Document:

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                                                                    Exhibit 10.4

                                    FORM OF
                        WAVESPLITTER TECHNOLOGIES, INC.
                       2000 EMPLOYEE STOCK PURCHASE PLAN

          1.  Purpose.  The WaveSplitter Technologies, Inc. Employee Stock
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Purchase Plan (the "Plan") is being established for the benefit of employees of
WaveSplitter Technologies, Inc., a Delaware corporation (the "Company"), and its
Designated Subsidiaries.  The Plan is intended to provide the employees of the
Employer with an opportunity to purchase common shares, par value $0.001 per
share, of the Company (the "Shares").  It is the intention of the Company that
the Plan qualify as an "employee stock purchase plan" within the meaning of
Section 423 of the Code, and the provisions of the Plan shall be construed in a
manner consistent with the requirements of such section of the Code.

          2.  Definitions.
              -----------

              a.  "Board" shall mean the Board of Directors of the Company.

              b.  "Change in Capitalization" shall mean any increase, reduction,
or change or exchange of Shares for a different number or kind of shares or
other securities or property by reason of a reclassification, recapitalization,
merger, consolidation, reorganization, issuance of warrants or rights, stock
dividend, stock split or reverse stock split, combination or exchange of shares,
repurchase of shares, change in corporate structure or otherwise; or any other
corporate action, such as declaration of a special dividend, that affects the
capitalization of the Company.

              c.  "Change in Control" shall mean the first to occur of any one
of the events set forth in the following paragraphs, provided that a Public
Offering shall not constitute a Change in Control:

              (i)   any Person is or becomes the "Beneficial Owner" (as defined
                    in Rule 13d-3 under the Exchange Act), directly or
                    indirectly, of securities of the Company (not including in
                    the securities "Beneficially Owned," within the meaning of
                    Rule 13d-3 under the Exchange Act, by such Person any
                    securities acquired directly from the Company) representing
                    35% or more of the Company's then outstanding securities,
                    excluding any
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                      Person who becomes such a Beneficial Owner in connection
                      with a transaction described in clause (A) of paragraph
                      (iii) hereof; or

               (ii)   the following individuals cease for any reason to
                      constitute a majority of the number of directors then
                      serving: individuals who, on the effective date of a
                      Public Offering, constitute the Board and any new director
                      (other than a director whose initial assumption of office
                      is in connection with an actual or threatened election
                      contest, including but not limited to a consent
                      solicitation, relating to the election of directors of the
                      Company) whose appointment or election by the Board or
                      nomination for election by the Company's stockholders was
                      approved or recommended by a vote of at least two-thirds
                      (2/3) of the directors then still in office who either
                      were directors on the effective date of a Public Offering
                      or whose appointment, election or nomination for election
                      was previously so approved or recommended; or

               (iii)  there is consummated a merger or consolidation of the
                      Company with any other corporation other than (A) a merger
                      or consolidation which results in the directors of the
                      Company immediately prior to such merger or consolidation
                      continuing to constitute at least a majority of the board
                      of directors of the Company, the surviving entity or any
                      parent thereof, or (B) a merger or consolidation effected
                      to implement a recapitalization of the Company (or similar
                      transaction) in which no Person is or becomes the
                      Beneficial Owner, directly or indirectly, of securities of
                      the Company (not including in the securities Beneficially
                      Owned by such Person any securities acquired directly from
                      the Company) representing 35% or more of the combined
                      voting power of the Company's then outstanding securities;
                      or

               (iv)   the stockholders of the Company approve a plan of complete
                      liquidation or dissolution of the Company or

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                       there is consummated an agreement for the sale or
                       disposition by the Company of all or substantially all of
                       the Company's assets, other than a sale or disposition by
                       the Company of all or substantially all of the Company's
                       assets to an entity at least a majority of the board of
                       directors of which comprises individuals who were
                       directors of the Company immediately prior to such sale
                       or disposition.

               d.  "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.

               e.  "Committee" shall mean the Compensation Committee or any
other committee of members of the Board appointed by the Board to administer the
Plan and to perform the functions set forth herein.

               f.  "Company" shall mean WaveSplitter Technologies, Inc., a
corporation organized under the laws of the State of Delaware, or any successor
corporation.

               g.  "Compensation" shall mean the fixed salary, wages,
commissions, overtime pay and bonuses paid by an Employer to an Employee as
reported by the Employer to the United States government for Federal income tax
purposes, including an Employee's portion of compensation deferral contributions
pursuant to Section 401(k) of the Code, any amount excludable pursuant to
Section 125 of the Code and/or any non-qualified compensation deferral, but
excluding any foreign service allowance, severance pay, expense reimbursement or
any credit or benefit under any employee plan maintained by the Employer.

               h.  "Continuous Status as an Employee" shall mean the absence of
any interruption or termination of service as an Employee. Continuous Status as
an Employee shall not be considered interrupted in the case of a leave of
absence agreed to in writing by the Employee's Employer, if such leave is for a
continuous period of not more than one year or re-employment upon the expiration
of such leave is guaranteed by contract or statute.

               i.  "Designated Subsidiaries" shall mean the Subsidiaries of the
Company which have been designated by the Board from time to time in its sole

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discretion as eligible to participate in the Plan, which may include
corporations which become Subsidiaries of the Company after the adoption of the
Plan.

               j.  "Employee" shall mean any employee of the Company or a
Designated Subsidiary, excluding any employee whose customary employment is for
less than twenty (20) hours per week.

               k.  "Employer" shall mean, as to any particular Employee, the
corporation which employs such Employee, whether it is the Company, a wholly
owned Subsidiary of the Company or a Designated Subsidiary of the Company.

               l.  "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.

               m.  "Exercise Date" shall mean the last Trading Day of each
Purchase Period.

               n.  "Fair Market Value" as of a particular date shall mean the
fair market value of a Share as determined by the Committee in its sole
discretion; provided that (i) if the Shares are admitted to trading on a
national securities exchange, fair market value of a Share on any date shall be
the closing sale price reported for such Share on such exchange on the last day
preceding such date on which a sale was reported, (ii) if the Shares are
admitted to quotation on the National Association of Securities Dealers
Automated Quotation ("Nasdaq") System or other comparable quotation system and
has been designated as a National Market System ("NMS") security, fair market
value of a Share on any date shall be the closing sale price reported for such
Share on such system on the last date preceding such date on which a sale was
reported, or (iii) if the Shares are admitted to quotation on the Nasdaq System
but has not been designated as an NMS security, fair market value of a Share on
any date shall be the average of the highest bid and lowest asked prices of such
Share on such system on the last date preceding such date on which both bid and
ask prices were reported. Notwithstanding anything to the contrary contained
herein, for purposes of the first Offering Period, the "Fair Market Value" of a
Share on the first Offering Date shall be the initial price to the public as set
forth in the final prospectus included within the registration statement on Form
S-1 filed with the Securities and Exchange Commission for the Public Offering
(the "Registration Statement").

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               o.  "Offering Date" shall mean the first Trading Day of each
Offering Period of the Plan, except with respect to any Offering Date coinciding
with a Public Offering, in which case "Offering Date" shall mean the date of the
Public Offering. The Offering Date of an Offering Period is the grant date for
the options offered in such Offering Period.

               p.  "Offering Period" shall mean a period as described in Section
4 hereof.

               q.  "Parent" shall mean any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company if, at the time of
granting an option, each of the corporations other than the Company owns shares
possessing 50% or more of the total combined voting power of all classes of
shares in one of the other corporations in such chain.

               r.  "Participant" shall mean an Employee who participates in the
Plan.

               s.  "Person" shall have the meaning given in Section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its affiliates, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.

               t.  "Plan" shall mean the WaveSplitter Technologies, Inc. 2000
Employee Stock Purchase Plan, as amended from time to time.

               u.  "Public Offering" shall mean the first underwritten initial
public offering of Shares by the Company.

               v.  "Purchase Period" shall mean each approximately six-month
period within or coinciding with an Offering Period commencing after one
Exercise Date and ending with the next Exercise Date in such Offering Period,
except that the first Purchase Period of any Offering Period shall commence on
the first Trading Day of such Offering Period and end with the next Exercise
Date; provided, however, that the first Purchase Period of the first Offering
Period under

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the Plan shall commence on the first Trading Day on which the Securities and
Exchange Commission declares the Company's Registration Statement effective and
shall end on the last Trading Day on or prior to March 31, 2001.

               w.  "Shares" shall mean shares of the common stock, par value
$0.001 per share, of the Company.

               x.  "Subsidiary" shall mean any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if, at
the time of granting an option, each of the corporations other than the last
corporation in the unbroken chain owns shares possessing fifty percent (50%) or
more of the total combined voting power of all classes of shares in one of the
other corporations in such chain.

               y.  "Trading Day" shall mean a day on which national stock
exchanges and the NASDAQ system are open for trading.

          3.   Eligibility.
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               a.  Subject to the requirements of Section 3b hereof, any person
who is an Employee as of an Offering Date shall be eligible to participate in
the Plan and be granted an option for the Offering Period commencing on such
Offering Date.

               b.  Notwithstanding any provisions of the Plan to the contrary,
no Employee shall be granted an option under the Plan (i) if, immediately after
the grant, such Employee (or any other person whose shares 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 (5%) or more
of the total combined voting power or value of all classes of shares of the
Company or of any Subsidiary or Parent of the Company, or (ii) which permits
such Employee's right to purchase shares under all employee stock purchase plans
(as described in Section 423 of the Code) of the Company and any Subsidiary or
Parent of the Company to accrue at a rate which exceeds twenty-five thousand
dollars ($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 would be
outstanding at any time. Any amounts received from an Employee which cannot be
used to purchase Shares as a result of this limitation will be returned as soon
as possible to the Employee without interest.

          4.   Offering Periods.  The Plan shall be implemented by a series of
               ----------------
consecutive, overlapping Offering Periods. The first such Offering Period shall
commence on the first Trading Day on or after the date of the Public Offering
(or such later date as may be established by the Committee) and end on the last
Trading Day on or before September 30, 2002. Unless otherwise determined by the
Committee, each subsequent Offering Period shall have a duration of twenty-four
(24) months, commencing on the first Trading Day on or after April 1 and October
1 of each year. The Plan shall continue until terminated in accordance with
Section 19 hereof. Subject to Section 19 hereof, the Committee shall have the
power to change the duration and/or the frequency of Offering Periods and/or
Purchase Periods with respect to future offerings and shall use its best efforts
to notify Employees of any.

                                       6 (1)
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such change at least fifteen (15) days prior to the scheduled beginning of the
first Offering Period to be affected. In no event shall any option granted
hereunder be exercisable more than twenty-seven (27) months from its date of
grant.

              To the extent permitted by any applicable laws, regulations, or
stock exchange rules, if the Fair Market Value of the Shares on any Exercise
Date in an Offering Period is lower than the Fair Market Value of the Shares
on the Offering 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.

          5.  Grant of Option; Participation; Price.
              -------------------------------------

              a. On each Offering Date, the Company shall commence an offering
by granting each eligible Employee an option to purchase Shares, subject to the
limitations set forth in Sections 3b and 11 hereof. Each option so granted shall
be exercisable for the number of Shares described in Section 8 hereof and shall
be exercisable only on the Exercise Date.

              b. Each eligible Employee may elect to become a Participant in the
Plan with respect to an Offering Period, by filing a subscription agreement with
his or her Employer authorizing payroll deductions in accordance with Section 6
hereof and filing it with the Company or the Employer in accordance with the
form's instructions at least ten business days prior to the applicable Offering
Date, unless a later time for filing the subscription agreement is set by the
Committee for all Employees with respect to a given offering. Such authorization
will remain in effect for subsequent Offering Periods, until modified or
terminated by the Participant by giving written notice to his or her Employer
prior to the next occurring Exercise Date.

              c. The option price per Share subject to an offering shall be 85%
of the Fair Market Value of a Share on (i) the Offering Date or (ii) the
Exercise Date, whichever is lower.

          6.  Payroll Deductions.
              ------------------

              a. Subject to Section 5b hereof, a Participant may, in accordance
with rules and procedures adopted by the Committee, authorize a payroll
deduction of any whole percentage from 1 percent to 15 percent of such
Participant's Compensation each pay period (the permissible range within such
percentages to be determined by the Committee from time to time). A Participant
may at any time increase or decrease such payroll deduction (including a
cessation of payroll deductions), by completing and filing with the Employer a
new subscription agreement authorizing a change in payroll deduction rate. The
Committee may, in its discretion, limit the number of rate changes by a
Participant during an Offering Period. A change in rate shall be effective as of
the next payroll period following the date of

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filing of the new subscription agreement. All payroll deductions made by a
Participant shall be credited to such Participant's account under the Plan.

              b. Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3b hereof, a Participant's
payroll deductions may be decreased to 0% at any time during a Purchase Period.
Payroll deductions shall recommence at the rate provided in such Participant's
subscription agreement at the beginning of the first Purchase Period which is
scheduled to end in the following calendar year, unless terminated by the
Participant as provided in Section 9 hereof.

              c. A Participant may withdraw from the Plan as provided in Section
9, which will terminate his or her payroll deductions for the Purchase Period in
which such withdrawal occurs.

          7.  Exercise of Option.
              ------------------

              a. Unless a Participant withdraws from the Plan as provided in
Section 9 hereof, or unless the Committee otherwise provides, such Participant's
election to purchase Shares shall be exercised automatically on the Exercise
Date, and the maximum number of Shares (including any fractional Share) subject
to such option will be purchased for such Participant at the applicable option
price with the accumulated payroll deductions. Notwithstanding the foregoing, a
Participant shall not be permitted to purchase greater than one thousand (1,000)
Shares in any one Purchase Period.

              b. Any cash balance remaining in a Participant's account after the
termination of an Offering Period will be carried forward to the Participant's
account for the purchase of Shares during the next Offering Period if the
Participant has elected to continue to participate in the Plan. Otherwise the
Participant will receive a cash payment equal to the cash balance of his or her
account.

              c. The Shares purchased upon exercise of an option hereunder shall
be credited to the Participant's account under the Plan as of the Exercise Date
and shall be deemed to be transferred to the Participant on such date. Except as
otherwise provided herein, the Participant shall have all rights of a
shareholder with respect to such Shares upon their being credited to the
Participant's account.

          8.  Delivery of Shares.
              ------------------

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              a. As promptly as practicable after receipt by the Company of a
written request for withdrawal of Shares from any Participant, the Company shall
arrange the delivery to such Participant of a share certificate representing the
Shares in the Participant's account which the Participant requests to withdraw
(any fractional shares being paid in cash). Subject to Section 8b hereof,
withdrawals may be made no more frequently than once each Offering Period.
Shares received upon share dividends or share splits shall be treated as having
been purchased on the Exercise Date of the Shares to which they relate.

              b. Notwithstanding anything in Section 8a hereof to the contrary,
Shares may be withdrawn by a Participant more than once during an Offering
Period under the following circumstances: (i) within 60 days following a Change
in Control of the Company or (ii) upon the approval of the Committee, in its
sole discretion.

          9.  Withdrawal; Termination of Employment.
              -------------------------------------

              a. A Participant may withdraw at any time all, but not less than
all, cash amounts in his or her account under the Plan that have not been used
to purchase Shares by giving written notice to the Company prior to the next
occurring Exercise Date. All such payroll deductions credited to such
Participant's account shall be paid to such Participant promptly after receipt
of such Participant's notice of withdrawal and such Participant's option for the
Offering Period in which the withdrawal occurs shall be automatically
terminated. No further payroll deductions for the purchase of Shares will be
made for such Participant during such Offering Period.

              b. Upon termination of a Participant's Continuous Status as an
Employee during the Offering Period for any reason, including voluntary
termination, retirement or death, the payroll deductions credited to such
Participant's account that have not been used to purchase Shares shall be
returned to such Participant or, in the case of such Participant's death, to the
person or persons entitled thereto under Section 13 hereof, and such
Participant's option will be automatically terminated.

              c. A Participant's withdrawal from an offering will not have any
effect upon such Participant's eligibility to participate in a succeeding
offering or in any similar plan which may hereafter be adopted by the Company.

          10. Dividends and Interest.
              ----------------------

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              a. Cash dividends paid on Shares held in a Participant's account
shall be distributed to Participants as soon as practicable.

              b. No interest shall accrue on or be payable with respect to the
payroll deductions of a Participant in the Plan.

          11. Shares.
              ------

              a. Subject to adjustment as provided in Section 17 hereof, the
maximum number of Shares which shall be reserved for sale under the Plan shall
be 2,000,000 Shares, provided, however, that on the first day of each fiscal
year of the Company (beginning in 2002) such number shall be increased by an
amount equal to the lesser of (i) 2,000,000 Shares or (ii) 2% of the number of
outstanding Shares on the last trading day of the immediately preceding fiscal
year. Such Shares may consist, in whole or in part, of authorized and unissued
Shares or treasury Shares. If the total number of Shares which would otherwise
be subject to options granted pursuant to Section 5a hereof on an Offering Date
exceeds the number of Shares then available under the Plan (after deduction of
all Shares for which options have been exercised or are then outstanding), the
Committee shall make a pro rata allocation of the Shares remaining available for
option grant in as uniform a manner as shall be practicable and as it shall
determine to be equitable. In such event, the Committee shall give written
notice to each Participant of such reduction of the number of option Shares
affected thereby and shall similarly reduce the rate of payroll deductions, if
necessary.

              b. Shares to be delivered to a Participant under the Plan will be
registered in the name of the Participant or, at the election of the
Participant, in the name of the Participant and another person as joint tenants
with rights of survivorship or community property.

          12. Administration. The Plan shall be administered by the Committee,
              --------------
and the Committee may select administrator(s) to whom its duties and
responsibilities hereunder may be delegated. The Committee shall have full power
and authority, subject to the provisions of the Plan, to promulgate such rules
and regulations as it deems necessary for the proper administration of the Plan,
to interpret the provisions in its sole discretion and supervise the
administration of the Plan, and to take all action in connection therewith or in
relation thereto as it deems necessary or advisable. Any decision reduced to
writing and signed by a majority of the members of the Committee shall be fully
effective as if it had been made at a meeting duly held. Except as otherwise
provided by the Committee, each Employer

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shall be charged with all expenses incurred in the administration of the Plan
with respect to such Employer's Employees. No member of the Committee shall be
personally liable for any action, determination, or interpretation made in good
faith with respect to the Plan, and all members of the Committee shall be fully
indemnified by the Company with respect to any such action, determination or
interpretation. All decisions, determinations and interpretations of the
Committee shall be final and binding on all persons, including the Company, the
Participant (or any person claiming any rights under the Plan from or through
any Participant) and any shareholder.

          13. Designation of Beneficiary.
              --------------------------

              a. A Participant may file with the Company, on forms supplied by
the Company, a written designation of a beneficiary who is to receive any Shares
and cash remaining in such Participant's account under the Plan in the event of
the Participant's death.

              b. Such designation of beneficiary may be changed by the
Participant at any time by written notice to the Company, on forms supplied by
the Company. In the event of the death of a Participant and in the absence of a
beneficiary validly designated under the Plan 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 shall deliver such Shares and/or cash in accordance with applicable
laws of descent and distribution.

          14. 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 by the Participant (other than by will, the
laws of descent and distribution or as provided in Section 13 hereof). 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 in accordance with Section 9 hereof.

          15. Use of Funds. All payroll deductions held by the Company under
              ------------
the Plan may be used by the Company for any corporate purpose, and the Company
shall not be obligated to segregate such funds.

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          16. Reports. Individual accounts will be maintained for each
              -------
Participant in the Plan. Statements of account will be given to Participants as
soon as practicable following each Offering Period, which statements will set
forth the amounts of payroll deductions, the per Share purchase price, the
number of Shares purchased, the aggregate Shares in the Participant's account
and the remaining cash balance, if any.

          17. Effect of Certain Changes.  In the event of a Change in
              -------------------------
Capitalization or the distribution of an extraordinary dividend, the Committee
shall conclusively determine the appropriate equitable adjustments, if any, to
be made under the Plan, including without limitation adjustments to the number
of Shares which have been authorized for issuance under the Plan but have not
yet been placed under option, as well as the price per Share covered by each
option under the Plan which has not yet been exercised. In the event of a Change
in Control of the Company, the Offering Period shall terminate unless otherwise
provided by the Committee.

          18. Term of Plan. Subject to the Board's right to discontinue the Plan
              ------------
(and thereby end its term) pursuant to Section 19 hereof, the term of the Plan
(and its last Offering Period) shall end on the tenth anniversary of a Public
Offering. Upon any discontinuance of the Plan, unless the Committee shall
determine otherwise, any assets remaining in the Participants' accounts under
the Plan shall be delivered to the respective Participant (or the Participant's
legal representative) as soon as practicable.

          19. Amendment to and Discontinuance of Plan. The Board may at any time
              ---------------------------------------
amend, suspend or discontinue the Plan. Except as provided in Section 17 hereof,
no such suspension or discontinuance may adversely affect options previously
granted and no amendment may make any change in any option theretofore granted
which adversely affects the rights of any Participant which accrued prior to the
date of effectiveness of such amendment without the consent of such Participant.
No amendment shall be effective unless it receives the requisite approval of the
shareholders of the Company if such shareholder approval of such amendment is
required to comply with Rule 16b-3 under the Exchange Act or Section 423 of the
Code or to comply with any other applicable law, regulation or stock exchange
rule.

          20. Notices. All notices or other communications by a Participant to
              -------
the Company under or in connection with the Plan shall be deemed to have

                                       12
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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.

          21. Regulations and Other Approvals; Governing Law.
              ----------------------------------------------

              a. This Plan and the rights of all persons claiming hereunder
shall be construed and determined in accordance with the laws of the State of
Delaware without giving effect to the choice of law principles thereof, except
to the extent that such law is preempted by federal law.

              b. The obligation of the Company to sell or deliver Shares with
respect to options granted under the Plan shall be subject to all applicable
laws, rules and regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.

              c. To the extent applicable hereto, the Plan is intended to comply
with Rule 16b-3 under the Exchange Act, and the Committee shall interpret and
administer the provisions of the Plan in a manner consistent therewith. Any
provisions inconsistent with such Rule shall be inoperative and shall not affect
the validity of the Plan.

          22. Withholding of Taxes. If the Participant makes a disposition,
              --------------------
within the meaning of Section 424(c) of the Code and regulations promulgated
thereunder, of any Share or Shares issued to such Participant pursuant to such
Participant's exercise of an option, and such disposition occurs within the
later of the two-year period commencing on the day after the Offering Date or
the one-year period commencing on the day after the Exercise Date, such
Participant shall, within ten (10) days of such disposition, notify the Company
thereof and thereafter immediately deliver to the Company any amount of Federal,
state, local or other income taxes and other amounts which the Company informs
the Participant the Company is required to withhold.

          23. Effective Date. The Plan shall be effective as of the [date of
              --------------
a Public Offering], subject to the approval of the Plan by the shareholders of
the Company within 12 months before or after the date the Plan is adopted.

                                       13<PAGE>

                                                                    EXHIBIT 10.5

     June 16, 2000

     Mr. William H. Diamond, Jr.
     16125 Francesca Ct.
     Monte Sereno, CA 95030                    Subject: Offer Letter

     Dear Bill:

     WaveSplitter is pleased to offer you a position as its President & Chief
     Executive Officer. We anticipate that your efforts will contribute
     significantly to WaveSplitter's growth and success.

     Initially, you will be paid a base salary at the rate of $250,000 per year,
     to be paid in prorated biweekly installments for the time that you are
     employed by WaveSplitter. Your base salary will not be subject to reduction
     except as part of a general reduction of all officer salaries. Increases to
     your base salary shall be at the discretion of the Board of Directors. In
     addition to your base salary, you will be eligible to earn a performance
     bonus as a participant in the 2000 WaveSplitter Executive Bonus Plan. Your
     bonus opportunity at 100% of targeted results will be 40% of your actual
     base salary for the portion of the year you are a WaveSplitter employee. At
     a minimum, you will receive a bonus of $25,000 for 2000 (or a prorata
     portion thereof if your employment terminates prior to the end of 2000).
     Your 2000 bonus will be paid promptly after the end of the year when full
     year results have been determined.

     Subject 14 approval of the Board of Directors, you will be entitled to the
     grant of an option (the "Option") to purchase 2,000,000 shares of
     WaveSplitter's Common Stock (the "Shares") on the terms and conditions of
     the Company's 1997 Stock Plan. We will seek the Board's approval of the
     Option at the regular meeting scheduled for June 23, 2000 provided that you
     have become an employee by that date. Otherwise, we will seek the necessary
     approval within ten (10) days after your WaveSplitter employment commences.
     To the extent permitted under applicable tax laws, this Option will be an
     Incentive Stock Option. One forty-eighth (1/48) of the Shares will vest
     each month following the commencement of your employment, such that all
     Shares will have vested after four years of employment. The Option exercise
     price will be the fair market value of the Shares at the time of the grant,
     as determined by the Board. This option will be exercisable for a period of
     twelve (12) months following termination of your employment. In addition,
     the Option will be subject to special acceleration of vesting in the event
     of a Change of Control as set forth in Exhibit A. Further, if in the
     absence of a Change of Control your employment is terminated by
     WaveSplitter without cause (as defined in

_____________________
     /1/ The company's stock is in the process of being split 4 to 1.

<PAGE>

Exhibit A) or is constructively terminated (as defined in Exhibit A), vesting of
the Option will be accelerated such that the shares that would have vested
during the twelve (12) month period immediately following termination will
become vested and immediately exercisable provided that you have signed an
agreement containing the provisions set forth in Exhibit B, attached, thereby
releasing WaveSplitter and its officers and directors from any claims or
liability associated with the termination of your employment and such agreement
has become irrevocable.

If you accept this position you will report to the Board of Directors. Your
start date will be July 5, 2000 (or sooner if possible). The position of
President & Chief Executive Officer is a full-time, exempt position.

WaveSplitter provides 10 paid holidays, as each holiday occurs, during each
calendar year. Nine of these holidays are fixed company holidays, and one
holiday is a personal choice with the approval of management.

You are eligible for 15 days of paid time off during each full year that you are
employed full-time by WaveSplitter. Paid time off may be used for vacation,
personal or family illness or other personal matters. Paid time off accrues at
the rate of approximately 1.25 days per month during full-time employment. Paid
time off may be used after it has accrued. Paid time off accrues at the rate of
one additional day per year for each additional year that you are employed full-
time by WaveSplitter. The maximum amount of paid time off that can be
accumulated and carried over from one year to the next is two times your annual
accrual rate.

The standard work day at WaveSplitter is eight hours. Calculations for pay for
holidays, vacation hours, and sick leave hours are based on base pay rate and a
maximum of eight hours per day. Bonuses overtime, and shift premiums are not
included in or calculated in pay for holidays, vacation hours, and sick leave
hours.

At this time, WaveSplitter offers several choices of major group major medical,
dental and vision insurance for eligible employees. For some of those choices,
the company currently pays 100% of the premiums. For others, the employee is
required to contribute to the cost through payroll deductions.

WaveSplitter works with the providers of group major medical, dental and vision
insurance in order that coverage may be available to eligible employees
effective the first day of the month following the first full calendar month of
employment. However, the effective date of health insurance is influenced by
completion and processing of application forms. Therefore, WaveSplitter cannot
guarantee the exact effective date of this insurance.

A summary of the benefits that are currently available to employees of
WaveSplitter is attached. Benefits, which are offered and/or made available to
employees of WaveSplitter, may be modified or changed by WaveSplitter at anytime
without notice. WaveSplitter does not necessarily participate in the cost of all
benefits. WaveSplitter policies and practices regarding employee benefits may
changed at anytime without notice and at the discretion of management.

This letter constitutes an offer of at-will employment. You may terminate your
employment at WaveSplitter at any time. Likewise, WaveSplitter has the right to

                                       2
<PAGE>

terminate your employment at any time with or without cause. In the event your
employment is terminated by WaveSplitter other than for cause (as defined in
Exhibit A) or is constructively terminated (as defined in Exhibit A):

     i)   WaveSplitter will pay you a lump sum payment equal to your then
          current annual base salary (less applicable withholding);

     ii)  WaveSplitter will pay you the bonus, if any, that would have been paid
          but for the termination of your employment, prorated through the date
          of termination, based on WaveSplitter's performance and in accordance
          with the terms of the applicable bonus plan (less applicable
          withholding): and

     iii) for a period of twelve (12) months following your termination date,
          WaveSplitter will pay the cost of continuing your major medical,
          dental, vision and life insurance coverage in effect immediately prior
          to the termination of your employment (subject to your payment of all
          applicable employee contributions, deductibles and premiums that were
          being paid by you prior to termination);

provided that you have signed an agreement containing the provisions set forth
in Exhibit B, attached, thereby releasing WaveSplitter and its officers and
directors from any claims or liability associated with the termination of your
employment and such agreement has become irrevocable.

Any agreement regarding employment, wages, benefits, or other conditions of
employment with WaveSplitter must be entered into in writing and signed by the
Chairman of the Board or another person specifically designated by the Board of
Directors. Any unwritten representations made by officers, agents, or employees
of WaveSplitter during the interview process are only their own personal
expectations of what the conditions of employment might be should you be hired
and are not binding on the company.

In consideration of employment by WaveSplitter, you will be asked to sign a
Nondisclosure and Invention Agreement, a copy of which is enclosed. In addition,
WaveSplitter will offer you the opportunity to become a party to its standard
form of indemnification agreement for officers and directors.

This offer of employment is available for ten (10) days from the above date.
WaveSplitter retains the right to withdraw this offer at midnight of the tenth
day following the above date.

WaveSplitter is committed to managing our business in an exemplary manner.
WaveSplitter is an equal opportunity employer. We believe that WaveSplitter is a
stimulating and rewarding environment to work in, and we look forward to your
joining us.

This offer of employment is contingent upon reference checking results
satisfactory to WaveSplitter. Please provide us with a list of references as
soon as possible so that we can conduct the reference checking process.

Should you have any questions or wish to discuss any concerns, please feel free
to talk to us. We look forward to hearing from you.

                                       3

<PAGE>

Sincerely,

/s/ Sheau Chen
-------------------------
Sheau Chen
President & CEO
WaveSplitter Technologies, Inc.

Offer
accepted: /s/ WILLIAM H. DIAMOND
         --------------------------
         William H. Diamond
<PAGE>

                Exhibit A. to Offer Letter dated June 16, 2000

1.   In the event that, in contemplation of, or at any time after a Change of
Control (as defined below), your employment with WaveSplitter (or its successor)
is (a) involuntarily terminated other than for "cause" or (b) is "constructively
terminated" (as such terms are defined below), and:

     (a)  if such termination or constructive termination within twelve (12)
months of the commencement of your employment, then one-half (1/2) of the then
unvested portion of the Option will immediately vest, or

     (b)  if such termination or constructive termination occurs more than
twelve (12) months after the commencement of your employment, then all of the
then unvested portion of the Option will immediately vest.

2.   For purposes of the foregoing:

     (a)  Termination for "cause" means (i) the failure by you substantially to
perform your material duties after a written demand for substantial performance
is delivered to you by the Board of Directors that specifically identifies the
manner in which the Board of Directors believes that you have not substantially
performed your duties and you have afforded a reasonable opportunity (not less
than 30 days) to cure such failure, (ii) the failure in a material respect) by
you to follow reasonable policies or directives established by the Board of
Directors after written notice to you by the Board of Directors that
specifically identifies the manner in which you are not following such policies
or directives, (iii) bad faith conduct that is materially detrimental to
WaveSplitter, or (iv) the conviction of you of any crime involving the property
or the business of WaveSplitter, or any felony.

     (b)  Your employment with WaveSplitter will be deemed to have been
"constructively terminated" if there shall occur (i) a reduction in your base
salary other than a reduction that is part of a general reduction of all officer
salaries, (ii) a material reduction in your title responsibility or authority,
or assignment of duties inconsistent therewith, or (iii) a change to your
primary WaveSplitter office location from 46430 Fremont Blvd, Fremont, CA to any
other location that would require you to travel more than forty (40) miles one-
way) from your home at 16125 Francesca Ct, Monte Sereno, CA to reach the office.

     (c)  A "Change of Control" shall be deemed to have occurred if (i)
WaveSplitter sells or otherwise disposes of all or substantially all of its
assets; (ii) there is a merger or consolidation of WaveSplitter with any other
corporation or corporations, if the shareholders of WaveSplitter, as a group, do
not hold, immediately after such event, more than 50% of the voting power of the
surviving or successor corporation; or (iii) a person or entity (exclusive of
persons who are now officers and directors of (WaveSplitter), including any
"person" as such term is used in Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), becomes the "beneficial owner" (as
defined in the Exchange Act) of capital stock of WaveSplitter representing 40%
or more of the combined voting power of the voting securities of WaveSplitter.
<PAGE>

                 Exhibit B to Offer Letter dated June 16, 2000

                           GENERAL RELEASE OF CLAIMS

     Employee hereby fully and forever releases WaveSplitter Technologies, Inc.
(the "Company"), its subsidiaries and affiliates and their respective officers,
directors, stockholders, investors, administrators, employees, assigns and
successors in interest (individually and collectively, the "Releasees"), from
any and all claims, liabilities, demands or causes of action that he may have or
claim to have, whether known or unknown, against the Releasees, whether for
violation of a statute, breach of contract, tort or any other claim based on its
employment and the termination of his employment, including but not limited to,
any claims of wrongful termination, infliction of emotional distress,
misrepresentation, interference with prospective economic advantage, negligence,
breach of contract or age, sex, disability, medical condition, or other
discrimination under the Civil Rights Act of 1964, the Age Discrimination in
Employment Act of 1967, the Americans with Disabilities Act, the Fair Employment
and Housing Act, or any other applicable law. Employee agrees that the severance
payments to be made to him and/or any accelerated vesting of stock options is in
full satisfaction and settlement of any such claims, liabilities, demands or
causes of action, and Employee hereby agrees that he will not file any lawsuit
or institute any proceeding asserting any such claim. Employee also waives any
and all rights that he currently may have arising under the Age Discrimination
in Employment Act of 1967, as amended.

     Employee waives the provisions of California Civil Code Section 1542, which
states: 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 EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.

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