Document:

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                                                                     EXHIBIT 4.1

                             WJ COMMUNICATIONS, INC.
                       2001 EMPLOYEE STOCK INCENTIVE PLAN

         SECTION 1. PURPOSE; DEFINITIONS

         The purpose of the Plan is to give WJ Communications, Inc. (the
"COMPANY") and its Affiliates (as defined below) a competitive advantage in
attracting, retaining and motivating employees and to provide the Company and
its subsidiaries or Affiliates with a stock plan providing incentives linked to
the financial results of the Company's businesses and increases in shareholder
value.

         For purposes of the Plan, the following terms are defined as set forth
below:

         "AFFILIATE" of a Person means a Person directly or indirectly
controlled by, controlling or under common control with such Person.

         "AWARD" means a Stock Appreciation Right, Stock Option or Restricted
Stock.

         "AWARD AGREEMENT" means a Restricted Stock Agreement or Option
Agreement. An Award Agreement may consist of provisions of an employment
agreement.

         "BOARD" means the Board of Directors of the Company.

         "CAUSE" shall have the meaning given in any written employment or
services agreement between the Company and the Participant, if any, or, in the
absence of such an agreement, shall mean any of the following acts or
circumstances: (i) willful destruction by the Participant of Company property
having a material value to the Company; (ii) fraud, embezzlement, theft, or
comparable dishonest activity committed by the Participant against the Company;
(iii) the Participant's conviction of or entering a plea of guilty or nolo
contendere to any crime constituting a felony or any misdemeanor involving
fraud, dishonesty or moral turpitude; (iv) the Participant's breach, neglect,
refusal or failure to discharge, in each case in any material respect, his or
her duties (other than due to Disability) commensurate with his or her title and
function or failure to comply with the lawful directions of the Board; or (v) a
willful and knowing material misrepresentation by the Participant to the Board.

         "CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.

         "COMMITTEE" means such committee of the Board as the Board may
designate, which shall be composed of not less than two Non-Employee Directors,
each of whom shall be appointed by and serve at the pleasure of the Board.

         "COMMON STOCK" means the Common Stock, $.01 par value per share, of the
Company.

         "COMPANY" means WJ Communications, Inc., a Delaware corporation.

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         "DISABILITY" means total and permanent disability as defined in Section
22(e)(3) of the Code.

         "EFFECTIVE DATE" has the meaning set forth in Section 13 hereof.

         "EMPLOYMENT" means, unless otherwise defined in an applicable
Restricted Stock Agreement, Option Agreement or employment agreement, employment
with the Company or any of its Affiliates.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.

         "FAIR MARKET VALUE" of the Common Stock means, as of any given date,
the mean between the highest and lowest reported sales prices of the Common
Stock on the Nasdaq National Market. If such sales prices are not so available,
the Fair Market Value of the Common Stock shall be determined by the Committee
in good faith in light of all circumstances (including, without limitation,
historical and projected earnings and revenues of the Company and the Company's
future prospects).

         "INCENTIVE STOCK OPTION" means any Stock Option designated as, and
qualified as, an "incentive stock option" within the meaning of Section 422 of
the Code.

         "NASDAQ" means the Nasdaq Stock Market, Inc.

         "NON-EMPLOYEE DIRECTOR" means a member of the Board who qualifies as a
Non-Employee Director as defined in Rule 16b-3(b)(3), as promulgated by the SEC
under the Exchange Act, or any successor definition adopted by the SEC.

         "NONQUALIFIED STOCK OPTION" means any Stock Option that is not an
Incentive Stock Option.

         "OPTION AGREEMENT" means an agreement setting forth the terms and
conditions of an Award of Stock Options and, if applicable, Stock Appreciation
Rights.

         "PARENT" means a "parent corporation" with respect to the Company,
whether now or later existing, as defined in Section 424 of the Code.

         "PARTICIPANT" has the meaning set forth in Section 4.

         "PERSON" means an individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization, government
(or any department or agency thereof) or other entity.

         "PLAN" means the WJ Communications, Inc. 2001 Employee Stock Incentive
Plan, as set forth herein and as hereinafter amended from time to time.

         "PLAN SHARES" has the meaning set forth in Section 12(b).

         "RESTRICTED STOCK" means an Award granted under Section 7.

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         "RESTRICTED STOCK AGREEMENT" means an agreement setting forth the terms
and conditions of an Award of Restricted Stock.

         "RULE 13D-3" means Rule 13d-3, as promulgated by the SEC under the
Exchange Act, as amended from time to time.

         "SEC" means the Securities and Exchange Commission or any successor
agency.

         "SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and any successor thereto.

         "STOCK APPRECIATION RIGHT" means a right granted under Section 6.

         "STOCK OPTION" means an option granted under Section 5.

         "SUBSIDIARY" means a "subsidiary corporation" with respect to the
Company, whether now or later existing, as defined in Section 424(f) of the
Code.

         In addition, certain other terms used herein have definitions otherwise
ascribed to them herein.

         SECTION 2. ADMINISTRATION

         The Plan shall be administered by the Committee, or, if no Committee
has been designated or appointed, by the Board (in which case all references
herein to the Committee shall include the Board).

         Among other things, the Committee shall have the authority, subject to
the terms of the Plan, to:

               (a) select the Participants to whom Awards may from time to time
be granted;

               (b) determine whether and to what extent Incentive Stock Options,
Nonqualified Stock Options, Stock Appreciation Rights and Restricted Stock or
any combination thereof are to be granted hereunder;

               (c) determine the number of shares of Common Stock to be covered
by each Award granted hereunder;

               (d) determine the terms and conditions of any Award granted
hereunder (including, but not limited to, the option price, any vesting
conditions, restrictions or limitations (which may be related to the performance
of the Participant, the Company or any of its Affiliates)) and any acceleration
of vesting or waiver or forfeiture regarding any Award and the shares of Common
Stock relating thereto, based on such factors as the Committee shall determine;

               (e) modify, amend or adjust the terms and conditions of any
Award, at any time or from time to time;

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               (f) determine to what extent and under what circumstances Common
Stock and other amounts payable with respect to an Award shall be deferred;

               (g) determine under what circumstances an Award may be settled in
cash or Common Stock under Sections 5(g) and 6(b)(ii);

               (h) adopt, alter and repeal such administrative rules, guidelines
and practices governing the Plan as it shall from time to time deem advisable;

               (i) interpret the terms and provisions of the Plan and any Award
issued under the Plan (and any agreement relating thereto); and

               (j) otherwise supervise the administration of the Plan.

         The Committee may act only by a majority of its members then in office,
except that the members thereof may authorize any one or more of their number or
any officer of the Company to execute and deliver documents on behalf of the
Committee.

         Any dispute or disagreement which may arise under, or as a result of,
or in any way relate to, the interpretation, construction or application of the
Plan or an Award (or related Award Agreement) granted hereunder shall be
determined by the Committee. Any determination made by the Committee pursuant to
the provisions of the Plan with respect to the Plan, any Award or Award
Agreement shall be made in the sole discretion of the Committee and, with
respect to an Award, at the time of the grant of the Award or, unless in
contravention of any express term of the Plan, at any time thereafter. All
decisions made by the Committee shall be final and binding on all persons,
including the Company and the Participants.

         SECTION 3. COMMON STOCK SUBJECT TO PLAN

         The total number of shares of Common Stock reserved and available for
grant under the Plan shall be 2,000,000. Shares subject to an Award under the
Plan may be authorized and unissued shares or may be treasury shares.

         If any shares of Restricted Stock are forfeited or if any Stock Option
(and related Stock Appreciation Right, if any) terminates without being
exercised, or if any Stock Appreciation Right is exercised or settled for cash,
the shares subject to such Awards shall again be available for distribution in
connection with Awards under the Plan.

         In the event of any merger, reorganization, consolidation,
recapitalization, spinoff, stock dividend, stock split, reverse stock split,
extraordinary distribution with respect to the Common Stock or other change in
corporate structure affecting the Common Stock, the Committee or the Board may
make such substitution or adjustment in the aggregate number and kind of shares
or other property reserved for issuance under the Plan, in the number, kind and
exercise price of shares or other property subject to outstanding Stock Options
and Stock Appreciation Rights, in the number and kind of shares or other
property subject to Restricted Stock Awards, and/or such other equitable
substitution or adjustments as it may determine to be fair and appropriate in
its sole discretion; provided, however, that the number of shares of common
stock subject to an Award shall always be a whole number.

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Any such adjusted exercise price shall also be used to determine the amount
payable by the Company upon the exercise of any Stock Appreciation Right
associated with any Stock Option.

         SECTION 4. PARTICIPANTS

         Each employee of the Company or any of its Affiliates who is not a
director of the Company nor an officer of the Company or any of its Affiliates
at the time that a particular Award is granted shall be a "Participant" eligible
to be granted such Award under the Plan.

         SECTION 5. STOCK OPTIONS

         The Committee shall have the authority to grant Incentive Stock
Options, Nonqualified Stock Options or both types of Stock Options (in each case
with or without Stock Appreciation Rights) to any Participant. Incentive Stock
Options may be granted only to employees of the Company and its Subsidiaries
(within the meaning of Section 424(f) of the Code). To the extent that any Stock
Option is not designated as an Incentive Stock Option or even if so designated
does not qualify as an Incentive Stock Option, it shall constitute a
Nonqualified Stock Option.

         Stock Options shall be evidenced by Option Agreements, which shall
include such terms and provisions as the Committee may determine from time to
time. An Option Agreement shall expressly indicate whether it is intended to be
an agreement for an Incentive Stock Option or a Nonqualified Stock Option. The
grant of a Stock Option shall occur on the date the Committee by resolution
selects an individual to be a Participant in any grant of a Stock Option,
determines the number of shares of Common Stock to be subject to such Stock
Option to be granted to such individual and specifies the terms and provisions
of the Stock Option, or on such other date as the Committee may determine. The
Company shall notify a Participant of any grant of a Stock Option, and a written
Option Agreement shall be duly executed and delivered by the Company to the
Participant. Subject to Section 12(a), such agreement shall become effective
upon execution by the Company and the Participant.

         Anything in the Plan to the contrary notwithstanding, no term of the
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any Incentive
Stock Option under such Section 422.

         Stock Options shall be subject to the following terms and conditions
and shall contain such additional terms and conditions as the Committee shall
deem desirable:

               (a) Exercise Price for Incentive Stock Options. The exercise
price for shares of Common Stock to be issued pursuant to the exercise of an
Incentive Stock Option will be determined by the Committee provided that the per
share exercise price will be no less than 100% of the Fair Market Value per
share on the date of grant; provided, further, that in the case of an Incentive
Stock Option granted to a Participant who, at the time the Incentive Stock
Option is granted, owns stock representing more than ten percent (10%) of the
voting power of all classes of capital stock of the Company or any Subsidiary,
the per

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Share exercise price will be no less than 110% of the Fair Market Value per
share on the date of grant.

               (b) Exercise Price for Nonqualified Stock Options. In the case of
a Nonqualified Stock Option, the exercise price will be determined by the
Committee provided that the per Share exercise price will be no less than 85% of
the Fair Market Value per Share on the date of grant; provided, further, that in
the case of an Incentive Stock Option granted to a Participant who, at the time
the Incentive Stock Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of capital stock of the Company
or any Parent or Subsidiary, the per Share exercise price will be no less than
110% of the Fair Market Value per Share on the date of grant.

               (c) Option Term. The term of each Stock Option shall be fixed by
the Committee and stated in the Option Agreement; provided, however, that in no
event may the term be more than ten (10) years from the date of grant. In
addition, in the case of an Incentive Stock Option granted to a Participant who,
at the time the Incentive Stock Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of capital stock of
the Company or any Parent or Subsidiary, the term of the Incentive Stock Option
will be five (5) years from the date of grant or any shorter term specified in
the Option Agreement.

               (d) Exercisability. Except as otherwise provided herein, Stock
Options shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee. If the Committee provides
that any Stock Option is exercisable only in installments, the Committee may at
any time waive such installment exercise provisions, in whole or in part, based
on such factors as the Committee may determine. In addition, the Committee may
at any time accelerate the exercisability of any Stock Option.

               (e) Method of Exercise. Subject to the provisions of this Section
5, vested Stock Options may be exercised, in whole or in part, at any time
during the option term by giving written notice of exercise to the Company
specifying the number of shares of Common Stock subject to the Stock Option to
be purchased.

         Such notice shall be accompanied by payment in full of the purchase
price by certified or bank check or such other instrument as the Company may
accept. If approved by the Committee, payment, in full or in part, may also be
made in the form of unrestricted Common Stock already owned by the Participant
(for at least six (6) months) of the same class as the Common Stock subject to
the Stock Option (based on the Fair Market Value of the Common Stock on the date
the Stock Option is exercised); provided, however, that, in the case of an
Incentive Stock Option the right to make a payment in the form of already owned
shares of Common Stock of the same class as the Common Stock subject to the
Stock Option may be authorized only at the time the Stock Option is granted.

         In the discretion of the Committee, payment for any shares subject to a
Stock Option may also be made by delivering a properly executed exercise notice
to the Company, together with a copy of irrevocable instructions to a broker to
deliver promptly to the Company the amount of sale or loan proceeds to pay the
purchase price, and, if requested by

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the Company, the amount of any federal, state, local or foreign withholding
taxes. To facilitate the foregoing, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms.

         In addition, in the discretion of the Committee, payment for any shares
subject to a Stock Option may also be made by instructing the Committee to
withhold a number of such shares having a Fair Market Value on the date of
exercise equal to the aggregate exercise price of such Stock Option, or in
accordance with such other payment methods as may be permitted by the Committee
in its sole discretion.

         No shares of Common Stock shall be issued until full payment therefor
has been made. Except as otherwise provided in the applicable Option Agreement,
subject to a Participant's compliance with Section 12(a) hereof, a Participant
shall have all of the rights of a shareholder of the Company holding the class
or series of Common Stock that is subject to such Stock Option (including, if
applicable, the right to vote the shares and the right to receive dividends and
distributions), when the Participant has given written notice of exercise, has
paid in full for such shares and, if requested, has given the representations
referred to in Section 12(c).

               (f) Nontransferability of Stock Options. A Stock Option may not
be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, subject to the terms of this Plan, during the lifetime of the
Participant, only by the Participant or any Person to whom such Stock Option is
transferred pursuant to this Section 5(e), including such Participant's
guardian, lead representative or other transferee.

         A Participant may file a written designation of a beneficiary who is to
receive any Stock Options that remain unexercised in the event of the
Participant's death. If a Participant is married and the designated beneficiary
is not the spouse, spousal consent will be required for the designation to be
effective. The Participant may change such designation of beneficiary at any
time by written notice to the Committee, subject to the above spousal consent
requirement. If a Participant dies and there is no beneficiary, validly
designated and living at the time of the Participant's death, the Company will
deliver such Participant's Stock Options to the executor or committee of his or
her estate, or if no such executor or committee has been appointed (to the
knowledge of the Company), the Company, in its discretion, may deliver such
Stock Options to the spouse or to any one or more dependents or relatives of the
Participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.

         If a Participant designates his or her spouse as beneficiary, that
designation will be deemed automatically revoked if the Participant's marriage
is later dissolved. Similarly, any designation of a beneficiary will be deemed
automatically revoked upon the death of the beneficiary if the beneficiary
predeceases the Participant. Without limiting the generality of the preceding
sentence, the interest in Stock Options of a spouse of a Participant who has
predeceased the Participant or whose marriage has been dissolved will
automatically pass to the Participant, and will not be transferable by such
spouse in any manner, including but not limited to such spouse's will, nor will
any such interest pass under the laws of intestate succession.

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         The term "PARTICIPANT" includes the estate of the Participant or the
legal representative of the Participant named in the Option Agreement and any
person to whom an Option is otherwise transferred in accordance with this
Section 5(e), by will or the laws of descent and distribution; provided,
however, that references herein to Employment of a Participant or termination of
Employment of a Participant shall continue to refer to the Employment or
termination of Employment of the applicable grantee of an Award hereunder.

               (g) Termination of Employment. If a Participant's Employment is
terminated for Cause, then all Stock Options held by such Participant shall
immediately be terminated and cancelled. Except as otherwise provided by the
Committee or in the applicable Option Agreement, upon the Participant's death or
when the Participant's Employment is terminated for any reason other than for
Cause, the Participant:

                    a. shall forfeit all Stock Options that have not previously
vested;

                    b. shall have ninety (90) days to exercise the Participant's
vested Stock Options that are vested on the date of the Participant's
termination of Employment if such termination is for any reason other than the
Participant's Disability or death; and

                    c. shall have one (1) year to exercise the Participant's
vested Stock Options that are vested on the date of Disability or death if the
Participant's termination of Employment is due to the Participant's Disability
or death.

         Any vested Stock Options not exercised within the permissible period of
time shall be forfeited by the Participant. Notwithstanding any of the
foregoing, the Participant shall not be permitted to exercise any Stock Option
at a time beyond the initial option term.

               (h) Cashing Out of Stock Option. On receipt of written notice of
exercise, the Committee may elect to cash out all or any portion of the shares
of Common Stock for which a Stock Option is being exercised by paying the
Participant an amount, in cash or Common Stock, equal to the excess of the Fair
Market Value of one share of Common Stock over the Exercise Price per share
times the number of shares of Common Stock having such Exercise Price for which
the Option is being exercised on the effective date of such cash-out.

         SECTION 6. STOCK APPRECIATION RIGHTS

               (a) Grant and Exercise. Stock Appreciation Rights may be granted
in conjunction with all or part of any Stock Option granted under the Plan. In
the case of a Nonqualified Stock Option, such rights may be granted either at or
after the time of grant of such Stock Option. In the case of an Incentive Stock
Option, such rights may be granted only at the time of grant of such Stock
Option. A Stock Appreciation Right shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option. In either case,
the terms and conditions of a Stock Appreciation Right shall be set forth in the
Option Agreement for the related Stock Option or an amendment thereto.

         A Stock Appreciation Right may be exercised by a Participant in
accordance with Section 6(b) by surrendering the applicable portion of the
related Stock Option in

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accordance with procedures established by the Committee. Upon such exercise and
surrender, the Participant shall be entitled to receive an amount determined in
the manner prescribed in Section 6(b). Stock Options which have been so
surrendered shall no longer be exercisable to the extent the related Stock
Appreciation Rights have been exercised.

               (b) Terms and Conditions. Stock Appreciation Rights shall be
subject to such terms and conditions as shall be determined by the Committee,
including the following:

                    (i) Stock Appreciation Rights shall be exercisable only at
such time or times and to the extent that the Stock Options to which they relate
are exercisable in accordance with the provisions of Section 5 and this Section
6;

                    (ii) upon the exercise of a Stock Appreciation Right, a
Participant shall be entitled to receive an amount equal to the product of (a)
the excess of the Fair Market Value of one share of Common Stock over the
Exercise Price per share specified in the related Stock Option times (b) the
number of shares in respect of which the Stock Appreciation Right shall have
been exercised, in cash, shares of Common Stock or both, with the Committee
having the right to determine the form of payment;

                    (iii) Stock Appreciation Rights shall be transferable only
with the related Stock Option in accordance with Section 5(e); and

                    (iv) upon the exercise of a Stock Appreciation Right (other
than an exercise for cash), the Stock Option or part thereof to which such Stock
Appreciation Right is related shall be deemed to have been exercised for the
purpose of the limitation set forth in Section 3 on the number of shares of
Common Stock to be issued under the Plan, but only to the extent of the number
of shares covered by the Stock Appreciation Right at the time of exercise.

         SECTION 7. RESTRICTED STOCK

         The Committee shall determine the Participants to whom and the time or
times at which grants of Restricted Stock will be awarded, the number of shares
to be awarded to any Participant, the conditions for vesting, the time or times
within which such Awards may be subject to forfeiture and restrictions on
transfer and any other terms and conditions of the Awards (including provisions
(i) relating to placing legends on certificates representing shares of
Restricted Stock, (ii) permitting the Company to require that shares of
Restricted Stock be held in custody by the Company with a stock power from the
owner thereof until restrictions lapse and (iii) relating to any rights to
purchase the Restricted Stock on the part of the Company and its Affiliates).
The terms and conditions of Restricted Stock Awards shall be set forth in a
Restricted Stock Agreement, which shall include such terms and provisions as the
Committee may determine from time to time. Except as provided in this Section 7,
the Restricted Stock Agreement and any other relevant agreements, the
Participant shall have, with respect to the shares of Restricted Stock, all of
the rights of a shareholder of the Company holding the class or series of Common
Stock that is the subject of the Restricted Stock Award, including, if
applicable, the right to vote the shares and, subject to the following sentence,
the right to receive any cash dividends or distributions (but, subject to the
third paragraph of Section 3, not the right to receive non-cash dividends

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or distributions). If so determined by the Committee in the applicable
Restricted Stock Agreement, cash dividends and distributions on the class or
series of Common Stock that is the subject of the Restricted Stock Award shall
be automatically deferred and reinvested in additional Restricted Stock, held
subject to the vesting of the underlying Restricted Stock, or held subject to
meeting conditions applicable only to dividends and distributions.

         SECTION 8. TAX OFFSET BONUSES

         At the time an Award is made hereunder or at any time thereafter, the
Committee may grant to the Participant receiving such Award the right to receive
a cash payment in an amount specified by the Committee, to be paid at such time
or times (if ever) as the Award results in compensation income to the
Participant, for the purpose of assisting the Participant to pay the resulting
taxes, all as determined by the Committee, and on such other terms and
conditions as the Committee shall determine.

         SECTION 9. CERTAIN EVENTS

         Upon the happening of a merger, reorganization or sale of substantially
all of the assets of the Company, the Committee, may, in its sole discretion, do
one or more of the following: (i) shorten the period during which Stock Options
are exercisable (provided they remain exercisable for at least 30 days after the
date notice of such shortening is given to the Participants); (ii) accelerate
any vesting schedule to which an Stock Option or Restricted Stock Award is
subject; (iii) arrange to have the surviving or successor entity or any parent
entity thereof assume the Restricted Stock Awards and the Stock Options or grant
replacement options with appropriate adjustments in the exercise prices and
adjustments in the number and kind of securities issuable upon exercise or
adjustments so that the Stock Options or their replacements represent the right
to purchase the shares of stock, securities or other property (including cash)
as may be issuable or payable as a result of such transaction with respect to or
in exchange for the number of shares of Common Stock purchasable and receivable
upon exercise of the Stock Options had such exercise occurred in full prior to
such transaction; or (iv) cancel Stock Options or unvested Stock Awards upon
payment to the Participants in cash, with respect to each Stock Option or
Restricted Stock Award to the extent then exercisable or vested (including, if
applicable, any Stock Options or Restricted Stock Awards as to which the vesting
schedule has been accelerated as contemplated in clause (ii) above), of an
amount that is the equivalent of the excess of the Fair Market Value of the
Common Stock (at the effective time of the merger, reorganization, sale or other
event) over (in the case of Stock Options) the exercise price of the Stock
Option. The Committee may also provide for one or more of the foregoing
alternatives in any particular Option Agreement or agreement governing a
Restricted Stock Award.

         SECTION 10. TERM, AMENDMENT AND TERMINATION

         The Plan will terminate ten (10) years after the Effective Date of the
Plan. Awards outstanding as of such date shall not be affected or impaired by
the termination of the Plan.

         The Board may amend, alter, or discontinue the Plan, prospectively or
retroactively, but no amendment, alteration or discontinuation shall be made
which would impair the

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rights of any Participant under an Award theretofore granted without the
Participant's consent.

         The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but no such amendment shall be made which would
impair the rights of any Participant thereunder without the Participant's
consent.

         SECTION 11. UNFUNDED STATUS OF PLAN

         It is presently intended that the Plan constitute an "unfunded" plan
for incentive and deferred compensation. The Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Common Stock or make payments; provided, however, that,
unless the Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the "unfunded" status of the Plan.

         SECTION 12. GENERAL PROVISIONS

               (a) Awards and Certificates. Shares of Restricted Stock and
shares of Common Stock issuable upon the exercise of a Stock Option or Stock
Appreciation Right (together, "PLAN SHARES") shall be evidenced in such manner
as the Committee may deem appropriate, including book-entry registration or
issuance of one or more stock certificates. Any certificate issued in respect of
Plan Shares shall be registered in the name of such Participant and shall bear
appropriate legends referring to the terms, conditions, and restrictions
applicable to such Award, substantially in the following form:

               "The transferability of this certificate and the shares of stock
               represented hereby are subject to the terms, conditions and
               restrictions (including forfeiture) of the WJ Communications,
               Inc. 2001 Employee Stock Incentive Plan and a Restricted Stock
               Agreement and/or a Stock Option Agreement, as the case may be,
               between the issuer and the registered holder hereof. Copies of
               such Plan and Agreement(s) are on file at the offices of WJ
               Communications, Inc., 401 River Oaks Parkway, San Jose, CA
               95134."

               "The securities represented by this certificate have not been
               registered under the Securities Act of 1933, as amended, or under
               the securities laws of any state, and may not be sold or
               otherwise disposed of except pursuant to an effective
               registration statement under said Act and applicable state
               securities laws or an applicable exemption to the registration
               requirements of such Act and laws."

         Such Plan Shares may bear other legends to the extent the Committee or
the Board determines it to be necessary or appropriate, including any required
pursuant to any applicable Restricted Stock Agreement or Option Agreement. If
and when all restrictions expire without a prior forfeiture of the Plan Shares
theretofore subject to such restrictions, upon surrender of legended
certificates representing such shares, new certificates for such shares shall be
delivered to the Participant without the first legend listed above.

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         The Committee may require that any certificates evidencing Plan Shares
be held in custody by the Company until the restrictions thereon shall have
lapsed and that the Participant deliver a stock power, endorsed in blank,
relating to the Plan Shares.

               (b) Representations and Warranties. The Committee may require
each person purchasing or receiving Plan Shares to (i) represent to and agree
with the Company in writing that such person is acquiring the shares without a
view to the distribution thereof and (ii) make any other representations and
warranties that the Committee deems appropriate.

               (c) Additional Compensation. Nothing contained in the Plan shall
prevent the Company or any of its Affiliates from adopting other or additional
compensation arrangements for its employees.

               (d) No Right of Employment. Adoption of the Plan or grant of any
Award shall not confer upon any employee any right to continued Employment, nor
shall it interfere in any way with the right of the Company or any of its
Affiliates thereof to terminate the Employment of any employee at any time.

               (e) Withholding Taxes. No later than the date as of which an
amount first becomes includible in the gross income of a Participant for federal
income tax purposes with respect to any Award under the Plan, such Participant
shall pay to the Company or, if appropriate, any of its Affiliates, or make
arrangements satisfactory to the Committee regarding the payment of, any
federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount. If approved by the Committee, withholding
obligations may be settled with Common Stock, including Common Stock that is
part of the Award that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditional on such payment
or arrangements, and the Company and its Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment
otherwise due to the Participant. The Committee may establish such procedures as
it deems appropriate, including making irrevocable elections, for the settlement
of withholding obligations with Common Stock.

               (f) Beneficiaries. The Committee shall establish such procedures
as it deems appropriate for a Participant to designate a beneficiary to whom any
amounts payable in the event of the Participant's death are to be paid or by
whom any rights of the Participant, after the Participant's death, may be
exercised.

               (g) Governing Law. The Plan and all Awards made and actions taken
thereunder shall be governed by and construed and enforced in accordance with
the laws of the State of California without regard to the principles of
conflicts of law thereof.

               (h) Compliance with Laws. If any law or any regulation of any
commission or agency having jurisdiction shall require the Company or a
Participant seeking to exercise Stock Options or Stock Appreciation Rights to
take any action with respect to the Plan Shares to be issued upon the exercise
of Stock Options or Stock Appreciation Rights then the date upon which the
Company shall issue or cause to be issued the certificate or certificates for
the Plan Shares shall be postponed until full compliance has

                                      -12-

<PAGE>   13

been made with all such requirements of law or regulation; provided, that the
Company shall use its reasonable efforts to take all necessary action to comply
with such requirements of law or regulation. Moreover, in the event that the
Company shall determine that, in compliance with the Securities Act or other
applicable statutes or regulations, it is necessary to register any of the Plan
Shares with respect to which an exercise of a Stock Option or Stock Appreciation
Right has been made, or to qualify any such Plan Shares for exemption from any
of the requirements of the Securities Act or any other applicable statute or
regulation, no Stock Options or Stock Appreciation Rights may be exercised and
no Plan Shares shall be issued to the exercising Participant until the required
action has been completed; provided, that the Company shall use its reasonable
efforts to take all necessary action to comply with such requirements of law or
regulation. Notwithstanding anything to the contrary contained herein, neither
the Board nor the members of the Committee owes a fiduciary duty to any
Participant in his or her capacity as such.

         SECTION 13. EFFECTIVE DATE OF PLAN

         The Plan shall be effective as of the date it is approved by the Board
(such date the "EFFECTIVE DATE").

                                      -13-<PAGE>   1
                                                                     EXHIBIT 4.2

                          WJ COMMUNICATIONS, INC. 2001
                          EMPLOYEE STOCK PURCHASE PLAN

I.       PURPOSE OF THE PLAN

         This Employee Stock Purchase Plan is intended to promote the interests
of WJ Communications, Inc. and its stockholders by providing Eligible Employees
with the opportunity to acquire a proprietary interest in the Corporation
through participation in a payroll-deduction based employee stock purchase plan
designed to qualify under Section 423 of the Code.

         Capitalized terms herein shall have the meanings assigned to such terms
in the attached Appendix.

II.      ADMINISTRATION OF THE PLAN

         A. The Plan Administrator shall have full authority to interpret and
construe any provision of the Plan and any form of agreement or other document
employed by the Corporation in the administration of the Plan in a manner
consistent with the requirements of Code Section 423. The Plan Administrator
shall determine all of the relevant terms and conditions of purchase rights
granted under the Plan; provided, however, that all Participants granted
purchase rights shall have the same rights and privileges within the meaning of
Code Section 423(b)(5). Decisions of the Plan Administrator shall be final and
binding on all parties having an interest in the Plan.

         B. The Plan Administrator may, consistent with the Plan and Code
Section 423, establish, change or terminate such rules, guidelines, policies,
procedures, limitations or adjustments as deemed advisable by the Plan
Administrator, in its discretion, for the proper administration of the Plan.

III.     STOCK SUBJECT TO PLAN

         A. The stock purchasable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock, including shares of Common Stock
purchased on the open market. The maximum number of shares of Common Stock which
may be issued over the term of the Plan shall not exceed One Million Five
Hundred Thousand (1,500,000) shares. If any outstanding purchase right for any
reason expires or is terminated or cancelled, the Common Stock allocable to the
unexercised portion of that purchase right shall again be available for issuance
under the Plan.

         B. Should any change be made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration, then appropriate adjustments shall
be made to (i) the maximum number and class of securities issuable under the
Plan, (ii) the maximum number and class of securities purchasable per
Participant on any one Purchase Date, (iii) the maximum number and class of
securities purchasable in the aggregate on any one Purchase Date and (iv) the

<PAGE>   2

number and class of securities and the price per share in effect under each
outstanding purchase right in order to prevent the dilution or enlargement of
benefits thereunder. Notwithstanding the foregoing, any fractional shares
resulting from an adjustment pursuant to this Section shall be rounded down to
the nearest whole number, and in no event may the purchase price be decreased to
an amount less than par value; if any, of the Common Stock subject to the
purchase right.

         C. If the outstanding shares of Common Stock are increased, decreased,
changed into or exchanged for a different number or kind of shares or securities
of the Corporation or a successor entity, or for other property (including
without limitation, cash), through reorganization, merger, recapitalization,
reclassification, stock combination, stock dividend, stock split, reverse stock
split, spin off or other similar transaction, an appropriate and proportionate
adjustment will be made in the maximum number and kind of shares as to which
purchase rights may be granted under this Plan. A corresponding adjustment
changing the number or kind of shares allocated to purchase rights that have
been granted prior to any such change will likewise be made. Any such adjustment
in the outstanding purchase rights will be made without change in the aggregate
purchase price applicable to the unexercised portion of the purchase rights but
with a corresponding adjustment in the price for each share or other unit of any
security covered by the purchase right. Where an adjustment under this Section
is made, the adjustment will be made in a manner which will not be considered a
"modification" under the provisions of subsection 424(h)(3) of the Code.

         D. The adjustments determined by the Plan Administrator pursuant to
this Article shall be final, binding and conclusive.

IV.      OFFERING PERIODS

         A. Shares of Common Stock shall be offered for purchase under the Plan
through a series of successive offering periods until such time as (i) the
maximum number of shares of Common Stock available for issuance under the Plan
shall have been purchased or (ii) the Plan shall have been sooner terminated.

         B. Each offering period shall be of approximately six (6) months
duration or such other duration as the Plan Administrator may determine. The
initial offering period shall commence at the Effective Time and terminate on
the last payroll on or before October 31, 2001. The next offering period shall
commence on the first payroll day on or after November 1, 2001 and terminate on
the last payroll day on or prior to April 30, 2002. Subsequent offering periods
shall commence as designated by the Plan Administrator; provided, however, that
no offering period may have a duration exceeding twenty-seven (27) months.

V.       ELIGIBILITY AND PARTICIPATION

         A. Each individual who is an Eligible Employee on the first day of any
offering period under the Plan may enter that offering period on such date,
provided he or she (1) remains an Eligible Employee, (2) completes the forms
prescribed by the Plan Administrator, and (3) files such forms with the Plan
Administrator (or its designate) on or before his or her scheduled Entry Date.

                                      -2-
<PAGE>   3

         B. A Participant shall automatically participate in the next offering
period commencing immediately after the Purchase Date of each offering period in
which the Participant participates provided that the Participant remains an
Eligible Employee on the first day of the of the new offering period and has not
either (a) withdrawn from the Plan pursuant to Article VII.7.(i), or (b)
terminated employment with a Participating Corporation. A Participant who may
automatically participate in a subsequent offering period, as provided in this
section, is not required to deliver any additional forms to the Plan
Administrator for the subsequent offering period in accordance with the
procedures set forth in Article V.A. However, a Participant may deliver a new
enrollment/change form for a subsequent offering period, in accordance with the
procedures set forth in Article VI if the Participant desires to change any
elections contained in the Participant's then effective enrollment/change form.

         C. Each individual who first becomes an Eligible Employee after the
first day of an offering period may not enter that offering period, but may
enter the next offering period, provided he or she (1) remains an Eligible
Employee, (2) completes the forms prescribed by the Plan Administrator, and (3)
files such forms with the Plan Administrator (or its designate) on or before his
or her scheduled Entry Date.

VI.      PAYROLL DEDUCTIONS

         A. The payroll deduction authorized by the Participant for purposes of
acquiring shares of Common Stock during an offering period may be any multiple
of one percent (1%) of the Total Compensation paid to the Participant during
such offering period, up to a maximum of fifteen percent (15%); provided that,
the amount of Participant's deferral may not exceed Ten Thousand Six Hundred
Twenty-Five Dollars ($10,625.00) per offering period. Except that for the
initial offering period, the amount of Participant's deferral may not exceed
Seventeen Thousand Five Hundred Dollars ($17,500.00). The deduction rate so
authorized shall continue in effect throughout the offering period, except to
the extent the Participant makes a new election to change such rate. The number
of times a Participant may, during any offering period, elect to reduce or
increase his or her rate of payroll deduction shall be one time during any one
offering period.

         B. Payroll deductions shall begin on the first pay day following the
Participant's Entry Date into the offering period and shall (unless sooner
terminated by the Participant) continue through the pay day ending with or
immediately prior to the last day of that offering period. The amounts so
collected shall be credited to the Participant's book account under the Plan,
but no interest shall be paid on the balance from time to time outstanding in
such account. The amounts collected from the Participant shall not be required
to be held in any segregated account or trust fund and may be commingled with
the general assets of the Corporation and used for general corporate purposes.

         C. The Participant's acquisition of Common Stock under the Plan on any
Purchase Date shall neither limit nor require the Participant's acquisition of
Common Stock on any subsequent Purchase Date of a different offering period.

         D. The Participant's payroll deductions shall cease during military
leave or other approved leave of absence.

                                      -3-
<PAGE>   4

VII.     PURCHASE RIGHTS

         A. GRANT OF PURCHASE RIGHT. A Participant shall be granted a separate
purchase right for each offering period in which he or she participates. The
purchase right shall be granted on the Participant's Entry Date into the
offering period and shall provide the Participant with the right to purchase
shares of Common Stock on the Purchase Date of the offering period, upon the
terms set forth below. If the Plan Administrator so requests, the Participant
shall execute a stock purchase agreement embodying such terms and such other
provisions (not inconsistent with the Plan) as the Plan Administrator may deem
advisable.

         Under no circumstances shall purchase rights be granted under the Plan
to any Eligible Employee if such individual would, immediately after the grant,
own (within the meaning of Code Section 424(d)) or hold outstanding options or
other rights to purchase, stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Corporation
or any Corporate Affiliate, as determined in accordance with Code Section
423(b).

         B. EXERCISE OF THE PURCHASE RIGHT. Each purchase right shall be
automatically exercised on the Purchase Date of the offering period, and shares
of Common Stock shall accordingly be purchased on behalf of each Participant on
each such Purchase Date. The purchase shall be effected by applying the
Participant's payroll deductions for the offering period ending on such Purchase
Date to the purchase of whole shares of Common Stock at the purchase price in
effect for the Participant for that Purchase Date.

         Shares of Common Stock acquired pursuant to the exercise of purchase
right may be paid only by means of payroll deductions from the Participant's
Total Compensation accumulated during an offering period for which such purchase
right was granted.

         C. PURCHASE PRICE. The purchase price at which each share of Common
Stock may be acquired in an offering period upon the exercise of any or all
outstanding purchase rights shall be established by the Plan Administrator;
provided, however, that the purchase price shall not be less than to eighty-five
percent (85%) of the lower of (i) the Fair Market Value per share of Common
Stock on the Participant's Entry Date into that offering period or (ii) the Fair
Market Value per share of Common Stock on that Purchase Date. Unless otherwise
provided by the Plan Administrator prior to the commencement of an offering
period, the purchase price per share at which Common Stock will be purchased on
the Participant's behalf on the Purchase Date of an offering period shall be
equal to eighty-five percent (85%) of the lower of (i) the Fair Market Value per
share of Common Stock on the Participant's Entry Date into that offering period
or (ii) the Fair Market Value per share of Common Stock on that Purchase Date.

         D. NUMBER OF PURCHASABLE SHARES. The number of shares of Common Stock
purchasable by a Participant on the Purchase Date of an offering period shall be
the number of whole shares obtained by dividing the amount collected from the
Participant through payroll deductions during the offering period ending with
that Purchase Date by the purchase price in effect for the Participant for that
Purchase Date; provided that, the Participant may not purchase more than 25,000
shares of Common Stock.

                                      -4-
<PAGE>   5

         E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not applied to the
purchase of shares of Common Stock on any Purchase Date because they are not
sufficient to purchase a whole share of Common Stock shall be held for the
purchase of Common Stock on the next Purchase Date.

         F. TERMINATION OF PURCHASE RIGHT. The following provisions shall govern
the termination of outstanding purchase rights:

               (i) A Participant may, at any time prior to the Purchase Date of
          an offering period, terminate his or her outstanding purchase right by
          filing the appropriate form with the Plan Administrator (or its
          designate), and no further payroll deductions shall be collected from
          the Participant with respect to the terminated purchase right. Any
          payroll deductions collected during the offering period in which such
          termination occurs shall, at the Participant's election, be
          immediately refunded or held for the purchase of shares on the next
          Purchase Date. If no such election is made at the time such purchase
          right is terminated, then the payroll deductions collected with
          respect to the terminated right shall be refunded as soon as possible.

               (ii) The termination of such purchase right shall be irrevocable,
          and the Participant may not subsequently rejoin the offering period
          for which the terminated purchase right was granted. In order to
          resume participation in any subsequent offering period, such
          individual must re-enroll in the Plan (by making a timely filing of
          the prescribed enrollment forms) on or before his or her scheduled
          Entry Date into that offering period.

               (iii) Should the Participant cease to remain an Eligible Employee
          for any reason (including death, disability or change in status) while
          his or her purchase right remains outstanding, then that purchase
          right shall immediately terminate, and all of the Participant's
          payroll deductions for the offering period in which the purchase right
          so terminates shall be immediately refunded.

         G. CHANGE IN CONTROL. The Board may, in its sole discretion, provide
that in the event of a Change in Control one or more of the following will
occur: (1) each outstanding purchase right shall automatically be exercised,
immediately prior to the effective date of any Change in Control, by applying
the payroll deductions of each Participant for the offering period in which such
Change in Control occurs to the purchase of whole shares of Common Stock at a
purchase price per share equal to eighty-five percent (85%) of the lower of (i)
the Fair Market Value per share of Common Stock on the Participant's Entry Date
into the offering period in which such Change in Control occurs or (ii) the Fair
Market Value per share of Common Stock immediately prior to the effective date
of such Change in Control (the Corporation shall use its best efforts to provide
at least ten (10)-days prior written notice of the occurrence of any Change in
Control, and Participants shall, following the receipt of such notice, have the
right to terminate their outstanding purchase rights prior to the effective date
of the Change in Control); (2) provide that all outstanding purchase rights
shall terminate effective the date of any Change in Control, or such other date
as the Plan Administrator may deem advisable, and all payroll deductions for the
offering period in which such Change in Control occurs shall be returned

                                      -5-
<PAGE>   6

to each Participant as soon as possible; (3) the surviving, continuing,
successor, or purchasing corporation or parent corporation, thereof, as the case
may be, may assume the Corporation's rights and obligations under the Plan; or
(4) such other alternative the Board deems advisable and which is in accordance
with the Plan and Code Section 423.

         H. PRORATION OF PURCHASE RIGHTS. Should the total number of shares of
Common Stock to be purchased pursuant to outstanding purchase rights on any
particular date exceed the number of shares then available for issuance under
the Plan, the Plan Administrator shall make a pro-rata allocation of the
available shares on a uniform and nondiscriminatory basis, and the payroll
deductions of each Participant, to the extent in excess of the aggregate
purchase price payable for the Common Stock pro-rated to such individual, shall
be refunded.

         I. ASSIGNABILITY. The purchase right shall be exercisable only by the
Participant during the Participant's lifetime, and shall not be assignable or
transferable by the Participant other than by the laws of descent and
distribution.

         J. STOCKHOLDER RIGHTS. A Participant shall have no stockholder rights
with respect to the shares subject to his or her outstanding purchase right
until the shares are purchased on the Participant's behalf in accordance with
the provisions of the Plan and the Participant has become a holder of record of
the purchased shares.

VIII.    ACCRUAL LIMITATIONS

         A. No Participant shall be entitled to accrue rights to acquire Common
Stock pursuant to any purchase right outstanding under this Plan if and to the
extent such accrual, when aggregated with (i) rights to purchase Common Stock
accrued under any other purchase right granted under this Plan and (ii) similar
rights accrued under other employee stock purchase plans (within the meaning of
Code Section 423) of the Corporation or any Corporate Affiliate, would otherwise
permit such Participant to purchase more than Twenty-Five Thousand Dollars
($25,000) worth of stock of the Corporation or any Corporate Affiliate
(determined on the basis of the Fair Market value per share on the date or dates
such rights are granted) for each calendar year such rights are at any time
outstanding.

         B. For purposes of applying such accrual limitations to the purchase
rights granted under the Plan, the following provisions shall be in effect:

               (i) The right to acquire Common Stock under each outstanding
          purchase right shall accrue on the Purchase Date of an offering period
          on which such right remains outstanding.

               (ii) No right to acquire Common Stock under any outstanding
          purchase right shall accrue to the extent the Participant has already
          accrued in the same calendar year the right to acquire Common Stock
          under one (1) or more other purchase rights at a rate equal to
          Twenty-Five Thousand Dollars ($25,000) worth of Common Stock
          (determined on the basis of the Fair Market Value per share on the
          date or dates of grant) for each calendar year such rights were at any
          time outstanding.

                                      -6-

<PAGE>   7

         C. If by reason of such accrual limitations, any purchase right of a
Participant does not accrue for a particular Purchase Date, then the payroll
deductions which the Participant made during that offering period with respect
to such purchase right shall be promptly refunded.

         D. In the event there is any conflict between the provisions of this
Article and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article shall be controlling.

IX.      EFFECTIVE DATE AND TERM OF THE PLAN

         A. The Plan was adopted by the Board on February 13, 2001 and shall
become effective at the Effective Time, provided no purchase rights granted
under the Plan shall be exercised, and no shares of Common Stock shall be issued
hereunder, until the Corporation shall have complied with all applicable
requirements of the 1933 Act (including the registration of the shares of Common
Stock issuable under the Plan on a Form S-8 registration statement filed with
the Securities and Exchange Commission), all applicable listing requirements of
any Stock Exchange or the Nasdaq National Market on which the Common Stock is
listed for trading and all other applicable requirements established by law or
regulation. In the event such stockholder approval is not obtained, or such
compliance is not effected, within twelve (12) months after the date on which
the Plan is adopted by the Board, the Plan shall terminate and have no further
force or effect, and all sums collected from Participants during the initial
offering period hereunder shall be refunded.

         B. Unless sooner terminated by the Board, the Plan shall terminate upon
the earliest of (i) the date on which all shares available for issuance under
the Plan shall have been sold pursuant to purchase rights exercised under the
Plan or (ii) the date on which all purchase rights are exercised or terminate in
connection with a Change in Control. No further purchase rights shall be granted
or exercised, and no further payroll deductions shall be collected, under the
Plan, following such termination.

X.       AMENDMENT OF THE PLAN

         The Board may alter, amend, suspend or discontinue the Plan at any time
to become effective immediately following the close of any offering period.
However, the Board may not, without the approval of the Corporation's
stockholders, (i) increase the number of shares of Common Stock issuable under
the Plan, except for permissible adjustments in the event of certain changes in
the Corporation's capitalization, (ii) alter the purchase price formula so as to
reduce the purchase price payable for the shares of Common Stock purchasable
under the Plan or (iii) modify eligibility requirements for participation in the
Plan.

                                      -7-
<PAGE>   8

XI.      GENERAL PROVISIONS

         A. The Corporation shall pay all costs and expenses incurred in the
administration of the Plan; however, each Plan Participant shall bear all costs
and expenses incurred by such individual in the sale or other disposition of any
shares purchased under the Plan.

         B. Nothing in the Plan shall confer upon the Participant any right to
continue in the employ of the Corporation or any Corporate Affiliate for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any Corporate Affiliate employing such person)
or of the Participant, which rights are hereby expressly reserved by each, to
terminate such person's employment at any time for any reason, with or without
cause.

         C. The laws of the State of Delaware shall govern the provisions of the
Plan without resort to that State's conflict-of-laws rules.

         D. The Corporation and each Participating Corporation shall have the
right to take whatever steps the Plan Administrator deems necessary or
appropriate to comply with all applicable federal, state, local, employment or
other tax withholding requirements, and the Corporation's obligations to deliver
shares under this Plan shall be conditioned upon compliance with all such
withholding tax requirements. Without limiting the generality of the foregoing,
the Corporation and each Participating Employer shall have the right to withhold
taxes from any other compensation or other amounts which it may owe to the
Participant, or to require the Participant to pay to the Corporation or the
Participating Corporation the amount of any taxes which the Corporation or the
Participating Corporation may be required to withhold with respect to such
shares. In this connection, the Plan Administrator may require the Participant
to notify the Plan Administrator, the Corporation, or a Participating
Corporation before the Participant sells or otherwise disposes of any shares
acquired under the Plan.

                                      -8-
<PAGE>   9

                                   SCHEDULE A

                          CORPORATIONS PARTICIPATING IN
                          EMPLOYEE STOCK PURCHASE PLAN
                            AS OF THE EFFECTIVE TIME

            _____________________________, a ____________ corporation

<PAGE>   10

                                    APPENDIX

         The following definitions shall be in effect under the Plan:

         A. BOARD shall mean the Corporation's Board of Directors.

         B. TOTAL COMPENSATION shall mean the (i) base salary payable to a
Participant by one or more Participating Companies during such individual's
period of participation in one or more offering periods under the Plan plus (ii)
all overtime payments, bonuses, commissions, current profit-sharing
distributions and other incentive-type payments. Such Total Compensation shall
be calculated before deduction of (A) any income or employment tax withholdings
or (B) any pre-tax contributions made by the Participant to any Code Section
401(k) salary deferral plan or any Code Section 125 cafeteria benefit program
now or hereafter established by the Corporation or any Corporate Affiliate.
However, Total Compensation shall NOT include any contributions (other than Code
Section 401(k) or Code Section 125 contributions) made on the Participant's
behalf by the Corporation or any Corporate Affiliate to any employee benefit or
welfare plan now or hereafter established.

         C. CHANGE IN CONTROL shall mean the occurrence of any of the following:

               (i) Any "Person" or "Group" (as such terms are defined in Section
          13(d) of the Securities Exchange Act of 1934 (the "Exchange Act") and
          the rules and regulations promulgated thereunder), other than the
          Corporation or a person that directly or indirectly controls, is
          controlled by, or is under common control with, the Corporation,
          becomes the "Beneficial Owner" (within the meaning of Rule 13d-3 under
          the Exchange Act), directly or indirectly, of securities of the
          Corporation, or of any entity resulting from a merger or consolidation
          involving the Corporation, representing more than fifty percent (50%)
          of the combined voting power of the then outstanding securities of the
          Corporation or such entity.

               (ii) The consummation of (x) a merger, consolidation or
          reorganization to which the Corporation is a party, whether or not the
          Corporation is the Person surviving or resulting therefrom, or (y) a
          sale, assignment, lease, conveyance or other disposition of all or
          substantially all of the assets of the Corporation, in one transaction
          or a series of related transactions, to any Person other than the
          Corporation, where any such transaction or series of related
          transactions as is referred to in clause (x) or clause (y) above in
          this subparagraph (ii) (singly or collectively, a "Transaction") does
          not otherwise result in a "Change in Control" pursuant to subparagraph
          (i) of this definition of "Change in Control"; provided, however, that
          no such Transaction shall constitute a "Change in Control" under this
          subparagraph (ii) if the Persons who were the stockholders of the
          Corporation immediately before the consummation of such Transaction
          are the Beneficial Owners, immediately following the consummation of
          such Transaction, of fifty percent (50%) or more of the combined
          voting power of the then outstanding voting securities of the Person
          surviving or resulting from any merger, consolidation or
          reorganization referred to in clause (x) above in this subparagraph
          (ii) or the Person to whom the assets of the Corporation are sold,
          assigned, leased, conveyed or

<PAGE>   11

          disposed of in any transaction or series of related transactions
          referred in clause (y) above in this subparagraph (ii), in
          substantially the same proportions in which such Beneficial Owners
          held voting stock in the Corporation immediately before such
          Transaction.

         D. CODE shall mean the Internal Revenue Code of 1986, as amended.

         E. COMMON STOCK shall mean the Corporation's common stock.

         F. CORPORATE AFFILIATE shall mean any parent or subsidiary corporation
of the Corporation (as determined in accordance with Code Section 424), whether
now existing or subsequently established.

         G. CORPORATION shall mean WJ Communications, Inc., a Delaware
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of WJ Communications, Inc. which shall by appropriate
action adopt the Plan.

         H. EFFECTIVE TIME shall mean May 1, 2001. Any Corporate Affiliate
which becomes a Participating Corporation after such Effective Time shall
designate a subsequent Effective Time with respect to its employee-Participants.

         I. ELIGIBLE EMPLOYEE shall mean any Employee who has completed 3
months of service with a Participating Corporation.

         J. EMPLOYEE shall mean a person treated as an employee of a
Participating Corporation for purposes of Code Section 423. A Participant shall
be deemed to have ceased to be an Employee either upon actual termination of
employment or upon a Corporate Affiliate or Affiliates employing the Participant
ceasing to be a Participating Corporation. For purposes of the Plan, an
individual shall not de deemed to have ceased to be an Employee while on any
military leave, sick leave, or other bona fide leave of absence approved by the
Corporation of ninety (90) days or less. If an individual's leave of absence
exceeds ninety (90) days, the individual shall be deemed to have ceased to be an
Employee under the Plan on the ninety-first (91) day of such leave unless the
individuals right to reemployment with the Participating Corporation is
guaranteed either by statute or by contract. The Plan Administrator shall
determine in good faith and in the exercise of its discretion whether an
individual has become or has ceased to be an Employee and the effective date of
such individual's employment or termination of employment, as the case may be,
and such determination shall be final, binding and conclusive.

         K. ENTRY DATE shall mean the date an Eligible Employee first commences
participation in the offering period in effect under the Plan. The earliest
Entry Date under the Plan shall be the Effective Time.

         L. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:

               (i) If the Common Stock is at the time traded on the Nasdaq
          National Market, then the Fair Market value shall be the closing
          selling price per share of Common Stock on the date in question, as
          such price is reported by the National

                                      -2-

<PAGE>   12

          Association of Securities Dealers on the Nasdaq National Market. If
          there is no closing selling price for the Common Stock on the date in
          question, then the Fair Market Value shall be the closing selling
          price on the last preceding date for which such quotation exists.

               (ii) If the Common Stock is at the time listed on any Stock
          Exchange, then the Fair market Value shall be the closing selling
          price per share of Common Stock on the date in question on the Stock
          Exchange determined by the Plan Administrator to be the primary market
          for the Common stock, as such price is officially quoted in the
          composite tape of transactions on such exchange. If there is no
          closing selling price for the Common Stock on the date in question,
          then the Fair Market Value shall be the closing selling price on the
          last preceding date for which such quotation exists.

         M. 1933 ACT shall mean the Securities Act of 1933, as amended.

         N. PARTICIPANT shall mean any Eligible Employee of a Participating
Corporation who is actively participating in the Plan.

         O. PARTICIPATING CORPORATION shall mean the Corporation and such
Corporate Affiliate or Affiliates as may be authorized from time to time by the
Board to extend the benefits of the Plan to their Eligible Employees. The
Participating Corporations in the Plan are listed in attached Schedule A.

         P. PLAN shall mean the Corporation's 2001 Employee Stock Purchase Plan,
as set forth in this document.

         Q. PLAN ADMINISTRATOR shall mean the Board, or a committee designated
by the Board, which committee shall consist solely of two (2) or more persons
who are "non-employee directors" within the meaning of Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended.

         R. PURCHASE DATE shall mean the last payroll day of each offering
period.

         S. STOCK EXCHANGE shall mean either the American Stock Exchange, or the
New York Stock Exchange.

                                      -3-

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