8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 21, 2016

IXIA

(Exact name of registrant as specified in its charter)

California	000-31523	95-4635982
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

26601 W. Agoura Road, Calabasas, California	91302
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 818.871.1800

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On March 21, 2016, the Compensation Committee (the “Committee”) of the Board of Directors of Ixia (the “Company”) approved the Ixia 2016 Senior Officer Bonus Plan (the “Plan”) under which certain designated senior officers of the Company, including all of the Company’s executive officers as of the date of adoption of the Plan (collectively, the “Eligible Officers”), are eligible to earn cash bonuses for the Company’s 2016 fiscal year based on the Company’s 2016 financial performance. The Plan provides that the Committee may, from time to time, designate additional senior officers of the Company and/or of its subsidiaries as “Eligible Officers” who are eligible to participate in the Plan.

Bonus Pool. As soon as reasonably practicable following the end of the Company’s 2016 fiscal year, the Company will determine, in accordance with the terms of the Plan and as described below, the funding (if any) for a cash bonus pool (the “Bonus Pool”) for the payment of bonuses to (i) Eligible Officers under the Plan and (ii) certain other employees of the Company who are eligible to participate in a separate employee bonus plan for 2016 (the “Employee Plan”). The Bonus Pool will also be used to discharge the Company’s liability for any taxes (e.g., FICA, FUTA, and similar taxes) due and payable by the Company with respect to any bonuses paid or payable by the Company under the Plan and the Employee Plan (collectively, “Employer Taxes”).

The amount of the Bonus Pool funding (if any) will be calculated based on the Company’s “adjusted margin” for 2016 (“2016 Adjusted Margin”), which is defined as the ratio (expressed as a percentage) of the Company’s “adjusted income” for its 2016 fiscal year to the Company’s consolidated revenues for its 2016 fiscal year, excluding any revenues directly resulting from acquisitions completed during 2016 (“2016 Revenue”). For purposes of the Plan, “adjusted income” means the Company’s operating income from continuing operations, subject to certain adjustments to (i) add back amounts paid or payable from the Bonus Pool, (ii) exclude the effect of acquisitions, and (iii) exclude any equity incentive compensation expenses, restructuring charges, impairment charges, acquisition-related amortization and other M&A-related charges, costs and expenses incurred in connection with or related to litigation or investigations arising outside the Company’s ordinary course of business, costs and expenses that are unusual in nature or infrequent in occurrence, and similar charges or income.

For purposes of the Plan, the Committee has supplementally determined a threshold level of 2016 Adjusted Margin (the “Threshold Margin”) and a target level of 2016 Adjusted Margin (the “Target Margin”). If 2016 Adjusted Margin does not exceed the Threshold Margin, then the Bonus Pool will not be funded. If 2016 Adjusted Margin exceeds the Threshold Margin, then the amount of the Bonus Pool will be calculated in accordance with a formula that takes into account, among other factors, the extent by which 2016 Adjusted Margin exceeds the Threshold Margin and, if applicable, the Target Margin, and the amount of 2016 Revenue. Provided the Threshold Margin is exceeded, higher levels of 2016 Adjusted Margin and/or 2016 Revenue will generally increase the amount of the Bonus Pool funding.

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Available Bonus Pool. The amount (if any) available for the payment of bonuses under the Plan (the “Available Bonus Pool”) will be equal to the amount of any Bonus Pool less (i) bonuses that have been or will be paid under the Employee Plan and (ii) Employer Taxes. The portion of any Bonus Pool allocable to the Employee Plan will generally be proportionate to the sum of the target bonuses for all individuals eligible to receive bonuses under the Employee Plan as compared to the sum of the target bonuses for all individuals eligible to receive bonuses under the Employee Plan and all Eligible Officers eligible to receive bonuses under the Plan.

The Committee may also, in its sole discretion, reduce the amount of the Available Bonus Pool before bonuses are calculated.

Bonus Calculations. If the Available Bonus Pool is funded, the Company will calculate the “Annual Bonus Opportunity” for each Eligible Officer by multiplying the salary he or she earned for 2016 by his or her “bonus percentage” as set forth in the Plan (or as later established by the Committee for any additional individuals designated by the Committee as Eligible Officers for purposes of the Plan). The bonus percentages set forth in the Plan include 100% for Bethany Mayer, President and Chief Executive Officer; 75% for Errol Ginsberg, Chief Innovation Officer; 70% for each of Brent Novak, Chief Financial Officer, and Alexander Pepe, Chief Operating Officer; and 60% for Christopher Williams, Senior Vice President, Human Resources (such individuals, collectively, the “Named Executive Officers”).

Each Eligible Officer’s bonus will then be calculated by (i) dividing his or her Annual Bonus Opportunity by the sum of all Annual Bonus Opportunities for all Eligible Officers then entitled to receive bonuses under the Plan and (ii) multiplying that amount by the amount of the Available Bonus Pool. However, in no event may an Eligible Officer’s bonus exceed 200% of his or her Annual Bonus Opportunity.

Target and Maximum Bonuses for Named Executive Officers. The following table sets forth, based on certain assumptions and expectations, the target and maximum bonuses that may be earned by the Named Executive Officers under the Plan. In the event the Bonus Pool is funded, the bonus amounts actually earned by each Named Executive Officer will depend on a number of factors, including, without limitation, (i) 2016 Adjusted Margin, (ii) 2016 Revenue, (iii) the amount by which the Bonus Pool is reduced for bonuses paid or payable under the Employee Plan and for Employer Taxes, (iv) the total amount of the Annual Bonus Opportunities for all Eligible Officers, (v) the actual salaries earned by the Named Executive Officers for 2016, and (vi) whether the Committee exercises its discretion to reduce the amount of the Available Bonus Pool.

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Target and Maximum Bonuses

Named Executive Officer	Title	Target Bonus(1)		Maximum Bonus(2)
Bethany Mayer	President and Chief Executive Officer	$	680,000	$	1,360,000
Errol Ginsberg	Chief Innovation Officer		361,875		723,750
Brent Novak	Chief Financial Officer		270,375		540,750
Alexander Pepe	Chief Operating Officer		262,500		525,000
Christopher Williams	Senior Vice President, Human Resources		172,500		345,000

(1) Each Named Executive Officer’s target bonus is equal to his or her expected Annual Bonus Opportunity, which is calculated by multiplying the salary that he or she is expected to earn for 2016 by his or her bonus percentage as set forth in the Plan.

(2) Each Named Executive Officer’s maximum bonus is equal to 200% of his or her target bonus as set forth in this table.

Payment of Bonuses. Any bonuses that become payable under the Plan will be paid on or before March 15, 2017. All bonus payouts under the Plan are subject to the prior approval of the Committee.

Clawback Provision; Recoupment. The Plan provides that if bonuses are paid or payable under the Plan and the Company’s consolidated financial statements for 2016 are restated or the Company announces that such statements will be restated, in either case to reflect a less favorable financial condition or less favorable results of operations than those previously determined and/or reported, the Committee may in its discretion determine not to pay, to delay the payment of, or to reduce or recover all or a portion of any bonus payable or paid to any Eligible Officer pursuant to the Plan. The foregoing right of recovery will remain in effect through the third anniversary of the date in 2017 on which any such bonuses are paid.

The Plan also provides that any bonuses paid under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by applicable law.

The foregoing description of the Plan is qualified in its entirety by reference to the Plan included as Exhibit 10.1 in this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

The following Exhibit is filed as a part of this Current Report on Form 8-K:

Exhibit No.	Description
10.1	Ixia 2016 Senior Officer Bonus Plan

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Ixia
Dated: March 25, 2016	By:	/s/ Matthew S. Alexander
		Matthew S. Alexander
		Senior Vice President, General Counsel, and Corporate Secretary

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EXHIBIT INDEX

Exhibit No.	Description
10.1	Ixia 2016 Senior Officer Bonus Plan

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EX-10.1

Exhibit 10.1

Ixia

2016 Senior Officer Bonus Plan

(As adopted by the Compensation Committee of the Board of Directors of Ixia on March 21, 2016)

I. Background and Purpose.

This 2016 Senior Officer Bonus Plan (this “Plan”) is effective as of March 21, 2016 (the “Effective Date”) and sets forth the terms under which certain senior officers of Ixia and/or its subsidiaries (each, an “Eligible Officer,” as further defined below) may earn and receive an annual cash incentive award (an “Annual Bonus”) based upon Ixia’s 2016 financial performance. Ixia and its subsidiaries are individually and collectively referred to herein as the “Company.”

Ixia believes that a portion of each Eligible Officer’s annual compensation should be “at risk” and directly linked to the Company’s consolidated financial performance. This Plan is designed to motivate Eligible Officers to achieve certain financial results for Ixia and to reward Eligible Officers for the achievement of those results. Ixia believes that the achievement of those results is important for Ixia’s success.

The Compensation Committee of Ixia’s Board of Directors (the “Committee”) will administer and have final authority on all matters relating to this Plan. The Committee may interpret and construe this Plan, decide any and all matters arising under or in connection with this Plan, and correct any defect, supply any omission, or reconcile any inconsistency in this Plan. All Annual Bonus payouts under this Plan are subject to the prior approval of the Committee as provided herein. All decisions by the Committee regarding this Plan will be made in the Committee’s sole discretion and will be final and binding on all persons having or claiming any interest in this Plan.

II. Eligible Officers.

The Committee may, from time to time, designate one or more senior officers of the Company as Eligible Officers. As of the Effective Date, the individuals identified in Exhibit A attached hereto, in their capacities with Ixia set forth opposite their names in such exhibit, have been designated by the Committee as Eligible Officers and are eligible to participate in this Plan.

An Eligible Officer whose title and/or responsibilities with the Company change after the Effective Date but who remains an officer of the Company will remain an Eligible Officer and will be entitled to continue to participate in this Plan on the same terms and conditions that applied immediately prior to such change, unless such Eligible Officer’s participation in this Plan is modified by the Committee pursuant to a duly adopted Committee resolution.

In order to earn and be eligible to receive an Annual Bonus under this Plan, an Eligible Officer must be employed by the Company as an Eligible Officer on the date on which such Annual Bonus is paid, unless such requirement has been, or is, waived by the Committee pursuant to a duly adopted Committee resolution.

III. Bonus Pool.

As soon as is reasonably practicable following the end of Ixia’s 2016 fiscal year, the Committee will determine, in accordance with the terms of this Plan, and approve the funding (if any) for a single cash bonus pool (the “Bonus Pool”) for both (i) Eligible Officers and (ii) certain other employees of the Company who are not subject to this Plan (the “Other Employees”). The Bonus Pool will be used to pay Annual Bonuses to Eligible Officers and cash bonuses to the

Other Employees (“Employee Bonuses”) under the terms of an employee bonus plan (the “Employee Bonus Plan”) that is intended to encourage and reward those Other Employees’ efforts on behalf of the Company in 2016. The Bonus Pool will also be used to discharge the Company’s liability for any taxes (e.g., FICA, FUTA, and similar taxes) due and payable by the Company with respect to any Annual Bonuses and Employee Bonuses that are paid by the Company. The method for calculating the Bonus Pool funding is set forth below.

Definitions

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

“Adjusted Income” means Ixia’s operating income from continuing operations calculated on a consolidated basis for the fiscal year ending December 31, 2016, except that such operating income shall be adjusted to (i) add back all amounts that have been or will be paid out from the Bonus Pool, (ii) exclude any equity incentive compensation expenses, restructuring charges, impairment charges, acquisition-related amortization and other M&A-related charges, costs and expenses incurred in connection with or related to litigation or investigations arising outside the Company’s ordinary course of business, costs and expenses that are unusual in nature or infrequent in occurrence, and similar charges or income, and (iii) exclude the effect of any acquisition(s) by the Company during 2016 of any other company or business (e.g., through a merger or acquisition of stock or assets) (any such acquisition is referred to herein as an “Acquisition”).

“Adjusted Margin” means the ratio (expressed as a percentage) of Adjusted Income to Revenue.

“Revenue” means the Company’s consolidated revenues for the fiscal year ending December 31, 2016, excluding any revenues directly resulting from any Acquisition.

“Target Margin” means the percentage established supplementally by the Committee on the date of adoption of this Plan as the “Target Margin” for purposes of this Plan.

“Threshold Margin” means the percentage established supplementally by the Committee on the date of adoption of this Plan as the “Threshold Margin” for purposes of this Plan.

Bonus Pool Funding Calculations

The amount of any Bonus Pool funding will be calculated as follows:

Step 1:	Determine if Adjusted Margin exceeds Threshold Margin. If Adjusted Margin does not exceed Threshold Margin, then the Bonus Pool will not be funded and no Annual Bonuses will be paid under this Plan. If Adjusted Margin does not exceed Threshold Margin, do not proceed to Step 2 of this process.
Step 2:	Subtract Threshold Margin from Adjusted Margin. The remainder from this calculation is referred to as “Above-Threshold Margin.”
Step 3:	Multiply Above-Threshold Margin and Revenue. The resulting product from this calculation is referred to as “Above-Threshold Income.”

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Step 4:	If Adjusted Margin exceeds Target Margin, then subtract Target Margin from Adjusted Margin. The remainder from this calculation is referred to as “Above-Target Margin.”
Step 5:	Multiply any Above-Target Margin and Revenue. The resulting product from this calculation is referred to as “Above-Target Income.”
Step 6:	Add together (i) the portion of the Above-Threshold Income that is equal to or less than $15,700,000 and (ii) any portion of any Above-Target Income that is greater than $15,700,000. This sum is referred to as “2016 Bonus Income.”
Step 7:	Add together (i) 100% of any amount that is part of the first $16,000,000 of 2016 Bonus Income, (ii) 90% of any amount that is part of the next $5,000,000 of 2016 Bonus Income, and (iii) 25% of any amount that is part of any 2016 Bonus Income in excess of $21,000,000. This sum will constitute the total amount of any funding for the Bonus Pool. No amounts other than this sum will be contributed to the Bonus Pool.

IV. Annual Bonuses.

If the Compensation Committee determines that the Bonus Pool is funded, then at the time of or promptly following the Committee’s determination and approval of the amount of the Bonus Pool, the Committee will determine in accordance with this section and then approve the amounts of the Annual Bonuses payable to the Eligible Officers who, as of the date of such determination (the “Determination Date”), are eligible to receive Annual Bonuses hereunder.

Definitions

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

“Annual Bonus Opportunity” means, for each Eligible Officer, the product of that individual’s Bonus Percentage and his or her Base Salary.

“Base Salary” means the total amount of base salary actually earned by an Eligible Officer for work performed for the Company as an officer or employee of the Company during Ixia’s 2016 fiscal year. For the avoidance of doubt, Base Salary does not include, among other things, reimbursement for moving expenses, relocation benefits, bonuses for any fiscal year, stock option or other equity incentive compensation, benefits received from participation in an employee stock purchase plan, discretionary bonuses, disability benefits, sign-on bonuses, 401(k) Plan matching contributions, vacation/PTO cash outs, on call pay, or similar payments.

“Bonus Percentage” refers to a fixed percentage of an Eligible Officer’s Base Salary. The Bonus Percentage for each Eligible Officer as of the Effective Date is set forth in Exhibit A attached hereto. The Committee shall establish the Bonus Percentage for any individuals designated as Eligible Officers by the Committee following the adoption of this Plan.

“Available Bonus Pool Funds” means the total amount contributed to the Bonus Pool pursuant to the foregoing section of this Plan, less (i) the total amount of all Employee Bonuses previously paid to, or that will be paid to, Other Employees under the terms of the Employee Bonus Plan, (ii) the total amount of the Company’s liability for any taxes

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(e.g., FICA, FUTA, and similar taxes) that have been paid or will become due and payable by the Company with respect to any Employee Bonuses or Annual Bonuses, and (iii) any additional amount that the Committee chooses, in its sole discretion, to deduct. However, in no event shall the Available Bonus Pool Funds be less than $0. The portion of any Bonus Pool allocated to the Employee Bonus Plan will generally be proportionate to the sum of the target bonuses for all individuals participating in the Employee Plan as compared to the sum of the target bonuses for all individuals participating in the Employee Plan and all individuals participating in this Plan.

Annual Bonus Calculations

The Committee will use the following mathematical formula to calculate each Eligible Officer’s Annual Bonus hereunder:

(A / B) x C

For purposes of the foregoing formula:

A =	such Eligible Officer’s Annual Bonus Opportunity;
B =	the sum of all of the Annual Bonus Opportunities for all Eligible Officers who, as of the Determination Date, are eligible to receive Annual Bonuses hereunder; and
C =	the Available Bonus Pool Funds.

However, in no event may an Eligible Officer’s Annual Bonus exceed 200% of that Eligible Officer’s Annual Bonus Opportunity. In the event that an Eligible Officer’s Annual Bonus would exceed 200% of that Eligible Officer’s Annual Bonus Opportunity, then the Committee shall reduce that Eligible Officer’s Annual Bonus to an amount that is equal to 200% of that Eligible Officer’s Annual Bonus Opportunity.

V. Payment Timing.

Each Annual Bonus that becomes payable to an Eligible Officer hereunder will be paid in one lump sum (subject to applicable withholding taxes and other deductions) promptly following the Determination Date and in any event on or prior to March 15, 2017.

VI. Clawback.

In the event that any of the Company’s consolidated financial statements for 2016 are restated, or the Company announces that any such statements will be restated, in either case to reflect a less favorable financial condition or less favorable results of operations than previously determined and/or reported, then the Committee has the absolute right in its sole discretion to not pay, to reduce, to delay the payment of, or to recover all or a portion of any Annual Bonus awarded to any Eligible Officer pursuant to the terms of this Plan. However, subject to the following paragraph, any such recovery must occur prior to the third anniversary of the date on which such Annual Bonus was paid.

Any amounts paid under this Plan will also be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which its securities are listed or as is otherwise required by applicable law.

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Exhibit A

Eligible Officers

Name	Capacity	Bonus Percentage
Bethany Mayer	President and Chief Executive Officer	100%
Errol Ginsberg	Chief Innovation Officer	75%
Matthew S. Alexander	Senior Vice President, General Counsel, and Corporate Secretary	60%
Walker Colston	Senior Vice President, Support	60%
Dennis Cox	Chief Product Officer	70%
Marie Hattar	Chief Marketing Officer	60%
Hans-Peter Klaey	Senior Vice President, Global Sales	100%
Brent Novak	Chief Financial Officer	70%
Alexander J. Pepe	Chief Operating Officer	70%
Christopher L. Williams	Senior Vice President, Human Resources	60%