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                                                                   EXHIBIT 10.3

                                      IXIA

                          EMPLOYEE STOCK PURCHASE PLAN

        The following constitutes the provisions of the Employee Stock Purchase
Plan (the "Plan") of Ixia (the "Company").

        1. PURPOSE. The purpose of the Plan is to provide employees of the
Company and its subsidiaries with an opportunity to purchase Common Stock of the
Company through payroll deductions. It is the intention of the Company that the
Plan qualify as an "Employee Stock Purchase Plan" under Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"). The provisions of the
Plan shall, accordingly, be construed so as to extend and limit participation in
a manner consistent with the requirements of that section of the Code, as
amended from time to time.

        2. CERTAIN DEFINITIONS.

           (a) "Board" shall mean the Board of Directors of the Company or any
committee thereof designated by the Board of Directors of the Company in
accordance with Section 13 of the Plan.

           (b) "Code" shall mean the Internal Revenue Code of 1986, as amended,
and any applicable regulations promulgated thereunder.

           (c) "Common Stock" shall mean the common stock of the Company.

           (d) "Compensation," unless otherwise determined by the Board of
Directors of the Company, means total cash compensation from employment
reportable on Form W-2 including, without limitation, regular straight-time
gross earnings, overtime pay, shift premium, incentive compensation, bonuses,
commissions and automobile allowances, plus any amounts contributed by the
Employee to the Company's 401(k) Plan from compensation paid to the Employee by
the Company, but expressly excluding relocation benefits, expense
reimbursements, gains realized in connection with the exercise of stock options
or participation in a stock option or purchase program and contributions by the
Company to qualified deferred compensation plans.

           (e) "Employee" means any person, including an officer, who is
customarily employed for more than 20 hours per week by the Company or its
Subsidiaries and more than five months in any calendar year. For purposes of the
Plan, the employment relationship shall be treated as continuing intact while
the individual is on sick leave or other leave of absence approved by the
Company. Where the period of leave exceeds 90 days and the individual's right to
reemployment is not guaranteed either by statute or by contract, the employment
relationship shall be deemed to have terminated on the 91st day of such leave.

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

           (g) "Exercise Date" means the last Trading Day of each Purchase
Period.

           (h) "Fair Market Value" means, as of any date, the fair market value
of one share of Common Stock, determined as follows:

                (i) If the Common Stock is listed on a national or regional
        securities exchange or market system, including without limitation the
        Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock
        Market, its fair market value shall be the closing sales price for such
        stock (or the mean of the closing bid and asked prices, if no sales were
        reported) as reported on such date (or, if such day is not a Trading
        Day, on the last Trading Day prior to such date) in THE WALL STREET
        JOURNAL or such other 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, its fair market
        value shall be the mean of the closing bid and asked prices for the
        Common Stock on such date (or, if such day is not a Trading Day, on the
        last Trading Day prior to such date), as reported in THE WALL STREET
        JOURNAL or such other source as the Board deems reliable; or

                (iii) In the absence of an established market for the Common
        Stock, the fair market value thereof shall be determined in good faith
        by the Board.

           (i) "Offering Periods" shall mean the periods of approximately 24
months during which an option granted pursuant to the Plan may be exercised,
commencing on the first Trading Day on or after May 1 and November 1 of each
year and terminating on the last Trading Day in the periods ending 24 months
later. The first Offering Period under the Plan shall commence on November 1,
2000. The duration and timing of Offering Periods may be changed pursuant to
Section 4 of this Plan.

           (j) "Purchase Period" shall mean the approximately six-month period
commencing after one Exercise Date and ending with the next Exercise Date,
except that the first Purchase Period of any Offering Period shall commence on
the Enrollment Date and end with the next Exercise Date.

           (k) "Purchase Price" shall mean 85% of the Fair Market Value of a
share of Common Stock on the Enrollment Date or on the Exercise Date, whichever
is lower; PROVIDED, HOWEVER, that the Purchase Price may be adjusted by the
Board pursuant to Section 19.

           (l) "Subsidiary" means any corporation described in Section 424 of
the Code in which the Company owns, directly or indirectly, 50% or more of the
voting shares.

           (m) "Trading Day" shall mean a day on which national stock exchanges
and The Nasdaq Stock Market are open for trading.

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        3. ELIGIBILITY.

           (a) GENERAL RULE. Any Employee, as defined in Section 2, who shall
have completed at least 30 days of continuous employment by the Company or its
Subsidiaries on the date his or her participation in the Plan is effective shall
be eligible to participate in the Plan, subject to the limitations imposed by
Section 423(b) of the Code.

           (b) EXCEPTIONS. Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option under the Plan if:

                (i) immediately after the grant, such Employee (or any other
        person whose stock ownership would be attributed to such Employee
        pursuant to Section 424(d) of the Code) would own shares and/or hold
        outstanding options to purchase shares possessing five percent or more
        of the total combined voting power or value of all classes of shares of
        the Company or of any Subsidiary; or

                (ii) such option would permit the Employee's rights to purchase
        shares under all employee stock purchase plans of the Company and its
        Subsidiaries to accrue (i.e., become exercisable) at a rate which
        exceeds $25,000 of fair market value of such shares (determined at the
        time such option is granted) for any calendar year in which such option
        is outstanding at any time.

        4. OFFERING PERIODS. The Plan shall be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after May 1 and November 1 of each year, or on such other date
as the Board shall determine, and continuing thereafter until terminated in
accordance with Section 20 hereof. The first Offering Period under the Plan
shall commence on November 1, 2000. The Board shall have the power to change the
duration of Offering Periods (including the commencement dates thereof) with
respect to future offerings without shareholder approval if such change is
announced at least five days prior to the scheduled beginning of the first
Offering Period to be affected thereafter. Participation in one offering under
the Plan shall neither limit nor require participation in any other offering.

        5. PARTICIPATION. An eligible Employee may become a participant in the
Plan by completing and signing a subscription agreement authorizing payroll
deductions on a form provided by the Company (the "Subscription Agreement") and
by filing it with the Company's payroll office not less than three business days
prior to the start of the applicable Offering Period with respect to which it is
to be effective unless a later time for filing the Subscription Agreement has
been set by the Company with respect to a given offering. An Employee's
authorization and participation in the Plan shall become effective on the first
Enrollment Date following the timely filing of his or her Subscription Agreement
and shall remain effective until revoked by the participant by the filing of a
Payroll Deduction Authorization Change or Withdrawal form as described in
Section 10(a) hereof or until changed by the filing of a Payroll Deduction
Authorization Change or Withdrawal form providing for a change in the
participant's payroll deduction rate. An Employee who becomes eligible to
participate in the Plan after the

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commencement of an Offering Period may not become a participant in the Plan
until the commencement of the next Offering Period.

        6. PAYROLL DEDUCTIONS.

           (a) Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in the
Offering Period as to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.

           (b) At the time a participant files his or her Subscription Agreement
with the Company, he or she shall elect to have payroll deductions made on each
payday during the next Offering Period at a percentage rate equal to a positive
whole number not exceeding 15%, or such other maximum rate as may be determined
from time to time by the Board subject to the provisions of Section 19 hereof,
of the Compensation which would otherwise be payable to such participant on each
such payday.

           (c) Payroll deductions for a participant shall commence on the first
payday following the date on which a participant's payroll deduction
authorization becomes effective and shall automatically continue from Offering
Period to Offering Period until changed or terminated by the participant in
accordance with the terms hereof.

           (d) All payroll deductions authorized by a participant shall be
credited to the participant's individual account under the Plan. A participant
may not make any additional payments into such account.

           (e) A participant may terminate his or her participation in the Plan
at any time prior to the termination of the Offering Period as provided in
Section 10 hereof, or may increase or decrease the rate of his or her payroll
deductions during an Offering Period or upon commencement of a new Purchase
Period or Offering Period by completing and filing with the Company at least
three business days prior to the start of the next Purchase Period or Offering
Period, as applicable, a new Subscription Agreement authorizing a change in
payroll deduction rate. The Board may, in its discretion, limit the number of
participation rate changes during any Offering Period. The change in rate shall
be effective as of the first full payday of the next Purchase Period or Offering
Period, as applicable, unless the Company elects to process a given change in
participation more quickly. A participant's Subscription Agreement shall remain
in effect for successive Offering Periods unless terminated as provided in
Section 10 hereof.

        7. GRANT OF OPTION. On the Enrollment Date of each Offering Period, each
participant in such Offering Period shall automatically be granted an option to
purchase on each Exercise Date during such Offering Period (at the applicable
Purchase Price) up to a number of shares of the Company's Common Stock
determined by dividing such Employee's payroll deductions accumulated prior to
such Exercise Date and retained in the participant's account as of the Exercise
Date by the applicable Purchase Price; PROVIDED, HOWEVER, that in no event shall
an Employee be permitted to purchase during each Purchase Period more than a
number of

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shares determined by dividing $12,500 by the Fair Market Value of a share of the
Company's Common Stock (subject to any adjustment pursuant to Section 19) on the
Enrollment Date; and PROVIDED FURTHER that such grant of options and purchase
shall be subject to the limitations set forth in Sections 3(b) and 12 hereof.
The Board may, for future Offering Periods, increase or decrease, in its
absolute discretion, the maximum number of shares of the Company's Common Stock
an Employee may purchase during each Purchase Period of an Offering Period.
Exercise of the option shall occur as provided in Section 8 hereof, unless the
participant has withdrawn pursuant to Section 10 hereof. The option shall expire
on the last day of the Offering Period.

        8. EXERCISE OF OPTION.

           (a) Unless a participant withdraws from the Plan as provided in
Section 10, his or her option for the purchase of shares shall be exercised
automatically on each Exercise Date of the Offering Period, and the accumulated
payroll deductions credited to a participant's account on the Exercise Date will
be applied to purchase whole shares of the Company's Common Stock (up to the
maximum number subject to option as determined in Section 7(a) hereof) at the
Purchase Price. Any amount credited to a participant's account and not applied
to the purchase of Common Stock by reason of the limitation on the number of
shares subject to option shall be refunded promptly to such participant after
the Exercise Date, provided that any amount remaining in a participant's account
and representing a fractional share shall be carried over and applied to the
purchase of shares in the subsequent Purchase Period or Offering Period if the
participant participates in the subsequent offering. During his or her lifetime,
a participant's option to purchase shares hereunder is exercisable only by the
participant.

           (b) If the Board determines that, on a given Exercise Date, the
number of shares with respect to which options are to be exercised may exceed
(i) the number of shares of Common Stock that were available for sale under the
Plan on the Enrollment Date of the applicable Offering Period, or (ii) the
number of shares available for sale under the Plan on such Exercise Date, the
Board may in its sole discretion (x) provide that the Company shall make a pro
rata allocation of the shares of Common Stock available for purchase on such
Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall
be practicable and as it shall determine in its sole discretion to be equitable
among all participants exercising options to purchase Common Stock on such
Exercise Date, and continue all Offering Periods then in effect, or (y) provide
that the Company shall make a pro rata allocation of the shares available for
purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform
a manner as shall be practicable and as it shall determine in its sole
discretion to be equitable among all participants exercising options to purchase
Common Stock on such Exercise Date, and terminate any or all Offering Periods
then in effect pursuant to Section 19 hereof. The Company may make a pro rata
allocation of the shares available on the Enrollment Date of any applicable
Offering Period pursuant to the preceding sentence, notwithstanding any
authorization of additional shares for issuance under the Plan by the Company's
shareholders subsequent to such Enrollment Date. In the event of any pro rata
allocation of shares, the Company shall give written notice of such allocation
to each participant affected thereby and shall reduce the rate of payroll
deductions, if necessary.

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        9. DELIVERY. As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall arrange for the issuance
and delivery to, or credit to the account of, each participant, as appropriate,
of the shares purchased upon exercise of his or her option. At the election of
the Company, the issuance and delivery of the shares purchased upon exercise of
a participant's option may be effected by transfer (electronic or otherwise in
the discretion of the Company) of such shares to a securities account maintained
in the participant's name.

        10. WITHDRAWAL; TERMINATION OF EMPLOYMENT.

            (a) A participant may terminate his or her participation in an
offering under the Plan and withdraw all, but not less than all, of the payroll
deductions credited to his or her account under the Plan at any time prior to an
Exercise Date by giving written notice of withdrawal to the Company on a Payroll
Deduction Authorization Change or Withdrawal form provided for such purpose. In
such case, all of the participant's payroll deductions credited to his or her
account shall be paid to him or her promptly after receipt of his or her notice
of withdrawal, his or her option for the Offering Period shall be automatically
canceled, and no further payroll deductions for the purchase of shares shall be
made for such Offering Period. If a participant withdraws from an Offering
Period, payroll deductions shall not resume at the beginning of the succeeding
Offering Period unless the participant delivers to the Company a new
Subscription Agreement in accordance with Section 5 hereof.

            (b) A participant may terminate his or her participation in the Plan
effective as of the first day of the next Purchase Period or Offering Period by
giving written notice of withdrawal to the Company on a Payroll Deduction
Authorization Change or Withdrawal form provided for such purpose. In such case,
the participant's payroll deductions will continue through the end of the
Purchase Period or Offering Period in which the notice of withdrawal is given,
all amounts deducted from the participant's Compensation during such Purchase
Period or Offering Period will be applied to the purchase of Common Stock
pursuant to the Plan, and following such termination of participation no further
payroll deductions for the purchase of shares shall be made except pursuant to a
new Subscription Agreement delivered in accordance with Section 5 hereof.

            (c) Upon termination of a participant's employment for any reason,
including retirement or death, as soon as practicable after such termination,
the payroll deductions credited to his or her account shall be returned to him
or her or, in the case of his or her death, to the person or persons entitled
thereto under Section 14, and his or her option shall be automatically canceled.

            (d) In the event an Employee fails to remain in the continuous
employ of the Company or its Subsidiaries for more than 20 hours per week during
the Offering Period in which the Employee is a participant, he or she will be
deemed to have elected to withdraw from the Plan and the payroll deductions
credited to his or her account will be returned to him or her and his or her
option will be canceled.

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            (e) A participant's withdrawal from an offering shall not have any
effect upon his or her eligibility to participate in a subsequent offering or in
any similar plan which may hereafter be adopted by the Company.

        11. INTEREST. No interest shall accrue on the payroll deductions of a
participant in the Plan.

        12. STOCK.

            (a) The maximum number of shares of the Company's Common Stock which
shall be made available for sale under the Plan shall be 300,000 shares, subject
to adjustment upon changes in capitalization of the Company as provided in
Section 18(a) hereof, together with a cumulative annual increase to the number
of shares reserved for issuance thereunder on May 1, 2001 and each May 1
thereafter equal to the lesser of (i) 200,000 shares, (ii) 1% of the outstanding
shares of the Company on the last day of the prior fiscal year or (iii) such
amount as may be determined by the Board. The shares to be sold to participants
in the Plan will be authorized but unissued shares. Upon the cancellation of any
option granted under the Plan, the shares subject thereto shall return to the
Plan and become available for options thereafter granted under the Plan.

            (b) A participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised.

            (c) Shares to be delivered to a participant under the Plan shall, as
specified in the participant's Subscription Agreement, be registered in the name
of the participant or in the name of the participant and his or her spouse.

        13. ADMINISTRATION. The Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its committee shall, to the fullest extent
permitted by law, be final and binding upon all parties.

        14. DESIGNATION OF BENEFICIARY.

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

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

        15. TRANSFERABILITY. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution, pursuant to a qualified domestic relations order as defined by the
Code or Title I of the Employee Retirement Income Security Act, or the rules
thereunder, or as provided in Section 14 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

        16. USE OF FUNDS. All payroll deductions received or held by the Company
on behalf of a participant under the Plan may be used by the Company for any
corporate purpose, and the Company shall not be obligated to segregate such
payroll deductions.

        17. REPORTS. Individual accounts will be maintained for each participant
in the Plan. Individual statements of account will be given to participating
Employees at least annually, which statements shall set forth the amounts of
payroll deductions, the Purchase Price, the number of shares purchased and the
remaining cash balance, if any, in a participant's account.

        18. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR CONTROL.

            (a) CHANGES IN CAPITALIZATION. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each option under the Plan which has not yet been exercised and the number of
shares of Common Stock which has been authorized for issuance under the Plan but
has not yet been placed under option or which has been returned to the Plan upon
the cancellation of an option, as well as the option price per share of Common
Stock covered by each option under the Plan which has not yet been exercised,
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock split,
stock dividend, combination of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without receipt of
consideration by the Company; PROVIDED, HOWEVER, that 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 issue by the Company of shares of stock
of any class, or securities convertible into

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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 of Common Stock
subject to option.

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

            (c) MERGER OR ASSET SALE. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding option shall be assumed or an
equivalent option substituted by the successor corporation or a parent or
subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option, any Purchase Periods
then in progress shall be shortened by setting a new Exercise Date (the "New
Exercise Date") and any Offering Periods then in progress shall end on the New
Exercise Date. The New Exercise Date shall be before the date of the Company's
proposed sale or merger. The Board shall notify each participant in writing, at
least ten business days prior to the New Exercise Date, that the Exercise Date
for the participant's option has been changed to the New Exercise Date and that
the participant's option shall be exercised automatically on the New Exercise
Date, unless prior to such date the participant has withdrawn from the Offering
Period as provided in Section 10 hereof.

            (d) No fractional shares of Common Stock shall be issuable on
account of any adjustment described herein, and the aggregate number of shares
into which shares then covered by an option, when changed as the result of such
adjustment, shall be reduced to the largest number of whole shares resulting
from such adjustment, unless the Board, in its sole discretion, shall determine
to issue scrip certificates in respect to any fractional shares, which scrip
certificates, in such event, shall be in a form and have such terms and
conditions as the Board in its discretion shall prescribe.

        19. AMENDMENT OR TERMINATION. The Board of Directors of the Company may
at any time and for any reason terminate or amend the Plan. Except as provided
in Section 18 hereof, no such termination can affect options previously granted,
provided that an Offering Period may be terminated by the Board of Directors on
any Exercise Date if the Board determines that the termination of the Offering
Period or the Plan is in the best interests of the Company and its shareholders.
Except as provided in Section 18 and this Section 19, no amendment may make any
change in any option theretofore granted which adversely affects the rights of
any participant without the prior written consent of such participant:

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            (a) To the extent necessary to comply with Section 423 of the Code
(or any successor rule or provision or any other applicable law, regulation or
stock exchange rule), the Company shall obtain shareholder approval of any
amendment to the Plan in such a manner and to such a degree as is required.

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

            (c) In the event the Board determines that the ongoing operation of
the Plan may result in unfavorable financial accounting consequences, the Board
may, in its discretion and to the extent necessary or desirable, modify or amend
the Plan to reduce or eliminate such accounting consequence including, but not
limited to:

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

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

                (iii) allocating shares.

           Such modifications or amendments shall not require shareholder
approval or the consent of any Plan participants.

        20. TERM OF PLAN. The Plan shall become effective upon the earlier to
occur of its adoption by the Board or its approval by vote of a majority of the
outstanding shares of the Company entitled to vote on the adoption of the Plan.
The Plan shall continue in effect for a term of ten years unless sooner
terminated under Sections 19 or 22 hereof.

        21. NOTICES. All notices or other communications (i) by a participant to
the Company in connection with the Plan shall be deemed to have been duly given
when received in the form specified by the Company at the location, or by the
person, designated by the Company for the receipt thereof and (ii) by the
Company to a participant in connection with the Plan shall be deemed to have
been duly given when received by the participant or, if earlier, five days after

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deposit in the United States mail by certified or registered mail, return
receipt requested, first class postage prepaid, addressed to the participant at
his or her address as shown on the records of the Company or as such participant
may request by written notice to the Company hereunder.

        22. SHAREHOLDER APPROVAL. Notwithstanding anything to the contrary
herein, the effectiveness of the Plan shall be expressly subject (a) to approval
by the Company's shareholders prior to November 1, 2000 by the affirmative vote
of the holders of a majority of the outstanding shares of stock of the Company
present or represented and entitled to vote thereon at a shareholder meeting
duly held or by written consent in accordance with applicable law and (b) to the
closing on or before November 1, 2000 of a public offering by the Company of the
Company's Common Stock pursuant to a registration statement filed with, and
declared effective by, the Securities and Exchange Commission under the
Securities Act of 1933, as amended.

        23. AUTOMATIC TRANSFER TO LOW PRICE OFFERING PERIOD. To the extent
permitted by any applicable laws, regulations or stock exchange or market system
rules, if the Fair Market Value of the Common Stock on any Exercise Date in an
Offering Period is lower than the Fair Market Value of the Common Stock on the
Enrollment Date of such Offering Period, then all participants in such Offering
Period shall be automatically withdrawn from such Offering Period immediately
after the exercise of their option on such Exercise Date and automatically
re-enrolled in the immediately following Offering Period as of the first day
thereof in accordance with the terms and conditions of their Subscription
Agreement then in effect.

        24. NO ENLARGEMENT OF EMPLOYEE RIGHTS. The Plan is purely voluntary on
the part of the Company, and the continuance of the Plan shall not be deemed to
constitute a contract between the Company and any Employee, or to be
consideration for or a condition of the employment of any Employee. Nothing
contained in this Plan shall be deemed to give any Employee the right to be
retained in the employ of the Company, its parent, Subsidiary or a successor
corporation, or to interfere with the right of the Company or any such
corporations to discharge or retire any Employee thereof at any time. No
Employee shall have any right to or interest in options authorized hereunder
prior to the grant of an option to such Employee, and upon such grant he or she
shall have only such rights and interests as are expressly provided herein,
subject, however, to all applicable provisions of the Company's Articles of
Incorporation, as the same may be amended from time to time.

        25. INFORMATION TO PARTICIPANTS. The Company shall provide without
charge to each participant in the Plan copies of such annual and periodic
reports as are provided by the Company to its shareholders generally.

        26. 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
conflicts of laws rules thereof.

        27. TAX WITHHOLDING. If at any time the Company or any Subsidiary is
required, under applicable laws and regulations, to withhold, or to make any
deduction of, any taxes or

                                      -11-
<PAGE>   12

take any other action in connection with any exercise of an option granted
hereunder or any disposition of shares of Common Stock issued hereunder, the
participant must make adequate provision for the Company's federal, state or
other tax withholding obligations which arise from such exercise or disposition.
The Company or such Subsidiary shall have the right to deduct or withhold from
the participant's compensation the amount necessary for the Company to meet
applicable withholding obligations.

        28. SECURITIES LAW COMPLIANCE. No shares of Common Stock may be issued
upon the exercise of any option under the Plan until all requirements of
applicable Federal, state, foreign or other securities laws with respect to the
purchase, sale and issuance of shares of Common Stock shall have been satisfied.
If any action must be taken because of such requirements, then the purchase,
sale and issuance of shares shall be postponed until such action can reasonably
be taken. Upon request by the Company, an Employee shall deliver to the Company
such information, representations or undertakings as the Company may reasonably
request in order to comply with any registration requirements or exemptions
therefrom of applicable securities laws. The Company may require any securities
so issued to bear a legend, may give its transfer agent instructions, and may
take such other steps as in its judgment are reasonably required to prevent any
violation of applicable securities laws.

                                      -12-
<PAGE>   13

                                      IXIA

                          EMPLOYEE STOCK PURCHASE PLAN

                                     FORM OF
                             SUBSCRIPTION AGREEMENT

    Instructions: Please print or type all information except your signature.

NAME: __________________________________________________________________________
            First                    Middle                    Last

ADDRESS: _______________________________________________________________________

SOCIAL SECURITY NO.:  ____  ____  ____  -  ____  ____  -  ____  ____  ____  ___

EMPLOYEE NO.: ___________________________   EMPLOYMENT START DATE: _____________

================================================================================
                              ORIGINAL APPLICATION

1.      I hereby elect to participate in the Ixia Employee Stock Purchase Plan
        (the "Plan") in accordance with this Subscription Agreement and subject
        to the terms and conditions of the Plan.

2.      I hereby authorize Ixia to make regular payroll deductions, at the rate
        indicated below and in accordance with the terms of the Plan, from the
        total Compensation (as defined in the Plan) including overtime, bonuses,
        commissions and other earnings, if any, paid to me during each offering
        period during which I remain a participant in the Plan:

<TABLE>
<S>                    <C>     <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
        (CIRCLE ONE)     1%     2%     3%     4%     5%     6%     7%     8%     9%
                         ---

                         10%     11%     12%     13%     14%     15%     OF COMPENSATION
</TABLE>

3.      I understand that payroll deductions at the indicated rate will continue
        from offering period to offering period unless I become ineligible to
        participate in the Plan or I file the Payroll Deduction Authorization
        Change or Withdrawal portion of this form below.

4.      I understand that the deducted amounts will be applied automatically to
        the purchase of shares of Ixia Common Stock at the end of each offering
        period unless I elect to cancel my option and withdraw from the Plan by
        filing the Payroll Deduction Authorization Change or Withdrawal portion
        of this form below.

5.      I hereby acknowledge that I have received and read a copy of Ixia's most
        recent Prospectus describing the terms and provisions of the Plan and
        understand the information therein and the risks of participating in the
        Plan.

<PAGE>   14

6.      Shares purchased for me under the Plan should be issued in the name(s)
        of: ____________________________________________________________________
        ________________________________________________________________________

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

8.      I will promptly (a) notify Ixia if I have sold, transferred, gifted or
        otherwise disposed of any shares purchased for me under the Plan at any
        time within two years after the end of the offering period in which such
        shares were purchased and (b) provide Ixia with all requested
        information regarding such transaction.

9.      In the event of my death before the end of an offering period, I hereby
        designate as my beneficiary(ies) to receive all payments and shares due
        me under the Plan:

        Name:  (Please print) __________________________________________________
                               First            Middle                   Last

_________________________    ___________________________________________________
Relationship                  Address

_________________________    ___________________________________________________
                              City               State               Zip Code

Name:  (Please print)        ___________________________________________________
                              First             Middle                  Last

_________________________    ___________________________________________________
Relationship                 Address

                             ___________________________________________________
                             City                State               Zip Code

DATE: _____________________                      _______________________________
                                                 SIGNATURE OF EMPLOYEE

===============================================================================

                           ELECTION NOT TO PARTICIPATE

        I hereby acknowledge receipt of a copy of Ixia's most recent Prospectus
which describes the Ixia Employee Stock Purchase Plan and elect not to
participate in the Plan. I understand that my decision not to participate in the
next offering under the Plan will not affect my eligibility to participate in
subsequent offerings under the Plan.

DATE: _____________________                      _______________________________
                                                 SIGNATURE OF EMPLOYEE

===============================================================================
                            (To be completed by Ixia)

Date Received: ____________                      Approved by: __________________

<PAGE>   15

                                      IXIA

                          EMPLOYEE STOCK PURCHASE PLAN

                                     FORM OF
              PAYROLL DEDUCTION AUTHORIZATION CHANGE OR WITHDRAWAL

        I am now a participant in the Ixia Employee Stock Purchase Plan (the
"Plan") and I wish to make the change indicated below (check one):

[  ]    A.      CHANGE IN PAYROLL DEDUCTION RATE: I hereby authorize the
                following new rate of payroll deduction, effective as of the
                first payday of the next Purchase Period (such change must be
                filed with the Company at least three days prior to the start of
                the Purchase Period with respect to which it is to be
                effective):

<TABLE>
<S>                    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
        (CIRCLE ONE)     1%     2%     3%     4%     5%     6%     7%     8%     9%

                        10%    11%    12%    13%    14%    15%     OF COMPENSATION
</TABLE>

[  ]    B.      WITHDRAWAL FROM PLAN AND IMMEDIATE CANCELLATION OF OPTION: I
                hereby elect to cancel my participation in the Plan effective
                immediately and to cancel my option to purchase Ixia Common
                Stock under the Plan and request that all amounts withheld from
                me through payroll deductions relating to the canceled option be
                refunded to me. I understand that cancellation of my option will
                be effective only if this form is filed with the Company prior
                to the close of the current Purchase Period. I understand that
                if I wish to participate in the Plan following my cancellation
                and withdrawal from the Plan, I must re-enroll by filing a new
                Subscription Agreement with the Company at least three business
                days prior to the start of the Offering Period with respect to
                which it is to be effective.

[  ]    C.      WITHDRAWAL FROM PLAN WITHOUT CANCELLATION OF OPTION IN CURRENT
                PURCHASE PERIOD. I hereby elect to cancel my participation in
                the Plan effective as of the first day of the next Purchase
                Period. However, I request that my previously authorized payroll
                deductions continue through the end of the current Purchase
                Period and that all amounts deducted from my Compensation during
                the current Purchase Period be applied to the purchase of Ixia
                Common Stock pursuant to the Plan. I understand that if I wish
                to participate in the Plan following my cancellation and
                withdrawal from the Plan, I must re-enroll by filing a new
                Subscription Agreement with the Company at least three business
                days prior to the start of the Offering Period with respect to
                which it is to be effective.

DATE: _____________________                      _______________________________
                                                 SIGNATURE OF EMPLOYEE

                                                 PRINT NAME: ___________________

================================================================================
                            (To be completed by Ixia)

Date Received: ____________                      Approved by: __________________<PAGE>   1
                                                                    EXHIBIT 10.4
                                      IXIA

                             OFFICER SEVERANCE PLAN

1.      PURPOSE.

        The Ixia Officer Severance Plan (this "Plan") is intended to provide
severance benefits to salaried officers of Ixia ("Ixia" or the "Company") who
shall become eligible for benefits under this Plan. The purpose of this Plan is
to provide certain benefits to Eligible Officers during the transition period
following the loss of employment under circumstances outlined in this Plan. The
provisions herein are being offered and provided at the sole discretion of the
Company. This Plan is effective September 1, 2000.

2.      DEFINITIONS.

        As used herein, the terms identified below shall have the meanings
indicated:

        (a) "ADMINISTRATOR" means the Compensation Committee of the Board of
Directors of the Company (or such other committee as may be appointed by the
Board to administer this Plan); and, in the absence of any such committee, shall
mean the Board of Directors of the Company.

        (b) "ANNUAL COMPENSATION" means the regular rate of annual base salary
paid by the Company to an Eligible Officer in his capacity as such with respect
to a calendar year (or any portion thereof if such person was not or will not be
an Eligible Officer for the entire calendar year) during the Employment Period
plus any bonus payments, commissions and incentive compensation earned by such
officer for services rendered to the Company during the immediately preceding
calendar year (all as shown on the Company's payroll records) and excluding
automobile allowances, pension payments, 401(k) matching contributions, gains
realized in connection with the exercise of a stock option or participation in a
stock option or purchase program, employer contributions for benefits,
relocation payments, expense reimbursements, noncash compensation and similar
payments.

        (c) "BOARD" means the Board of Directors of the Company.

        (d) "CAUSE" Termination by Ixia of an officer's employment for "Cause"
means termination as a result of:

            (i)    death or long-term disability;

            (ii)   a course of persistent conduct amounting to gross
                   incompetence;

            (iii)  any absence (excluding vacations, illnesses or leaves of
                   absence) from work for more than ten consecutive work days or
                   chronic absences from

<PAGE>   2

                   work (also excluding vacations, illnesses or leaves of
                   absence), all of which are neither authorized, justified nor
                   excused;

            (iv)   willful and persistent refusal or failure, after multiple
                   explicit written notices and reasonable time to comply, to
                   perform material, appropriate duties or to follow important
                   Company policies;

            (v)    refusal, after explicit multiple written notices and
                   reasonable time to comply, to obey any lawful resolution of
                   the Board;

            (vi)   embezzlement or other unlawful appropriation of property or
                   other asset of the Company or unlawful appropriation of a
                   corporate opportunity of the Company;

            (vii)  offer, payment, solicitation or acceptance of any unlawful
                   bribe or kickback with respect to the Company's business;

            (viii) indictment or conviction of the officer for or the entering
                   of a plea of nolo contendere with respect to any felony
                   whatsoever or for any misdemeanor involving moral turpitude;

            (ix)   any act or failure to act by the officer that is widely
                   reported in the general or trade press or otherwise and which
                   achieves a general notoriety and which act or failure to act
                   involves conduct that is illegal or generally considered
                   immoral or scandalous;

            (x)    any intentional material breach of the officer's obligations
                   to the Company under any nondisclosure or proprietary
                   agreement with or on behalf of the Company or any material
                   unauthorized disclosure of any important and confidential
                   information of the Company; or

            (xi)   unlawful use (including being under the influence) or
                   possession of illegal drugs on Company premises.

        (e) "CHANGE IN CONTROL" A "Change in Control" of the Company shall be
deemed to have occurred at such time as (i) any "person" (as such term is used
in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 (the
"Exchange Act")) becomes after the effective date of this Plan the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company's then outstanding securities; (ii) during
any period of 12 consecutive months, individuals who at the beginning of such
period constitute the Board cease for any reason to constitute at least a
majority thereof unless the election, or the nomination for election by the
Company's shareholders, of each new director was approved by a vote of at least
a majority of the directors then still in office who were directors at the
beginning of the period; (iii) there occurs the closing of a merger or
consolidation of the Company with any other

<PAGE>   3

corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or (iv) the
shareholders of the Company approve a plan of liquidation of the Company or an
agreement for the sale or disposition (other than in the ordinary course of
business) by the Company of all or substantially all of the Company's assets (or
any transaction having essentially the same effect).

        (f) "CEO" means the Chief Executive Officer of the Company or, if no
person is then serving as Chief Executive Officer, the President of the Company.

        (g) "ELIGIBLE OFFICERS" mean only those duly elected or appointed
officers of the Company that are expressly designated as "Eligible Officers" by
the Board for the purposes of this Plan pursuant to resolutions duly adopted by
the Board.

        (h) "EMPLOYMENT PERIOD" means the aggregate period of time during which
an individual has been employed as a duly elected or appointed Eligible Officer
(other than solely as Chairman of the Board, Secretary and/or Assistant
Secretary) by the Company prior to the Termination Date.

        (i) "GOOD REASON" means, without the express written consent of the
officer, the occurrence after, or concurrently in connection with, a Change of
Control of the Company of any of the following:

            (i)    a reduction by the Company (or the surviving and controlling
                   company if other than the Company (the "Acquiror")) in the
                   officer's annual base salary as in effect on the date
                   immediately prior to the Change in Control of the Company;

            (ii)   the Company or the Acquiror requiring the officer to be based
                   for six months or more at a Company office more than 30 miles
                   from the Company's offices at which such officer was
                   principally employed immediately prior to the date of the
                   Change in Control of the Company except for required and
                   appropriate travel on the Company's or the Acquiror's
                   business to an extent substantially consistent with the
                   officer's business travel obligations immediately prior to
                   the Change in Control of the Company;

            (iii)  the assignment to the officer of duties significantly
                   inconsistent with the position in the Company that such
                   officer held immediately prior to the Change in Control of
                   the Company, or a significantly adverse change in the nature
                   or status of the officer's responsibilities or the conditions
                   of the officer's employment from those in effect immediately
                   prior to such Change in Control;

<PAGE>   4

            (iv)   the failure by the Company or the Acquiror to continue in
                   effect any compensation or benefit plan or perquisites in
                   which the officer participates immediately prior to the
                   Change in Control of the Company which is material to the
                   officer's total compensation, unless an at least equally
                   beneficial arrangement (embodied in an ongoing, substitute or
                   alternative plan) has been made with respect to such plan, or
                   the failure by the Company or the Acquiror to continue such
                   officer's participation therein (or in such ongoing,
                   substitute or alternative plan) on a basis at least as
                   favorable, both in terms of the amount of benefits provided
                   and the level of the officer's participation relative to
                   comparably situated participants, as existed immediately
                   prior to such Change in Control; or

            (v)    the failure by the Company or the Acquiror to continue to
                   provide the officer with benefits substantially similar to
                   those enjoyed by such officer under any of the Company's life
                   insurance, medical, dental, accident, or disability plans in
                   which the officer was participating immediately prior to such
                   Change in Control of the Company or the taking of any action
                   by the Company or the Acquiror which would directly or
                   indirectly materially reduce any of such benefits.

        (j) "SEVERANCE ALLOWANCE" means the aggregate gross amount of severance
payments determined in accordance with Section 4(a) of this Plan to be paid to
an Eligible Officer who is entitled to receive severance benefits under this
Plan.

        (k) "TERMINATION DATE" means the date on which an Eligible Officer
ceases to be a duly elected or appointed officer of the Company (other than
Chairman of the Board, Secretary and/or Assistant Secretary).

3.      ELIGIBILITY.

        (a) Only Eligible Officers shall be eligible to receive benefits under
this Plan.

        (b) Ixia will pay severance benefits under this Plan on account of the
termination of an Eligible Officer's employment with Ixia only if the conditions
set forth in Section 5 are fulfilled and such termination is non-temporary and:

            (i)    the result of a reduction in force (an involuntary separation
                   without Cause and due to elimination of position or a layoff
                   of personnel);

            (ii)   the result of Ixia's belief that the officer is unable to
                   fulfill or is not fulfilling the requirements of or should
                   not hold an officer position for a reason other than for
                   Cause;

            (iii)  the result of such officer having submitted to the Company
                   his/her written resignation or offer of resignation (even if
                   such indicates that such

<PAGE>   5

                   resignation is "voluntary") upon and in accordance with (A)
                   the request by the Board in writing or pursuant to a duly
                   adopted resolution of the Board or (B) with respect to all
                   Eligible Officers other than the Chief Executive Officer of
                   the Company, the written request of the Chief Executive
                   Officer of the Company;

            (iv)   the result of a divestment by Ixia of the operating unit in
                   which such officer works and which unit is sold, conveyed or
                   transferred to another corporation or entity (whether in
                   connection with a sale of assets, stock or other form of
                   transaction) and the officer is not offered employment by the
                   acquiring corporation or entity on substantially the same or
                   comparable terms and conditions as his/her employment with
                   Ixia;

            (v)    the result of an otherwise voluntary separation following the
                   Company requiring the officer to be based more than 30 miles
                   from the Company's offices at which such officer was
                   principally employed and such officer declines to relocate
                   except for required and appropriate travel on the Company's
                   business consistent with the officer's prior business travel
                   obligations;

            (vi)   the result of an otherwise voluntary separation within 30
                   days following a greater than 10% reduction by the Company of
                   the Eligible Officer's annual base salary as in effect from
                   time to time; or

            (vii)  for the convenience of Ixia or otherwise for any reason other
                   than one or more of the reasons set forth in Section 3(c).

        (c) Notwithstanding Section 3(b), Ixia will not be obligated to pay
severance benefits to an Eligible Officer if the termination is the result of:

            (i)    voluntary separation (a separation, including retirement,
                   initiated by the officer), other than a voluntary separation
                   pursuant to Section 3(b)(ii), 3(b)(iii), 3(b)(iv), 3(b)(v) or
                   3(b)(vi) hereof;

            (ii)   retirement (other than at the time of reduction in force and
                   other than as a result of Section 3(b)(iii)), whether early
                   retirement, retirement at normal retirement age or retirement
                   following normal retirement age;

            (iii)  the Company having terminated such officer's employment for
                   Cause; or

            (iv)   the removal of an Eligible Officer from one or more officer
                   positions but such officer is offered and accepts (and
                   continuing to work at the Company in such new officer
                   position shall, among other methods, be a method of
                   acceptance) one or more other officer positions (other than
                   merely Secretary or Assistant Secretary) at the Company.

<PAGE>   6

4.      AMOUNT AND PAYMENT OF BENEFITS.

        (a) SEVERANCE COMPENSATION. An Eligible Officer who is entitled to
receive severance benefits under this Plan shall receive a Severance Allowance
in an amount equal to the product of (i) such Eligible Officer's highest rate of
Annual Compensation during the Employment Period and (ii) a percentage
determined in accordance with the following table:

<TABLE>
<CAPTION>
                                    HIGHEST OFFICE HELD AT OR PRIOR TO TERMINATION
                              ----------------------------------------------------------
          LENGTH OF
      EMPLOYMENT PERIOD          VP            SVP/EVP          CFO/COO         CEO/PRES
      -----------------       --------         -------          -------         --------
<S>                           <C>              <C>              <C>             <C>
 Less than One Year              50%              55%             60%              65%
 Equal to or more than
   One Year but less
   than Three Years              75%              80%             85%             100%
 Equal to or more than
   Three Years but less
   than Five Years              100%             105%            110%             200%
 Equal to or more than
   Five Years                   125%             130%            140%             300%
</TABLE>

        (b) METHOD OF PAYMENT. A terminated officer's Severance Allowance will
normally be paid in 12 equal monthly installments, less all applicable
withholding taxes, commencing ten days after the effective date of the Agreement
required under Section 5 of his Plan.

        (c) HEALTH CARE INSURANCE CONTINUATION. Ixia (at its expense) will
continue, for a period of 18 months following the Termination Date, health care
coverage for the terminated officer and his/her family members who are
"qualified beneficiaries" (as such term is defined in the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA")) under Ixia's group health plan(s)
generally available during such period to employees participating in such
plan(s) and at levels and with coverage no greater than those provided to such
terminated officer as of the Termination Date. Thereafter, such terminated
officer (at his/her expense) may elect coverage under a conversion health plan
available under Ixia's group health plan(s) from the Company's health insurance
carrier if and to the extent he/she is entitled to do so as a matter of right
under federal or state law.

        (d) OTHER BENEFIT PLANS. Except as otherwise expressly provided in this
Section 4 or as required by applicable law, a terminated officer shall have no
right to continue his/her participation in any Ixia benefit plan following such
officer's termination. Without limiting the generality of the foregoing, a
terminated officer shall not be entitled to participate in the Company's 401(k)
Plan or any similar plan following his/her Termination Date.

        (e) VACATION PAY. A terminated officer will be promptly paid for accrued
and unused vacation entitlement on and through the Termination Date.

        (f) OFFSET. To the maximum extent permitted by law, the Company may
offset any and all amounts due or otherwise owed to the Company by the
terminated officer against the severance payments due to the terminated officer
under this Plan.

        (g) SECTION 280G. Notwithstanding anything herein to the contrary, to
the extent that the Severance Allowance to be paid to an Eligible Officer
hereunder exceeds an amount equal to three times the Eligible Officer's base
compensation as determined pursuant to Code Section 280G, the amount of the
Severance Allowance shall be reduced to the minimum extent necessary to ensure
that the Severance Allowance does not exceed the amount determined pursuant to
Code Section 280G.

<PAGE>   7

5.      CONDITION PRECEDENT TO SEVERANCE BENEFITS.

        (a) Notwithstanding anything herein to the contrary and in consideration
for and as a condition precedent to the payment of severance or any other
benefits under this Plan, an Eligible Officer otherwise entitled to receive
payments or benefits under this Plan shall, following his/her Termination Date,
execute and deliver to the Company a written separation agreement (the
"Agreement"), in the form of agreement attached hereto as ATTACHMENT I. Except
as otherwise provided in the last sentence of Section 5(b), an Eligible Officer
shall not have any rights whatsoever to receive severance benefits under this
Plan unless he or she timely executes and delivers to the Company the Agreement.
The obligations set forth in the Agreement shall be in addition to any existing
and continuing duties that such Eligible Officer may otherwise have under law to
the Company as a result of his/her former capacity as an officer, employee,
director, shareholder or otherwise.

        (b) Not later than 20 days after an Eligible Officer's Termination Date,
the Company shall provide such Eligible Officer with the Agreement for his/her
execution. Unless such Agreement is duly executed and returned by the Eligible
Officer to the Company within 21 days after he or she receives it or the
Eligible Officer correctly disputes or otherwise correctly disagrees with the
Company's determination of the severance payments payable under this Plan and
has made a timely claim in accordance with Section 8(a) hereof, such officer
shall be deemed to have waived and forfeited his/her rights to severance
payments and benefits under this Plan and the Company shall have no further
obligations whatsoever to such Eligible Officer under this Plan. If the Company
shall not provide the Agreement to the Eligible Officer within 20 days after
such Officer's Termination Date, the Company shall be deemed to have waived the
condition set forth in this Section 5 and the Eligible Officer shall not be
required to execute the Agreement as a condition to receiving any severance
payments or other benefits under this Plan.

6.      CHANGE IN CONTROL PROVISIONS.

        (a) The provisions of this Section 6 shall apply only in the event that
a Change in Control of the Company shall occur.

        (b) In the event that a Change in Control of the Company shall occur,
Ixia will pay the severance benefits provided in this Plan to an Eligible
Officer who elects to terminate his/her employment unilaterally (i) within one
year of such Change in Control for any reason, with or without "Good Reason" or
(ii) within two years of such Change in Control for "Good Reason." The
provisions of this Section 6 shall automatically expire two years after a Change
in Control occurs and an Eligible Officer shall not be eligible to claim
benefits under this Plan, including Section 6, thereafter.

        (c) In the event that an officer's employment with the Company is
terminated for any reason prior to the Change in Control of the Company, and
subsequently a Change in Control of the Company occurs, such officer shall not
be entitled to any benefits under this Section 6 unless such termination was in
connection with or otherwise directly because of such anticipated Change in
Control.

<PAGE>   8

7.      ADMINISTRATION OF THIS PLAN.

        This Plan shall be interpreted and administered for the Company by the
Administrator who shall also be the named fiduciary of this Plan. The
Administrator shall administer this Plan in accordance with its terms and shall
have all powers necessary to carry out this Plan's provisions on behalf of the
Company. The Administrator shall have discretionary authority on behalf of the
Company to determine reasonably and in good faith all questions arising in the
administration, interpretation and application of this Plan and to construe the
terms of this Plan, including any disputed or doubtful terms or the eligibility
of an Eligible Officer for any benefit hereunder. Except as otherwise expressly
provided in this Plan, the Administrator shall have no power or authority to add
to, subtract from or modify any of the terms of this Plan, or to change or
modify any of the benefits provided by this Plan, or to waive or fail to apply
any requirements for eligibility for a benefit under this Plan.

8.      CLAIMS FOR BENEFITS.

        (a) In the event an Eligible Officer disputes or otherwise disagrees
with the Company's determination of the severance benefits payable to him or her
and desires to make a claim (a "claimant") with respect to any of the benefits
provided hereunder, the claimant shall so notify, in writing, the Administrator
by actual receipt or registered mail (addressed to the "Officer Severance Plan
Administrator," Ixia, 26601 West Agoura Road, Calabasas, California 91302) and
shall submit evidence of events constituting a termination of employment with
the Company. Any claim with respect to any of the benefits provided under this
Plan shall be made in writing within 90 days of the later of his/her becoming
aware of the event which the claimant asserts entitles him or her to severance
benefits or the Company notifying him or her of its determination of the
severance benefits payable to him or her under this Plan as a result of the
occurrence of that event. Failure by the claimant to submit his/her claim within
such 90-day period shall bar the claimant from disputing the Company's
notification to him or her of its determination of the severance benefits
payable to him or her under this Plan as a result of the occurrence of that
event.

        (b) In the event that a claim which is made by a claimant is wholly or
partially denied, the claimant will receive from the Administrator within 60
days of the claimant's above-referenced notice a written explanation of the
reason for denial and the claimant or his/her duly authorized representative may
appeal the denial of the claim to the Administrator at any time within 60 days
after the receipt by the claimant of written notice from the Administrator of
the denial of the claim. In connection therewith, the claimant or his/her duly
authorized representative may request a review of the denied claim, may review
pertinent documents, and may submit issues and comments in writing. Upon receipt
of a request for review of a denied claim, the Administrator shall make a
decision with respect thereto and, not later than 60 days after receipt of a
request for review, shall furnish the claimant with a decision on the review in
writing, including the specific reasons for the decision written in a manner
reasonably calculated to be understandable by the claimant or the claimant's
attorney or accountant, as well as specific reference to the pertinent
provisions of this Plan upon which the decision is based. In reaching

<PAGE>   9

its decision, the Administrator shall have the discretionary authority in good
faith to determine on behalf of the Company all questions arising under this
Plan.

9.      MISCELLANEOUS PROVISIONS.

        (a) If an Eligible Officer shall become entitled to receive benefits or
payments from the Company pursuant to the provisions of any statute, rule or
regulation of the United States or any state, territory, commonwealth or
political subdivision thereof as the result of a plant or facility shutdown or
closing, or the change in the control or ownership of the Company (other than
unemployment benefits), the amount of severance benefits payable hereunder shall
be offset dollar for dollar and reduced by such benefits otherwise payable to
the Eligible Officer under such statute, rule or regulation.

        (b) The failure of the Company to enforce at any time any of the
provisions of this Plan, or to require at any time performance of any of the
provisions of this Plan, shall in no way be construed to be a waiver of these
provisions, nor in any way to affect the validity of this Plan or any part
thereof, or the right of the Company thereafter to enforce every provision.

        (c) Except as may be required by law, no benefit which shall be payable
under this Plan to any Eligible Officer shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge, and any attempt to alienate, sell, transfer, assign, pledge, encumber or
charge all or any part of the benefit shall be void; provided, however, in the
event of the death of a terminated officer prior to the end of the period over
which such officer is entitled to receive severance benefits under this Plan,
the severance benefits payable hereunder shall be paid to the estate of such
officer or to the person who acquired the rights to such benefits by bequest or
inheritance. Except as may be provided by law, no benefit shall in any manner be
liable for, or subject to, the debts, contracts, liabilities, engagements or
torts of any Eligible Officer, nor shall it be subject to attachment or legal
process for, or against, the Eligible Officer and the same shall not be
recognized under this Plan.

        (d) The definitions and criteria set forth herein are solely for the
purpose of defining Plan eligibility. No legal rights to employment are created
or implied by this Plan, nor are any conditions or restrictions hereby placed on
termination of employment. Unless the employee has a written employment
agreement binding on Ixia which provides otherwise, employment with Ixia is
employment-at-will. This means termination of employment may be initiated by the
officer or by Ixia at any time for any reason which is not unlawful, with or
without cause.

        (e) This Plan shall be construed, administered and governed under and by
the laws of the State of California and the laws of the United States to the
extent they preempt state law or are otherwise applicable to this Plan.

        (f) This Plan constitutes the entire Officer Severance Plan for the
Company and supersedes all previous representations, understandings and plans
with respect to officer severance, and any such representations, understandings
and plans with respect to officer severance are hereby canceled and terminated
in all respects.
<PAGE>   10

        (g) Subject to the limitations herein provided, this Plan and each
provision hereof may be amended, modified, supplemented, terminated or waived at
any time by the Board. Each such amendment, modification, supplement,
termination or waiver shall be in writing, shall be promptly sent in writing to
each Eligible Officer and shall be effective on the date on or after such Board
action as is specified by the Board; provided, however, that (i) no such action
shall have the effect of retroactively changing or depriving any terminated
officers of their rights to benefits payable with respect to events occurring
prior to the effective date of such amendment, modification, supplement,
termination or waiver unless the explicit written consent or waiver of such
officer thereto is obtained; (ii) no such action shall retroactively materially
diminish the rights under this Plan of an officer who is an Eligible Officer at
the date on which such amendment, modification, supplement, termination or
waiver is approved by the Board unless (a) the explicit written consent thereto
or waiver by such officer is obtained or (b) the Board specifies that such
action shall not become effective with respect to those officers who are
Eligible Officers on the date such action is duly approved by the Board until at
least 12 months have elapsed after such officers have been notified in writing
of the Board's approval of such action; and (iii) no such action shall be taken
within a period of two years following a Change in Control. Except as expressly
provided herein, no course of dealing between the parties hereto and no delay in
exercising any right, power or remedy conferred hereby or now or hereafter
existing at law, in equity, by statute or otherwise, shall operate as a waiver
of, or otherwise prejudice, any such right, power or remedy.

                                      IXIA

                                            /S/ ERROL GINSBERG
                                      ------------------------------------------
                                      Errol Ginsberg
                                      Chief Executive Officer and  President

Date:   September 1, 2000

<PAGE>   11

                                  ATTACHMENT I

                         EMPLOYMENT SEPARATION AGREEMENT

        THIS EMPLOYMENT SEPARATION AGREEMENT (the "Agreement"), which includes
Exhibits A, B and C hereto which are incorporated herein by this reference, is
entered into by and between IXIA, a California corporation ("Ixia"), and
____________________ ("Former Employee"), and shall become effective when
executed by both parties hereto (the "Effective Date").

                                    RECITALS

        A. Former Employee ceased to be an employee and officer of Ixia on
_______________, 20___ (the "Termination Date").

        B. Former Employee desires to receive severance benefits under Ixia's
Officer Severance Plan dated September ___, 2000 (the "Severance Plan"), which
benefits are stated in the Severance Plan to be contingent upon, among other
things, Former Employee's entering into this Agreement and undertaking the
obligations set forth herein.

        C. Ixia and Former Employee desire to set forth their respective rights
and obligations with respect to Former Employee's separation from Ixia and to
finally and forever settle and resolve all matters concerning Former Employee's
past services to Ixia.

                                    AGREEMENT

        NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and conditions set forth herein, the receipt and sufficiency of
which are hereby acknowledged, Ixia and Former Employee hereby agree as follows:

1.      DEFINITIONS

        As used herein, the following terms shall have the meanings set forth
below:

        1.1 "INCLUDES;" "INCLUDING." Except where followed directly by the word
"only," the terms "includes" or "including" shall mean "includes, but is not
limited to," and "including, but not limited to," respectively.

        1.2 "SEVERANCE COVERED PERIOD." The term "Severance Covered Period"
shall mean a period of time commencing upon the effective date of this Agreement
and ending on the date on which the last installment of the Severance Allowance
is due and payable pursuant to Section 6.2 of this Agreement.

        1.3 OTHER CAPITALIZED TERMS. Capitalized terms (other than those
specifically defined herein) shall have the same meanings ascribed to them in
the Severance Plan.
<PAGE>   12

2.      MUTUAL REPRESENTATIONS, WARRANTIES AND COVENANTS

        Each party hereto represents, warrants and covenants (with respect to
itself/himself only) to the other party hereto that, to its/his respective best
knowledge and belief as of the date of each party's respective signature below:

        2.1 FULL POWER AND AUTHORITY. It/he has full power and authority to
execute, enter into and perform its/his obligations under this Agreement; this
Agreement, after execution by both parties hereto, will be a legal, valid and
binding obligation of such party enforceable against it/him in accordance with
its terms; it/he will not act or omit to act in any way which would materially
interfere with or prohibit the performance of any of its/his obligations
hereunder, and no approval or consent other than as has been obtained of any
other party is necessary in connection with the execution and performance of
this Agreement.

        2.2 EFFECT OF AGREEMENT. The execution, delivery and performance of this
Agreement and the consummation of the transactions hereby contemplated:

            (a) will not interfere or conflict with, result in a breach of,
constitute a default under or violation of any of the terms, provisions,
covenants or conditions of any contract, agreement or understanding, whether
written or oral, to which it/he is a party (including, in the case of Ixia, its
bylaws and articles of incorporation each as amended to date) or to which it/he
is bound;

            (b) will not conflict with or violate any applicable law, rule,
regulation, judgment, order or decree of any government, governmental agency or
court having jurisdiction over such party; and

            (c) has not heretofore been assigned, transferred or granted to
another party, or purported to assign, transfer or grant to another party, any
rights, obligations, claims, entitlements, matters, demands or causes of actions
relating to the matters covered herein.

3.      CONFIDENTIALITY OBLIGATIONS DO NOT TERMINATE

        Former Employee acknowledges that any confidentiality, proprietary
rights or nondisclosure agreement(s) in favor of Ixia which he may have entered
into from time to time in connection with his employment (collectively, the
"Nondisclosure Agreement") with Ixia is understood to be intended to survive,
and does survive, any termination of such employment, and accordingly nothing in
this Agreement shall be construed as terminating, limiting or otherwise
affecting any such Nondisclosure Agreement or Former Employee's obligations
thereunder. Without limiting the generality of the foregoing, no time period set
forth in this Agreement shall be construed as shortening or limiting the term of
any such Nondisclosure Agreement, which term shall continue as set forth
therein.

                                       2
<PAGE>   13

4.      BENEFITS

        4.1 HEALTH CARE INSURANCE CONTINUATION. Ixia (at its expense) will
continue, for a period of 18 months following the Termination Date, health care
coverage for Former Employee and his family members who are "qualified
beneficiaries" (as such term is defined in the Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA")) under Ixia's group health plan(s)
generally available during such period to employees participating in such
plan(s) and at levels and with coverage no greater than those provided to such
Former Employee as of the Termination Date. Thereafter, Former Employee (at his
expense) may elect coverage under a conversion health plan available under
Ixia's group health plan(s) from the Company's health insurance carrier if and
to the extent he is entitled to do so as a matter of right under federal or
state law.

        4.2 OTHER BENEFIT PLANS. Except as otherwise expressly provided in this
Section 4 or as required by applicable law, Former Employee shall have no right
to continue his participation in any Ixia benefit plan following such employee's
termination.

5.      STOCK OPTIONS

        EXHIBIT A hereto sets forth any and all outstanding stock options,
warrants and other rights to purchase capital stock or other securities of Ixia
(including but not limited to stock purchase agreements) which have been
previously issued to Former Employee and which are outstanding as of the date
hereof. Nothing in this Agreement shall alter or affect any of such outstanding
stock options, warrants or rights, Former Employee's rights or responsibilities
with respect thereto, including but not limited to Former Employee's rights to
exercise any of his options, warrants or rights following the Termination Date,
or Ixia's rights with respect thereto.

6.      PAYMENTS TO FORMER EMPLOYEE

        6.1 EMPLOYEE COMPENSATION. Ixia has paid, and Former Employee
acknowledges and agrees that Ixia has paid, to him any and all salary and
accrued but unpaid vacation and sick pay owed by Ixia to Former Employee up to
and including the Termination Date other than any compensation owed to him under
the Severance Plan.

        6.2 SEVERANCE ALLOWANCE. In consideration for the release by Former
Employee set forth herein (including the release of any and all claims Former
Employee has or may have under the Age Discrimination in Employment Act ("ADEA")
and Older Workers Benefit Protection Act ("OWBPA")) and Former Employee's
performance of his obligations under this Agreement (including but not limited
to Former Employee's obligations under Section 7 hereof), Former Employee is
entitled to receive, and Ixia shall pay to Former Employee, a Severance
Allowance in the aggregate gross amount of $______________ payable in 12 equal
monthly installments of $________ each, less all applicable withholding taxes,
beginning on the date that is ten days after the Effective Date, in accordance
with the terms and conditions of the Severance Plan.

                                       3
<PAGE>   14

7.      NON-COMPETITION AND NON-SOLICITATION

        7.1 Subject and in addition to Former Employee's existing fiduciary
duties as a former officer and employee of Ixia to the extent such continues
under applicable law after Former Employee's Termination Date, provided that
Ixia has not breached any of the terms of this Agreement or any other currently
existing written agreements between Ixia and Former Employee, Former Employee
agrees until the earlier of (i) the completion of the Severance Covered Period
or (ii) such date as Ixia may terminate this Agreement for default hereunder:

            (a) Not to engage, either directly or indirectly, in any Competing
Business Activity (as defined below) or be associated with a Competing Business
Entity (as defined below) as an officer, director, employee, principal,
consultant, lender, creditor, investor, agent or otherwise for any corporation,
partnership, company, agency, person, association or any other entity; provided,
however, that nothing contained herein shall prevent Former Employee from owning
not more than 5% of the common equity and not more than 5% of the voting power
of, or lending not more than $25,000 to, any Competing Business Entity or any
business engaged in a Competing Business Activity; provided, further, that for
purposes of this agreement, any equity ownership, voting control or lending
activity of Former Employee shall be deemed to include that of (i) any family
member or (ii) person or entity controlled by Former Employee;

            (b) Not to call upon or cause to be called upon, or solicit or
assist in the solicitation of, in connection with any Competing Business Entity
or Competing Business Activity, any entity, agency, person, firm, association,
partnership or corporation that is a customer or account of Ixia, currently
and/or during the Severance Covered Period, for the purpose of selling, renting,
leasing, licensing or supplying any product or service that is the same as,
similar to or competitive with the products or services then being sold or
developed by Ixia;

            (c) Not to enter into an employment or agency relationship with a
Competing Business Entity or involving a Competing Business Activity with any
person who, at the time of such entry, is an officer, director, employee,
principal or agent of or with respect to Ixia; and

            (d) Not to induce or attempt to induce any person described in
Section 7.1(c) to leave his employment, agency, directorship or office with
Ixia.

        7.2 For purposes of this Section 7, a "Competing Business Activity"
shall mean any business activity of a person or entity (other than Ixia)
involving the development, design, manufacture, distribution, marketing,
licensing, renting, leasing or selling within the Territory (as defined below)
of products and services which are the same as, similar to or competitive with
products or services of Ixia then in existence or under development. For
purposes hereof, the Territory shall include the United States of America,
Canada, Mexico, Central America, South America, Europe, Japan, Australia,
Singapore and such other countries in which Ixia then distributes, markets,
licenses, rents, leases or sells its products or services. An entity as a whole
shall be deemed to be a Competing Business Entity if it has one or more business
activities involving the development, design, manufacture, distribution,
marketing, licensing, renting, leasing or selling directly or indirectly within
the Territory of products or services which are the

                                       4
<PAGE>   15

same as, similar to or competitive with products or services of Ixia then being
sold or under development and if and only if the revenues derived directly or
indirectly from engaging in such business activities by such entity represent
either more than 3% of the entity's revenues or at least $5 million in aggregate
sales, or both, for the then-preceding 12-month period.

        7.3 The parties acknowledge that the provisions and obligations set
forth in this Section 7 are an integral part of this Agreement and that in the
event Former Employee breaches any of the provisions or obligations of this
Section 7 or any other term, provision or obligation of this Agreement, then
Ixia, in addition to any other rights or remedy it may have at law, in equity,
by statute or otherwise, shall be excused from its payment obligations to Former
Employee under the Severance Plan and this Agreement.

8.      CONFIDENTIAL INFORMATION AND TRADE SECRETS

        8.1 Former Employee hereby recognizes, acknowledges and agrees that Ixia
is the owner of proprietary rights in certain confidential sales and marketing
information, programs, tactics, systems, methods, processes, compilations of
technical and non-technical information, records and other business, financial,
sales, marketing and other information and things of value. To the extent that
any or all of the foregoing constitute valuable trade secrets and/or
confidential and/or privileged information of Ixia, Former Employee hereby
further agrees as follows:

            (a) That, except with prior written authorization from Ixia's CEO,
for purposes related to Ixia's best interests, he will not directly or
indirectly duplicate, remove, transfer, disclose or utilize, nor knowingly allow
any other person to duplicate, remove, transfer, disclose or utilize, any
property, assets, trade secrets or other things of value, including, but not
limited to, records, techniques, procedures, systems, methods, market research,
new product plans and ideas, distribution arrangements, advertising and
promotional materials, forms, patterns, lists of past, present or prospective
customers, and data prepared for, stored in, processed by or obtained from, an
automated information system belonging to or in the possession of Ixia which are
not intended for and have not been the subject of public disclosure. Former
Employee agrees to safeguard all Ixia trade secrets in his possession or known
to him at all times so that they are not exposed to, or taken by, unauthorized
persons and to exercise his reasonable efforts to assure their safekeeping. This
subsection shall not apply to information that as of the date hereof is, or as
of the date of such duplication, removal, transfer, disclosure or utilization
(or the knowing allowing thereof) by Former Employee has (i) become generally
known to the public or competitors of Ixia (other than as a result of a breach
of this Agreement); (ii) been lawfully obtained by Former Employee from any
third party who has lawfully obtained such information without breaching any
obligation of confidentiality; or (iii) been published or generally disclosed to
the public by Ixia. Former Employee shall bear the burden of showing that any of
the foregoing exclusions applies to any information or materials.

            (b) That all improvements, discoveries, systems, techniques, ideas,
processes, programs and other things of value made or conceived in whole or in
part by Former Employee with respect to any aspects of Ixia's current or
anticipated business while an employee of Ixia are

                                       5
<PAGE>   16

and remain the sole and exclusive property of Ixia, and Former Employee has
disclosed all such things of value to Ixia and will cooperate with Ixia to
insure that the ownership by Ixia of such property is protected. All of such
property of Ixia in Former Employee's possession or control, including, but not
limited to, all personal notes, documents and reproductions thereof, relating to
the business and the trade secrets or confidential or privileged information of
Ixia has already been, or shall be immediately, delivered to Ixia.

        8.2 Former Employee further acknowledges that as the result of his prior
service as an officer and employee of Ixia, he has had access to, and is in
possession of, information and documents protected by the attorney-client
privilege and by the attorney work product doctrine. Former Employee understands
that the privilege to hold such information and documents confidential is
Ixia's, not his personally, and that he will not disclose the information or
documents to any person or entity without the express prior written consent of
the CEO or Board of Ixia unless he is required to do so by law.

        8.3 Former Employee's obligations set forth in this Section 8 shall be
in addition to, and not instead of, Former Employee's obligations under any
written Nondisclosure Agreement.

9.      ENFORCEMENT OF SECTIONS 7 AND 8

        Former Employee hereby acknowledges and agrees that the services
rendered by him to Ixia in the course of his prior employment were of a special
and unique character, and that breach by him of any provision of the covenants
set forth in Sections 7 and 8 of this Agreement will cause Ixia irreparable
injury and damages. Former Employee expressly agrees that Ixia shall be
entitled, in addition to all other remedies available to it whether at law or in
equity, to injunctive or other equitable relief to secure their enforcement.

        The parties hereto expressly agree that the covenants contained in
Sections 7 and 8 hereof are reasonable in scope, duration and otherwise;
however, if any of the restraints provided in said covenants are adjudicated to
be excessively broad as to geographic area or time or otherwise, said restraint
shall be reduced to whatever extent is reasonable and the restraint shall be
fully enforced in such modified form. Any provisions of said covenants not so
reduced shall remain in full force and effect.

10.     PROHIBITION AGAINST DISPARAGEMENT

        10.1 Former Employee agrees that for a period of two years following the
Effective Date any communication, whether oral or written, occurring on or off
the premises of Ixia, made by him or on his behalf to any person or entity
(including, without limitation, any Ixia employee, customer, vendor, supplier,
any competitor, any media entity and any person associated with any media) which
in any way relates to Ixia (or any of its subsidiaries) or to Ixia's or any of
its subsidiaries' directors, officers, management or employees: (a) will be
truthful; and (b) will not, directly or indirectly, criticize, disparage, or in
any manner undermine the reputation or business practices of Ixia or its
directors, officers, management or employees.

                                       6
<PAGE>   17

        10.2 The only exceptions to Section 10.1 shall be: (a) truthful
statements privately made to (i) the CEO of Ixia, (ii) any member of Ixia's
Board, (iii) Ixia's auditors, (iv) inside or outside counsel of Ixia, (v) Former
Employee's counsel or (vi) Former Employee's spouse; (b) truthful statements
lawfully compelled and made under oath in connection with a court or government
administrative proceeding; and (c) truthful statements made to specified persons
upon and in compliance with prior written authorization from Ixia's CEO or Board
to Former Employee directing him to respond to inquiries from such specified
persons.

11.     COOPERATION

        Former Employee agrees that for a period of five years commencing with
the Effective Date he will cooperate fully and reasonably with Ixia in
connection with any future or currently pending matter, proceeding, litigation
or threatened litigation: (1) directly or indirectly involving Ixia (which, for
purposes of this section, shall include Ixia and each of its current and future
subsidiaries, successors or permitted assigns); or (2) directly or indirectly
involving any director, officer or employee of Ixia (with regard to matters
relating to such person(s) acting in such capacities with regard to Ixia
business). Such cooperation shall include making himself available upon
reasonable notice at reasonable times and places for consultation and to testify
truthfully (at Ixia's expense for reasonable, pre-approved out-of-pocket travel
costs plus a daily fee equal to one-twentieth of his monthly severance
compensation under Section 6.2 hereof for each full or partial day during which
Former Employee makes himself so available) in any action as reasonably
requested by the CEO or the Board of Directors. Former Employee further agrees
to immediately notify Ixia's CEO in writing in the event that he receives any
legal process or other communication purporting to require or request him to
produce testimony, documents, information or things in any manner related to
Ixia, its directors, officers or employees, and that he will not produce
testimony, documents, information or other things with regard to any pending or
threatened lawsuit or proceeding regarding Ixia without giving Ixia prior
written notice of the same and reasonable time to protect its interests with
respect thereto. Former Employee further promises that when so directed by the
CEO or the Board of Directors, he will make himself available to attend any such
legal proceeding and will truthfully respond to any questions in any manner
concerning or relating to Ixia and will produce all documents and things in his
possession or under his control which in any manner concern or relate to Ixia.
Former Employee covenants and agrees that he will immediately notify Ixia's CEO
in writing in the event that he breaches any of the provisions of Sections 7, 8,
10 or 11 hereof.

12.     SOLE ENTITLEMENT

        Former Employee acknowledges and agrees that his sole entitlement to
compensation, payments of any kind, monetary and nonmonetary benefits and
perquisites with respect to his prior Ixia relationship (as an officer and
employee) is as set forth in the Severance Plan, this Agreement, the Company's
bonus plan for officers as in effect from time to time, stock option and warrant
agreements, COBRA, and such other written agreements and securities between Ixia
and Former Employee as may exist or as may be set forth on EXHIBIT B hereto.

                                       7
<PAGE>   18

13.     RELEASE OF CLAIMS

        13.1 GENERAL. Former Employee does hereby and forever release and
discharge Ixia and the predecessor corporation of Ixia as well as the
successors, current, prior or future shareholders of record, officers,
directors, heirs, predecessors, assigns, agents, employees, attorneys, insurers
and representatives of each of them, past, present or future, from any and all
cause or causes of action, actions, judgments, liens, indebtedness, damages,
losses, claims, liabilities and demands of any kind or character whatsoever,
whether known or unknown, suspected to exist or not suspected to exist,
anticipated or not anticipated, whether or not heretofore brought before any
state or federal agency, court or other governmental entity which are existing
on or arising prior to the date of this Agreement and which, directly or
indirectly, in whole or in part, relate or are attributable to, connected with,
or incidental to the previous employment of Former Employee by Ixia, the
separation of that employment, and any dealings between the parties concerning
Former Employee's employment existing prior to the date of execution of this
Agreement, excepting only those obligations expressly recited herein or to be
performed hereunder. Nothing contained in this Section 12 shall affect any
rights, claims or causes of action which Former Employee may have (1) with
respect to his outstanding stock options, warrants or other stock subscription
rights to purchase Ixia Common Stock or other securities under the terms and
conditions thereof; (2) as a shareholder of Ixia; (3) to indemnification by
Ixia, to the extent required under the provisions of Ixia's Articles of
Incorporation, Ixia's Bylaws, the California General Corporation Law, insurance
or contracts, with respect to matters relating to Former Employee's prior
service as a director, an officer, employee and agent of Ixia; (4) with respect
to his eligibility for severance payments under the Severance Plan or any other
written agreement listed on EXHIBIT B hereto; and (5) to make claims against or
seek indemnification or contribution from anyone not released by the first
sentence of this Section 12 with respect to any matter or anyone released by the
first sentence of this Section 12 with respect to any matter not released
thereby; or (6) with respect to Ixia's performance of this Agreement. Further,
Former Employee waives specifically any and all rights or claims Former Employee
has or may have under the ADEA and/or the OWBPA, and acknowledges that such
waiver is given voluntarily in exchange for certain consideration included in
the severance benefits being paid pursuant to this Agreement.

        13.2 WAIVER OF UNKNOWN CLAIMS. Former Employee acknowledges that he is
aware that he may hereafter discover claims or facts different from or in
addition to those he now knows or believes to be true with respect to the
matters herein released, and he agrees that this release shall be and remain in
effect in all respects a complete general release as to the matters released and
all claims relative thereto which may exist or may heretofore have existed,
notwithstanding any such different or additional facts. Former Employee
acknowledges that he has been informed of Section 1542 of the Civil Code of the
State of California, and does hereby expressly waive and relinquish all rights
and benefits which he has or may have under said Section, which reads as
follows:

        "A general release does not extend to claims which the creditor does not
        know or suspect to exist in his favor at the time of

                                       8
<PAGE>   19

        executing the release, which if known by him must have materially
        affected his settlement with the debtor."

        13.3 COVENANT NOT TO SUE ON MATTERS RELEASED. Former Employee covenants
that he will not make, assert or maintain against any person or entity that
Former Employee has released in this Agreement, any claim, demand, action, cause
of action, suit or proceeding arising out of or in connection with the matters
herein released, including but not limited to any claim or right under the ADEA,
the OWBPA, or any other federal or state statute or regulation. Former Employee
represents and warrants that he has not assigned or transferred, purported to
assign or transfer, and will not assign or transfer, any matter or claim herein
released. Former Employee represents and warrants that he knows of no other
person or entity which claims an interest in the matters or claims herein
released. Former Employee agrees to, and shall at all times, indemnify and hold
harmless each person and entity that Former Employee has released in this
Agreement against any claim, demand, damage, debt, liability, account, action or
cause of action, or cost or expense, including attorneys' fees, resulting or
arising from any breach of the representations, warranties and covenants made
herein.

14.     ASSIGNMENT

        Former Employee represents and warrants that he has not heretofore
assigned, transferred or granted or purported to assign, transfer or grant any
claims, entitlement, matters, demands or causes of action herein released,
disclaimed, discharged or terminated, and agrees to indemnify and hold harmless
Ixia from and against any and all costs, expense, loss or liability incurred by
Ixia as a consequence of any such assignment, transfer or grant.

15.     FORMER EMPLOYEE REPRESENTATIONS

        Notwithstanding that this Agreement is being entered into subsequent to
the Termination Date, except as listed by Former Employee on EXHIBIT C, from the
period beginning on the Termination Date to the Effective Date, Former Employee
represents and warrants that he has not acted or omitted to act in any respect
which directly or indirectly would have constituted a violation of Sections 7,
8, 10 or 11 herein had this Agreement then been in effect.

16.     MISCELLANEOUS

        16.1 NOTICES. All notices and demands referred to or required herein or
pursuant hereto shall be in writing, shall specifically reference this Agreement
and shall be deemed to be duly sent and given upon actual delivery to and
receipt by the relevant party (which notice, in the case of Ixia, must be from
an officer of Ixia) or five days after deposit in the U.S. mail by certified or
registered mail, return receipt requested, with postage prepaid, addressed as
follows (if, however, a party has given the other party due notice of another
address for the sending of notices, then future notices shall be sent to such
new address):

                                       9
<PAGE>   20

               (a)    If to Ixia:                Ixia
                                                 26601 West Agoura Road
                                                 Calabasas, California 91302
                                                 Attn:  Chief Executive Officer

                      With a copy to:            Ronald W. Buckly, Esq.
                                                 Bryan Cave LLP
                                                 120 Broadway, Suite 300
                                                 Santa Monica, CA 90401

               (b)    If to Former Employee:

        16.2 LEGAL ADVICE AND CONSTRUCTION OF AGREEMENT. Both Ixia and Former
Employee have received (or have voluntarily and knowingly elected not to
receive) independent legal advice with respect to the advisability of entering
into this Agreement and with respect to all matters covered by this Agreement
and neither has been entitled to rely upon or has in fact relied upon the legal
or other advice of the other party or such other party's counsel (or employees)
in entering into this Agreement.

        16.3 PARTIES' UNDERSTANDING. Ixia and Former Employee state that each
has carefully read this Agreement, that it has been fully explained to it/him by
its/his attorney (or that it/he has voluntarily and knowingly elected not to
receive such explanation), that it/he fully understands its final and binding
effect, that the only promises made to it/him to sign the Agreement are those
stated herein, and that it/he is signing this Agreement voluntarily.

        16.4 RECITALS AND SECTION HEADINGS. Each term of this Agreement is
contractual and not merely a recital. All recitals are incorporated by reference
into this Agreement. Captions and section headings are used herein for
convenience only, are not part of this Agreement and shall not be used in
interpreting or construing it.

        16.5 ENTIRE AGREEMENT. This Agreement constitutes a single integrated
contract expressing the entire agreement of the parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous oral and
written agreements and discussions with respect to the subject matter hereof.
Notwithstanding the foregoing, the parties understand and agree that any
Nondisclosure Agreement and all other written agreements between Former Employee
and Ixia are separate from this Agreement and, subject to the terms and
conditions of each such agreement, shall survive the execution of this
Agreement, and nothing contained in this Agreement shall be construed as
affecting the rights or obligations of either party set forth in such
agreements.

        16.6 SEVERABILITY. In the event any provision of this Agreement or the
application thereof to any circumstance shall be determined by arbitration
pursuant to Section 16.10 of this Agreement or held by a court of competent
jurisdiction to be invalid, illegal or unenforceable, or

                                       10
<PAGE>   21

to be excessively broad as to time, duration, geographical scope, activity,
subject or otherwise, it shall be construed to be limited or reduced so as to be
enforceable to the maximum extent allowed by applicable law as it shall then be
in force, and if such construction shall not be feasible, then such provision
shall be deemed to be deleted herefrom in any action before that court, and all
other provisions of this Agreement shall remain in full force and effect.

        16.7 AMENDMENT AND WAIVER. This Agreement and each provision hereof may
be amended, modified, supplemented or waived only by a written document
specifically identifying this Agreement and signed by each party hereto. Except
as expressly provided in this Agreement, no course of dealing between the
parties hereto and no delay in exercising any right, power or remedy conferred
hereby or now or hereafter existing at law, in equity, by statute or otherwise,
shall operate as a waiver of, or otherwise prejudice, any such rights, power or
remedy.

        16.8 CUMULATIVE REMEDIES. None of the rights, powers or remedies
conferred herein shall be mutually exclusive, and each such right, power or
remedy shall be cumulative and in addition to every other right, power or
remedy, whether conferred herein or now or hereafter available at law, in
equity, by statute or otherwise.

        16.9 SPECIFIC PERFORMANCE. Each party hereto may obtain specific
performance to enforce its/his rights hereunder and each party acknowledges that
failure to fulfill its/his obligations to the other party hereto would result in
irreparable harm.

        16.10 ARBITRATION. Except for the right of either party to apply to a
court of competent jurisdiction for a Temporary Restraining Order to preserve
the status quo or prevent irreparable harm, any dispute or controversy between
Ixia and Former Employee under this Agreement involving its interpretation or
the obligations of a party hereto shall be determined by binding arbitration in
accordance with the commercial arbitration rules of the American Arbitration
Association, in the County of Los Angeles, State of California.

        Arbitration may be conducted by one impartial arbitrator by mutual
agreement. In the event that the parties are unable to agree on a single
arbitrator within 30 days of first demand for arbitration, the arbitration shall
proceed before a panel of three arbitrators, one of whom shall be selected by
Ixia and one of whom shall be selected by Former Employee, and the third of whom
shall be selected by the two arbitrators selected. All arbitrators are to be
selected from a panel provided by the American Arbitration Association. The
arbitrators shall have the authority to permit discovery, to the extent deemed
appropriate by the arbitrators, upon request of a party. The arbitrators shall
have no power or authority to add to or, except as otherwise provided by Section
16.6 hereof, to detract from the agreements of the parties, and the prevailing
party shall recover costs and attorneys' fees incurred in arbitration. The
arbitrators shall have the authority to grant injunctive relief in a form
substantially similar to that which would otherwise be granted by a court of
law. The arbitrators shall have no authority to award punitive or consequential
damages. The resulting arbitration award may be enforced, or injunctive relief
may be sought, in any court of competent jurisdiction. Any action arising out of
or relating to this Agreement may

                                       11
<PAGE>   22

be filed only in the Superior Court of the County of Los Angeles, California or
the United States District Court for the Central District of California.

        16.11 CALIFORNIA LAW AND LOCATION. This Agreement was negotiated,
executed and delivered within the State of California, and the rights and
obligations of the parties hereto shall be construed and enforced in accordance
with and governed by the internal (and not the conflict of laws) laws of the
State of California applicable to the construction and enforcement of contracts
between parties resident in California which are entered into and fully
performed in California. Any action or proceeding arising out of, relating to or
concerning this Agreement that is not subject to the arbitration provisions set
forth in Section 16.10 above shall be filed in the state courts of the County of
Los Angeles, State of California or in a United States District Court in the
Central District of California and in no other location. The parties hereby
waive the right to object to such location on the basis of venue.

        16.12 ATTORNEYS' FEES. In the event a lawsuit is instituted by either
party concerning a dispute under this Agreement, the prevailing party in such
lawsuit shall be entitled to recover from the losing party all reasonable
attorneys' fees, costs of suit and expenses (including the reasonable fees,
costs and expenses of appeals), in addition to whatever damages or other relief
the injured party is otherwise entitled to under law or equity in connection
with such dispute.

        16.13 FORCE MAJEURE. Neither Ixia nor Former Employee shall be deemed in
default if its/his performance of obligations hereunder is delayed or become
impossible or impracticable by reason of any act of God, war, fire, earthquake,
strike, civil commotion, epidemic, or any other cause beyond such party's
reasonable control.

        16.14 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but which together shall constitute one
and the same instrument.

        16.15 SUCCESSORS AND ASSIGNS. Neither party may assign this Agreement or
any of its rights or obligations hereunder (including, without limitation,
rights and duties of performance) to any third party or entity, and this
Agreement may not be involuntarily assigned or assigned by operation of law,
without the prior written consent of the non-assigning party, which consent may
be given or withheld by such non-assigning party in the sole exercise of its
discretion, except that Ixia may assign this Agreement to a corporation
acquiring: (1) 50% or more of Ixia's capital stock in a merger or acquisition;
or (2) all or substantially all of the assets of Ixia in a single transaction;
and except that Former Employee may transfer or assign his rights under this
Agreement voluntarily, involuntarily or by operation of law upon or as a result
of his death to his heirs, estate and/or personal representative(s). Any
prohibited assignment shall be null and void, and any attempted assignment of
this Agreement in violation of this section shall constitute a material breach
of this Agreement and cause for its termination by and at the election of the
other party hereto by notice. This Agreement shall be binding upon and inure to
the benefit of each of the parties hereto and each person or entity released
pursuant to Section 12 hereof and, except as otherwise provided herein, their
respective legal successors and permitted assigns.

                                       12
<PAGE>   23

        16.16 PAYMENT PROCEDURE. Except as otherwise explicitly provided herein
or in the Severance Plan, all payments by Ixia to Former Employee or by Former
Employee to Ixia due hereunder may be by, at the paying party's election, cash,
wire transfer or check. Except as explicitly provided herein or in the Severance
Plan, neither party may reduce any payment or obligation due hereunder by any
amount owed or believed owed to the other party under any other agreement,
whether oral or written, now in effect or hereafter entered into.

        16.17 SURVIVAL. The definitions, representations and warranties herein
as well as obligations set forth in Sections 7, 8 and 10-16 shall survive any
termination of this Agreement for any reason whatsoever.

        16.18 NO ADMISSION. Neither the entry into this Agreement nor the giving
of consideration hereunder shall constitute an admission of any wrongdoing by
Ixia or Former Employee.

        16.19 LIMITATION OF DAMAGES. Except as expressly set forth herein, in
any action or proceeding arising out of, relating to or concerning this
Agreement, including any claim of breach of contract, liability shall be limited
to compensatory damages proximately caused by the breach and neither party
shall, under any circumstances, be liable to the other party for consequential,
incidental, indirect or special damages, including but not limited to lost
profits or income, even if such party has been apprised of the likelihood of
such damages occurring.

        16.20 PRONOUNS. As used herein, the words "he", "him", "his" and
"himself" shall be deemed to refer to the feminine as the identity of the person
referred to and the context may require.

        16.21 EFFECTIVENESS. This Agreement shall become effective upon
execution by the later of the parties hereto to execute this Agreement.

17.     21 DAY REVIEW PERIOD; RIGHT TO REVOKE

        Former Employee acknowledges that he was advised in writing to consult
with an attorney prior to executing this Agreement and represents and warrants
to Ixia that he has done so, and further acknowledges that he has been given a
period of 21 days within which to consider the terms and provisions of this
Agreement with his attorney. If Former Employee has executed and delivered to
Ixia this Agreement prior to the expiration of such 21-day period, then in doing
so, Former Employee acknowledges that he has unconditionally and irrevocably
waived his right to that unexpired portion of such 21-day period. In addition,
Former Employee shall have the right to revoke this Agreement for a period of
seven days following the date on which this

                                       13
<PAGE>   24

Agreement is signed by sending written notification of such revocation directly
to each of Ixia and Ronald W. Buckly at the addresses specified in Section 16.1,
supra, via hand delivery.

IXIA                                       [INSERT FORMER EMPLOYEE'S NAME]

By:                                        Signature:
  -----------------------------------
Print Name:
          ---------------------------
Print Title:
           --------------------------
Date:                         , 20         Date:                         , 20
     -------------------------    ---           -------------------------    ---

                                       14
<PAGE>   25

                                    EXHIBIT A

                        OUTSTANDING STOCK PURCHASE RIGHTS

<TABLE>
<CAPTION>
                                            Maximum
                                           Number of
                                             Shares        Purchase
                                           Currently         Price        Termination
Type of Security          Date Issued     Purchasable      Per Share          Date
----------------          -----------     -----------      ---------      -----------
<S>                       <C>             <C>              <C>            <C>

[e.g., stock option,
warrant, etc.]
</TABLE>

<PAGE>   26

                                    EXHIBIT B

            LIST OF OTHER AGREEMENTS (PURSUANT TO SECTIONS 12 AND 13)

<PAGE>   27

                                   EXHIBIT C

                      EXCEPTIONS (PURSUANT TO SECTION 15)

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