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EXHIBIT 10.1




Ixia

2007 Executive Officer Bonus Plan



Ixia (“Ixia” or the “Company”) believes that a portion of each executive officer’s annual
compensation should be directly related to the Company’s financial performance and such officer’s
achievement of individual objectives. The 2007 Executive Officer Bonus Plan (“2007 Bonus Plan” or
“this Plan”) is designed to motivate Ixia’s officers and to reward them for their continuing
contributions to the Company’s business if, in 2007, the Company achieves certain financial results
and such officers achieve their individual objectives. The Company believes that the achievement
of these results and objectives is essential for the Company’s success. The effective date of the
2007 Bonus Plan is July 25, 2007 (the “Effective Date”).




2007 Bonus Plan



Each Eligible Officer (as defined below), by virtue of his or her continuing employment with Ixia,
will be eligible to receive:





	(i)	 	Annual Bonus: a bonus based on the Company’s financial performance as measured by
the degree to which the Company achieves two pre-set financial targets for 2007 approved by
the Compensation Committee of the Board of Directors (the “Compensation Committee”); and






	(ii)	 	Discretionary Bonus: a bonus based on his/her achievement in 2007 of individual
business or strategic objectives approved by the Compensation Committee (upon the
recommendation of the Company’s Chief Executive Officer in the case of all Eligible Officers
other than the Chief Executive Officer).




The Annual Bonus and the Discretionary Bonus payable to an Eligible Officer will be calculated, in
part, as a percentage of such Officer’s annual base salary of record in effect at December 31,
2007. In determining an Eligible Officer’s annual base salary of record, certain compensation and
payments (e.g., reimbursement for moving expenses, bonus payments received under this Plan or
otherwise, stock option or other equity incentive compensation, discretionary bonuses, disability
benefits, sign-on bonuses, 401(k) Plan matching contributions, vacation cash outs, on call pay, and
similar payments) will be excluded.



If an executive officer commences his/her employment as an Eligible Officer prior to October 1,
2007, then for purposes of determining the amount payable as an Annual Bonus or a Discretionary
Bonus, an Officer’s annual base salary will be prorated based on the ratio of (i) the number of
days that he/she serves as an Eligible Officer during 2007 to (ii) 360. An executive officer who
commences his/her employment during the fourth calendar quarter of 2007 will not be eligible to
receive either an Annual Bonus or a Discretionary Bonus.




Eligible Officers



The following executive officers have been designated by the Compensation Committee as Eligible
Officers for purposes of the 2007 Bonus Plan and will be eligible to participate in the 2007 Bonus
Plan (all titles are positions with Ixia unless otherwise specified):



President and Chief Executive Officer

Chief Financial Officer

Executive Vice President, Operations

Senior Vice President, Corporate Affairs and General Counsel

Senior Vice President, Engineering

Vice President, Engineering Operations




 









 







A person appointed as an executive officer after the Effective Date shall be eligible to
participate in the 2007 Bonus Plan if he/she is expressly designated as an Eligible Officer under
the 2007 Bonus Plan pursuant to a duly adopted Compensation Committee resolution.



An Eligible Officer whose title changes after the Effective Date shall be entitled to continue to
participate in the 2007 Bonus Plan on the same terms and conditions as applied immediately prior to
such title change unless either (i) the terms of such Eligible Officer’s participation in the 2007
Bonus Plan are changed pursuant to a duly adopted Compensation Committee resolution; or (ii) the
Compensation Committee amends this Plan to add the new title as an Eligible Officer in the Eligible
Officer table above in which case such Officer shall participate at the bonus participation level
corresponding to such new title.



In order to earn and be eligible to receive bonuses payable under the 2007 Bonus Plan, an Eligible
Officer must be employed by Ixia or one of its subsidiaries as an Eligible Officer on the date on
which such bonuses are paid, unless such requirement is waived by the Compensation Committee or
pursuant to a duly adopted Compensation Committee resolution. An Eligible Officer who is on an
approved leave of absence from the Company at any time during 2007 will, for purposes of
determining eligibility under the 2007 Bonus Plan, be treated as being employed by the Company
during such leave of absence.



Annual Bonuses



The Company’s consolidated revenues for 2007 and its Operating Income (as defined herein) will be
the financial measures for calculating the amount of Annual Bonuses payable under the 2007 Bonus
Plan. For purposes of this 2007 Bonus Plan, “Operating Income” means the Company’s operating
income from continuing operations calculated on a consolidated basis for the year ending December
31, 2007 before any bonuses payable under the 2007 Bonus Plan and the Company’s 2007 employee bonus
plan (as adjusted to exclude the effects of equity incentive compensation expense, restructuring
charges, impairment charges, acquisition-related amortization and other M&A-related charges or
income, and similar charges or income). If any of the Company’s existing business units becomes a
discontinued operation prior to January 1, 2008, then the revenue and/or Operating Income targets
under the Plan may be amended by the Compensation Committee in its sole discretion.



The amount of an Eligible Officer’s Annual Bonus will be calculated by multiplying (i) the product
of such Eligible Officer’s annual base salary of record at December 31, 2007 and the applicable
Annual Bonus Percentage listed opposite such Eligible Officer’s title in the Bonus Participation
Table below by (ii) the applicable Bonus Factor (as defined herein). The Bonus Factor will be
equal to the average of the Revenue Bonus Factor and the Operating Income Bonus Factor as
determined in accordance with Schedule A. Stated mathematically, the amount of an Annual
Bonus payable to an Eligible Officer equals ((AxB)xC), where A = an Eligible Officer’s annual base
salary of record at the end of 2007; B = the applicable Annual Bonus Percentage for such Eligible
Officer; and C = the applicable Bonus Factor.



The amount of the Company’s 2007 consolidated revenues and Operating Income will determine the
applicable Bonus Factor. The Compensation Committee has supplementally approved levels of revenues
and Operating Income for purposes of Schedule A. As indicated on Schedule A, the
Company’s achievement of the minimum revenue target will result in a Revenue Bonus Factor of 50%,
while higher revenues will result in higher Revenue Bonus Factors as set forth in Schedule
A, up to a maximum Revenue Bonus Factor of 130%. The Revenue Bonus Factor will be 0% if the
Company’s 2007 revenues are below the minimum revenue target. As also indicated on Schedule
A, the Company’s achievement of the minimum Operating Income target will result in an Operating
Income Bonus Factor of 50%, while higher Operating Income will result in higher Operating Income
Bonus Factors as set forth in Schedule A, up to a maximum Operating Income Bonus Factor of
160%. The Operating Income Bonus Factor will be 0% if the Company’s 2007 Operating Income is below
the


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minimum Operating Income target. There will be a linear increase in the percentage amount of the
Revenue Bonus Factor and the Operating Income Bonus Factor if the amount of 2007 revenues and/or
2007 Operating Income falls between any two amounts.



Except as otherwise provided herein, an Annual Bonus will be payable in one lump sum (subject to
applicable withholding taxes and other deductions) within 30 days after the Company’s consolidated
financial results for 2007 are publicly announced. An Eligible Officer who is on an approved leave
of absence from the Company on the date on which Annual Bonuses are paid by the Company and
thereafter returns to active status as an Eligible Officer upon the end of such leave of absence,
will be paid his/her Annual Bonus to which he/she is otherwise entitled within 30 days following
his/her return to active status as an Eligible Officer. An Eligible Officer who is on an approved
leave of absence from the Company on the date on which the Annual Bonuses are paid by the Company
and thereafter fails to return to active status as an Eligible Officer upon the end of such leave
of absence, will not be eligible to receive an Annual Bonus.



Discretionary Bonuses



The percentage degree (0% to 100%) to which an Eligible Officer achieves his/her objectives for
2007 will be the measure for his/her 2007 Discretionary Bonus. The determination of the percentage
degree to which an Eligible Officer achieves his/her objectives will be made by the Compensation
Committee not later than February 15, 2008.



The amount of a bonus payable as a Discretionary Bonus will be calculated by multiplying (i) the
product of an Eligible Officer’s annual base salary of record at December 31, 2007 and the
Discretionary Bonus Percentage listed opposite such Officer’s title in the Bonus Participation
Table below by (ii) the percentage degree to which it is determined that such Eligible Officer has
achieved his/her objectives for 2007.



Except as otherwise provided herein, a Discretionary Bonus will be payable in one lump sum (subject
to applicable withholding taxes and other deductions) within 30 days of the determination of the
percentage degree to which the Eligible Officer has achieved his/her objectives. An Eligible
Officer who is on an approved leave of absence from the Company on the date on which Discretionary
Bonuses are paid by the Company and thereafter returns to active status as an Eligible Officer upon
the end of such leave of absence, will be paid his/her Discretionary Bonus to which he/she is
otherwise entitled within 30 days following his/her return to active status as an Eligible Officer.
An Eligible Officer who is on an approved leave of absence from the Company on the date on which
Discretionary Bonuses are paid by the Company and thereafter fails to return to active status as an
Eligible Officer upon the end of such leave of absence, will forfeit his/her right to any
Discretionary Bonus to which he/she may otherwise be entitled for 2007.



Bonus Participation Levels



For purposes of determining an Eligible Officer’s Annual Bonus or Discretionary Bonus under the
2007 Bonus Plan, the 2007 Bonus Opportunity, Annual Bonus Percentage, and Discretionary Bonus
Percentage for each of the Eligible Officers identified below will be as follows:




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Bonus Participation Table




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2007	 	Annual	 	Discretionary
	 	 	Bonus	 	Bonus	 	Bonus
	Title	 	Opportunity	 	Percentage	 	Percentage
	President and Chief Executive Officer
	 	 	100	%	 	 	75 	%	 	 	25	%
	Chief Financial Officer
	 	 	50	 	 	 	37.5	 	 	 	12.5	 
	Executive Vice President, Operations
	 	 	50	 	 	 	37.5	 	 	 	12.5	 
	Senior Vice President, Corporate Affairs
and General Counsel
	 	 	50	 	 	 	37.5	 	 	 	12.5	 
	Senior Vice President, Engineering
	 	 	50	 	 	 	37.5	 	 	 	12.5	 
	Vice President, Engineering Operations
	 	 	50	 	 	 	37.5	 	 	 	12.5	 





Additional Bonuses:



In
addition to bonuses payable under the 2007 Bonus Plan, additional bonuses may also be paid by
the Company, but only upon the express approval of the independent members of the Board of
Directors in their sole discretion.




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Schedule A  




2007 Revenue Bonus Factor Matrix




	 	 	 	 	 	 	 	 	 
	 	 	Revenue Targets(1)	 	Revenue
	 	 	(in thousands)	 	Bonus Factor(1)
	Maximum
	 	$	(2)	 	 	 	130	%
	 
	 	 	(2)	 	 	 	120	 
	 
	 	 	(2)	 	 	 	110	 
	 
	 	 	(2)	 	 	 	100	 
	Minimum
	 	 	(2)	 	 	 	50	 






2007 Operating Income Bonus Factor Matrix




	 	 	 	 	 	 	 	 	 
	 	 	Operating Income Targets(1)	 	Operating Income
	 	 	(in thousands)	 	Bonus Factor(1)
	Maximum
	 	$	(2)	 	 	 	160	%
	 
	 	 	(2)	 	 	 	140	 
	 
	 	 	(2)	 	 	 	120	 
	 
	 	 	(2)	 	 	 	100	 
	Minimum
	 	 	(2)	 	 	 	50	 








 




			
	(1)	 	For performance between two Revenue or Operating Income targets, the
Revenue Bonus Factor and the Operating Income Bonus Factor shall be interpolated linearly.
	 
	(2)	 	The Compensation Committee has supplementally established levels of Revenue
and Operating Income for purposes of this Schedule A.






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