, however, that with
respect to such Options granted prior to the 2004 Restatement Effective Date and
except as provided in Subsection D(ii) of this Section VII, no Option may be
exercised at any time unless the Participant is then a Non-Employee Director and
has been so continuously since the granting of the Option.
          (iv) Each Option granted pursuant to Section VI.B. will vest and
become exercisable in four equal quarterly installments commencing on the last
day of the calendar quarter in which the Option is granted and continuing on the
last day of each of the three calendar quarters thereafter, as long as the
optionee continues to serve as a Non-Employee Director on such vesting dates;
provided, however, that with respect to such Options granted prior to the 2004
Restatement Effective Date and except as provided in Subsection D(ii) of this
Section VII, no Option may be exercised at any time unless the Participant is
then a Non-Employee Director and has been so continuously since the granting of
the Option.
          (v) For Options granted on or after the 2004 Restatement Effective
Date pursuant to Subsections A or B of Section VI, each vested installment of
Options will expire four years after vesting, subject to earlier termination
pursuant to Section IX.B. of this Plan.
          (vi) An Option may not be exercised for a fraction of a Share.

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     C. Termination of Service.
          (i) Options granted on or after the 2004 Restatement Effective Date
shall not terminate or expire as to unexercised vested installments as a result
of a Participant’s voluntary or involuntary termination of service as a
Non-Employee Director, including as a result of his or her death or Disability.
In the event of any such termination, the Participant (or his or her personal
representative if the Participant has died) may, at any time through the
expiration of the four-year exercise period for any installment vested on the
date of such termination, exercise the Options as to all or part of such vested
installment. To the extent that the Participant is not entitled to exercise the
Options at the date of such termination, or to the extent that vested
installments of Options at the time of termination of service are not exercised
prior to the four-year anniversary of the date on which such installments
vested, the Options shall terminate. In no event shall any such Options be
exercisable as to any vested installment after the expiration of the four-year
exercise period applicable to such installment.
          (ii) For Options granted prior to the 2004 Restatement Effective Date,
if a Participant voluntarily or involuntarily terminates his or her service as a
Non-Employee Director for any reason other than death or Disability, the
Participant may exercise the Options at any time within 90 days after the date
of such termination, but only to the extent that the Participant was entitled to
exercise the Options on the date of termination. In no event shall such Options
be exercisable after the expiration of the term of the Options, and any Options
not so exercised shall expire. For Options granted prior to the Amendment
Effective Date, if a Participant’s service as a Non-Employee Director is
terminated by reason of death or Disability, the Participant, or the
Participant’s personal representative if the Participant has died, may exercise
any or all of the Participant’s unexercised Options which are vested on the date
of termination, provided such exercise occurs within 12 months after the date of
the Participant’s death or termination of service as a result of Disability but
not after the expiration of the term of the Options.
     D. Payment of Option Exercise Price. The exercise price is to be paid in
full upon exercise of an Option, either (i) in cash, (ii) by check, (iii) in
shares of Common Stock having a Fair Market Value on the date of surrender equal
to the aggregate cash exercise price of the Option being exercised, (iv) by
consideration received by the Company under a cashless exercise program
acceptable to the Company in connection with the Plan, or (v) by any combination
of the payment methods specified in the foregoing clauses (i), (ii), (iii) and
(iv); provided, however, that shares of Common Stock tendered in payment must be
shares owned by the Non-Employee Director and registered in the Non-Employee
Director’s name and may not include shares of Common Stock acquired by the
Non-Employee Director through the exercise of an Option granted less than six
months prior to the date of exercise of the Option being exercised.
     E. Option Agreements. An Award of an Option granted prior to the 2004
Restatement Effective Date shall be evidenced by a written agreement in
substantially the form of the agreement attached hereto as Attachment I. An
Award of an Option granted on or after the 2004 Restatement

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Effective Date shall be evidenced by a written agreement in substantially the
form of the agreement attached hereto as Attachment II.
     F. Pro Rata Allocation. In the event that the Options to be granted under
the Plan on a specific grant date would exceed the number of shares then
available for grant hereunder, the shares available for grant shall be allocated
on a pro rata basis among the Non-Employee Directors who are entitled to be
granted Options on such grant date.
     G. Procedure for Exercise. An Option shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance with
the terms of the Option agreement by the person entitled to exercise the Option
and full payment for the shares with respect to which the Option is exercised
has been received by the Company. Full payment may consist of any consideration
and method of payment allowable under Subsection E of this Section VII. Until
the issuance (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company) of the stock certificate
evidencing such shares, no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the shares to be issued upon
exercise of the Option, notwithstanding the exercise of the Option. A share
certificate for the number of shares acquired upon exercise of an Option shall
be issued as soon as administratively practicable after such exercise; provided,
however, that if the shares are covered by a registration statement under the
1933 Act or can otherwise be issued without a legend restricting their transfer,
the Participant may direct that the shares be issued and delivered by electronic
transfer to a securities account maintained in the Participant’s name. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section IX of the Plan.
          Exercise of an Option in any manner shall result in a decrease in the
number of shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of shares as to which the
Option is exercised.
SECTION VIII. TERMS AND CONDITIONS
OF RESTRICTED STOCK UNITS
     A. Grant. A Restricted Stock Unit is a bookkeeping entry that represents
the right to receive one Share to be issued and delivered at the end of the
applicable vesting period, subject to a risk of cancellation and to the other
terms and conditions set forth in the Plan and in any Award Agreement evidencing
the Restricted Stock Unit. The Company shall establish and maintain accounts for
Participants in which the Company shall record Restricted Stock Units and the
transactions and events affecting such units. Restricted Stock Units and other
items reflected in the account will represent only bookkeeping entries by the
Company to evidence the Company’s unfunded obligations. The terms of any
Restricted Stock Unit granted under this Plan shall be set forth in a written
Award Agreement which shall contain provisions determined by the Committee which
are not inconsistent with the Plan and which shall be in substantially the form
of the agreement attached at Attachment III.

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     B. Vesting.
          (i) The Restricted Stock Units granted on any given date pursuant to
Section VI.A. will vest in eight equal quarterly installments commencing on the
15th day of the second calendar month of the first calendar quarter following
the calendar quarter in which the Restricted Stock Units are granted and
continuing on the 15th day of the second calendar month of each of the seven
calendar quarters thereafter, as long as the recipient continues to serve as a
Non-Employee Director on such vesting dates; provided, however, that to the
extent then unvested (1) any grants made upon initial election at an Annual
Meeting shall vest in full on the date immediately preceding the date of the
Annual Meeting held during the second calendar year following the grant date and
(2) any grants made upon initial election or appointment to the Board on a date
other than the date of an Annual Meeting shall vest in full on the date
immediately preceding the date of the second anniversary of the grant date, as
long as in each case the recipient is serving as a Non-Employee Director on such
vesting date.
          (ii) The Restricted Stock Units granted on any given date pursuant to
Section VI.B. will vest in four equal quarterly installments commencing on the
15th day of the second calendar month during the first calendar quarter
following the calendar quarter in which the Restricted Stock Units are granted
and continuing on the 15th day of the second calendar month of each of the three
calendar quarters thereafter, as long as the recipient continues to serve as a
Non-Employee Director on such vesting dates; provided, however, that to the
extent then unvested, the Restricted Stock Units granted on the date of an
Annual Meeting shall vest on the date immediately preceding the date of the next
year’s Annual Meeting as long as the recipient is serving as a Non-Employee
Director on such vesting date.
     C. Rights of Holders of Restricted Stock Units; Dividend Equivalents.
Unless the Committee otherwise provides in an Award Agreement for Restricted
Stock Units, any Participant holding Restricted Stock Units shall have no rights
as a shareholder of the Company with respect to such Restricted Stock Units.
Subject to the provisions of the Plan and any Award Agreement, the recipient of
Restricted Stock Units may, if so determined by the Committee, be entitled to
receive, with respect to the number of shares of Common Stock covered by the
Award, payments (“Dividend Equivalents”) in amounts equivalent to cash, stock or
other property paid by the Company as dividends on the Company’s Common Stock
prior to the vesting of the Restricted Stock Units.
     D. Delivery of Shares in Settlement of Restricted Stock Units. Restricted
Stock Units (if not previously cancelled) will be automatically settled on or
about the vesting date(s) set forth in the Award Agreement evidencing the Award,
but in no event later than two and one-half (2 1/2) months after the end of the
calendar year in which the vesting date occurs. The Company may make delivery of
Shares in settlement of Restricted Stock Units by either delivering one or more
stock certificates representing such Shares to the Participant, registered in
the name of the Participant, or by depositing such Shares into an account
maintained for the Participant and established in connection with any Company
plan or arrangement providing for investment in Common Stock of the Company.

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     E. Termination of Continuous Status as a Non-Employee Director. Unless
otherwise determined by the Committee or unless otherwise provided in the Award
Agreement evidencing the Award, in the event of the termination of a
Participant’s status as a Non-Employee Director, the Participant’s Restricted
Stock Units which are not vested as of the date of such status change shall not
vest and shall automatically be cancelled for no value and without issuance of
any Shares.
     F. Waiver of Forfeiture. The Committee may, when it finds that a waiver
would be in the best interests of the Company and subject to such terms and
conditions as the Committee shall deem appropriate, waive in whole or in part
any remaining vesting restrictions with respect to any Restricted Stock Units or
any other conditions set forth in any related Award Agreement.
     G. Pro Rata Allocation. In the event that the Restricted Stock Units to be
granted under the Plan on a specific grant date would exceed the number of
shares then available for grant hereunder, the shares available for grant shall
be allocated on a pro rata basis among the Non-Employee Directors who are
entitled to be granted Awards on such grant date.
SECTION IX. ADJUSTMENTS UPON
CHANGES IN CAPITALIZATION, DISSOLUTION,
LIQUIDATION, MERGER OR ASSET SALE
     A. Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of Shares covered by each outstanding
Award, or the number and type of Shares which have been authorized for issuance
under the Plan but as to which no Awards have yet been granted or which have
been returned to the Plan upon cancellation, expiration or forfeiture of an
Award, as well as the exercise price per Share, as applicable, covered by such
outstanding Awards, shall be proportionately adjusted for any increase or
decrease in the number of issued Shares resulting from a stock split, reverse
stock split, combination or reclassification or the payment of a stock dividend
(but only on the Common Stock) or any other increase or decrease in the number
of Shares effected without receipt of consideration by the Company; provided,
however, that the conversion of any convertible securities of the Company shall
not be deemed to have been “effected without receipt of consideration.” Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into or exchangeable for shares of stock of any class, shall affect,
and no adjustment by reason thereof shall be made with respect to, the number or
price of Shares subject to an Award or the number of Shares subject to the Plan.
Without limiting the generality of the foregoing, no adjustment shall be made to
the number of Shares subject to the automatic grant provisions of Section VI of
the Plan as a result of any changes in capitalization as described in this
Section IX.A.
     B. Dissolution, Liquidation, Merger or Asset Sale. In the event of the
proposed dissolution or liquidation of the Company, the proposed sale of all or
substantially all of the assets of the Company, or the merger, consolidation or
reorganization of the Company with or into another corporation as a result of
which the Company is not the surviving corporation or as a result of which the
outstanding shares of Common Stock are exchanged for or converted into cash or
property or securities not of the Company, the Board shall (i) declare that all
Options outstanding

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under the Plan shall terminate as of a date fixed by the Board which is at least
30 days after notice thereof is given by the Company to all Participants, unless
such 30-day period is waived by all Participants and shall give each Participant
the right to exercise his or her Option or Options granted hereunder as to all
or any part of the shares subject thereto, including shares which have not
vested at such time, until the date of termination of the Options, provided,
however, that no Options may be exercised after their expiration;
(ii) accelerate the vesting of Restricted Stock Units; and/or (iii) cause any
Award outstanding as of the effective date of any such event to be cancelled in
consideration of a cash payment or grant of an alternative option or award
(whether by the Company or any entity that is a party to the transaction), or a
combination thereof, to the holder of the cancelled Award, provided that such
payment and/or grant are substantially equivalent in value to the fair market
value of the cancelled Award as determined by the Board or its Committee.
     C. No Fractional Shares. No fractional shares of Common Stock shall be
issuable on account of any action described in this Section IX, and the
aggregate number of shares covered by an Award, when changed as the result of
such action, shall be reduced to the largest number of whole shares resulting
from such action.
SECTION X. AMENDMENT OR TERMINATION
     A. Amendment or Termination. Unless this Plan shall have been earlier
terminated as hereinafter provided, this Plan shall terminate, and no Award
shall thereafter be granted hereunder, on September 1, 2010. The Board of
Directors may, at any time prior to such date, (i) terminate this Plan or
(ii) make such amendments to or modifications of the Plan as the Board may deem
advisable; provided, however, that no amendment authorized by the Board will be
effective unless approved by the shareholders of the Company if the amendment
would (a) increase the number of shares reserved for issuance under the Plan
other than an adjustment under Section IX of the Plan; or (b) amend or modify
the Plan in any other way if such amendment or modification requires approval by
the shareholders of the Company in order to comply with the requirements of
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended, or
any other applicable law, regulation or stock exchange or market system rule or
requirement.
     B. Effect of Amendment or Termination. Any amendment or termination of the
Plan shall not affect any Awards already granted under the Plan. Such Awards
shall remain in full force and effect as if the Plan had not been so amended or
terminated.
SECTION XI. WITHHOLDING
     The grant of Awards hereunder and the issuance of shares pursuant thereto
is conditioned upon the Company’s reservation of the right to withhold, in
accordance with any applicable law and from any compensation payable to a
Non-Employee Director, any taxes the Company determines that it is required to
withhold under federal, state or local law as a result of such grants or the
issuance of shares pursuant thereto. To the extent that such compensation, if
any, is insufficient to pay any taxes required to be so withheld, the Company
may, in its sole discretion, require a Non-Employee Director, as a condition to
the issuance of such shares, to pay in cash to the Company an amount sufficient
to cover such tax liability or otherwise to make arrangements

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satisfactory to the Company to enable the Company to satisfy its withholding
obligations under federal, state and local law.
SECTION XII. MISCELLANEOUS
     A. Rights to Continued Service. Nothing in this Plan or in any Award
granted pursuant to this Plan shall confer on any individual any right to
continue as a Non-Employee Director.
     B. Investment Undertakings. Until and unless the issuance of shares of
Common Stock pursuant to this Plan shall have been registered pursuant to the
1933 Act and applicable state securities laws, each Participant acquiring shares
of Common Stock under this Plan may be required, as a condition precedent to
such issuance, to execute and deliver to the Company a letter or certificate
containing such investment representations, agreements restricting sale
(including, without limitation, provision for stop transfer orders and
restrictive legends on stock certificates) and confirmation of other relevant
facts to support any exemption from the registration requirements under the 1933
Act and such state securities laws on which the Company intends to rely, all as
shall be deemed reasonably necessary by counsel for the Company and in such form
as such counsel shall determine.
     C. Administration of the Plan. The Plan shall be administered by the Board.
The Board may at any time appoint a Committee consisting of not less than two
persons to administer the Plan on behalf of the Board, subject to such terms and
conditions as the Board may prescribe. The Board or its Committee shall have the
authority to make all determinations deemed necessary or advisable for the
administration of the Plan; provided, however, that the Board or its Committee
shall have no discretion to determine the selection of persons to whom Awards
will be granted, the frequency of Awards or the number of shares subject to
Awards (except in accordance with Section VII.F. hereof), the exercise prices of
Options, or any other material terms of the Awards. All decisions and
determinations of the Board or its Committee with respect to the Plan shall be
final and binding.
     D. Reservation of Shares. The Company, during the term of this Plan, shall
at all times reserve and keep available, such number of shares as shall be
sufficient to satisfy the requirements of this Plan.
     E. Nontransferability of Awards. No Awards granted under the Plan, and no
Shares subject to any such Awards, that have not been issued or as to which any
applicable vesting restriction has not lapsed, may be sold, pledged, assigned,
hypothecated, gifted, transferred or disposed of in any manner, either
voluntarily or involuntarily by operation of law, other than by will or by the
laws of descent or distribution or transfers between spouses incident to a
divorce. Options may be exercised during the life of the optionee only by the
optionee or the optionee’s guardian or legal representative.
     F. Requirements of Law. The granting of Awards and the issuance of Shares
under this Plan shall be subject to all applicable laws, rules and regulations
and to such approvals by any governmental agencies or national securities
exchanges as may be required. Accordingly, the Company shall not issue or sell
any Shares under this Plan if such action would constitute a violation

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of applicable laws, rules and regulations, including without limitation
securities laws. Furthermore, the inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority shall not have
been obtained.
SECTION XIII. EFFECTIVENESS OF THE ORIGINAL PLAN
     Effectiveness of the Original Plan was subject to approval by the
shareholders of the Company within 12 months after the date on which the
Original Plan was adopted by the Board of Directors; provided, however, that
Options could be granted pursuant to the Original Plan subject to subsequent
approval of the Original Plan by the Company’s shareholders. Such approval was
given at a regular meeting of the shareholders of the Company or at a special
meeting of the shareholders duly called and held for such purpose, or by written
consent of the shareholders in accordance with applicable law. Grants of
Options, if any, made prior to shareholder approval of the Original Plan were
made subject to the obtaining of such approval and, if such approval had not
been obtained as aforesaid, any such grants would not have been effective for
any purpose.
*     *     *

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CERTIFICATE OF SECRETARY
     The undersigned Secretary of Ixia, a California corporation (the
“Company”), hereby certifies that the foregoing is a true and correct copy of
the Company’s Amended and Restated Non-Employee Director Stock Option Plan as
adopted by the Board of Directors of the Company on April 23, 2007 and as
approved by the shareholders of the Company on May 25, 2007.
     IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Secretary as of the date set forth below.

                Date: May 26, 2007  /s/ Ronald W. Buckly       Ronald W. Buckly,
Secretary           

 

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Attachment I
IXIA
DIRECTOR STOCK OPTION PLAN
STOCK OPTION AGREEMENT
     Ixia, a California corporation (the “Company”), hereby grants to
                                                    
                                                 (the “Optionee”) an option (the
“Option”) to purchase a total of
                                                                            
     (                    ) shares of Common Stock (the “Shares”) of the
Company, at the price set forth herein, and in all respects subject to the terms
and provisions of the Company’s Director Stock Option Plan (the “Plan”), which
terms and provisions are hereby incorporated by reference herein. Unless the
context herein otherwise requires, the terms defined in the Plan shall have the
same meanings herein.
     1. Nature of the Option. This Option is intended to be a nonstatutory stock
option and is not intended to be an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or to
otherwise qualify for any special tax benefits to the Optionee.
     2. Date of Grant; Term of Option. This Option is granted as of
                    , and it may not be exercised later than
                    .
     3. Option Exercise Price. The Option exercise price is
$                     per Share, which price is not less than one hundred
percent (100%) of the fair market value thereof on the date this Option is
granted.
     4. Exercise of Option. This Option shall be exercisable during its term
only in accordance with the terms and provisions of the Plan and this Option as
follows:
          (a) Right to Exercise. This Option shall vest and become exercisable,
cumulatively, in four (4) equal installments of
                                                             (            
        ) Shares commencing on the last day of the calendar quarter during which
this Option is granted, with an additional installment vesting on the last day
of each of the three (3) calendar quarters thereafter as long as the Optionee
remains a Non-Employee Director.
          (b) Method of Exercise. This Option shall be exercisable by written
notice which shall state the election to exercise this Option, the number of
Shares in respect to which this Option is being exercised, and such other
representations and agreements as to the Optionee’s investment intent with
respect to such Shares as may be required by the Company hereunder or pursuant
to the provisions of the Plan. Such written notice shall be signed by the
Optionee and shall be delivered in person or by certified mail to the Secretary
of the Company or such other person as may be designated by the Company. The
written notice shall be accompanied by payment of the purchase price and an
executed Stock Purchase Agreement if required by the Company. Payment of the
purchase price shall be by cash, check, the delivery of Shares owned by the
Optionee having a fair market value equal to the aggregate purchase price of the
Shares being purchased, or

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any combination of such consideration and methods of payment. The purchase price
may also be paid by consideration received by the Company under any cashless
exercise program acceptable to the Company in connection with the Plan. The
certificate or certificates for the Shares as to which the Option shall be
exercised shall be registered in the name of the Optionee and shall be legended
as set forth in the Plan, any Stock Purchase Agreement, and/or as required under
applicable law.
          (c) Restrictions on Exercise. This Option may not be exercised if the
issuance of the Shares upon such exercise would constitute a violation of any
applicable federal or state securities laws or other laws or regulations. As a
condition to the exercise of this Option, the Company may require the Optionee
to make any representation and warranty to the Company as may be required by any
applicable law or regulation.
     5. Termination of Status as an Outside Director.
          (a) If the Optionee ceases to serve as a Non-Employee Director for any
reason other than death or Disability, the Optionee shall have the right to
exercise this Option at any time within three months after the date of such
termination to the extent that the Optionee was entitled to exercise this Option
at the date of such termination. To the extent that the Optionee was not
entitled to exercise the Option at the date of termination, or to the extent
this Option is not exercised within such three-month period, this Option shall
terminate. Notwithstanding the foregoing, this Option shall not be exercisable
after the expiration of the term set forth in Section 2 hereof.
          (b) If the Optionee ceases to serve as a Non-Employee Director due to
death or Disability, the Optionee (or the personal representative of the
Optionee if the Optionee has died) shall have the right to exercise this Option
at any time within 12 months after the date of such termination to the extent
that the Optionee was entitled to exercise the Option at the date of such
termination. To the extent that the Optionee was not entitled to exercise this
Option at the date of termination, or to the extent this Option is not exercised
within such 12-month period, this Option shall terminate. Notwithstanding the
foregoing, this Option shall not be exercisable after the expiration of the term
set forth in Section 2 hereof.
     6. Nontransferability of Option. This Option may not be sold, pledged,
assigned, hypothecated, gifted, transferred or disposed of in any manner, other
than by will or by the laws of descent or distribution and may be exercised
during the lifetime of the Optionee only by the Optionee. Subject to the
foregoing and the terms of the Plan, the terms of this Option shall be binding
upon the executors, administrators, heirs, successors and assigns of the
Optionee.
     7. Continuation as a Director. This Option shall not confer upon the
Optionee any right to continue or be nominated as a director of the Company or
any of its subsidiaries or limit in any respect the right of the Company to
remove the Optionee as a director of the Company at any time.

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     8. Withholding. The Company reserves the right to withhold, in accordance
with any applicable laws, from any consideration payable to the Optionee any
taxes required to be withheld by federal, state or local law as a result of the
grant or exercise of this Option or the sale or other disposition of the Shares
issued upon exercise of this Option. If the amount of any consideration payable
to the Optionee is insufficient to pay such taxes or if no consideration is
payable to the Optionee, upon the request of the Company, the Optionee shall pay
to the Company an amount sufficient for the Company to satisfy any federal,
state or local tax withholding requirements it may incur, as a result of the
grant or exercise of this Option or the sale or other disposition of the Shares
issued upon the exercise of this Option.
     9. The Plan. This Option is subject to, and the Company and the Optionee
agrees to be bound by, all of the terms and conditions of the Company’s Director
Stock Option Plan as such Plan may be amended from time to time in accordance
with the terms thereof, provided that no such amendment shall deprive the
Optionee, without his consent, of this Option or any rights hereunder.

         
Date:                                                                             
            Ixia, a California corporation
 
       
 
  By:    
 
       
 
  Title:    
 
       

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     The Optionee acknowledges receipt of a copy of the Ixia Director Stock
Option Plan, a copy of which is attached hereto, and represents that he or she
has read and is familiar with the terms and provisions thereof, and hereby
accepts this Option subject to all of the terms and provisions thereof. The
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board of Directors or its committee upon any questions
arising under the Plan.

             
Date:                                                            
                                Signature of Optionee
 
                                          Address
 
                 
 
  City   State   Zip Code

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Attachment II
IXIA
AMENDED AND RESTATED
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
STOCK OPTION AGREEMENT
     Ixia, a California corporation (the “Company”), hereby grants to
                                                  
                                                   (the “Optionee”) an option
(the “Option”) to purchase a total of                              
                                                        (                    )
shares of Common Stock (the “Shares”) of the Company, at the price set forth
herein, and in all respects subject to the terms and provisions of the Company’s
Amended and Restated Non-Employee Director Stock Option Plan (the “Plan”), which
terms and provisions are hereby incorporated by reference herein. Unless the
context herein otherwise requires, the terms defined in the Plan shall have the
same meanings herein.
     1. Nature of the Option. This Option is intended to be a nonstatutory stock
option and is not intended to be an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or to
otherwise qualify for any special tax benefits to the Optionee.
     2. Date of Grant; Term of Option. This Option is granted as of
                                        , and it may not be exercised later than
                    . Each vested installment of this Option will expire on the
four-year anniversary of its vesting date.
     3. Option Exercise Price. The Option exercise price is
$                     per Share, which price is not less than one hundred
percent (100%) of the fair market value thereof on the date this Option is
granted.
     4. Exercise of Option. This Option shall be exercisable during its term
only in accordance with the terms and provisions of the Plan and this Option as
follows:
          (a) Right to Exercise. This Option shall vest and become exercisable,
cumulatively, in                      equal installments of
                                                    
                             (                    ) Shares each commencing on
the last day of the calendar quarter during which this Option is granted, with
an additional installment vesting on the last day of each of the
                     calendar quarters thereafter as long as the Optionee
remains a Non-Employee Director. The Optionee may exercise this Option, in whole
or in part, to acquire Shares as to which this Option has vested at any time
during the period beginning on and including the applicable vesting date and
ending on and including the four-year anniversary of such vesting date (e.g.,
this Option shall be exercisable as to the installment vesting on
                                         from and including
                                          through the close of business on
                                        ).

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          (b) Method of Exercise. This Option shall be exercisable by written
notice which shall state the election to exercise this Option, the number of
Shares in respect to which this Option is being exercised, and such other
representations and agreements as to the Optionee’s investment intent with
respect to such Shares as may be required by the Company hereunder or pursuant
to the provisions of the Plan. Such written notice shall be signed by the
Optionee and shall be delivered in person or by certified mail to the Secretary
of the Company or such other person as may be designated by the Company. The
written notice shall be accompanied by payment of the purchase price and an
executed Stock Purchase Agreement if required by the Company. Payment of the
purchase price shall be by cash, check, the delivery of Shares owned by the
Optionee having a fair market value equal to the aggregate purchase price of the
Shares being purchased, or any combination of such consideration and methods of
payment. The purchase price may also be paid by consideration received by the
Company under any cashless exercise program acceptable to the Company in
connection with the Plan. The certificate or certificates for the Shares as to
which the Option shall be exercised shall be registered in the name of the
Optionee and shall be legended as set forth in the Plan, any Stock Purchase
Agreement, and/or as required under applicable law.
          (c) Restrictions on Exercise. This Option may not be exercised if the
issuance of the Shares upon such exercise would constitute a violation of any
applicable federal or state securities laws or other laws or regulations. As a
condition to the exercise of this Option, the Company may require the Optionee
to make any representation and warranty to the Company as may be required by any
applicable law or regulation.
     5. Termination of Status as a Non-Employee Director. If the Optionee ceases
to serve as a Non-Employee Director for any reason, the Optionee shall have the
right to exercise any vested installments of this Option prior to the close of
business on the four-year anniversary of the date on which such installment
vested. To the extent that the Optionee was not entitled to exercise the Option
at the date of termination, or to the extent any vested installment of this
Option is not exercised prior to the close of business on the four-year
anniversary of the date on which such installment vested, this Option shall
terminate.
     6. Nontransferability of Option. This Option may not be sold, pledged,
assigned, hypothecated, gifted, transferred or disposed of in any manner, other
than by will or by the laws of descent or distribution. This Option may be
exercised during the lifetime of the Optionee only by the Optionee. Subject to
the foregoing and the terms of the Plan, the terms of this Option shall be
binding upon the executors, administrators, heirs, successors and assigns of the
Optionee.
     7. Continuation as a Director. This Option shall not confer upon the
Optionee any right to continue or be nominated as a director of the Company or
any of its subsidiaries or limit in any respect the right of the Company to
remove the Optionee as a director of the Company at any time.
     8. Withholding. The Company reserves the right to withhold, in accordance
with any applicable laws, from any consideration payable to the Optionee any
taxes required to be withheld by federal, state or local law as a result of the
grant or exercise of this Option or the sale or other disposition of the Shares
issued upon exercise of this Option. If the amount of any consideration

II-2

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payable to the Optionee is insufficient to pay such taxes or if no consideration
is payable to the Optionee, upon the request of the Company, the Optionee shall
pay to the Company an amount sufficient for the Company to satisfy any federal,
state or local tax withholding requirements it may incur, as a result of the
grant or exercise of this Option or the sale or other disposition of the Shares
issued upon the exercise of this Option.
     9. The Plan. This Option is subject to, and the Company and the Optionee
agree to be bound by, all of the terms and conditions of the Company’s Amended
and Restated Non-Employee Director Stock Option Plan as such Plan may be amended
from time to time in accordance with the terms thereof, provided that no such
amendment shall deprive the Optionee, without his consent, of this Option or any
rights hereunder.

         
Date:                                                                       
Ixia, a California corporation
      By:                 Title:        

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     The Optionee acknowledges receipt of a copy of the Ixia Amended and
Restated Non-Employee Director Stock Option Plan, a copy of which is attached
hereto, and represents that he or she has read and is familiar with the terms
and provisions thereof, and hereby accepts this Option subject to all of the
terms and provisions thereof. The Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board of Directors
or its committee upon any questions arising under the Plan.

                 
Date:
                                               Signature of Optionee
 
                         
 
                          Address        
 
                         
 
      City   State   Zip Code

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Attachment III

Amended and Restated
Non-Employee Director Equity Incentive Plan
Restricted Stock Unit Award Agreement
Ixia (“Ixia” or the “Company”) hereby grants to you a Restricted Stock Unit
Award under the Ixia Amended and Restated Non-Employee Director Equity Incentive
Plan (the “Plan”), as set forth below. Capitalized terms defined in the Plan but
not in this Agreement shall have the meanings given to them herein.

     
Name:
   
 
   
Date of Grant:
   
 
   
Number of
Restricted Stock Units:
   
 
   
Nature of
Restricted Stock Units:
 
Each Restricted Stock Unit represents the right to receive one share (“Share”)
of Ixia Common Stock to be issued and delivered at the end of the applicable
vesting period, subject to the risk of cancellation as described herein and in
the Plan.
 
   
Vesting Schedule:
  The Restricted Stock Units will vest in [eight/four] equal quarterly
installments, with the first installment vesting on [                     15,
200___] and the remaining installments vesting on the 15th day of the second
calendar month of each of the [seven/three] calendar quarters thereafter, as
long as you remain a Non-Employee Director of the Company through each such
vesting dates.
 
   
Forfeiture:
  If you cease to serve as a Non-Employee Director for any reason, any
Restricted Stock Units which are not vested as of the date of such termination
shall not vest and shall automatically be cancelled and forfeited for no value
and without any issuance of Shares.
 
   
Taxes:
  Payment of the applicable taxes in connection with the vesting of Restricted
Stock Units shall be a condition to the issuance and delivery of Shares upon any
vesting of the Restricted Stock Units (see Restricted Stock Unit Terms and
Conditions attached hereto).

This Restricted Stock Unit Award Agreement consists of this page and the
Restricted Stock Unit Terms and Conditions attached hereto. By signing below,
you accept the grant of this Restricted Stock Unit Award and agree that this
Restricted Stock Unit Award is subject in all respects to the terms and
conditions of the Plan and the related Prospectus containing information
concerning the Plan.
You further acknowledge and agree that (i) you have carefully reviewed this
Restricted Stock Unit Award Agreement (including the Restricted Stock Unit Terms
and Conditions attached hereto) and the Plan and (ii) this Restricted Stock Unit
Award Agreement and the Plan set forth the entire understanding between you and
the Company regarding this Restricted Stock Unit Award and supersede all prior
or contemporaneous oral and written agreements with respect thereto.
IXIA

         
By:
       
 
   
Print Name:
      Date
 
   
Title:
       
 
   
 
                                   Participant   Date

 

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AMENDED AND RESTATED
IXIA NON-EMPLOYEE DIRECTOR EQUITY INCENTIVE PLAN
Restricted Stock Unit Award Agreement — Restricted Stock Unit Terms and
Conditions
The following Restricted Stock Unit Terms and Conditions apply to the Restricted
Stock Unit Award granted by Ixia (“Ixia” or the “Company”) to the Participant
whose name appears on the Restricted Stock Unit Award Agreement cover page to
which these Restricted Stock Unit Terms and Conditions are attached.

1.   Amended and Restated 1997 Equity Incentive Plan. This Restricted Stock Unit
Award is in all respects subject to the terms, definitions and provisions of the
Ixia Amended and Restated Non-Employee Director Equity Incentive Plan (the
“Plan”) adopted by the Company and incorporated herein by reference. Capitalized
terms defined in the Plan but not defined in this Restricted Stock Unit Award
Agreement shall have the meanings given to them in the Plan.   2.   Vesting of
Restricted Stock Units Awards.

  (a)   Upon each vesting date for the Restricted Stock Unit Award (each, a
“Vesting Date”), one share of Ixia Common Stock shall be issuable for each
Restricted Stock Unit that vests on such date, subject to the terms and
provision of the Plan and this Restricted Stock Unit Award Agreement. Following
vesting, the Company will issue and transfer such Shares to the Participant as
soon as administratively feasible and following satisfaction of any required
withholding tax obligations as provided in Section 4 below.     (b)   To the
extent the Restricted Stock Units vest and Shares are issued and delivered to
the Participant, such Shares will be free of the terms and conditions of this
Restricted Stock Unit Award Agreement.     (c)   No rights of a shareholder
shall exist with respect to the Restricted Stock Units as a result of the mere
grant of the Restricted Stock Units. Such rights shall exist only after issuance
of the Shares following the applicable Vesting Date.

3.   Delivery of Shares upon Vesting of Restricted Stock Units. Restricted Stock
Units (if not previously forfeited) will automatically be settled on or about
the Vesting Date or Vesting Dates set forth on the cover page of this Restricted
Stock Unit Award Agreement. The Company may make delivery of Shares upon vesting
of Restricted Stock Units either by (i) delivering one or more stock
certificates representing such Shares to the Participant, registered in the name
of the Participant, or (ii) if administratively feasible for the Company at such
time, electronically depositing such Shares into a securities account maintained
for the Participant. All certificates for Shares and all Shares shall be subject
to such stop transfer orders and other restrictions as the Company may deem
advisable under the rules, regulations and other requirements of the Securities
and Exchange Commission, any stock exchange or quotation system upon which the
Shares are then listed or quoted, and any applicable Federal or state securities
law, and the Company may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.

4.   Taxes. The Participant is responsible for any federal, state, local or
other income, employment or other applicable taxes required to be withheld under
Federal, state, local or other law in connection with: (i) the vesting of the
Restricted Stock Unit Award and the issuance and delivery of Shares to the
Participant, or (iii) any other event occurring pursuant to this Restricted
Stock Award Agreement or the Plan (collectively, “Taxes”). The Participant
acknowledges that in connection with the issuance of Shares upon the vesting of
Restricted Stock Units, the Company may be required to withhold

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    from the Participant an amount that is sufficient to satisfy the Company’s
tax withholding obligations. Notwithstanding any contrary provision of this
Restricted Stock Unit Award Agreement or the Plan, no Shares will be issued to
the Participant (or his or her estate, if applicable) upon vesting of Restricted
Stock Units unless and until satisfactory arrangements (as determined by the
Committee) have been made by the Participant with respect to the withholding and
payment of any applicable Taxes which the Company determines must be withheld
with respect to such Shares. The Committee, in its sole discretion and pursuant
to such procedures as it may specify from time to time, may (but is not required
to) permit the Participant to satisfy any such Tax withholding obligations in
any of the following ways:

  (a)   Payment in Cash. The Participant may elect to pay to the Company an
amount sufficient to cover such Taxes by making a cash payment to the Company.

  (b)   Payment by Sale of Shares. The Participant may also elect to satisfy his
or her obligations for the payment of such Taxes by arranging for the sale, upon
vesting of Restricted Stock Units, of that number of whole Shares which are
otherwise deliverable upon vesting and for which sales proceeds are sufficient
to satisfy the amount of the Taxes required to be withheld.

  (c)   Company Rights. Any elections permitted to be made pursuant to this
Section 4 shall be made in writing or via electronic transmission on such form
as shall be prescribed by the Company for such purpose. The Company also
reserves the right to withhold Taxes, in accordance with any applicable law,
(i) from any compensation or other amounts payable to the Participant and/or
(ii) except where the Participant is paying taxes in the manner described in
Section 4(a) above, from the Shares otherwise issuable to the Participant upon
the vesting of Restricted Stock Units. The Participant further agrees that if he
or she at any time fails to make satisfactory arrangements for the payment of
Taxes upon the vesting of Restricted Stock Units, then in addition to the
Company options specified in the immediately preceding sentence, the Participant
may be deemed to have elected to sell vested Shares to cover the payment of
applicable Taxes. In the event that the Company elects to satisfy the
Participant’s obligations for the payment of Taxes by retaining Shares which
would otherwise be deliverable in connection with the Restricted Stock Unit
Award upon vesting, the Company shall retain that number of whole Shares which
have a Fair Market Value sufficient to satisfy the amount of the Taxes required
to be withheld. “Fair Market Value” for this purpose shall be as determined in
the Plan as of the last trading day before the applicable Vesting Date.

5.   Termination of Status as Non-Employee Director. If the Participant ceases
to serve as an Employee for any reason and thereby terminates his or her status
as a Non-Employee Director, the Participant’s Restricted Stock Units which are
not vested as of the date of such termination shall not vest and shall
automatically be cancelled and forfeited for no value and without any issuance
of Shares.

6.   Nontransferability of Restricted Stock Units. This Restricted Stock Unit
Award may not be sold, pledged, assigned, hypothecated, gifted, transferred or
disposed of in any manner either voluntarily or involuntarily by operation of
law, other than transfers between spouses incident to a divorce. Subject to the
foregoing and the terms of the Plan, the terms of this Restricted Stock Unit
Award shall be binding upon the executors, administrators, heirs, successors and
assigns of the Participant. The Shares issued upon vesting of the Restricted
Stock Unit Award will not be subject to restrictions on transfer under this
Section 6.

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7.   No Dividend Equivalents. The Participant shall not be entitled to receive,
currently or on a deferred basis, any payments (i.e., “dividend equivalents”)
equivalent to cash, stock or other property paid by the Company as dividends on
the Company’s Common Stock prior to the vesting of the Restricted Stock Units.

8.   No Right of Continued Service. Neither the Plan nor this Restricted Stock
Unit Award shall confer upon the Participant any right to continue in the
service of the Company as a Non-Employee Director.

9.   Miscellaneous.

  (a)   Successors and Assigns. This Restricted Stock Unit Award Agreement shall
bind and inure only to the benefit of the parties to this Restricted Stock Unit
Award Agreement (the “Parties”) and their respective permitted successors and
assigns.     (b)   No Third-Party Beneficiaries. Nothing in this Restricted
Stock Unit Award Agreement is intended to confer any rights or remedies on any
persons other than the Parties and their respective permitted successors or
assigns. Nothing in this Restricted Stock Unit Award Agreement is intended to
relieve or discharge the obligation or liability of third persons to any Party.
No provision of this Restricted Stock Unit Award Agreement shall give any third
person any right of subrogation or action over or against any Party.     (c)  
Amendments.

  (i)   The Committee reserves the right to amend the terms and provisions of
this Restricted Stock Unit Award without the Participant’s consent to comply
with any Federal or state securities law.     (ii)   Except as specifically
provided in subsection (i) above, this Restricted Stock Unit Award Agreement
shall not be changed or modified, in whole or in part, except by supplemental
agreement signed by the Parties. Either Party may waive compliance by the other
Party with any of the covenants or conditions of this Restricted Stock Unit
Award Agreement, but no waiver shall be binding unless executed in writing by
the Party making the waiver. No waiver or any provision of this Restricted Stock
Unit Award Agreement shall be deemed, or shall constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing
waiver. Any consent under this Restricted Stock Unit Award Agreement shall be in
writing and shall be effective only to the extent specifically set forth in such
writing.

  (d)   Governing Law. To the extent that Federal laws do not otherwise control,
the Plan and all determinations made or actions taken pursuant hereto shall be
governed by the laws of the state of California, without regard to the conflict
of laws rules thereof.     (e)   Severability. If any provision of this
Restricted Stock Unit Award Agreement or the application of such provision to
any person or circumstances is held invalid or unenforceable, the remainder of
this Restricted Stock Unit Award Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby.

*     *     *     *

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