ALLIANCEFIBER OPTIC PRODUCTS, INC. 

*         2000EMPLOYEE STOCK PURCHASE PLAN*

        (Asamended and restated as of July 26, 2004) 

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        ALLIANCEFIBER OPTIC PRODUCTS, INC. 

2000 EMPLOYEE STOCKPURCHASE PLAN 

SECTION 1. Purpose Of ThePlan. 

        ThePlan was adopted by the Board on September 7, 2000, effective as of the date of the IPO.The Plan was subsequently amended, and is hereby amended and restated as of July 26, 2004.The purpose of the Plan is to provide Eligible Employees with an opportunity to increasetheir proprietary interest in the success of the Company by purchasing Stock from theCompany on favorable terms and to pay for such purchases through payroll deductions. ThePlan is intended to qualify under section 423 of the Code. 

SECTION 2. Definitions. 

        (a)      “AccumulationPeriod” means a six-month period during which contributions may be made towardthe purchase of Stock under the Plan, as determined pursuant to Section 4(b). 

        (b)      “Board”means the Board of Directors of the Company, as constituted from time to time. 

        (c)      “Code”means the Internal Revenue Code of 1986, as amended. 

        (d)      “Committee”means a committee of the Board, as described in Section 3. 

        (e)      "Company" means Alliance Fiber Optic Products, Inc., a Delaware corporation.

        (f)      “Compensation”means (i) the total compensation paid in cash to a Participant by a Participating Company,including salaries, wages, bonuses, incentive compensation, commissions, overtime pay andshift premiums, plus (ii) any pre-tax contributions made by the Participant under section401(k) or section 125 of the Code. “Compensation” shall exclude all non-cashitems, moving or relocation allowances, cost-of-living equalization payments, carallowances, tuition reimbursements, imputed income attributable to cars or life insurance,severance pay, fringe benefits, contributions or benefits received under employee benefitplans, income attributable to the exercise of stock options, and similar items. TheCommittee shall determine whether a particular item is included in Compensation. 

        (g)      “CorporateReorganization” means: 

             (i)      The consummation of a mergeror consolidation of the Company with or into another entity, or any other corporatereorganization; or 

             (ii)              The sale, transfer or other disposition of all or substantially all of the          Company’s assets or the complete liquidation or dissolution of the Company. 

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        (h)              “Eligible Employee” means any employee of a Participating          Company whose customary employment is for more than five months per calendar          year and for more than 20 hours per week. 

        Theforegoing notwithstanding, an individual shall not be considered an Eligible Employee ifhis or her participation in the Plan is prohibited by the law of any country which hasjurisdiction over him or her or if he or she is subject to a collective bargainingagreement that does not provide for participation in the Plan. 

        (i)              “Exchange Act” means the Securities Exchange Act of 1934, as          amended. 

        (j)              “Fair Market Value” means the market price of Stock, determined          by the Committee as follows: 

             (i)              If Stock was traded on The Nasdaq National Market on the date in question, then          the Fair Market Value shall be equal to the last-transaction price quoted for          such date by The Nasdaq National Market; or 

             (ii)              If Stock was traded on a stock exchange on the date in question, then the Fair          Market Value shall be equal to the closing price reported by the applicable          composite transactions report for such date; or 

             (iii)              If none of the foregoing provisions is applicable, then the Fair Market Value          shall be determined by the Committee in good faith on such basis as it deems          appropriate. 

        Wheneverpossible, the determination of Fair Market Value by the Committee shall be based on theprices reported in the Wall Street Journal or as reported directly to the Companyby Nasdaq or a stock exchange. Such determination shall be conclusive and binding on allpersons. 

        (k)              “IPO” means the initial offering of Stock to the public          pursuant to a registration statement filed by the Company with the Securities          and Exchange Commission. 

        (l)              “Offering Period” means a 24-month period with respect to which          the right to purchase Stock may be granted under the Plan, as determined          pursuant to Section 4(a). 

        (m)              “Participant” means an Eligible Employee who elects to          participate in the Plan, as provided in Section 4(c). 

        (n)              “Participating Company” means (i) the Company and (ii) each          present or future Subsidiary designated by the Committee as a Participating          Company. 

        (o)              “Plan” means this Alliance Fiber Optic Products, Inc. 2000          Employee Stock Purchase Plan, as it may be amended from time to time. 

        (p)              “Plan Account” means the account established for each          Participant pursuant to Section 8(a). 

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        (q)              “Purchase Price” means the price at which Participants may          purchase Stock under the Plan, as determined pursuant to Section 8(b). 

        (r)              “Stock” means the Common Stock of the Company. 

        (s)              “Subsidiary” means any corporation (other than the Company) in          an unbroken chain of corporations beginning with the Company, if each of the          corporations other than the last corporation in the unbroken chain owns stock          possessing 50% or more of the total combined voting power of all classes of          stock in one of the other corporations in such chain. 

SECTION 3. Administrationof the Plan. 

        (a)              Committee Composition. The Plan shall be administered by the Committee.          The Committee shall consist exclusively of one or more directors of the Company,          who shall be appointed by the Board. 

        (b)              Committee Responsibilities. The Committee shall interpret the Plan and          make all other policy decisions relating to the operation of the Plan. The          Committee may adopt such rules, guidelines and forms as it deems appropriate to          implement the Plan. The Committee’s determinations under the Plan shall be          final and binding on all persons. 

SECTION 4. Enrollment andParticipation. 

        (a)              Offering Periods. While the Plan is in effect, two Offering Periods shall          commence in each calendar year. The Offering Periods shall consist of the          24-month periods commencing on each May 1 and November 1, except that the first          Offering Period shall commence on the date of the IPO and end on October 31,          2002. 

        (b)              Accumulation Periods. While the Plan is in effect, two Accumulation          Periods shall commence in each calendar year. The Accumulation Periods shall          consist of the six-month periods commencing on May 1 and November 1, except that          the first Accumulation Period shall commence on the date of the IPO and end on          April 30, 2001. 

        (c)              Enrollment. Any individual who, on the day preceding the first day of an          Offering Period (other than the initial Offering Period), qualifies as an          Eligible Employee may elect to become a Participant in the Plan for such          Offering Period by executing the enrollment form prescribed for this purpose by          the Committee. The enrollment form shall be filed with the Company at the          prescribed location not later than 15 days prior to the commencement of such          Offering Period. All Eligible Employees shall be automatically enrolled in the          initial Offering Period under the Plan. 

        (d)              Duration of Participation. Once enrolled in the Plan, a Participant shall          continue to participate in the Plan until he or she ceases to be an Eligible          Employee, withdraws from the Plan under Section 6(a) or reaches the end of the          Offering Period in which his or her employee contributions were discontinued          under Section 5(d). A Participant who discontinued employee contributions under          Section 5(d) or 9(b) or withdrew from the Plan under Section 6(a) may again          become a Participant, if he or she then is an Eligible Employee, by following          the procedure described in Subsection (c) above. A Participant whose employee          contributions were discontinued automatically under Section 9(b) shall          automatically resume participation at the beginning of the earliest Offering          Period ending in the next calendar year, if he or she then is an Eligible          Employee. 

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        (e)              Applicable Offering Period. For purposes of calculating the purchase          price under Section 8(b), the applicable Offering Period shall be determined as          follows: 

             (i)              Once a Participant is enrolled in the Plan for an Offering Period, such Offering          Period shall continue to apply to him or her until the earliest of: (A) the          end of such Offering Period; (B) the end of his or her participation under          Subsection (d) above; or (C) re-enrollment in a subsequent Offering Period          under Paragraph (ii) below. 

             (ii)              In the event that the Fair Market Value of Stock on the last trading day before          the commencement of the Offering Period in which the Participant is enrolled is          higher than on the last trading day before the commencement of any subsequent          Offering Period, the Participant shall automatically be re-enrolled for such          subsequent Offering Period. 

             (iii)              When a Participant reaches the end of an Offering Period but his or her          participation is to continue, then such Participant shall automatically be          re-enrolled for the Offering Period that commences immediately after the end of          the prior Offering Period. 

SECTION 5. EmployeeContributions. 

        (a)              Frequency of Payroll Deductions. A Participant may purchase shares of          Stock under the Plan solely by means of payroll deductions; provided, however,          that in the initial Accumulation Period, Participants may also purchase shares          of Stock by making a lump sum cash payment at the end of the Accumulation          Period. Payroll deductions, as designated by the Participant pursuant to          Subsection (b) below, shall occur on each payday during participation in          the Plan. 

        (b)              Amount of Payroll Deductions. An Eligible Employee shall designate on the          enrollment form the portion of his or her Compensation that he or she elects to          have withheld for the purchase of Stock. Such portion shall be a whole          percentage of the Eligible Employee’s Compensation, but not less than 1%          nor more than 20%. During the initial Accumulation Period, no payroll deduction          will be made unless a Participant timely files the proper form with the Company          after a registration statement covering the Stock is filed and effective under          the Securities Act of 1933, as amended. 

        (c)              Changing Withholding Rate. If a Participant wishes to change the rate of          payroll withholding, he or she may do so by filing a new enrollment form with          the Company at the prescribed location at any time. The new withholding rate          shall be effective as soon as reasonably practicable after such form has been          received by the Company. The new withholding rate shall be a whole percentage of          the Eligible Employee’s Compensation, but not less than 1% nor more than          20%. 

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        (d)              Discontinuing Payroll Deductions. If a Participant wishes to discontinue          employee contributions entirely, he or she may do so by filing a new enrollment          form with the Company at the prescribed location at any time. Payroll          withholding shall cease as soon as reasonably practicable after such form has          been received by the Company. (In addition, employee contributions may be          discontinued automatically pursuant to Section 9(b)). A Participant who has          discontinued employee contributions may resume such contributions by filing a          new enrollment form with the Company at the prescribed location. Payroll          withholding shall resume as soon as reasonably practicable after such form has          been received by the Company. 

        (e)              Limit on Number of Elections. No Participant shall make more than two          elections under Subsection (c) or (d) above during any Offering Period. 

SECTION 6. WithdrawalFrom The Plan. 

        (a)              Withdrawal. A Participant may elect to withdraw from the Plan by filing          the prescribed form with the Company at the prescribed location at any time          before the last day of an Accumulation Period; provided, however, that in the          initial Accumulation Period, Participants may be deemed to withdraw from the          Plan by declining or failing to remit timely payment to the Company for the          shares of Stock. As soon as reasonably practicable thereafter, payroll          deductions shall cease and the entire amount credited to the Participant’s          Plan Account shall be refunded to him or her in cash, without interest. No          partial withdrawals shall be permitted. 

        (b)              Re-enrollment After Withdrawal. A former Participant who has withdrawn          from the Plan shall not be a Participant until he or she re-enrolls in the Plan          under Section 4(c). Re-enrollment may be effective only at the commencement          of an Offering Period. 

SECTION 7. Change inEmployment Status. 

        (a)              Termination of Employment. Termination of employment as an Eligible          Employee for any reason, including death, shall be treated as an automatic          withdrawal from the Plan under Section 6(a). (A transfer from one          Participating Company to another shall not be treated as a termination of          employment.) 

        (b)              Leave of Absence. For purposes of the Plan, employment shall not be          deemed to terminate when the Participant goes on a military leave, a sick leave          or another bona fide leave of absence, if the leave was approved by the Company          in writing. Employment, however, shall be deemed to terminate ninety (90) days          after the Participant goes on a leave, unless a contract or statute guarantees          his or her right to return to work. Employment shall be deemed to terminate in          any event when the approved leave ends, unless the Participant immediately          returns to work. 

        (c)              Death. In the event of the Participant’s death, the amount credited          to his or her Plan Account shall be paid to a beneficiary designated by him or          her for this purpose on the prescribed form or, if none, to the          Participant’s estate. Such form shall be valid only if it was filed with          the Company at the prescribed location before the Participant’s death. 

SECTION 8.        Plan Accounts and Purchase of Shares

        (a)              Plan Accounts. The Company shall maintain a Plan Account on its books in          the name of each Participant. Whenever an amount is deducted from the          Participant’s Compensation under the Plan, such amount shall be credited to          the Participant’s Plan Account. Amounts credited to Plan Accounts shall not          be trust funds and may be commingled with the Company’s general assets and          applied to general corporate purposes. No interest shall be credited to Plan          Accounts. 

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        (b)              Purchase Price. The Purchase Price for each share of Stock purchased on          the last trading day of the month in which the Accumulation Period expired shall          be the lower of: 

             (i)              85% of the Fair Market Value of such share on the last trading day of the month          in which the Accumulation Period expired; or 

             (ii)              85% of the Fair Market Value of such share on the last trading day before the          commencement of the applicable Offering Period (as determined under Section          4(e)) or, in the case of the first Offering Period under the Plan, 85% of the          price at which one share of Stock is offered to the public in the IPO. 

        (c)              Number of Shares Purchased. As of the last trading day of each month in          which the Accumulation Period expired, each Participant shall be deemed to have          elected to purchase the number of shares of Stock calculated in accordance with          this Subsection (c), unless the Participant has previously elected to          withdraw from the Plan in accordance with Section 6(a). The amount then in          the Participant’s Plan Account shall be divided by the Purchase Price, and          the number of shares that results shall be purchased from the Company with the          funds in the Participant’s Plan Account. The foregoing notwithstanding, no          Participant shall purchase more than 5,000 shares of Stock with respect to any          Accumulation Period nor more than the amounts of Stock set forth in Sections          9(b) and 14(a).The Committee may determine with respect to all Participants that          any fractional share, as calculated under this Subsection (c), shall be (i)          rounded down to the next lower whole share or (ii) credited as a fractional          share. 

        (d)              Available Shares Insufficient. In the event that the aggregate number of          shares that all Participants elect to purchase during an Accumulation Period          exceeds the maximum number of shares remaining available for issuance under          Section 14(a), then the number of shares to which each Participant is entitled          shall be determined by multiplying the number of shares available for issuance          by a fraction, the numerator of which is the number of shares that such          Participant has elected to purchase and the denominator of which is the number          of shares that all Participants have elected to purchase. 

        (e)              Issuance of Stock. Certificates representing the shares of Stock          purchased by a Participant under the Plan shall be issued to him or her as soon          as reasonably practicable after the close of the applicable Accumulation Period,          except that the Committee may determine that such shares shall be held for each          Participant’s benefit by a broker designated by the Committee (unless the          Participant has elected that certificates be issued to him or her). Shares may          be registered in the name of the Participant or jointly in the name of the          Participant and his or her spouse as joint tenants with right of survivorship or          as community property. 

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        (f)              Unused Cash Balances. An amount remaining in the Participant’s Plan          Account that represents the Purchase Price for any fractional share shall be          carried over in the Participant’s Plan Account to the next Accumulation          Period. Any amount remaining in the Participant’s Plan Account that          represents the Purchase Price for whole shares that could not be purchased by          reason of Subsection (c) above, Section 9(b) or Section 14(a) shall be          refunded to the Participant in cash, without interest. 

        (g)              Stockholder Approval. Any other provision of the Plan notwithstanding, no          shares of Stock shall be purchased under the Plan unless and until the          Company’s stockholders have approved the adoption of the Plan. 

SECTION 9. Limitations onStock Ownership. 

        (a)              Five Percent Limit. Any other provision of the Plan notwithstanding, no          Participant shall be granted a right to purchase Stock under the Plan if such          Participant, immediately after his or her election to purchase such Stock, would          own stock possessing more than 5% of the total combined voting power or value of          all classes of stock of the Company or any parent or Subsidiary of the Company.          For purposes of this Subsection (a), the following rules shall apply: 

             (i)              Ownership of stock shall be determined after applying the attribution rules of          section 424(d) of the Code; 

             (ii)              Each Participant shall be deemed to own any stock that he or she has a right or          option to purchase under this Plan or any other; and 

        (iii)    EachParticipant shall be deemed to have the right to purchase 5,000 shares of Stock under thisPlan with respect to each Accumulation Period. 

        (b)              Dollar Limit. Any other provision of the Plan notwithstanding, no          Participant shall purchase Stock with a Fair Market Value in excess of $25,000          per calendar year (under this Plan and all other employee stock purchase plans          of the Company or any parent or Subsidiary of the Company). 

        Forpurposes of this Subsection (b), the Fair Market Value of Stock shall be determinedin each case as of the beginning of the Offering Period in which such Stock is purchased.Employee stock purchase plans not described in section 423 of the Code shall bedisregarded. If a Participant is precluded by this Subsection (b) from purchasingadditional Stock under the Plan, then his or her employee contributions shallautomatically be discontinued and shall resume at the beginning of the earliestAccumulation Period ending in the next calendar year (if he or she then is an EligibleEmployee). 

SECTION 10. Rights NotTransferable. 

        Therights of any Participant under the Plan, or any Participant’s interest in any Stockor moneys to which he or she may be entitled under the Plan, shall not be transferable byvoluntary or involuntary assignment or by operation of law, or in any manner other than bybeneficiary designation or the laws of descent and distribution. If a Participant in anymanner attempts to transfer, assign or otherwise encumber his or her rights or interestunder the Plan, other than by beneficiary designation or the laws of descent anddistribution, then such act shall be treated as an election by the Participant to withdrawfrom the Plan under Section 6(a). 

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SECTION 11. No Rights asan Employee. 

        Nothingin the Plan or in any right granted under the Plan shall confer upon the Participant anyright to continue in the employ of a Participating Company for any period of specificduration or interfere with or otherwise restrict in any way the rights of theParticipating Companies or of the Participant, which rights are hereby expressly reservedby each, to terminate his or her employment at any time and for any reason, with orwithout cause. 

SECTION 12. No Rights asa Stockholder. 

        AParticipant shall have no rights as a stockholder with respect to any shares of Stock thathe or she may have a right to purchase under the Plan until such shares have beenpurchased on the last day of the applicable Offering Period. 

SECTION 13. SecuritiesLaw Requirements. 

        Sharesof Stock shall not be issued under the Plan unless the issuance and delivery of suchshares comply with (or are exempt from) all applicable requirements of law, including(without limitation) the Securities Act of 1933, as amended, the rules and regulationspromulgated thereunder, state securities laws and regulations, and the regulations of anystock exchange or other securities market on which the Company’s securities may thenbe traded. 

SECTION 14. Stock OfferedUnder The Plan. 

        (a)              Authorized Shares The maximum aggregate number of shares of Stock          available for purchase under the Plan is one million five hundred thousand          (1,500,000), plus an annual increase to be added on the first day of the          Company’s fiscal year beginning in years 2001 through 2010 equal to such          amount as may be determined by the Board or, if less, the lesser of (i) one          million (1,000,000) shares or (ii) one percent (1%) of the outstanding shares on          such date. The aggregate number of Shares available for purchase under the Plan          shall at all times be subject to adjustment pursuant to Section 14. 

        (b)              Antidilution Adjustments. The aggregate number of shares of Stock offered          under the Plan, the 5,000 share limitation described in Section 8(c) and the          price of shares that any Participant has elected to purchase shall be adjusted          proportionately by the Committee for any increase or decrease in the number of          outstanding shares of Stock resulting from a subdivision or consolidation of          shares or the payment of a stock dividend, any other increase or decrease in          such shares effected without receipt or payment of consideration by the Company,          the distribution of the shares of a Subsidiary to the Company’s          stockholders or a similar event. 

        (c)              Reorganizations. Any other provision of the Plan notwithstanding,          immediately prior to the effective time of a Corporate Reorganization, the          Offering Period then in progress shall terminate and shares shall be purchased          pursuant to Section 8, unless the Plan is assumed by the surviving          corporation or its parent corporation pursuant to the plan of merger or          consolidation. The Plan shall in no event be construed to restrict in any way          the Company’s right to undertake a dissolution, liquidation, merger,          consolidation or other reorganization. 

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SECTION 15. Amendment orDiscontinuance. 

        TheBoard shall have the right to amend, suspend or terminate the Plan at any time and withoutnotice. Except as provided in Section 14, any increase in the aggregate number ofshares of Stock to be issued under the Plan shall be subject to approval by a vote of thestockholders of the Company. In addition, any other amendment of the Plan shall be subjectto approval by a vote of the stockholders of the Company to the extent required by anapplicable law or regulation. 

SECTION 16. Execution. 

        Torecord the amendment and restatement of the Plan by the Board, the Company has caused itsauthorized officer to execute the same.