Document:

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                                                                   EXHIBIT 10.19

                               STEPHEN R. RIZZONE
                      NON-QUALIFIED STOCK OPTION AGREEMENT

          This Agreement is made effective as of June 18, 1999, by and between
Ortel Corporation, a Delaware corporation (the "Company"), and Stephen R.
Rizzone (the "EXECUTIVE").

          WHEREAS, on June 18, 1999, the Company and EXECUTIVE entered into an
Employment Agreement;

          WHEREAS, the Company wishes to afford the EXECUTIVE the opportunity to
purchase shares of its $.001 par value Common Stock; and

          WHEREAS, the Board has determined that it would be to the advantage
and best interest of the Company and its stockholders to grant the Option
provided for herein to the EXECUTIVE as an inducement to enter into and remain
in the service of the Company or its Subsidiaries and as an incentive for
increased efforts during such service, and has advised the Company thereof and
instructed the undersigned officers to issue said Option.

          NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:

                                   ARTICLE I.
                                  DEFINITIONS

          Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary.

          Section 1.1   Board
                        -----

"Board" shall mean the Board of Directors of the Company, excluding the
EXECUTIVE.

          Section 1.2   Cause
                        -----

          "Cause" shall mean, for purposes of Section 3.3 hereof, the occurrence
of any of the following:  (a) any intentional action or intentional failure to
act by EXECUTIVE which was performed in bad faith and to the material detriment
to the Company; or (b) EXECUTIVE is convicted of a felony crime involving moral
turpitude.

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          Section 1.3   Change of Control
                        -----------------

          (a) "Change of Control" shall mean the occurrence of any of the
following:

                  (i)   any "person," including a "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any group of
which the Executive is a member), is or becomes the "beneficial owner" (as
defined in Rule 13(d) (3) under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined voting power
of the Company's then outstanding securities; or

                  (ii)  any consolidation or merger of the Company or any
subsidiary where the stockholders of the Company, immediately prior to the
consolidation or merger, would not, immediately after the consolidation or
merger, beneficially own (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, shares representing in the aggregate 50%
or more of the combined voting power of the securities of the corporation
issuing cash or securities in the consolidation or merger (or of its ultimate
parent corporation, if any); or

                  (iii) there shall occur (A) any sale, lease, exchange or other
transfer (in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of the
assets of the Company, other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by persons in
substantially the same proportion as their ownership of the Company immediately
prior to such sale or (B) the approval by stockholders of the Company of any
plan or proposal for the liquidation or dissolution of the Company; or

                  (iv)  the members of the Board at the beginning of any
consecutive 24-calendar-month period (the "Incumbent Directors") cease for any
reason other than due to death to constitute at least a majority of the members
of the Board; provided that any director whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at least a
majority of the members of the Board then still in office who were members of
the Board at the beginning of such 24-calendar-month period, shall be deemed to
be an Incumbent Director.

          Section 1.4   Code
                        -----

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

          Section 1.5   Common Stock
                        ------------

          "Common Stock" shall mean the common stock of the Company, par value
$.001 per share, and any equity security of the Company issued or authorized to
be issued in the future, but excluding any warrants, options or other rights to
purchase Common Stock.  Debt securities

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of the Company convertible into Common Stock shall be deemed equity securities
of the Company.

          Section 1.6   Company
                        -------

          "Company" shall mean Ortel Corporation, a Delaware corporation, or any
successor corporation.

          Section 1.7   Competing Relationship with the Company
                        ---------------------------------------

          "Competing Relationship with the Company" shall mean when EXECUTIVE,
anywhere in the world (i) engages in any business which competes directly with
the Company, (ii) renders any services to any person, corporation, partnership
or other entity (other than the Company or its affiliates) which competes
directly with the Company, or (iii) become interested in any such person,
corporation, partnership or other entity (other than the Company) as a partner,
shareholder, principal, agent, employee, consultant or in any other relationship
or capacity; provided, however, that, notwithstanding the foregoing, the
EXECUTIVE may invest in securities of any entity, solely for investment purposes
and without participating in the business thereof, if (A) such securities are
traded on any national securities exchange or the National Association of
Securities Dealers, Inc. Automated Quotation System, (B) the EXECUTIVE is not a
controlling person of, or a member of a group which controls, such entity and
(C) the EXECUTIVE does not, directly or indirectly, own 5% or more of any class
of securities of such entity.

          Section 1.8   Employment Agreement
                        --------------------

          "Employment Agreement" shall mean that certain Employment Agreement
between the Company and the EXECUTIVE dated June 18, 1999, as the same may be
amended from time to time.

          Section 1.9   Exchange Act
                        ------------

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

          Section 1.10   Fair Market Value
                         -----------------

          "Fair Market Value" of a share of the Common Stock as of a given date
shall be: (i) the closing price of a share of Common Stock on the principal
exchange on which shares of the Common Stock are then trading, if any (or as
reported on any composite index which includes such principal exchange), on such
date, or if shares were not traded on such date, then on the next preceding date
on which a trade occurred; or (ii) if the Common Stock is not traded on an
exchange but is (A) a Nasdaq National Market Security quoted on Nasdaq, the
closing price of a share of the Common Stock on such date as quoted on Nasdaq,
or if shares were not quoted on such date, then on the next preceding date on
which a quote occurred; or (B) otherwise quoted on Nasdaq or a successor
quotation system, the mean between the closing representative bid and asked
prices for the Common Stock on such date as reported by Nasdaq or such

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successor quotation system, or if shares were not quoted on such date, then on
the next preceding date on which a quote occurred; or (iii) if the Common Stock
is not publicly traded on an exchange and not quoted on Nasdaq or a successor
quotation system, the Fair Market Value of a share of Common Stock as
established by the Committee acting in good faith.

          Section 1.11   Option
                         ------

          "Option" shall mean the non-qualified stock option granted under this
Agreement.

          Section 1.12   EXECUTIVE
                         ---------

          "EXECUTIVE" shall mean Stephen R. Rizzone.

          Section 1.13   Rule 16b-3
                         ----------

          "Rule 16b-3 " shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended from time to time.

          Section 1.14   Secretary
                         ---------

          "Secretary" shall mean the Secretary of the Company.

          Section 1.15   Subsidiary
                         ----------

          "Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50 percent
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

          Section 1.16   Termination of Employment
                         -------------------------

          "Termination of Employment" shall mean the time when the employee-
employer relationship between the EXECUTIVE and the Company or any Subsidiary is
terminated for any reason, including, but not by way of limitation, a
termination by resignation, discharge with or without Cause, death, disability
or retirement; but excluding (i) terminations where there is a simultaneous re-
employment or continuing employment of the EXECUTIVE by the Company or any
Subsidiary, (ii) at the discretion of the Board, terminations which result in a
temporary severance of the employee-employer relationship, and (iii) at the
discretion of the Board, terminations which are followed by the simultaneous
establishment of a consulting relationship by the Company or a Subsidiary with
the EXECUTIVE.  The Board, in its absolute discretion, shall determine the
effect of all matters and questions relating to Termination of Employment,
including, but not by way of limitation, the question of whether a Termination
of Employment resulted from a discharge for Cause, and all questions of whether
particular leaves of absence constitute Terminations of Employment.
Notwithstanding any other provision of this Agreement, the Company or any
Subsidiary has an absolute and unrestricted right to terminate EXECUTIVE's
employment at any time for any reason whatsoever, with or without Cause, except
to the extent expressly provided otherwise in writing.

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                                  ARTICLE II.
                                GRANT OF OPTION

          Section 2.1   Grant of Option
                        ---------------

          In consideration of the EXECUTIVE's agreement to remain in the employ
of the Company or its Subsidiaries for a period of at least one year after the
Option is granted and for other good and valuable consideration, on June 18,
1999, the Company irrevocably grants to the EXECUTIVE the Option to purchase all
or any part of an aggregate of 600,000 shares of its Common Stock, upon the
terms and conditions set forth in this Agreement.

          Section 2.2   Purchase Price
                        --------------

         The purchase price of the shares of Common Stock covered by the Option
shall be $9.4375 per share, without commission or other charge, representing the
closing price of a share of Common Stock as quoted on The Nasdaq Stock Market on
June 17, 1999.

          Section 2.3   Consideration to Company
                        ------------------------

          In consideration of the granting of this Option by the Company, the
EXECUTIVE agrees to render faithful and efficient services to the Company or a
Subsidiary, with such duties and responsibilities as the Company shall from time
to time prescribe, for a period of at least one (1) year from the date this
Option is granted.  Nothing in this Agreement shall confer upon the EXECUTIVE
any right to continue in the employ of the Company or any Subsidiary or shall
interfere with or restrict in any way the rights of the Company and any
Subsidiary, which are hereby expressly reserved, to discharge the EXECUTIVE at
any time for any reason whatsoever, with or without Cause.

          Section 2.4   Adjustments in Option
                        ---------------------

          (a) In the event that the outstanding shares of the stock subject to
the Option are changed into or exchanged for a different number or kind of
shares of the Company or other securities of the Company, or of another
corporation, by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, stock dividend or
combination of shares, the Board shall make an appropriate and equitable
adjustment in the number and kind of shares as to which the Option, or portions
thereof then unexercised, shall be exercisable, to the end that after such event
the EXECUTIVE's proportionate interest shall be maintained as before the
occurrence of such event.  Such adjustment in the Option shall include any
necessary corresponding adjustment in the Option price per share, but shall be
made without change in the total price applicable to the unexercised portion of
the Option (except for any change in the aggregate price resulting from
rounding-off of share quantities or prices).  Any such adjustment made by the
Board shall be final and binding upon the EXECUTIVE, the Company and all other
interested persons.

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          (b) In the event of a "spin-off" or other substantial distribution of
assets of the Company which has a material diminutive effect upon the Fair
Market Value of the Company's Common Stock, the Board shall in its discretion
make an appropriate and equitable adjustment to the Option to reflect such
diminution.

          Section 2.5   Covenant to Grant Additional Options
                        ------------------------------------

          In consideration of the EXECUTIVE's agreement to remain in the employ
of the Company or its Subsidiaries for a period of at least one year after the
Option is granted and for other good and valuable consideration, the Company
covenants and agrees to grant additional non-qualified stock options to the
EXECUTIVE throughout the period continuing until the earlier of (i) a Change in
Control or (b) a Termination of Employment, as follows:

          (a) The first "Measurement Date" hereunder shall be October 8, 1999.
Each date as of which the Diluted Number of Shares has increased by more than
20,000 from the preceding Measurement Date, shall also be deemed to be a
"Measurement Date" hereunder.  As of and on each Measurement Date, the Board of
Directors of the Company shall be deemed to have automatically granted
additional non-qualified stock options to the EXECUTIVE in an amount equal to
five percent (5%) of the increase in the Diluted Number of Shares from the
previous Measurement Date, or, in the case of the first Measurement Date, from
June 18, 1999.  These additional non-qualified stock option grants are referred
to herein as the "Anti-Dilution Options."  For the purpose of this Section 2.5,
the "Diluted Number of Shares" at any Measurement Date shall be an amount equal
to the number of outstanding shares of Common Stock on such date plus the number
of shares of Common Stock subject to outstanding options (excluding shares or
options held by or granted to EXECUTIVE) on such date, less any shares or
options issued pursuant to transactions described in Section 2.4(a) or (b).

          (b) Each Anti-Dilution Option shall have an exercise price equal to
the Fair Market Value of the Common Stock on the date of automatic grant of such
Anti-Dilution Option.

          (c) Each Anti-Dilution Option shall be granted substantially upon the
terms and conditions set forth in this Agreement.  Thus, 12/48th of an Anti-
Dilution Option shall vest on the first anniversary of the date of grant of such
Anti-Dilution Option, and 1/48th shall vest on the first day of each full month
thereafter, so that such Anti-Dilution Option shall be fully vested on the first
day of the 48 th month after its date of grant.

          (d) Each Anti-Dilution Option shall be deemed automatically granted
under the Company's 1994 Equity Participation Plan, as amended.  To the extent
the Company is prohibited from granting all or any portion of an Anti-Dilution
Option due to the "Award Limit" constraints set forth in such plan, the Company
agrees to grant such portion of the Anti-Dilution Option that is so prohibited
from granting when due hereunder promptly in succeeding years, as permitted by
the "Award Limit" provisions of such plan.

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          (e) Each Anti-Dilution Option shall be evidenced by and subject to the
terms and conditions substantially contained in the form of Option Agreement
attached hereto as Exhibit A.

          (f) Notwithstanding anything herein to the contrary, no Anti-Dilution
Options shall be granted with respect to any increase in shares or options
resulting from any Change in Control.  The automatic grant of Anti-Dilution
Options and the Company's obligations under this Section 2.5 shall cease and be
of no further force or effect as of the earlier of (i) a Change in Control or
(ii) a Termination of Employment.

                                 ARTICLE III.
                           PERIOD OF EXERCISABILITY

          Section 3.1   Commencement of Exercisability
                        ------------------------------

          (a) The Option shall become exercisable in cumulative installments as
follows:

                  (i)   The first installment shall consist of twenty-five
percent (25%) of the shares covered by the Option and shall become exercisable
on June 18, 2000; and

                  (ii)  The remaining installments shall consist of 1/48th of
the shares covered by the Option and shall become exercisable on the first day
of each full month thereafter, so that the Option shall become exercisable with
respect to all of the shares on June 1, 2003.

          (b) No portion of the Option which is unexercisable at Termination of
Employment shall thereafter become exercisable.

          Section 3.2   Duration of Exercisability
                        --------------------------

          The installments provided for in Section 3.1 are cumulative.  Each
such installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.

          Section 3.3   Expiration of Option
                        --------------------

          The Option may not be exercised to any extent by anyone after the
first to occur of the following events:

          (a) The expiration of ten (10) years from the date the Option was
granted; or(b) The time of the EXECUTIVE's Termination of Employment for Cause;
or

          (c)  The earlier of (i) expiration of two (2) years from the date of
the EXECUTIVE's Termination of Employment other than Termination of Employment
for Cause

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(as defined in Section 1.2 hereof), or (ii) the date EXECUTIVE enters into a
Competing Relationship with the Company.

          Section 3.4   Acceleration of Exercisability
                        ------------------------------

          Subject to Section 3.1(b), all of the unvested Option shares held by
the EXECUTIVE at such time shall be and become fully exercisable upon:

          (a)  the occurrence of a Change in Control prior to a Termination of
Employment, or

          (b)  a Termination of Employment, other than (x) a Termination of
Employment for cause as defined in the Employment Agreement, and (y) a
Termination of Employment by EXECUTIVE other than for any of the reasons
specified in Section 11(a)(2) of the Employment Agreement.

                                  ARTICLE IV.
                              EXERCISE OF OPTION

          Section 4.1   Person Eligible to Exercise
                        ---------------------------

          During the lifetime of the EXECUTIVE, only the EXECUTIVE may exercise
the Option or any portion thereof, or to the extent the Option or any portion
thereof is transferred in accordance with the terms hereof pursuant to a
qualified domestic relations order (a defined by the Code), by the transferee
thereof.  After the death of the EXECUTIVE, any exercisable portion of the
Option may, prior to the time when the Option becomes unexercisable under
Section 3.3, be exercised by the EXECUTIVE's personal representative or by any
person empowered to do so under the EXECUTIVE's will or under the then
applicable laws of descent and distribution.

          Section 4.2  Partial Exercise
                       ----------------

          Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
one hundred (100) shares (or the minimum installment set forth in Section 3. 1,
if a smaller number of shares) and shall be for whole shares only.

          Section 4.3   Manner of Exercise
                        ------------------

          The exercisable Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or the Secretary's office of all
of the following prior to the time when the Option or such portion becomes
unexercisable under Section 3.3:

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          (a)  Notice in writing signed by the EXECUTIVE or the other person
then entitled to exercise the Option or portion, stating that the Option or
portion is thereby exercised, such notice complying with all applicable rules
established by the Board; and

          (b)

                  (i)   Full payment (in cash) for the shares with respect to
which such Option or portion is exercised;

                  (ii)  With the consent of the Board, payment delayed for up to
thirty (30) days from the date the Option, or portion thereof, is exercised; or

                  (iii) With the consent of the Board, (A) shares of the
Company's Common Stock owned by the EXECUTIVE duly endorsed for transfer to the
Company or (B) shares of the Company's Common Stock issuable to the EXECUTIVE
upon exercise of the Option, with a Fair Market Value on the date of Option
exercise equal to the aggregate purchase price of the shares with respect to
which such Option or portion is exercised; or

                  (iv)  With the consent of the Board, property of any kind
which constitutes good and valuable consideration; or

                  (v)   With the consent of the Board, a full recourse
promissory note bearing interest (at no less than such rate as shall then
preclude the imputation of interest under the Code or successor provision) and
payable upon such terms as may be prescribed by the Board. The Board may also
prescribe the form of such note and the security, if any, to be given for such
note. The Option may not be exercised, however, by delivery of a promissory note
or by a loan from the Company when or where such loan or other extension of
credit is prohibited by law; or

                  (vi)  With the consent of the Board, any combination of the
consideration provided in the foregoing subparagraphs; and

          (c)  A bona fide written representation and agreement, in a form
satisfactory to the Board, signed by the EXECUTIVE or other person then entitled
to exercise such Option or portion, stating that the shares of stock are being
acquired for the EXECUTIVE's own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the EXECUTIVE or other person then entitled to exercise
such Option or portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if
any sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above.  The Board may, in its absolute
discretion, take whatever additional actions it deems appropriate to insure the
observance and performance of such representation and agreement and to effect
compliance with the Securities Act and any other federal or state securities
laws or regulations.  Without limiting the generality of the foregoing, the
Board may require an opinion of counsel acceptable to it to the effect that any
subsequent transfer of shares acquired on an Option exercise

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does not violate the Securities Act, and may issue stop-transfer orders covering
such shares. Share certificates evidencing stock issued on exercise of this
Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however, not be required if the shares to be issued pursuant to such exercise
have been registered under the Securities Act, and such registration is then
effective in respect of such shares; and

          (d)  Full payment to the Company (or other employer corporation) of
all amounts which, under federal, state or local tax law, it is required to
withhold upon exercise of the Option; with the consent of the Board, (i) shares
of the Company's Common Stock owned by the EXECUTIVE duly endorsed for transfer,
or (ii) shares of the Company's Common Stock issuable to the EXECUTIVE upon
exercise of the Option, having a Fair Market Value at the date of Option
exercise equal to the sums required to be withheld, may be used to make all or
part of such payment, provided that the number of shares so used for payment of
such withholding requirement shall be limited to the number necessary to pay the
tax withholding based on the minimum statutory withholding rates for federal and
state tax purposes, including payroll taxes, that are applicable to such
supplemental taxable income; and

          (e)  In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the EXECUTIVE, appropriate proof
of the right of such person or persons to exercise the Option.

          Section 4.4   Conditions to Issuance of Stock Certificates
                        --------------------------------------------

          The shares of stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company.  Such shares shall
be fully paid and nonassessable.  The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:

          (a)  The admission of such shares to listing on all stock exchanges or
markets on which such class of stock is then listed; and

          (b)  The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Board shall, in its absolute discretion, deem necessary or advisable;
and

          (c)  The obtaining of any approval or other clearance from any state
or federal governmental agency which the Board shall, in its absolute
discretion, determine to be necessary or advisable; and

          (d)  The receipt by the Company of full payment for such shares,
including payment of all amounts which, under federal, state or local tax law,
it is required to withhold upon exercise of the Option; and

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          (e)  The lapse of such reasonable period of time following the
exercise of the Option as the Board may from time to time establish for reasons
of administrative convenience.

          Section 4.5   Rights as Stockholder
                        ---------------------

          The holder of the Option shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.

                                   ARTICLE V.
                                OTHER PROVISIONS

          Section 5.1   Administration
                        --------------

          The Board shall have the power to interpret this Agreement and to
adopt such rules for the administration, interpretation and application of the
Option granted hereunder and to interpret or revoke any such rules.  All actions
taken and all interpretations and determinations made by the Board in good faith
shall be final and binding upon the EXECUTIVE, the Company and all other
interested persons.  No member of the Board shall be personally liable for any
action, determination or interpretation made in good faith with respect to this
Agreement or the Option.

          Section 5.2   Option Not Transferable
                        -----------------------

          Neither the Option nor any interest or right therein or part thereof
shall be liable for the debts, contracts or engagements of the EXECUTIVE or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution or pursuant to a qualified domestic relations order (as defined in
the Code).

          Section 5.3   Shares to Be Reserved
                        ---------------------

          The Company shall at all times during the term of the Option reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.

          Section 5.4   Notices
                        -------

          Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Board of Directors of the Company in care of
its Secretary, and any notice to be given to the EXECUTIVE shall be addressed to
him at the address given beneath his signature

                                       11
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hereto. By a notice given pursuant to this Section 5.4, either party may
hereafter designate a different address for notices to be given to him. Any
notice which is required to be given to the EXECUTIVE shall, if the EXECUTIVE is
then deceased, be given to the EXECUTIVE's personal representative if such
representative has previously informed the Company of his status and address by
written notice under this Section 5.4. Any notice shall be deemed duly given
when enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.

          Section 5.5   Titles
                        ------

          Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.

          Section 5.6   Construction
                        ------------

          This Agreement shall be administered, interpreted and enforced under
the internal laws of the State of Delaware.

          Section 5.7   Conformity to Securities Laws
                        -----------------------------

          The EXECUTIVE acknowledges that this Agreement is intended to conform
to the extent necessary with all provisions of the Securities Act of 1933, as
amended, and the Exchange Act and any and all regulations and rules promulgated
by the Securities and Exchange Commission thereunder, including without
limitation Rule 16b-3.  Notwithstanding anything herein to the contrary, this
Agreement shall be administered, and the Option is granted and may be exercised,
only in such a manner as to conform to such laws, rules and regulations.  To the
extent permitted by applicable law, this Agreement shall be deemed amended to
the extent necessary to conform to such laws, rules and regulations.

          Section 5.8   Amendment
                        ---------

          This Agreement may be amended at any time by the Board, provided,
however, that without the consent of the EXECUTIVE, no such amendment may impair
any rights of the EXECUTIVE under this Agreement.

                                       12
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          IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto on March 1, 2000.

                                         ORTEL CORPORATION,
                                         a Delaware corporation

                                         By: /s/ Anthony J. Iorillo
                                             -----------------------

                                             Anthony J. Iorillo,
                                             Director and Authorized Agent

                                         EXECUTIVE

                                         /s/ Stephen R. Rizzone
                                         ---------------------------
                                         Stephen R. Rizzone
                                         1101 Ebbtide Road
                                         Corona del Mar, CA 92656

                                         (on file)
                                         ---------------------------
                                         Social Security Number

                                       13
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                                   EXHIBIT A
          FORM OF OPTION AGREEMENT TO EVIDENCE ANTI-DILUTION OPTIONS

                               STEPHEN R. RIZZONE
               NON-QUALIFIED ANTI-DILUTION STOCK OPTION AGREEMENT

          This Agreement is made effective as of ______________ by and between
Ortel Corporation, a Delaware corporation (the "Company"), and Stephen R.
Rizzone (the "EXECUTIVE").

          WHEREAS, the Company and EXECUTIVE entered into the Stephen R. Rizzone
Non-Qualified Stock Option Agreement effective as of June 18, 1999 (the
"Original Option Agreement"), which calls for the automatic grant of non-
qualified stock options upon the happening of certain events;

          WHEREAS, the events required to give rise to the automatic grant of
additional options under the Original Option Agreement have transpired, and the
Company wishes to afford the EXECUTIVE the opportunity to purchase shares of its
$.001 par value Common Stock; and

          WHEREAS, the Board has determined that it would be to the advantage
and best interest of the Company and its stockholders to grant the Option
provided for herein to the EXECUTIVE as an inducement to enter into and remain
in the service of the Company or its Subsidiaries and as an incentive for
increased efforts during such service, and has advised the Company thereof and
instructed the undersigned officers to issue said Option.

          NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:

                                   ARTICLE I.
                                  DEFINITIONS

          Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary.

          Section 1.1   Board
                        -----

          "Board" shall mean the Board of Directors of the Company, excluding
the EXECUTIVE.

          Section 1.2   Cause
                        -----

          "Cause" shall mean, for purposes of Section 3.3 hereof, the occurrence
of any of the following:  (a) any intentional action or intentional failure to
act by EXECUTIVE which was

                                       1
<PAGE>

performed in bad faith and to the material detriment to the Company; or (b)
EXECUTIVE is convicted of a felony crime involving moral turpitude.

          Section 1.3   Change of Control

          (a) "Change of Control" shall mean the occurrence of any of the
following:

                  (i)   any "person," including a "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any group of
which the Executive is a member), is or becomes the "beneficial owner" (as
defined in Rule 13(d) (3) under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined voting power
of the Company's then outstanding securities; or

                  (ii)  any consolidation or merger of the Company or any
subsidiary where the stockholders of the Company, immediately prior to the
consolidation or merger, would not, immediately after the consolidation or
merger, beneficially own (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, shares representing in the aggregate 50%
or more of the combined voting power of the securities of the corporation
issuing cash or securities in the consolidation or merger (or of its ultimate
parent corporation, if any); or

                  (iii) there shall occur (A) any sale, lease, exchange or other
transfer (in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of the
assets of the Company, other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by persons in
substantially the same proportion as their ownership of the Company immediately
prior to such sale or (B) the approval by stockholders of the Company of any
plan or proposal for the liquidation or dissolution of the Company; or

                  (iv)  the members of the Board at the beginning of any
consecutive 24-calendar-month period (the "Incumbent Directors") cease for any
reason other than due to death to constitute at least a majority of the members
of the Board; provided that any director whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at least a
majority of the members of the Board then still in office who were members of
the Board at the beginning of such 24-calendar-month period, shall be deemed to
be an Incumbent Director.

          Section 1.4   Code
                        ----

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

                                       2
<PAGE>

          Section 1.5   Common Stock
                        ------------

          "Common Stock" shall mean the common stock of the Company, par value
$.001 per share, and any equity security of the Company issued or authorized to
be issued in the future, but excluding any warrants, options or other rights to
purchase Common Stock.  Debt securities of the Company convertible into Common
Stock shall be deemed equity securities of the Company.

          Section 1.6   Company
                        -------

          "Company" shall mean Ortel Corporation, a Delaware corporation, or any
successor corporation.

          Section 1.7   Competing Relationship with the Company
                        ---------------------------------------

          "Competing Relationship with the Company" shall mean when EXECUTIVE,
anywhere in the world (i) engages in any business which competes directly with
the Company, (ii) renders any services to any person, corporation, partnership
or other entity (other than the Company or its affiliates) which competes
directly with the Company, or (iii) become interested in any such person,
corporation, partnership or other entity (other than the Company) as a partner,
shareholder, principal, agent, employee, consultant or in any other relationship
or capacity; provided, however, that, notwithstanding the foregoing, the
EXECUTIVE may invest in securities of any entity, solely for investment purposes
and without participating in the business thereof, if (A) such securities are
traded on any national securities exchange or the National Association of
Securities Dealers, Inc. Automated Quotation System, (B) the EXECUTIVE is not a
controlling person of, or a member of a group which controls, such entity and
(C) the EXECUTIVE does not, directly or indirectly, own 5% or more of any class
of securities of such entity.

          Section 1.8   Employment Agreement
                        --------------------

          "Employment Agreement" shall mean that certain Employment Agreement
between the Company and the EXECUTIVE dated June 18, 1999, as the same may be
amended from time to time.

          Section 1.9   Exchange Act
                        ------------

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

          Section 1.10   Fair Market Value
                         -----------------

          "Fair Market Value" of a share of the Common Stock as of a given date
shall be: (i) the closing price of a share of Common Stock on the principal
exchange on which shares of the Common Stock are then trading, if any (or as
reported on any composite index which includes such principal exchange), on such
date, or if shares were not traded on such date, then on the next preceding date
on which a trade occurred; or (ii) if the Common Stock is not traded

                                       3
<PAGE>

on an exchange but is (A) a Nasdaq National Market Security quoted on Nasdaq,
the closing price of a share of the Common Stock on such date as quoted on
Nasdaq or if shares were not quoted on such date, then on the next preceding
date on which a quote occurred; or (B) otherwise quoted on Nasdaq or a successor
quotation system, the mean between the closing representative bid and asked
prices for the Common Stock on such date as reported by Nasdaq or such successor
quotation system, or if shares were not quoted on such date, then on the next
preceding date on which a quote occurred; or (iii) if the Common Stock is not
publicly traded on an exchange and not quoted on Nasdaq or a successor quotation
system, the Fair Market Value of a share of Common Stock as established by the
Committee acting in good faith.

          Section 1.11   Option
                         ------

          "Option" shall mean the non-qualified stock option granted under this
Agreement.

          Section 1.12   EXECUTIVE
                         ---------

          "EXECUTIVE" shall mean Stephen R. Rizzone.

          Section 1.13   Rule 16b-3
                         ----------

          "Rule 16b-3 " shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended from time to time.

          Section 1.14   Secretary
                         ---------

          "Secretary" shall mean the Secretary of the Company.

          Section 1.15   Subsidiary
                         ----------

          "Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50 percent
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

          Section 1.16   Termination of Employment
                         -------------------------

          "Termination of Employment" shall mean the time when the employee-
employer relationship between the EXECUTIVE and the Company or any Subsidiary is
terminated for any reason, including, but not by way of limitation, a
termination by resignation, discharge with or without Cause, death, disability
or retirement; but excluding (i) terminations where there is a simultaneous re-
employment or continuing employment of the EXECUTIVE by the Company or any
Subsidiary, (ii) at the discretion of the Board, terminations which result in a
temporary severance of the employee-employer relationship, and (iii) at the
discretion of the Board, terminations which are followed by the simultaneous
establishment of a consulting relationship by the Company or a Subsidiary with
the EXECUTIVE.  The Board, in its absolute discretion, shall determine the
effect of all matters and questions relating to Termination of Employment,
including, but not by way of limitation, the question of whether a Termination
of Employment

                                       4
<PAGE>

resulted from a discharge for Cause, and all questions of whether particular
leaves of absence constitute Terminations of Employment. Notwithstanding any
other provision of this Agreement, the Company or any Subsidiary has an absolute
and unrestricted right to terminate EXECUTIVE's employment at any time for any
reason whatsoever, with or without Cause, except to the extent expressly
provided otherwise in writing.

                                  ARTICLE II.
                                GRANT OF OPTION

          Section 2.1   Grant of Option
                        ---------------

          In consideration of the EXECUTIVE's agreement to remain in the employ
of the Company or its Subsidiaries for a period of at least one year after the
Option is granted and for other good and valuable consideration, on
______________, the Company irrevocably grants to the EXECUTIVE the Option to
purchase all or any part of an aggregate of ____________ shares of its Common
Stock, upon the terms and conditions set forth in this Agreement.

          Section 2.2   Purchase Price
                        --------------

          The purchase price of the shares of Common Stock covered by the Option
shall be $_______________per  share, without commission or other charge,
representing the closing price of a share of Common Stock as quoted on The
Nasdaq Stock Market on _________________.

          Section 2.3   Consideration to Company
                        ------------------------

          In consideration of the granting of this Option by the Company, the
EXECUTIVE agrees to render faithful and efficient services to the Company or a
Subsidiary, with such duties and responsibilities as the Company shall from time
to time prescribe, for a period of at least one (1) year from the date this
Option is granted.  Nothing in this Agreement shall confer upon the EXECUTIVE
any right to continue in the employ of the Company or any Subsidiary or shall
interfere with or restrict in any way the rights of the Company and any
Subsidiary, which are hereby expressly reserved, to discharge the EXECUTIVE at
any time for any reason whatsoever, with or without Cause.

          Section 2.4   Adjustments in Option
                        ---------------------

          (a)  In the event that the outstanding shares of the stock subject to
the Option are changed into or exchanged for a different number or kind of
shares of the Company or other securities of the Company, or of another
corporation, by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, stock dividend or
combination of shares, the Board shall make an appropriate and equitable
adjustment in the number and kind of shares as to which the Option, or portions
thereof then unexercised, shall be exercisable, to the end that after such event
the EXECUTIVE's proportionate interest shall be maintained as before the
occurrence of such event.  Such adjustment in the Option shall include any
necessary corresponding adjustment in the Option price per share, but shall be
made without change in the

                                       5
<PAGE>

total price applicable to the unexercised portion of the Option (except for any
change in the aggregate price resulting from rounding-off of share quantities or
prices). Any such adjustment made by the Board shall be final and binding upon
the EXECUTIVE, the Company and all other interested persons.

          (b)  In the event of a "spin-off" or other substantial distribution of
assets of the Company which has a material diminutive effect upon the Fair
Market Value of the Company's Common Stock, the Board shall in its discretion
make an appropriate and equitable adjustment to the Option to reflect such
diminution.

                                 ARTICLE III.
                           PERIOD OF EXERCISABILITY

          Section 3.1   Commencement of Exercisability
                        ------------------------------

          (a)  The Option shall become exercisable in cumulative installments as
follows:

                  (i)   The first installment shall consist of twenty-five
percent (25%) of the shares covered by the Option and shall become exercisable
on the first anniversary of the date of grant or _______________; and

                  (ii)  The remaining installments shall consist of 1/48th of
the shares covered by the Option and shall become exercisable on the first day
of each full month thereafter, so that the Option shall become exercisable with
respect to all of the shares on ______________.

          (b)  No portion of the Option which is unexercisable at Termination of
Employment shall thereafter become exercisable.

          Section 3.2   Duration of Exercisability
                        --------------------------

          The installments provided for in Section 3.1 are cumulative.  Each
such installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.

          Section 3.3   Expiration of Option
                        --------------------

          The Option may not be exercised to any extent by anyone after the
first to occur of the following events:

          (a)  The expiration of ten (10) years from the date the Option was
granted; or

          (b)  The time of the EXECUTIVE's Termination of Employment for Cause;
or

                                       6
<PAGE>

          (c)  The earlier of (i) expiration of two (2) years from the date of
the EXECUTIVE's Termination of Employment other than Termination of Employment
for Cause (as defined in Section 1.2 hereof) , or (ii) the date EXECUTIVE enters
into a Competing Relationship with the Company.

          Section 3.4   Acceleration of Exercisability
                        ------------------------------

          Subject to Section 3.1(b), all of the unvested Option shares held by
the EXECUTIVE at such time shall be and become fully exercisable upon:

          (a)  the occurrence of a Change in Control prior to a Termination of
Employment, or

          (b)  a Termination of Employment, other than (x) a Termination of
Employment for cause as defined in the Employment Agreement, and (y) a
Termination of Employment by EXECUTIVE other than for any of the reasons
specified in Section 11(a)(2) of the Employment Agreement.

                                  ARTICLE IV.
                              EXERCISE OF OPTION

          Section 4.1   Person Eligible to Exercise
                        ---------------------------

          During the lifetime of the EXECUTIVE, only the EXECUTIVE may exercise
the Option or any portion thereof, or to the extent the Option or any portion
thereof is transferred in accordance with the terms hereof pursuant to a
qualified domestic relations order (a defined by the Code), by the transferee
thereof.  After the death of the EXECUTIVE, any exercisable portion of the
Option may, prior to the time when the Option becomes unexercisable under
Section 3.3, be exercised by the EXECUTIVE's personal representative or by any
person empowered to do so under the EXECUTIVE's will or under the then
applicable laws of descent and distribution.

          Section 4.2   Partial Exercise
                        ----------------

          Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
one hundred (100) shares (or the minimum installment set forth in Section 3. 1,
if a smaller number of shares) and shall be for whole shares only.

          Section 4.3   Manner of Exercise
                        ------------------

          The exercisable Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or the Secretary's office of all
of the following prior to the time when the Option or such portion becomes
unexercisable under Section 3.3:

                                       7
<PAGE>

          (a)  Notice in writing signed by the EXECUTIVE or the other person
then entitled to exercise the Option or portion, stating that the Option or
portion is thereby exercised, such notice complying with all applicable rules
established by the Board; and

          (b)

                  (i)   Full payment (in cash) for the shares with respect to
which such Option or portion is exercised;

                  (ii)  With the consent of the Board, payment delayed for up to
thirty (30) days from the date the Option, or portion thereof, is exercised; or

                  (iii) With the consent of the Board, (A) shares of the
Company's Common Stock owned by the EXECUTIVE duly endorsed for transfer to the
Company or (B) shares of the Company's Common Stock issuable to the EXECUTIVE
upon exercise of the Option, with a Fair Market Value on the date of Option
exercise equal to the aggregate purchase price of the shares with respect to
which such Option or portion is exercised; or

                  (iv)  With the consent of the Board, property of any kind
which constitutes good and valuable consideration; or

                  (v)   With the consent of the Board, a full recourse
promissory note bearing interest (at no less than such rate as shall then
preclude the imputation of interest under the Code or successor provision) and
payable upon such terms as may be prescribed by the Board. The Board may also
prescribe the form of such note and the security, if any, to be given for such
note. The Option may not be exercised, however, by delivery of a promissory note
or by a loan from the Company when or where such loan or other extension of
credit is prohibited by law; or

                  (vi)  With the consent of the Board, any combination of the
consideration provided in the foregoing subparagraphs; and

          (c)  A bona fide written representation and agreement, in a form
satisfactory to the Board, signed by the EXECUTIVE or other person then entitled
to exercise such Option or portion, stating that the shares of stock are being
acquired for the EXECUTIVE's own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the EXECUTIVE or other person then entitled to exercise
such Option or portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if
any sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above.  The Board may, in its absolute
discretion, take whatever additional actions it deems appropriate to insure the
observance and performance of such representation and agreement and to effect
compliance with the Securities Act and any other federal or state securities
laws or regulations.  Without limiting the generality of the foregoing, the
Board may require an opinion of counsel acceptable to it to the effect that any
subsequent transfer of shares acquired on an Option exercise

                                       8
<PAGE>

does not violate the Securities Act, and may issue stop-transfer orders covering
such shares. Share certificates evidencing stock issued on exercise of this
Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however, not be required if the shares to be issued pursuant to such exercise
have been registered under the Securities Act, and such registration is then
effective in respect of such shares; and

          (d)  Full payment to the Company (or other employer corporation) of
all amounts which, under federal, state or local tax law, it is required to
withhold upon exercise of the Option; with the consent of the Board, (i) shares
of the Company's Common Stock owned by the EXECUTIVE duly endorsed for transfer,
or (ii) shares of the Company's Common Stock issuable to the EXECUTIVE upon
exercise of the Option, having a Fair Market Value at the date of Option
exercise equal to the sums required to be withheld, may be used to make all or
part of such payment, provided that the number of shares so used for payment of
such withholding requirement shall be limited to the number necessary to pay the
tax withholding based on the minimum statutory withholding rates for federal and
state tax purposes, including payroll taxes, that are applicable to such
supplemental taxable income; and

          (e)  In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the EXECUTIVE, appropriate proof
of the right of such person or persons to exercise the Option.

          Section 4.4   Conditions to Issuance of Stock Certificates
                        --------------------------------------------

          The shares of stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company.  Such shares shall
be fully paid and nonassessable.  The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:

          (a)  The admission of such shares to listing on all stock exchanges or
markets on which such class of stock is then listed; and

          (b)  The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Board shall, in its absolute discretion, deem necessary or advisable;
and

          (c)  The obtaining of any approval or other clearance from any state
or federal governmental agency which the Board shall, in its absolute
discretion, determine to be necessary or advisable; and

          (d)  The receipt by the Company of full payment for such shares,
including payment of all amounts which, under federal, state or local tax law,
it is required to withhold upon exercise of the Option; and
<PAGE>

          (e)  The lapse of such reasonable period of time following the
exercise of the Option as the Board may from time to time establish for reasons
of administrative convenience.

          Section 4.5   Rights as Stockholder
                        ---------------------

          The holder of the Option shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.

                                   ARTICLE V.
                                OTHER PROVISIONS

          Section 5.1   Administration
                        --------------

          The Board shall have the power to interpret this Agreement and to
adopt such rules for the administration, interpretation and application of the
Option granted hereunder and to interpret or revoke any such rules.  All actions
taken and all interpretations and determinations made by the Board in good faith
shall be final and binding upon the EXECUTIVE, the Company and all other
interested persons.  No member of the Board shall be personally liable for any
action, determination or interpretation made in good faith with respect to this
Agreement or the Option.

          Section 5.2   Option Not Transferable
                        -----------------------

          Neither the Option nor any interest or right therein or part thereof
shall be liable for the debts, contracts or engagements of the EXECUTIVE or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution or pursuant to a qualified domestic relations order (as defined in
the Code).

          Section 5.3   Shares to Be Reserved
                        ---------------------

          The Company shall at all times during the term of the Option reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.

          Section 5.4   Notices
                        -------

          Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Board of Directors of the Company in care of
its Secretary, and any notice to be

                                      10
<PAGE>

given to the EXECUTIVE shall be addressed to him at the address given beneath
his signature hereto. By a notice given pursuant to this Section 5.4, either
party may hereafter designate a different address for notices to be given to
him. Any notice which is required to be given to the EXECUTIVE shall, if the
EXECUTIVE is then deceased, be given to the EXECUTIVE's personal representative
if such representative has previously informed the Company of his status and
address by written notice under this Section 5.4. Any notice shall be deemed
duly given when enclosed in a properly sealed envelope or wrapper addressed as
aforesaid, deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service.

          Section 5.5   Titles
                        ------

          Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.

          Section 5.6   Construction
                        ------------

          This Agreement shall be administered, interpreted and enforced under
the internal laws of the State of Delaware.

          Section 5.7   Conformity to Securities Laws
                        -----------------------------

          The EXECUTIVE acknowledges that this Agreement is intended to conform
to the extent necessary with all provisions of the Securities Act of 1933, as
amended, and the Exchange Act and any and all regulations and rules promulgated
by the Securities and Exchange Commission thereunder, including without
limitation Rule 16b-3.  Notwithstanding anything herein to the contrary, this
Agreement shall be administered, and the Option is granted and may be exercised,
only in such a manner as to conform to such laws, rules and regulations.  To the
extent permitted by applicable law, this Agreement shall be deemed amended to
the extent necessary to conform to such laws, rules and regulations.

          Section 5.8   Amendment
                        ---------

          This Agreement may be amended at any time by the Board, provided,
however, that without the consent of the EXECUTIVE, no such amendment may impair
any rights of the EXECUTIVE under this Agreement.

                                      11
<PAGE>

          IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto on _______________.

                                         ORTEL CORPORATION,
                                         a Delaware corporation

                                         By: ________________________________
                                              Anthony J. Iorillo,
                                              Director and Authorized Agent

                                         EXECUTIVE

                                         ___________________________________
                                         Stephen R. Rizzone
                                         1101 Ebbtide Road
                                         Corona del Mar, CA 92656

                                         (on file)
                                         ___________________________________
                                         Social Security Number

                                      12<PAGE>

                                                                   EXHIBIT 10.20

                             ADDENDUM TO AGREEMENT

          THIS ADDENDUM TO AGREEMENT ("Agreement") is made effective as December
30, 1999 and is entered into by and between Ortel Corporation (the "Company")
and Wim H. J. Selders ("Executive").

          WHEREAS, effective as of June 25, 1999, the Company and Executive
entered into an agreement specifying the terms of Executive's retirement (the
"Agreement");

          WHEREAS, the parties have agreed that the final payments to Executive
under the Agreement be made by December 31, 1999.  These payments relate to the
reimbursement and gross-up of tax payments to be made to Executive;

          WHEREAS, Executive has worked closely with the Company and KPMG LLP to
determine the final amounts due to Executive, and the calculation of the
payments is dependent in large part on facts, circumstances and expectations
personal to Executive.

          For and in consideration of the foregoing recitals and the mutual
covenants and agreements set forth herein, the Company and Executive agree as
follows:

      1.  FINAL PAYMENT UNDER THE AGREEMENT.  Executive and the Company agree
          ---------------------------------
that the payment hereby delivered to Executive represents the complete and final
payment owing by the Company to Executive under the Agreement which is
calculated as $775,052 in gross less $211,238 taxes withheld based on tax
withholding and exemptions specified by the Executive plus a refund of $116 of
Medicare taxes erroneously withheld from a previous payment to Executive.
Executive hereby acknowledges receipt of a check for a net amount of $563,930
from the Company and agrees that the same represents the full, complete and
final payment owing by the Company to the Executive under the Agreement. The
Company shall promptly pay when due all tax withholdings made on the foregoing
sum and otherwise withheld from sums previously paid to Executive.

      2.  FINAL SATISFACTION OF CERTAIN OBLIGATIONS.  As a result of the
          -----------------------------------------
foregoing payments and payments previously made to Executive under the
Agreement, Executive agrees that all of the Company's

                                       1
<PAGE>

obligations to Executive under Sections 2a, 2b, 2c, 2d, 2g and 2h have been
fully and completely satisfied and that the Company does not now, nor in the
future will it, owe anything further to Executive under such Sections. In
addition, the parties acknowledge and agree that (a) the loan contemplated by
Section 2g has been made by the Company and subsequently paid in full by
Executive, and all shares of stock held to secure such indebtedness have been
released by the Company to Executive, and neither of the parties has any further
obligation under Section 2g, and (b) the sale of the automobile contemplated by
Section 2i has been accomplished and there are no further obligations of either
party under Section 2i. The parties further acknowledge and agree, that the
Company is obligated to continue providing the benefits set forth in Sections
2e, and 2f as provided therein.

      3.  RELEASE IN THE EVENT THE ACTUAL TAX LIABILITY (AND GROSS-UP) IS
          ---------------------------------------------------------------
GREATER OR LESS THAN PAID HEREUNDER.  Each party understands and agrees that the
-----------------------------------
actual tax liabilities of Executive and the consequent gross-up payments that
may be required under the Agreement may be more or less than that the amount
paid hereunder. Executive hereby releases and forever discharges the Company
Releasees, and the Company hereby releases and forever discharges the Executive
Releasees, for any and all Claims, which they now have or may hereafter have
against the other by reason of the determination of the amount paid hereunder,
the payment of such amount, or if the amount of actual tax liabilities of
Executive and the consequent gross-up payments that may be required under the
Agreement differ from the amount paid to Executive under this Addendum.

      4.  MISCELLANEOUS.  Capitalized terms used but not defined herein shall
          --------------
have the respective meanings assigned to them in the Agreement. Except as
modified by this Addendum, the Agreement shall remain in full force and effect,
and shall be deemed to include this Addendum as of the date first written above.

Wim H. J. Selders                    Ortel Corporation

/s/ Wim H.J. Selders                 By:  /s/ Stephen R. Rizzone
---------------------------               --------------------------------
                                     Stephen R. Rizzone, Chief Executive Officer

                                       2

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