P-COM, INC.
 
                           2004 EQUITY INCENTIVE PLAN
 
 
 
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                                TABLE OF CONTENTS
 
                                                                            Page
                                                                            ----
 
ARTICLE 1 INTRODUCTION.........................................................1
 
ARTICLE 2 DEFINITIONS..........................................................1
 
ARTICLE 3 ADMINISTRATION.......................................................4
 
         3.1      Committee Composition........................................4
 
         3.2      Committee Responsibilities...................................4
 
         3.3      Committee for Non-Officer Grants.............................5
 
         3.4      Scope of Discretion..........................................5
 
         3.5      Unfunded Plan................................................5
 
ARTICLE 4 STOCK AVAILABLE FOR GRANTS...........................................5
 
         4.1      Basic Limitation.............................................5
 
         4.2      Additional Stock.............................................5
 
         4.3      Dividend Equivalents.........................................6
 
ARTICLE 5 ELIGIBILITY..........................................................6
 
ARTICLE 6 OPTIONS..............................................................6
 
         6.1      Option Agreement.............................................6
 
         6.2      Number of Shares.............................................6
 
         6.3      Exercise Price...............................................6
 
         6.4      Exercisability and Term......................................7
 
         6.5      Incentive Stock Options......................................7
 
         6.6      Effect of Change in Control..................................8
 
         6.7      Effect of Termination of Service.............................8
 
         6.8      Nonassignability of Options..................................9
 
         6.9      Modification or Assumption of Options........................9
 
 
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         6.10     Buyout Provisions............................................9
 
ARTICLE 7 PAYMENT FOR OPTION STOCK............................................10
 
         7.1      General Rule................................................10
 
         7.2      Surrender of Stock..........................................10
 
         7.3      Exercise/Sale...............................................10
 
         7.4      Exercise/Pledge.............................................10
 
         7.5      Promissory Note.............................................10
 
         7.6      Other Forms of Payment......................................10
 
ARTICLE 8 STOCK APPRECIATION RIGHTS...........................................11
 
         8.1      SAR Agreement...............................................11
 
         8.2      Number of Shares............................................11
 
         8.3      Exercise Price..............................................11
 
         8.4      Exercisability and Term.....................................11
 
         8.5      Effect of Change in Control.................................11
 
         8.6      Exercise of SARs............................................11
 
         8.7      Nonassignability of SARs....................................12
 
         8.8      Modification or Assumption of SARs..........................12
 
ARTICLE 9 RESTRICTED STOCK....................................................12
 
         9.1      Restricted Stock Agreement..................................12
 
         9.2      Purchase Price..............................................12
 
         9.3      Payment for Awards..........................................12
 
         9.4      Vesting Conditions..........................................12
 
         9.5      Voting and Dividend Rights..................................13
 
         9.6      Nonassignability of Restricted Stock........................13
 
ARTICLE 10 STOCK UNITS........................................................13
 
 
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         10.1     Stock Unit Agreement........................................13
 
         10.2     Payment for Awards..........................................13
 
         10.3     Vesting Conditions..........................................13
 
         10.4     Voting and Dividend Rights..................................14
 
         10.5     Form and Time of Settlement of Stock Units..................14
 
         10.6     Death of Recipient..........................................14
 
         10.7     Creditors' Rights...........................................14
 
         10.8     Nonassignability of Stock Units.............................14
 
ARTICLE 11 PROTECTION AGAINST DILUTION........................................15
 
         11.1     Adjustments.................................................15
 
         11.2     Dissolution or Liquidation..................................15
 
         11.3     Reorganizations.............................................15
 
ARTICLE 12 DEFERRAL OF AWARDS.................................................16
 
ARTICLE 13 PAYMENT OF DIRECTOR'S FEES IN SECURITIES...........................16
 
         13.1     Effective Date..............................................16
 
         13.2     Elections to Receive Non-Statutory Stock Options,
                  Restricted Stock or Stock Units.............................16
 
         13.3     Number and Terms of Non-Statutory Stock Options,
                  Restricted Stock or Stock Units.............................16
 
ARTICLE 14 LIMITATION ON RIGHTS...............................................17
 
         14.1     Retention Rights............................................17
 
         14.2     Stockholders' Rights........................................17
 
         14.3     Regulatory Requirements.....................................17
 
ARTICLE 15 WITHHOLDING TAXES..................................................17
 
         15.1     General.....................................................17
 
         15.2     Stock Withholding...........................................17
 
 
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ARTICLE 16 FUTURE OF THE PLAN.................................................18
 
         16.1     Term of the Plan............................................18
 
         16.2     Amendment or Termination....................................18
 
ARTICLE 17 ADDITIONAL PROVISIONS..............................................18
 
         17.1     Financial Statements........................................18
 
         17.2     Governing Law...............................................18
 
 
 
 
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                                   P-COM, INC.
                           2004 EQUITY INCENTIVE PLAN
 
                                   ARTICLE 1
                                  INTRODUCTION
 
                  The purpose of this P-Com, Inc. 2004 Equity Incentive Plan is
to offer certain Employees, Outside Directors, and Consultants the opportunity
to acquire a proprietary interest in the Company by the grant of Awards in the
form of Options (which may constitute Non-Statutory Stock Options and Incentive
Stock Options), Restricted Stock, Stock Appreciation Rights, or Stock Units.
Through the Plan, the Company and its Related Corporations seek to attract,
motivate, and retain highly competent persons. The success of the Company and
its Related Corporations are dependent upon the efforts of these persons.
 
                                   ARTICLE 2
                                   DEFINITIONS
 
                  As used herein, the following definitions shall apply.
 
                  "Award" shall mean any award of an Option, SAR, Restricted
Stock, or Stock Unit under the Plan.
 
                  "Board" shall mean the Board of Directors of the Company.
 
                  "Cause" shall mean: (i) the unauthorized use or disclosure of
the confidential information or trade secrets of the Company, which use or
disclosure causes material harm to the Company; (ii) conviction of, or a plea of
"guilty" or "no contest" to, a felony under the laws of the United States or any
State thereof; (iii) gross negligence; (iv) willful misconduct; or (v) a failure
to perform assigned duties that continues after the Participant has received
written notice of such failure from the Board. The foregoing, however, shall not
be deemed an exclusive list of all acts or omissions that the Company (or
Related Corporation employing the Participant) may consider as grounds for the
discharge of the Participant without Cause.
 
                  "Change in Control" shall mean:
 
                           (i) The consummation of a merger or consolidation of
         the Company with or into another entity or any other corporate
         reorganization, if persons who were not stockholders of the Company
         immediately prior to such merger, consolidation or other reorganization
         own immediately after such merger, consolidation, or other
         reorganization 50% or more of the voting power of the outstanding
         securities of (A) the continuing or surviving entity or (B) any direct
         or indirect parent corporation of such continuing or surviving entity;
 
                           (ii) The sale, transfer, or other disposition of all
         or substantially all of the Company's assets;
 
 
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                           (iii) A change in the composition of the Board, as a
         result of which fewer than a majority of the incumbent directors are
         directors who either (A) had been directors of the Company on the date
         24 months prior to the date of the event that may constitute a Change
         in Control (the "original directors") or (B) were elected, or nominated
         for election, to the Board with the affirmative votes of at least a
         majority of the original directors who were still in office at the time
         of the election or nomination; or
 
                           (iv) Any transaction as a result of which any person
         is the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
         Act), directly or indirectly, of securities of the Company representing
         at least 51% of the total voting power represented by the Company's
         then outstanding voting securities. For purposes of this Paragraph
         (iv), the term "person" shall have the same meaning as used in Sections
         13(d) and 14(d) of the Exchange Act but shall exclude (A) a trustee or
         other fiduciary holding securities under an employee benefit plan of
         the Company or of a Related Corporation and (B) a corporation owned
         directly or indirectly by the stockholders of the Company in
         substantially the same proportions as their ownership of the Common
         Stock of the Company.
 
A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.
 
                  "Code" shall mean the Internal Revenue Code of 1986, as
amended.
 
                  "Committee" shall mean a committee of the Board, as described
in Article 3.
 
                  "Common Stock" shall mean one share of the common stock of the
Company.
 
                  "Company" shall mean P-Com, Inc., a Delaware corporation.
 
                  "Consultant" shall mean any natural person who performs bona
fide services for the Company or a Related Corporation as a consultant or
advisor, excluding Employees and Outside Directors.
 
                  "Disability" shall mean total and permanent disability as
defined in Section 22(e)(3) of the Code.
 
                  "Employee" shall mean any individual who is a common-law
employee of the Company or a Related Corporation.
 
                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
 
                  "Exercise Price," in the case of an Option, shall mean the
amount for which one share of Common Stock may be purchased upon exercise of
such Option, as specified in the applicable Option Agreement. "Exercise Price,"
in the case of a SAR, shall mean an amount, as specified in the applicable SAR
Agreement, which is subtracted from the Fair Market Value of one share of Common
Stock in determining the amount payable upon exercise of such SAR.
 
 
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                  "Fair Market Value" shall mean the market price of Common
Stock, determined by the Committee in good faith on such basis as it deems
appropriate. Whenever possible, the determination of Fair Market Value by the
Committee shall be based on the prices reported in The Wall Street Journal. Such
determination shall be conclusive and binding on all persons.
 
                  "Incentive Stock Option" shall mean an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
 
                  "Involuntary Termination" shall mean the termination of the
Participant's Service by reason of:
 
                           (i) The involuntary discharge of the Participant by
         the Company (or the Related Corporation employing him or her) for
         reasons other than Cause; or
 
                           (ii) The voluntary resignation of the Participant
         following (A) a material adverse change in his or her title, stature,
         authority or responsibilities with the Company (or the Related
         Corporation employing him or her), (B) a material reduction in his or
         her base salary or (C) receipt of notice that his or her principal
         workplace will be relocated by more than 30 miles.
 
                  "Non-Statutory  Stock Option" shall mean an Option not
intended to qualify as an Incentive  Stock Option.
 
                  "Option" shall mean an Incentive Stock Option or a
Non-Statutory Stock Option granted under the Plan and entitling the holder to
purchase Common Stock.
 
                  "Option Agreement" shall mean a written agreement that
evidences an Option in such form as the Committee shall approve from time to
time.
 
                  "Optioned Stock" shall mean the Common Stock subject to an
Option.
 
                  "Optionee" shall mean an individual, trust, or estate who
holds an Option or SAR.
 
                  "Outside Director" shall mean a member of the Board who is not
an Employee.
 
                  "Participant" shall mean an individual, trust, or estate who
holds an Award.
 
                  "Plan" shall mean this P-Com, Inc. 2004 Equity Incentive Plan,
as amended from time to time.
 
                  "Related Corporation" shall mean any parent or subsidiary (as
defined in Sections 424(e) and (f) of the Code) of the Company.
 
                  "Restricted Stock" shall mean Common Stock awarded under the
Plan.
 
                  "Restricted Stock Agreement" shall mean the agreement between
the Company and the recipient of Restricted Stock that contains the terms,
conditions, and restrictions pertaining to such Restricted Stock.
 
 
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                  "SAR Agreement" shall mean the agreement between the Company
and an Optionee that contains the terms, conditions, and restrictions pertaining
to his or her SAR.
 
                  "Service" shall mean the performance of services for the
Company (or any Related Corporation) by an Employee, Outside Director, or
Consultant, as determined by the Committee in its sole discretion. Service shall
not be considered interrupted in the case of: (i) a change of status (i.e., from
Employee to Consultant, Outside Director to Consultant, or any other
combination); (ii) transfers between locations of the Company or between the
Company and any Related Corporation; or (iii) a leave of absence approved by the
Company or a Related Corporation. A leave of absence approved by the Company or
a Related Corporation shall include sick leave, military leave, or any other
personal leave approved by an authorized representative of the Company or a
Related Corporation.
 
                  "Stock Appreciation Right" or "SAR" shall mean a stock
appreciation right granted under the Plan.
 
                  "Stock Unit" shall mean a bookkeeping entry representing the
equivalent of one share of Common Stock, as awarded under the Plan.
 
                  "Stock Unit Agreement" shall mean the agreement between the
Company and the recipient of a Stock Unit that contains the terms, conditions
and restrictions pertaining to such Stock Unit.
 
                  "10% Stockholder" shall mean the owner of stock (as determined
under Section 424(d) of the Code) possessing more than 10% of the total combined
voting power of all classes of stock of the Company (or any Related
Corporation).
 
                  "Termination Date" shall mean the date on which a
Participant's Service terminates, as determined by the Committee in its sole
discretion.
 
                                   ARTICLE 3
                                 ADMINISTRATION
 
                  3.1 COMMITTEE COMPOSITION. The Committee shall administer the
Plan. The Committee shall consist exclusively of two or more directors of the
Company, who shall be appointed by the Board. In addition, the composition of
the Committee shall satisfy:
 
                           (i) Such requirements as the Securities and Exchange
         Commission may establish for administrators acting under plans intended
         to qualify for exemption under Rule 16b-3 (or its successor) under the
         Exchange Act; and
 
                           (ii) Such requirements as the Internal Revenue
         Service may establish for outside directors acting under plans intended
         to qualify for exemption under Section 162(m)(4)(C) of the Code.
 
                  3.2 COMMITTEE RESPONSIBILITIES. The Committee shall: (i)
select the Employees, Outside Directors, and Consultants who are to receive
Awards under the Plan; (ii) determine the type, number, vesting requirements,
and other features and conditions of such Awards; (iii) interpret the Plan; and
 
 
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(iv) make all other decisions relating to the operation of the Plan. The
Committee may adopt such rules or guidelines as it deems appropriate to
implement the Plan.
 
                  3.3 COMMITTEE FOR NON-OFFICER GRANTS. The Board may also
appoint a secondary committee of the Board, which shall be composed of one or
more directors of the Company who need not satisfy the requirements of Section
3.1. Such secondary committee may administer the Plan with respect to Employees
and Consultants who are not considered officers or directors of the Company
under Section 16 of the Exchange Act, may grant Awards under the Plan to such
Employees and Consultants and may determine all features and conditions of such
Awards. Within the limitations of this Section, any reference in the Plan to the
Committee shall include such secondary committee.
 
                  3.4 SCOPE OF DISCRETION. On all matters for which the Plan
confers the authority, right or power on the Board, the Committee, or a
secondary committee to make decisions, that body may make those decisions in its
sole and absolute discretion. Those decisions will be final, binding and
conclusive. In making its decisions, the Board, Committee or secondary committee
need not treat all persons eligible to receive Awards, all Participants, or all
Awards the same way. Notwithstanding anything herein to the contrary, and except
as provided in Section 16.2, the discretion of the Board, Committee or secondary
committee is subject to the specific provisions and specific limitations of the
Plan, as well as all rights conferred on specific Participants by Award
agreements and other agreements entered into pursuant to the Plan.
 
                  3.5 UNFUNDED PLAN. The Plan shall be unfunded. Although
bookkeeping accounts may be established with respect to Participants, any such
accounts will be used merely as a convenience. The Company shall not be required
to segregate any assets on account of the Plan, the grant of Awards, or the
issuance of Common Stock. The Company and the Committee shall not be deemed to
be a trustee of stock or cash to be awarded under the Plan. Any obligations of
the Company to any Participant shall be based solely upon contracts entered into
under the Plan. No such obligations shall be deemed to be secured by any pledge
or other encumbrance on any assets of the Company. Neither the Company nor the
Committee shall be required to give any security or bond for the performance of
any such obligations.
 
                                   ARTICLE 4
                           STOCK AVAILABLE FOR GRANTS
 
                  4.1 BASIC LIMITATION. Common Stock issued pursuant to the Plan
may be authorized but unissued stock or treasury stock. The aggregate number of
shares of Common Stock that may be issued under the Plan pursuant to all types
of Awards shall not exceed 3,000,000 subject to Section 4.2. The limitations of
this Section 4.1 shall be subject to adjustment pursuant to Article 11.
 
                  4.2 ADDITIONAL STOCK. If Restricted Stock or Common Stock
issued upon the exercise of Options are forfeited, then such Common Stock shall
again become available for Awards under the Plan. If Options, SARs, or Stock
Units are forfeited or terminate for any other reason before being exercised,
then the corresponding Common Stock shall again become available for Awards
 
 
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under the Plan. If Stock Units are settled, then only the number of Common Stock
(if any) actually issued in settlement of such Stock Units shall reduce the
number available under Section 4.1 and the balance shall again become available
for Awards under the Plan. If SARs are exercised, then only the number of Common
Stock (if any) actually issued in settlement of such SARs shall reduce the
number available under Section 4.1 and the balance shall again become available
for Awards under the Plan. Notwithstanding the foregoing, the aggregate number
of Common Stock that may be issued under the Plan upon the exercise of Incentive
Stock Options shall not be increased when Restricted Stock or other Common Stock
are repurchased.
 
                  4.3 DIVIDEND EQUIVALENTS. Any dividend equivalents paid or
credited under the Plan shall not be applied against the number of Common Stock
available for Awards.
 
ARTICLE 5
                                   ELIGIBILITY
 
                  The persons eligible to participate in the Plan shall be
limited to Employees, Outside Directors, and Consultants who have the potential
to impact the long-term success of the Company and/or its Related Corporations
and who have been selected by the Committee to participate in the Plan.
 
                                   ARTICLE 6
                                     OPTIONS
 
                  6.1 OPTION AGREEMENT. Each Option shall be evidenced by an
Option Agreement, in the form approved by the Committee and may contain such
provisions as the Committee deems appropriate; provided, however, that each
Option Agreement shall comply with the terms specified below. Each Option
Agreement evidencing an Incentive Stock Option shall, in addition, be subject to
Section 6.5.
 
                  6.2 NUMBER OF SHARES. Each Option Agreement shall specify the
number of shares of Common Stock subject to the Option and shall provide for the
adjustment of such number in accordance with Article 11. Options granted to any
Optionee in a single fiscal year of the Company shall not cover more than
833,333 shares of Common Stock. The limitations set forth in the preceding
sentence shall be subject to adjustment in accordance with Article 11.
 
                  6.3 EXERCISE PRICE.
 
                           (i) So long as the issuance and sale of securities
         under this Plan require qualification under the California Corporate
         Securities Law of 1968, the Exercise Price of an Option shall be
         determined by the Committee but shall not be less than 85% (or 110% in
         the case of a person who owns on the date of grant of such Option,
         securities of the Company possessing more than 10% of the total
         combined voting power of all classes of stock of the Company or any
         Related Corporation) of the Fair Market Value of a share of Common
         Stock on the date of grant of such Option.
 
                           (ii) In the event that the issuance and sale of
         securities under this Plan no longer require qualification under the
         California Corporate Securities Law of 1968, (i) the Exercise Price of
 
 
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         an Option shall be determined by the Committee but shall not be less
         than 85% of the Fair Market Value of a share of Common Stock on the
         date of grant of such Option, and (ii) in the case of a Non-Statutory
         Stock Option, an Option Agreement may specify an Exercise Price that
         varies in accordance with a predetermined formula.
 
                  6.4 EXERCISABILITY AND TERM. Each Option Agreement shall
specify the date or event when all or any installment of the Option is to become
exercisable; provided, however, that so long as the issuance and sale of
securities under this Plan require qualification under the California Corporate
Securities Law of 1968, an Option awarded to anyone other than an officer,
director or Consultant of the Company shall vest at a rate of at least 20% per
year. The Option Agreement shall also specify the term of the Option; provided,
however, that no Option shall have a term in excess of 10 years measured from
the date of grant of such Option. An Option Agreement may provide for
accelerated exercisability in the event of the Optionee's death, disability, or
other events and may provide for expiration prior to the end of its term in the
event of the termination of the Optionee's Service.
 
                  6.5 INCENTIVE STOCK OPTIONS. The terms specified below shall
be applicable to all Incentive Stock Options, and these terms shall, as to such
Incentive Stock Options, supercede any conflicting terms in Article 6. Options
which are specifically designated as Non-Statutory Stock Options when issued
under the Plan shall not be subject to the terms of this Section.
 
                           (i) Eligibility. Incentive Stock Options may only be
         granted to Employees.
 
                           (ii) Exercise Price. The Exercise Price of an
         Incentive Stock Option shall not be less than 100% of the Fair Market
         Value of a share of Common Stock on the date of grant of such Option,
         except as otherwise provided in Subsection (d) below.
 
                           (iii) Dollar Limitation. In the case of an Incentive
         Stock Option, the aggregate Fair Market Value of the Optioned Stock
         (determined as of the date of grant of each Incentive Stock Option)
         with respect to Incentive Stock Options granted to any Employee under
         the Plan (or any other option plan of the Company or any Related
         Corporation) that may for the first time become exercisable as
         Incentive Stock Options during any one calendar year shall not exceed
         the sum of $100,000. An Incentive Stock Option is considered to be
         first exercisable during a calendar year if the Incentive Stock Option
         will become exercisable at any time during the year, assuming that any
         condition on the Optionee's ability to exercise the Incentive Stock
         Option related to the performance of services is satisfied. If the
         Optionee's ability to exercise the Incentive Stock Option in the year
         is subject to an acceleration provision, then the Incentive Stock
         Option is considered first exercisable in the calendar year in which
         the acceleration provision is triggered. To the extent the Employee
         holds two or more Incentive Stock Options which become exercisable for
         the first time in the same calendar year, the foregoing limitation on
         the exercisability of such Options as Incentive Stock Options shall be
         applied on the basis of the order in which such Incentive Stock Options
         are granted. However, because an acceleration provision is not taken
 
 
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         into account prior to its triggering an Incentive Stock Option that
         becomes exercisable for the first time during a calendar year by
         operation of such provision does not affect the application of the
         $100,000 limitation with respect to any Incentive Stock Option (or
         portion thereof) exercised prior to such acceleration. Any Incentive
         Stock Options in excess of such limitation shall automatically be
         treated as Non-Statutory Stock Options.
 
                           (iv) 10% Stockholder. If any Employee to whom an
         Incentive Stock Option is granted is a 10% Stockholder, then the
         Exercise Price shall not be less than 110% of the Fair Market Value of
         a share of Common Stock on the date of grant of such Option, and the
         Option term shall not exceed five years measured from the date of grant
         of such Option.
 
                           (v) Change in Status. In the event of an Optionee's
         change of status from Employee to Consultant or to Outside Director, an
         Incentive Stock Option held by the Optionee shall cease to be treated
         as an Incentive Stock Option and shall be treated for tax purposes as a
         Non-Statutory Stock Option three months and one day following such
         change of status.
 
                           (vi) Approved Leave of Absence. If an Optionee is on
         an approved leave of absence, and the Optionee's reemployment upon
         expiration of such leave is not guaranteed by statute or contract,
         including Company policies, then on the 91st day of such leave any
         Incentive Stock Option held by the Optionee shall cease to be treated
         as an Incentive Stock Option and shall be treated for tax purposes as a
         Non-Statutory Stock Option.
 
                  6.6 EFFECT OF CHANGE IN CONTROL. The Committee may determine,
at the time of granting an Option or thereafter, that such Option shall become
exercisable as to all or part of the Common Stock subject to such Option in the
event that a Change in Control occurs with respect to the Company or in the
event that the Optionee is subject to an Involuntary Termination after a Change
in Control. However, in the case of an Incentive Stock Option, the acceleration
of exercisability shall not occur without the Optionee's written consent. In
addition, acceleration of exercisability may be required under Section 11.3.
 
                  6.7 EFFECT OF TERMINATION OF SERVICE. So long as the issuance
and sale of securities under this Plan require qualification under the
California Corporate Securities Law of 1968, Options granted under the Plan
shall be subject to the following provisions:
 
                           (i) Termination of Service. Upon termination of an
         Optionee's Service, other than due to death, Disability, or Cause, the
         Optionee may exercise his/her Option (i) at any time on or prior to the
         date determined by the Committee, which date shall be at least 30 days
         subsequent to the Optionee's Termination Date (but in no event later
         than the expiration of the term of such Option), and (ii) only to the
         extent that the Optionee was entitled to exercise such Option on the
         Termination Date. If, on the Termination Date, the Optionee is not
         entitled to exercise the Optionee's entire Option, the Optioned Stock
         covered by the unexercisable portion of the Option shall revert to the
         Plan. If, after termination of Service, the Optionee does not exercise
 
 
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         his/her Option within the time specified herein, the Option shall
         terminate, and the Optioned Stock shall revert to the Plan.
 
                           (ii) Disability of Optionee. In the event of
         termination of an Optionee's Service due to his/her Disability, the
         Optionee may exercise his/her Option (i) at any time on or prior to the
         date determined by the Committee, which date shall be at least six
         months subsequent to the Termination Date (but in no event later than
         the expiration date of the term of his/her Option), and (ii) only to
         the extent that the Optionee was entitled to exercise such Option on
         the Termination Date. To the extent the Optionee is not entitled to
         exercise the Option on the Termination Date, or if the Optionee does
         not exercise the Option to the extent so entitled within the time
         specified herein, the Option shall terminate, and the Optioned Stock
         shall revert to the Plan.
 
                           (iii) Death of Optionee. In the event that an
         Optionee dies while in Service, the Optionee's Option may be exercised
         by the Optionee's estate or by a person who has acquired the right to
         exercise the Option by bequest or inheritance (i) at any time on or
         prior to the date determined by the Committee, which date shall be at
         least six months subsequent to the date of death (but in no event later
         than the expiration date of the term of his/her Option), and (ii) only
         to the extent that the Optionee was entitled to exercise the Option at
         the date of death. If, at the time of death, the Optionee was not
         entitled to exercise his/her entire Option, the Optioned Stock covered
         by the unexercisable portion of the Option shall immediately revert to
         the Plan. If, after death, the Optionee's estate or a person who
         acquires the right to exercise the Option by bequest or inheritance
         does not exercise the Option within the time specified herein, the
         Option shall terminate, and the Optioned Stock shall revert to the
         Plan.
 
                  6.8 NONASSIGNABILITY OF OPTIONS. Except as determined by the
Committee, no Option shall be assignable or otherwise transferable by the
Participant except by will or by the laws of descent and distribution. No rights
under an Incentive Stock Option may be transferred by the Participant, other
than to a trust where under Section 671 of the Code and other applicable law the
Participant is considered the sole beneficial owner of the option while it is
held in trust, or by will or the laws of descent and distribution.
 
                  6.9 MODIFICATION OR ASSUMPTION OF OPTIONS. Within the
limitations of the Plan, the Committee may modify, extend or assume outstanding
options or may accept the cancellation of outstanding options (whether granted
by the Company or by another issuer) in return for the grant of new options for
the same or a different number of shares and at the same or a different exercise
price. The foregoing notwithstanding, no modification of an Option shall,
without the consent of the Optionee, alter or impair his or her rights or
obligations under such Option.
 
                  6.10 BUYOUT PROVISIONS. The Committee may at any time (i)
offer to buy out for a payment in cash or cash equivalents an Option previously
granted or (ii) authorize an Optionee to elect to cash out an Option previously
granted, in either case at such time and based upon such terms and conditions as
the Committee shall establish.
 
 
                                      -9-
<PAGE>
 
                                   ARTICLE 7
                            PAYMENT FOR OPTION STOCK
 
                  7.1 GENERAL RULE. The entire Exercise Price of Common Stock
issued upon exercise of Options shall be payable in cash or cash equivalents at
the time when such Common Stock are purchased, except as follows:
 
                           (i) In the case of an Incentive Stock Option granted
         under the Plan, payment shall be made only pursuant to the express
         provisions of the applicable Option Agreement. The Option Agreement may
         specify that payment may be made in any form(s) described in this
         Article.
 
                           (ii) In the case of a Non-Statutory Stock Option, the
         Committee may at any time accept payment in any form(s) described in
         this Article.
 
                  7.2 SURRENDER OF STOCK. To the extent that this Section is
applicable, all or any part of the Exercise Price may be paid by surrendering,
or attesting to the ownership of, Common Stock that are already owned by the
Optionee. Such Common Stock shall be valued at their Fair Market Value on the
date when the new Common Stock are purchased under the Plan. The Optionee shall
not surrender, or attest to the ownership of, Common Stock in payment of the
Exercise Price if such action would cause the Company to recognize compensation
expense (or additional compensation expense) with respect to the Option for
financial reporting purposes.
 
                  7.3 EXERCISE/SALE. To the extent that this Section is
applicable, all or any part of the Exercise Price and any withholding taxes may
be paid by delivering (on a form prescribed by the Company) an irrevocable
direction to a securities broker approved by the Company to sell all or part of
the Common Stock being purchased under the Plan and to deliver all or part of
the sales proceeds to the Company; provided, that such payment would not cause
the Company to violate Section 402 of the Sarbanes-Oxley Act of 2002, as
determined by the Committee in its sole discretion.
 
                  7.4 EXERCISE/PLEDGE. To the extent that this Section is
applicable, all or any part of the Exercise Price and any withholding taxes may
be paid by delivering (on a form prescribed by the Company) an irrevocable
direction to pledge all or part of the Common Stock being purchased under the
Plan to a securities broker or lender approved by the Company, as security for a
loan, and to deliver all or part of the loan proceeds to the Company; provided,
that such payment would not cause the Company to violate Section 402 of the
Sarbanes-Oxley Act of 2002, as determined by the Committee in its sole
discretion.
 
                  7.5 PROMISSORY NOTE. To the extent that this Section is
applicable, and consistent with applicable laws, regulations and rules, all or
any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) a full-recourse promissory
note. However, the par value of the Common Stock being purchased under the Plan,
if newly issued, shall be paid in cash or cash equivalents.
 
                  7.6 OTHER FORMS OF PAYMENT. To the extent that this Section is
applicable, all or any part of the Exercise Price and any withholding taxes may
be paid in any other form that is consistent with applicable laws, regulations,
and rules.
 
 
                                      -10-
<PAGE>
 
                                   ARTICLE 8
                            STOCK APPRECIATION RIGHTS
 
                  8.1 SAR AGREEMENT. Each grant of a SAR under the Plan shall be
evidenced by a SAR Agreement between the Optionee and the Company. Such SAR
shall be subject to all applicable terms of the Plan and may be subject to any
other terms that are not inconsistent with the Plan. The provisions of the
various SAR Agreements entered into under the Plan need not be identical.
 
                  8.2 NUMBER OF SHARES. Each SAR Agreement shall specify the
number of Common Stock to which the SAR pertains and shall provide for the
adjustment of such number in accordance with Article 11. SARs granted to any
Optionee in a single fiscal year of the Company shall in no event pertain to
more than 833,333 shares of Common Stock. The limitations set forth in the
preceding sentence shall be subject to adjustment in accordance with Article 11.
 
                  8.3 EXERCISE PRICE. Each SAR Agreement shall specify the
Exercise Price. A SAR Agreement may specify an Exercise Price that varies in
accordance with a predetermined formula while the SAR is outstanding.
 
                  8.4 EXERCISABILITY AND TERM. Each SAR Agreement shall specify
the date when all or any installment of the SAR is to become exercisable. The
SAR Agreement shall also specify the term of the SAR. The grant or vesting of
the SAR may be made contingent on the achievement of performance conditions. A
SAR Agreement may provide for accelerated exercisability in the event of the
Optionee's death, disability, or other events and may provide for expiration
prior to the end of its term in the event of the termination of the Optionee's
Service. SARs may be awarded in combination with Options, and such an Award may
provide that the SARs will not be exercisable unless the related Options are
forfeited. A SAR granted under the Plan may provide that it will be exercisable
only in the event of a Change in Control.
 
                  8.5 EFFECT OF CHANGE IN CONTROL. The Committee may determine,
at the time of granting a SAR or thereafter, that such SAR shall become fully
exercisable as to all Common Stock subject to such SAR in the event that the
Company is subject to a Change in Control or in the event that the Optionee is
subject to an Involuntary Termination after a Change in Control. In addition,
acceleration of exercisability may be required under Section 11.3.
 
                  8.6 EXERCISE OF SARS. Upon exercise of a SAR, the Optionee (or
any person having the right to exercise the SAR after his or her death) shall
receive from the Company (i) Common Stock, (ii) cash or (iii) a combination of
Common Stock and cash, as the Committee shall determine. The amount of cash
and/or the Fair Market Value of Common Stock received upon exercise of SARs
shall, in the aggregate, be equal to the amount by which the Fair Market Value
(on the date of surrender) of the Common Stock subject to the SARs exceeds the
Exercise Price. If, on the date when a SAR expires, the Exercise Price under
such SAR is less than the Fair Market Value on such date but any portion of such
SAR has not been exercised or surrendered, then such SAR shall automatically be
deemed to be exercised as of such date with respect to such portion.
 
 
                                      -11-
<PAGE>
 
                  8.7 NONASSIGNABILITY OF SARS. Except as determined by the
Committee, no SAR shall be assignable or otherwise transferable by the
Participant except by will or by the laws of descent and distribution.
 
                  8.8 MODIFICATION OR ASSUMPTION OF SARS. Within the limitations
of the Plan, the Committee may modify, extend or assume outstanding SARs or may
accept the cancellation of outstanding SARs (whether granted by the Company or
by another issuer) in return for the grant of new SARs for the same or a
different number of shares and at the same or a different exercise price. The
foregoing notwithstanding, no modification of a SAR shall, without the consent
of the Optionee, alter or impair his or her rights or obligations under such
SAR.
 
                                   ARTICLE 9
                                RESTRICTED STOCK
 
                  9.1 RESTRICTED STOCK AGREEMENT. Each grant of Restricted Stock
under the Plan shall be evidenced by a Restricted Stock Agreement between the
recipient and the Company. Such Restricted Stock shall be subject to all
applicable terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Restricted Stock
Agreements entered into under the Plan need not be identical.
 
                  9.2 PURCHASE PRICE. So long as the issuance and sale of
securities under this Plan require qualification under the California Corporate
Securities Law of 1968, the purchase price for a Restricted Stock Award shall be
(i) determined by the Committee, but shall not be less than 85% (or 100% in the
case of a person who owns on the date of grant of such Restricted Stock Award,
securities of the Company possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any Related Corporation) of the
Fair Market Value of a share of Common Stock on the date of grant of such
Restricted Stock Award; and (ii) payable only in cash, cash equivalents, or
full-recourse promissory notes.
 
                  9.3 PAYMENT FOR AWARDS. Subject to Section 9.2 and the
following sentence, Restricted Stock may be sold or awarded under the Plan for
such consideration as the Committee may determine, including (without
limitation) cash, cash equivalents, full-recourse promissory notes, past
services and future services. To the extent that an Award consists of newly
issued Restricted Stock, the consideration shall consist exclusively of cash,
cash equivalents or past services rendered to the Company (or a Related
Corporation) or, for the amount in excess of the par value of such newly issued
Restricted Stock, full-recourse promissory notes, as the Committee may
determine.
 
                  9.4 VESTING CONDITIONS. Each Award of Restricted Stock may or
may not be subject to vesting. Vesting shall occur, in full or in installments,
upon satisfaction of the conditions specified in the Restricted Stock Agreement.
The Committee may include among such conditions the requirement that the
performance of the Company or a business unit of the Company for a specified
period of one or more years equal or exceed a target determined in advance by
the Committee. Such target shall be based on one or more of the criteria set
forth in Appendix A. The Committee shall identify such target not later than the
90th day of such period. In no event shall the number of Restricted Stock which
are subject to performance-based vesting conditions and which are granted to any
 
 
                                      -12-
<PAGE>
 
Participant in a single fiscal year of the Company exceed 833,333, subject to
adjustment in accordance with Article 11. A Restricted Stock Agreement may
provide for accelerated vesting in the event of the Participant's death,
disability or retirement or other events. The Committee may determine, at the
time of granting Restricted Stock or thereafter, that all or part of such
Restricted Stock shall become vested in the event that a Change in Control
occurs with respect to the Company or in the event that the Participant is
subject to an Involuntary Termination after a Change in Control.
 
                  9.5 VOTING AND DIVIDEND RIGHTS. The holders of Restricted
Stock awarded under the Plan shall have the same voting, dividend and other
rights as the Company's other stockholders. A Restricted Stock Agreement,
however, may require that the holders of Restricted Stock invest any cash
dividends received in additional Restricted Stock. Such additional Restricted
Stock shall be subject to the same conditions and restrictions as the Award with
respect to which the dividends were paid.
 
                  9.6 NONASSIGNABILITY OF RESTRICTED STOCK. Except as determined
by the Committee, no Restricted Stock shall be assignable or otherwise
transferable by the Participant except by will or by the laws of descent and
distribution until such time as the Restricted Stock has vested.
 
                                   ARTICLE 10
                                   STOCK UNITS
 
                  10.1 STOCK UNIT AGREEMENT. Each grant of Stock Units under the
Plan shall be evidenced by a Stock Unit Agreement between the recipient and the
Company. Such Stock Units shall be subject to all applicable terms of the Plan
and may be subject to any other terms that are not inconsistent with the Plan.
The provisions of the various Stock Unit Agreements entered into under the Plan
need not be identical. Stock Units may be granted in consideration of a
reduction in the recipient's other compensation.
 
                  10.2 PAYMENT FOR AWARDS. To the extent that an Award is
granted in the form of Stock Units, no cash consideration shall be required of
the Award recipients.
 
                  10.3 VESTING CONDITIONS. Each Award of Stock Units may or may
not be subject to vesting. Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Stock Unit Agreement. The
Committee may include among such conditions the requirement that the performance
of the Company or a business unit of the Company for a specified period of one
or more years equal or exceed a target determined in advance by the Committee.
Such target shall be based on one or more of the criteria set forth in Appendix
A. The Committee shall determine such target not later than the 90th day of such
period. In no event shall the number of Stock Units which are subject to
performance-based vesting conditions and which are granted to any Participant in
a single fiscal year of the Company exceed 833,333, subject to adjustment in
accordance with Article 11. A Stock Unit Agreement may provide for accelerated
vesting in the event of the Participant's death, disability or retirement or
other events. The Committee may determine, at the time of granting Stock Units
or thereafter, that all or part of such Stock Units shall become vested in the
event that the Company is subject to a Change in Control or in the event that
the Participant is subject to an Involuntary Termination after a Change in
 
 
                                      -13-
<PAGE>
 
Control. In addition, acceleration of vesting may be required under Section
11.3.
 
                  10.4 VOTING AND DIVIDEND RIGHTS. The holders of Stock Units
shall have no voting rights. Prior to settlement or forfeiture, any Stock Unit
awarded under the Plan may, at the Committee's discretion, carry with it a right
to dividend equivalents. Such right entitles the holder to be credited with an
amount equal to all cash dividends paid on one Common Stock while the Stock Unit
is outstanding. Dividend equivalents may be converted into additional Stock
Units. Settlement of dividend equivalents may be made in the form of cash, in
the form of Common Stock, or in a combination of both, as determined by the
Committee. Prior to distribution, any dividend equivalents that are not paid
shall be subject to the same conditions and restrictions as the Stock Units to
which they attach.
 
                  10.5 FORM AND TIME OF SETTLEMENT OF STOCK UNITS. Settlement of
vested Stock Units may be made in the form of (i) cash, (ii) Common Stock or
(iii) any combination of both, as determined by the Committee. The actual number
of Stock Units eligible for settlement may be larger or smaller than the number
included in the original Award, based on predetermined performance factors.
Methods of converting Stock Units into cash may include (without limitation) a
method based on the average Fair Market Value of Common Stock over a series of
trading days. Vested Stock Units may be settled in a lump sum or in
installments. The distribution may occur or commence when all vesting conditions
applicable to the Stock Units have been satisfied or have lapsed, or it may be
deferred to any later date. The amount of a deferred distribution may be
increased by an interest factor or by dividend equivalents. Until an Award of
Stock Units is settled, the number of such Stock Units shall be subject to
adjustment pursuant to Article 11.
 
                  10.6 DEATH OF RECIPIENT. Any Stock Units Award that becomes
payable after the recipient's death shall be distributed to the recipient's
beneficiary or beneficiaries. Each recipient of a Stock Units Award under the
Plan shall designate one or more beneficiaries for this purpose by filing the
prescribed form with the Company. A beneficiary designation may be changed by
filing the prescribed form with the Company at any time before the Award
recipient's death. If no beneficiary was designated or if no designated
beneficiary survives the Award recipient, then any Stock Units Award that
becomes payable after the recipient's death shall be distributed to the
recipient's estate.
 
                  10.7 CREDITORS' RIGHTS. A holder of Stock Units shall have no
rights other than those of a general creditor of the Company. Stock Units
represent an unfunded and unsecured obligation of the Company, subject to the
terms and conditions of the applicable Stock Unit Agreement.
 
                  10.8 NONASSIGNABILITY OF STOCK UNITS. Except as determined by
the Committee, no Stock Unit Award shall be assignable or otherwise transferable
by the Participant except by will or by the laws of descent and distribution.
 
 
                                      -14-
<PAGE>
 
                                   ARTICLE 11
                           PROTECTION AGAINST DILUTION
 
                  11.1 ADJUSTMENTS. In the event of a subdivision of the
outstanding Common Stock, a declaration of a dividend payable in Common Stock,
or a combination or consolidation of the outstanding Common Stock (by
reclassification or otherwise) into a lesser number of Common Stock,
corresponding adjustments shall automatically be made in each of the following:
 
                           (i) The number of Options, Restricted Stock, SARs,
         and Stock Units available for future Awards under Article 4;
 
                           (ii) The limitations set forth in Sections 6.2, 8.2,
         9.4, and 10.3;
 
                           (iii) The number of Common Stock covered by each
         outstanding Option and SAR;
 
                           (iv) The Exercise Price under each outstanding Option
         and SAR; or
 
                           (v) The number of Stock Units included in any prior
         Award that has not yet been settled.
 
In the event of a declaration of an extraordinary dividend payable in a form
other than Common Stock in an amount that has a material effect on the price of
Common Stock, a recapitalization, a spin-off or a similar occurrence, the
Committee shall make such adjustments as it, in its sole discretion, deems
appropriate in one or more of the foregoing. Except as provided in this Article
11, a Participant shall have no rights by reason of any issuance by the Company
of stock of any class or securities convertible into stock of any class, any
subdivision or consolidation of shares of stock of any class, the payment of any
stock dividend or any other increase or decrease in the number of shares of
stock of any class.
 
                  11.2 DISSOLUTION OR LIQUIDATION. To the extent not previously
exercised or settled, Options, SARs and Stock Units shall terminate immediately
prior to the dissolution or liquidation of the Company.
 
                  11.3 REORGANIZATIONS. In the event that the Company is a party
to a merger or other reorganization, outstanding Awards shall be subject to the
agreement of merger or reorganization. Such agreement shall provide for (i) the
continuation of the outstanding Awards by the Company, if the Company is a
surviving corporation, (ii) the assumption of the outstanding Awards by the
surviving corporation or its parent or subsidiary, (iii) the substitution by the
surviving corporation or its parent or subsidiary of its own awards for the
outstanding Awards, (iv) full exercisability or vesting and accelerated
expiration of the outstanding Awards or (v) settlement of the full value of the
outstanding Awards in cash or cash equivalents followed by cancellation of such
Awards.
 
 
                                      -15-
<PAGE>
 
                                   ARTICLE 12
                               DEFERRAL OF AWARDS
 
                  The Committee (in its sole discretion) may permit or require a
Participant to:
 
                           (i) Have cash that otherwise would be paid to such
         Participant as a result of the exercise of a SAR or the settlement of
         Stock Units credited to a deferred compensation account established for
         such Participant by the Committee as an entry on the Company's books;
 
                           (ii) Have Common Stock that otherwise would be
         delivered to such Participant as a result of the exercise of an Option
         or SAR converted into an equal number of Stock Units; or
 
                           (iii) Have Common Stock that otherwise would be
         delivered to such Participant as a result of the exercise of an Option
         or SAR or the settlement of Stock Units converted into amounts credited
         to a deferred compensation account established for such Participant by
         the Committee as an entry on the Company's books. Such amounts shall be
         determined by reference to the Fair Market Value of such Common Stock
         as of the date when they otherwise would have been delivered to such
         Participant.
 
A deferred compensation account established under this Article may be credited
with interest or other forms of investment return, as determined by the
Committee. A Participant for whom such an account is established shall have no
rights other than those of a general creditor of the Company. Such an account
shall represent an unfunded and unsecured obligation of the Company and shall be
subject to the terms and conditions of the applicable agreement between such
Participant and the Company. If the deferral or conversion of Awards is
permitted or required, the Committee (in its sole discretion) may establish
rules, procedures and forms pertaining to such Awards, including (without
limitation) the settlement of deferred compensation accounts established under
this Article 12.
 
                                   ARTICLE 13
                    PAYMENT OF DIRECTOR'S FEES IN SECURITIES
 
                  13.1 EFFECTIVE DATE. No provision of this Article shall be
effective unless and until the Board has determined to implement such provision.
 
                  13.2 ELECTIONS TO RECEIVE NON-STATUTORY STOCK OPTIONS,
RESTRICTED STOCK OR STOCK UNITS. An Outside Director may elect to receive his or
her annual retainer payments and/or meeting fees from the Company in the form of
cash, Non-Statutory Stock Options, Restricted Stock or Stock Units, or a
combination thereof, as determined by the Board. Such Non-Statutory Stock
Options, Restricted Stock and Stock Units shall be issued under the Plan. An
election under this Article shall be filed with the Company on the prescribed
form.
 
                  13.3 NUMBER AND TERMS OF NON-STATUTORY STOCK OPTIONS,
RESTRICTED STOCK OR STOCK UNITS. The number of Non-Statutory Stock Options,
Restricted Stock or Stock Units to be granted to Outside Directors in lieu of
annual retainers and meeting fees that would otherwise be paid in cash shall be
 
 
                                      -16-
<PAGE>
 
calculated in a manner determined by the Board. The Board shall also determine
the terms of such Non-Statutory Stock Options, Restricted Stock or Stock Units.
 
                                   ARTICLE 14
                              LIMITATION ON RIGHTS
 
                  14.1 RETENTION RIGHTS. Neither the Plan nor any Award granted
under the Plan shall be deemed to give any individual a right to remain an
Employee, Outside Director, or Consultant. The Company and its Related
Corporations reserve the right to terminate the Service of any Employee, Outside
Director, or Consultant at any time, with or without Cause, subject to
applicable laws, the Company's certificate of incorporation and by-laws and a
written employment agreement (if any).
 
                  14.2 STOCKHOLDERS' RIGHTS. A Participant shall have no
dividend rights, voting rights, or other rights as a stockholder with respect to
any Common Stock covered by his or her Award prior to the time when a stock
certificate for such Common Stock is issued or, if applicable, the time when he
or she becomes entitled to receive such Common Stock by filing any required
notice of exercise and paying any required Exercise Price. No adjustment shall
be made for cash dividends or other rights for which the record date is prior to
such time, except as expressly provided in the Plan.
 
                  14.3 REGULATORY REQUIREMENTS. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Common Stock under the
Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Company reserves the
right to restrict, in whole or in part, the delivery of Common Stock pursuant to
any Award prior to the satisfaction of all legal requirements relating to the
issuance of such Common Stock, to their registration, qualification or listing
or to an exemption from registration, qualification or listing.
 
                                   ARTICLE 15
                                WITHHOLDING TAXES
 
                  15.1 GENERAL. To the extent required by applicable federal,
state, local, or foreign law, a Participant or his or her successor shall make
arrangements satisfactory to the Company for the satisfaction of any withholding
tax obligations that arise in connection with the Plan. The Company shall not be
required to issue any Common Stock or make any cash payment under the Plan until
such obligations are satisfied.
 
                  15.2 STOCK WITHHOLDING. To the extent that applicable law
subjects a Participant to tax withholding obligations, the Committee may permit
such Participant to satisfy all or part of such obligations by having the
Company withhold all or a portion of any Common Stock that otherwise would be
issued to him or her or by surrendering all or a portion of any Common Stock
that he or she previously acquired. Such Common Stock shall be valued at their
Fair Market Value on the date when they are withheld or surrendered.
 
 
                                      -17-
<PAGE>
 
                                   ARTICLE 16
                               FUTURE OF THE PLAN
 
                  16.1 TERM OF THE PLAN. The Plan shall become effective as of
the earliest date on which the Plan has been adopted by the Board and approved
by the Company's stockholders. Unless sooner terminated by the Board, the Plan
shall continue until the day prior to the tenth anniversary of the date on which
the Board adopted the Plan or the date on which the stockholders of the Company
approved the Plan, which ever is earlier. When the Plan terminates, no Awards
shall be granted under the Plan thereafter. The termination of the Plan shall
not affect any shares of Common Stock previously issued or any Awards previously
granted under the Plan.
 
                  16.2 AMENDMENT OR TERMINATION. The Board may, at any time and
for any reason, amend or terminate the Plan. An amendment of the Plan shall be
subject to the approval of the Company's stockholders only to the extent
required by applicable laws, regulations or rules.
 
                                   ARTICLE 17
                              ADDITIONAL PROVISIONS
 
                  17.1 FINANCIAL STATEMENTS. The Company's annual financial
statements are included in the Company's Annual Reports on Form 10-K, copies of
which are publicly available, at no cost, at the Securities and Exchange
Commission's website located at http://www.sec.gov. Upon request by any
Participant, the Company shall provide such Participant with a copy of the
Company's most recent Annual Report on Form 10-K, as filed with the Securities
and Exchange Commission.
 
                  17.2 GOVERNING LAW. The Plan shall be governed by, and
construed in accordance with, the laws of the State of Delaware (except their
choice-of-law provisions).
 
 
                                     P-COM, INC.
 
 
Date: ___________________________    By:
                                         --------------------------------------
 
 
                                     Its:

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