P COM INC, DEF 14A, 2000-10-27

P COM INC
DEF 14A, 2000-10-27
RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT

Previous: REPUBLIC PORTFOLIOS, 40-17F2, 2000-10-27

Next: P COM INC, DEF 14A, 2000-10-27

<PAGE>

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]

[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 14a-11 or (S) 240.14a-12.

P-COM, INC.
________________________________________________________________________________
(Name of Registrant as Specified in Charter)

Payment of Filing Fee (Check the appropriate box)

[_] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1. Title of each class of securities to which transaction applies.

________________________________________________________________________________

2. Aggregate number of securities to which transaction applies.

________________________________________________________________________________

3. Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount of which the filing fee is
calculated and state how it was determined):

________________________________________________________________________________

4. Proposed maximum aggregate value of transaction:

________________________________________________________________________________

5. Total fee paid:

________________________________________________________________________________

[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or Schedule and the date of its filing.

6. Amount previously paid:

________________________________________________________________________________

7. Form, Schedule or Registration Statement No.:

________________________________________________________________________________

8. Filing Party:

________________________________________________________________________________

9. Date filed:

________________________________________________________________________________
<PAGE>

[LOGO OF P-COM]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 30, 2000

TO THE STOCKHOLDERS OF P-COM, INC.:

NOTICE IS HEREBY GIVEN that the "1999" Annual Meeting of Stockholders of P-
Com, Inc., a Delaware corporation (the "Company"), will be held on November
30, 2000 at 9:30 a.m., Pacific Standard Time at the Los Gatos Lodge, 50 Los
Gatos/Saratoga Rd., Los Gatos, California 95032, for the following purposes,
as more fully described in the Proxy Statement accompanying this Notice:

1. To elect 2 directors to serve for "three-year" terms ending upon the 2002
annual meeting of stockholders, or until their successors are duly elected;
and

2. To transact such other business as may properly come before the meeting
or any postponements or adjournments thereof.

Only stockholders of record at the close of business on October 16, 2000 are
entitled to notice of and to vote at the Annual Meeting. The stock transfer
books of the Company will remain open between the record date and the date of
the meeting. A list of stockholders entitled to vote at the Annual Meeting
will be available for inspection at the executive offices of the Company.

All stockholders are cordially invited to attend the meeting in person.
Whether or not you plan to attend, please sign and return the enclosed proxy
as promptly as possible in the envelope enclosed for your convenience. Should
you receive more than one proxy because your shares are registered in
different names and addresses, each proxy should be signed and returned to
assure that all your shares will be voted. You may revoke your proxy at any
time prior to the Annual Meeting. If you attend the Annual Meeting and vote by
ballot, your proxy will be revoked automatically and only your vote at the
Annual Meeting will be counted.

Sincerely,

/s/ George P. Roberts
_____________________________________
George P. Roberts
Chief Executive Officer and
Chairman of the Board of Directors
Campbell, California
October 30, 2000

YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
PLEASE READ THE ATTACHED PROXY STATEMENT CAREFULLY, COMPLETE, SIGN AND DATE
THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED
ENVELOPE.
<PAGE>

P-COM, INC.

3175 South Winchester Boulevard
Campbell, California 95008

PROXY STATEMENT
FOR THE "1999" ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 30, 2000

General

The enclosed proxy ("Proxy") is solicited on behalf of the Board of
Directors of P-Com, Inc., a Delaware corporation (the "Company"), for use at
the "1999" Annual Meeting of Stockholders to be held on November 30, Los Gatos
Lodge, 50 Los Gatos/Saratoga Rd., Los Gatos, California 95032. These proxy
solicitation materials were mailed on or about October 30, 2000, to all
stockholders entitled to vote at the Annual Meeting.

Voting

The specific proposals to be considered and acted upon at the Annual Meeting
are summarized in the accompanying Notice and are described in more detail in
this Proxy Statement. On October 16, 2000, which is the record date for
determination of stockholders entitled to notice of and to vote at the Annual
Meeting, 80,373,358 shares of the Company's common stock, par value $0.0001
("Common Stock"), were issued and outstanding, and no shares of the Company's
Series A Preferred Stock, par value $0.0001, were issued and outstanding. Each
common stockholder is entitled to one vote for each share of Common Stock held
by such stockholder on October 16, 2000. Stockholders may not cumulate votes
in the election of directors.

All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Directors are elected by a plurality vote.
All other proposals will be decided by an affirmative vote of the holders of a
majority of the shares present in person or represented by proxy and entitled
to vote on such matter. Abstentions and broker non-votes are counted as
present for purposes of determining the presence or absence of a quorum for
the transaction of business. Abstentions will be counted towards the
tabulations of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes, whereas broker non-votes will not be
counted for purposes of determining whether a proposal has been approved.

Proxies

If the enclosed form of proxy is properly signed and returned, the shares
represented thereby will be voted at the Annual Meeting in accordance with the
instructions specified thereon. If the proxy does not specify how the shares
represented thereby are to be voted, the proxy will be voted FOR the election
of the directors proposed by the Board unless the authority to vote for the
election of such director is withheld. In addition, the proxy solicited by the
Board of Directors for the "1999" Annual Meeting will confer discretionary
authority to vote on any stockholder proposal presented at that meeting. You
may revoke or change your Proxy at any time before the Annual Meeting by
filing with the Chief Financial Officer of the Company at the Company's
principal executive offices at 3175 South Winchester Boulevard, Campbell,
California 95008, a notice of revocation or another signed Proxy with a later
date. You may also revoke your Proxy by attending the Annual Meeting and
voting in person.

Solicitation

The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing and mailing of this Proxy Statement, the Proxy
and any additional solicitation materials furnished to the stockholders. The
original solicitation of proxies by mail may be supplemented by a solicitation
by telephone or other means

1
<PAGE>

by directors, officers or employees of the Company. No additional compensation
will be paid to these individuals for any such services. Except as described
above, the Company does not presently intend to solicit proxies other than by
mail.

Deadline for Receipt of Stockholder Proposals

Proposals of stockholders of the Company that are intended to be presented
by such stockholders at the Company's 2001 Annual Meeting must be received no
later than March 1, 2001 in order that they may be included in the proxy
statement and form of proxy relating to that meeting. We anticipate that such
meeting will be held in June 2001. It is too late to submit proposals for
inclusion in the proxy statement for the 2000 Annual Meeting of Stockholders.

2
<PAGE>

ELECTION OF DIRECTORS

General

The Company's Certificate of Incorporation provides for a classified Board
of Directors consisting of three classes of directors with staggered three-
year terms. Each class consists, as nearly as possible, of one-third of the
total number of directors. The Board currently consists of five persons. The
class whose term of office expires at the "1999" Annual Meeting currently
consists of two directors. The directors elected to this class will serve for
a term of three years, expiring at the 2003 annual meeting of stockholders or
until their successors have been duly elected. Both of the nominees listed
below currently are directors of the Company.

Each nominee for election has agreed to serve if elected, and management has
no reason to believe that such nominee will be unavailable to serve. If either
nominee is unable or declines to serve as a director at the time of the Annual
Meeting, the proxies will be voted for any nominee who may be designated by
the present Board of Directors to fill the vacancy. Unless otherwise
instructed, the proxy holders will vote the proxies received by them FOR the
nominees named below.

Nominees for Term Ending Upon the 2002 Annual Meeting of Stockholders

George P. Roberts, 67, is a founder of the Company and has served as Chief
Executive Officer and a Director since October 1991. From October 1991 to
December 1996, Mr. Roberts served as President of the Company. Since September
1993, he has also served as Chairman of the Board of Directors.

Brian T. Josling, 58, is a co-founder of Aval Communications Inc., a company
that designs and manufactures products for wireless telecommunications
networks, where he has served as the Chairman of the Board of Directors and
Chief Technology Officer since 1994.

Continuing Directors for Term Ending Upon the 2000 Annual Meeting of
Stockholders

John A. Hawkins, 39, has served as a Director of the Company since September
1991. Since August 1995, Mr. Hawkins has been a General Partner of Generation
Capital Partners, L.P., a private equity firm. Mr. Hawkins serves as a
director of PixTech, Inc., a manufacturer of flat panel displays.

James J. Sobczak, 58, has served as a Director of the Company since April
1997. Mr. Sobczak has also served as the President and Chief Operating Officer
of the Company since September 1999. Since 1991, Mr. Sobczak has been the
President of Telecommunications Education and Research Network, Inc., a
corporation providing research and education services to universities offering
degrees in telecommunications. Additionally, since 1993, Mr. Sobczak has
taught graduate courses in telecommunications at the University of Pittsburgh
and, from 1993 to 1995, was a lecturer in the Carnegie-Mellon University
executive education program.

Continuing Director for Term Ending Upon the 2001 Annual Meeting of
Stockholders

M. Bernard Puckett, 54, has served as a Director of the Company since May
1994. Since January 1996, Mr. Pukett has been a private investor. From June
1995 to January 1996, he was President and Chief Executive Officer of Mobile
Telecommunication Technologies Corp. ("Mtel"), a telecommunications
corporation. Mr. Puckett currently serves as a director of Nielson Media
Research, Inc. (formerly known as Cognizant Corp.), R.R. Donnelley & Sons Co.
and Software.com, Inc.

Board Committees and Meetings

The Board of Directors held 15 meetings and acted by unanimous written
consent 6 times during the fiscal year ended December 31, 1998 (the "1998
Fiscal Year"). The Board of Directors held 10 meetings and acted by

3
<PAGE>

unanimous written consent 18 times during the fiscal year ended December 31,
1999 (the "1999 Fiscal Year"). The Board of Directors has an Audit Committee
and a Compensation Committee. Each director attended or participated in 75% or
more of the aggregate of (i) the total number of meetings of the Board of
Directors and (ii) the total number of meetings held by all committees of the
Board on which such director served during the 1998 Fiscal Year. Each director
attended or participated in 75% or more of the aggregate of (i) the total
number of meetings of the Board of Directors and (ii) the total number of
meetings held by all committees of the Board on which such director served
during the 1999 Fiscal Year.

The Compensation Committee currently consists of two directors, Mr. Josling
and Mr. Hawkins, and is primarily responsible for reviewing and approving the
Company's general compensation policies and setting compensation levels for
the Company's executive officers. The Compensation Committee also has the
authority to administer the Company's Employee Stock Purchase Plan and the
Company's 1995 Stock Option/Stock Issuance Plan and to make option grants
thereunder. The Compensation Committee acted by unanimous written consent 22
times during the 1998 Fiscal Year. The Compensation Committee met 1 time and
acted by unanimous written consent 8 times during the 1999 Fiscal Year.

The Audit Committee currently consists of two directors, Mr. Josling and Mr.
Puckett, each of whom is independent (as defined in Rule 4200(a)(15) of the
National Association of Securities Dealers' listing standards), and is
primarily responsible for approving the services performed by the Company's
independent auditors and reviewing their reports regarding the Company's
accounting practices and systems of internal accounting controls. The Audit
Committee held 4 meetings during the 1998 Fiscal Year. The Audit Committee
held 4 meetings during the 1999 Fiscal Year. The Board of Directors has
adopted a charter for the Audit Committee; the charter is attached as an
appendix to this proxy statement.

Audit Committee Statement

"The Audit Committee has reviewed and discussed the Company's audited
financial statements for the years ended December 31, 1998 and 1999. The Audit
Committee has discussed with the Company's independent auditors the matters
required to be discussed by SAS 61 (Codification of Statements on Auditing
Standards, AU (S) 380). The Audit Committee has received the written
disclosures and the letter from the independent accountants required by
Independence Standards Board Standard No. 1 (Independence Standards Board
Standard No. 1, Independence Discussions with Audit Committees), and has
discussed with the independent accountants the independent accountants'
independence. Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's 1998 and 1999 Annual Reports on Form
10-K, respectively, for filing with the SEC."

M. Bernard Puckett
Brian T. Josling

Director Compensation

Board members who are employees of the Company do not receive cash
compensation for their services as directors.

Under the Automatic Option Grant Program contained in the Company's 1995
Stock Option/Stock Issuance Plan (the "1995 Plan"), each individual who first
joins the Board as a non-employee director any time after February 1, 1996
will receive, at the time of such initial election or appointment, an
automatic option grant, to purchase 40,000 shares of Common Stock, provided
such person has not previously been in the Company's employ. Mr. Josling
received such an automatic grant, with an exercise price of $4.438 per share,
on September 1, 1999. In addition, on the date of each annual stockholders
meeting, each individual who continues to serve as a non-employee Board
member, whether or not such individual is standing for re-election at that
particular Annual Meeting, will be granted an option to purchase 4,000 shares
of Common Stock, provided such individual has not received an option grant
under the Automatic Option Grant Program within the preceding six months.

4
<PAGE>

Each grant under the Automatic Option Grant Program will have an exercise
price per share equal to the fair market value per share of the Company's
Common Stock on the grant date, and will have a maximum term of 10 years,
subject to earlier termination at the end of the 12 month period measured from
the date of the optionee's cessation of Board service. Each option will be
immediately exercisable for all of the option shares. However, any shares
purchased under the initial 40,000-share option grant made to a newly elected
or appointed non-employee Board member will be subject to repurchase by the
Company, at the exercise price paid per share, upon the optionee's cessation
of Board service prior to vesting in those shares. The shares subject to such
initial grant will vest in a series of 8 successive equal quarterly
installments upon the optionee's completion of each successive 3-month period
of Board service over the 24-month period measured from the grant date.

Each automatic option will remain exercisable for a twelve month period
following the optionee's cessation of service as a Board member. In no event,
however, may the option be exercised after the expiration date of the option
term. During the applicable post-service exercise period, the option may not
be exercised for more than the number of option shares (if any) in which the
Board member is vested at the time of his or her cessation of Board service.

The shares subject to each automatic option grant will immediately vest upon
(i) the optionee's death or permanent disability while a Board member, (ii) an
acquisition of the Company by merger or asset sale, (iii) the successful
completion of a tender offer for more than 50% of the Company's outstanding
voting stock or (iv) a change in the majority of the Board effected through
one or more proxy contests for Board membership.

Upon the successful completion of a hostile tender offer for more than 50%
of the Company's outstanding voting stock, each outstanding automatic option
grant may be surrendered to the Company for a cash distribution per
surrendered option share in an amount equal to the excess of (a) the highest
price per share of Common Stock paid in connection with such tender offer over
(b) the exercise price payable for such share.

On May 18, 1998, the date of the 1998 Annual Stockholders Meeting, each of
the then non-employee Board members, Messrs. Hawkins, Puckett and Sobczak (and
Mr. Gill Cogan), received an automatic option grant to purchase 4,000 shares
of Common Stock. The exercise price per share in effect under each such option
was $19.25, the fair market value per share of Common Stock on the grant date.
Each of the options was immediately exercisable for all the option shares, but
any shares purchased under the option would be subject to repurchase by the
Company, at the exercise price paid per share, upon the optionee's cessation
of Board service prior to vesting in those shares. The shares subject to each
option grant were to vest in a series of 8 successive equal quarterly
installments upon the optionee's completion of each successive 3-month period
of Board service over the 24-month period measured from the grant date.

On July 31, 1998, each of the option grants made under the Automatic Grant
Program on May 18, 1998 with an exercise price of $19.25 per share was
cancelled, and a new option for 4,000 shares was granted to each of the four
non-employee Board members with an exercise price of $5.8125 per share, the
fair market value per share of Common Stock on the grant date of the new
option. A similar cancellation/regrant program was made available to all
Company employees, other than the then executive officers. Each of the new
options is immediately exercisable for all the option shares, but any shares
purchased under the option will be subject to repurchase by the Company, at
the exercise price paid per share, upon the optionee's cessation of Board
service prior to vesting in those shares. The shares subject to each new
option will vest in a series of 8 successive equal quarterly installments upon
the optionee's completion of each successive 3-month period of Board service
over the 24-month period measured from the July 31, 1998 grant date.

Recommendation of the Board of Directors

The Board of Directors unanimously recommends that the stockholders vote FOR
the election of the nominees listed above.

5
<PAGE>

OTHER MATTERS

The Company knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters properly come before
the Annual Meeting, it is the intention of the persons named in the enclosed
form of Proxy to vote the shares they represent as the Board of Directors may
recommend. Discretionary authority with respect to such other matters is
granted by the execution of the enclosed Proxy.

OWNERSHIP OF SECURITIES

The following table sets forth certain information known to the Company with
respect to the beneficial ownership of the Company's Common Stock as of
September 30, 2000, by (i) all persons who are beneficial owners of five
percent (5%) or more of the Company's Common Stock, (ii) each director of the
Company, (iii) the five persons serving as executive officers of the Company
on December 31, 1999 who were the most highly compensated by the Company in
1999, (iv) two additional persons (Messrs. Antoniucci and Sophie) who were
executive officers at some times during 1999 but not on December 31, 1999, and
whose cash compensation would have placed them among the five most highly-
compensated executive officers for 1999, and (v) all current directors and
executive officers as a group. Each of the stockholders has sole voting and
investment power with respect to the shares beneficially owned, subject to
community property laws, where applicable.

<TABLE>
<CAPTION>
Percentage
Shares of Shares
Beneficially Beneficially
Beneficial Owner Owned (#) Owned(1)
---------------- ------------ ------------
<S> <C> <C>
State of Wisconsin Investment Board................. 14,199,300 17.7
P.O. Box 7842
Madison, WI 53707

Firsthand Capital Management, Inc. ................. 10,981,800 13.7
101 Park Center Plaza, Ste. 1300
San Jose, CA 95113

George P. Roberts(2)................................ 1,322,405 1.7
Pier G. Antoniucci.................................. 29,947 *
Paul T. Obert(3).................................... 42,294 *
Sunil B. Poduval.................................... 8,800 *
Michael J. Sophie................................... -0- *
Robert E. Collins(4)................................ 61,979 *
John R. Wood(5)..................................... 132,176 *
John A. Hawkins(6).................................. 30,000 *
Brian T. Josling(7)................................. 20,000 *
M. Bernard Puckett(8)............................... 81,332 *
James J. Sobczak9).................................. 126,909 *
All current directors and executive officers as a
group (9 persons)(10).............................. 1,825,895 2.3
</TABLE>
--------
* Less than one percent of the outstanding Common Stock

(1) Percentage of ownership is based on 80,357,688 shares of Common Stock
outstanding on September 30, 2000. Shares of Common Stock subject to
stock options that are currently exercisable or will become exercisable
within 60 days after September 30, 2000 are deemed outstanding for
computing the percentage of the person or group holding such options, but
are not deemed outstanding for computing the percentage of any other
person or group.

(2) Includes 1,138,330 shares issuable upon exercise of options that are
currently exercisable or will become exercisable within 60 days after
September 30, 2000.

(3) Includes 44,402 shares issuable upon exercise of options that are
currently exercisable or will become exercisable within 60 days after
September 30, 2000.

6
<PAGE>

(4) Includes 19,271 shares issuable upon exercise of options that are
currently exercisable or will become exercisable within 60 days after
September 30, 2000.

(5) Includes 88,958 shares issuable upon exercise of options that are
currently exercisable or will become exercisable within 60 days after
September 30, 2000.

(6) Includes 30,000 shares issuable upon exercise of options that are
currently exercisable or will become exercisable within 60 days after
September 30, 2000.

(7) Includes 20,000 shares issuable upon exercise of options that are
currently exercisable or will become exercisable within 60 days after
September 30, 2000.

(8) Includes 61,332 shares issuable upon exercise of options that are
currently exercisable or will become exercisable within 60 days after
September 30, 2000.

(9) Includes 137,750 shares issuable upon exercise of options that are
currently exercisable or will become exercisable within 60 days after
September 30, 2000.

(10) Includes 1,528,726 shares issuable upon exercise of options that are
currently exercisable or will become exercisable within 60 days after
September 30, 2000.

7
<PAGE>

EXECUTIVE COMPENSATION AND RELATED INFORMATION

The following table provides certain information summarizing the
compensation earned by (i) the Company's Chief Executive Officer and (ii) each
of the Company's other four executive officers whose salary and bonus for the
fiscal year ended December 31, 1998 (the "1998 Fiscal Year") was in excess of
$100,000 (collectively, the "1998 Named Executive Officers"), for services
rendered in all capacities to the Company and its subsidiaries for each of the
three fiscal years ending in 1998. No other executive officer who would
otherwise have been included in such table on the basis of salary and bonus
earned for the 1998 Fiscal Year resigned or terminated employment during that
fiscal year. Messrs. Antoniucci, Sophie and Bean are no longer employed by the
Company.

1998 SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Number of
Securities
------------
Annual Compensation Long-Term
---------------------------- Compensation
Name and Principal Position Year Salary ($)(1) Bonus ($) Awards
--------------------------- ---- ------------- --------- ------------
<S> <C> <C> <C> <C>
George P. Roberts.................... 1998 366,600 0 450,000
Chief Executive Officer 1997 330,069 358,000 300,000
and Chairman of the Board of
Directors 1996 250,000 162,500 570,000

Pier G. Antoniucci................... 1998 270,855 0 200,000
Former President and 1997 244,962 165,000 200,000
Chief Operating Officer 1996 165,769 81,900 300,000

Michael J. Sophie.................... 1998 195,000 0 200,000
Former Chief Financial Officer, 1997 175,673 109,000 150,000
Vice President, Finance and
Administration 1996 117,308 48,750 220,000

John R. Wood......................... 1998 141,278 0 45,000
Senior Vice President, 1997 147,421 28,980 10,000
Technology 1996 138,000 44,850 10,000

Kenneth E. Bean, II.................. 1998 107,250 0 90,000
Former Senior Vice President, 1997 109,462 25,000 60,000
Quality Assurance 1996 93,000 30,225 0
</TABLE>
--------
(1) Includes amounts deferred under the Company's 401(k) Plan.

8
<PAGE>

The following table provides certain information summarizing the
compensation earned by (i) the five persons serving as executive officers of
the Company on December 31, 1999 who were the most highly compensated by the
Company in 1999, and (ii) two additional persons (Messrs. Antoniucci and
Sophie) who were executive officers at some times during 1999 but not on
December 31, 1999, and whose cash compensation would have placed them among
the five most highly-compensated executive officers for 1999, for the 1999
Fiscal Year (collectively, the "1999 Named Executive Officers"), for services
rendered in all capacities to the Company and its subsidiaries for each of the
last three fiscal years. Messrs. Antoniucci, Poduval, Sophie, Obert and
Collins are no longer employed by the Company.

1999 SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Number of
Securities
------------
Annual Compensation Long-Term
----------------------- Compensation
Name and Principal Position Year Salary ($)(1) Bonus ($) Awards
--------------------------- ---- ------------- --------- ------------
<S> <C> <C> <C> <C>
George P. Roberts.................... 1999 376,000 0 0
Chief Executive Officer and 1998 366,600 0 450,000
Chairman of the Board of Directors 1997 330,069 358,000 300,000

Pier G. Antoniucci................... 1999 270,000 0 0
Former President and Chief Operating
Officer 1998 270,855 0 200,000
1997 244,962 165,000 200,000

Paul T. Obert........................ 1999 204,123 0 30,000
Senior Vice President 1998 165,360 46,000 60,000
No./So. America, Asia 1997 18,462 0 35,000

Sunil B. Poduval..................... 1999 161,250 165,000 75,000
Vice President European Operations 1998 140,488 0 91,500
1997 113,429 0 40,000

Michael J. Sophie.................... 1999 143,077 0 0
Former Chief Financial Officer and
Former 1998 195,000 0 200,000
Vice President, Finance and
Administration 1997 175,673 109,000 150,000

Robert E. Collins.................... 1999 142,308 0 175,000
Former Chief Financial Officer and
Former
Vice President, Finance and
Administration

John R. Wood......................... 1999 144,900 0 20,000
Senior Vice President, Technology 1998 141,278 0 45,000
1997 147,421 28,980 10,000
</TABLE>
--------
(1) Includes amounts deferred under the Company's 401(k) Plan.

9
<PAGE>

Option Grants in 1998 Fiscal Year

The following table contains information concerning the stock option grants
made to each of the 1998 Named Executive Officers for the 1998 Fiscal Year. No
stock appreciation rights were granted to these individuals during such fiscal
year.

<TABLE>
<CAPTION>
Individual Grant
-------------------------------------------------------------
Potential
Realizable Value
at Assumed Annual
Number of % of Total Rates of Stock
Securities Options Price
Underlying Granted to Appreciation for
Options Employees Exercise Option Term(1)
Granted in Fiscal Price Expiration -----------------
Name (#) Year ($/Sh) Date 5% ($) 10% ($)
---- ---------- ---------- -------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
George P. Roberts ...... 450,000(2) 7.11 3.00 09/17/08 849,007 2,151,552

Pier G. Antoniucci...... 200,000(2) 3.11 3.00 09/17/08 377,337 956,246

Michael J. Sophie....... 200,000(2) 3.11 3.00 09/17/08 377,337 956,246

John R. Wood............ 45,000(2) .71 3.00 09/17/08 84,900 215,155

Kenneth E. Bean, II..... 90,000(2) 1.42 3.00 09/17/08 169,801 430,311
</TABLE>
--------
(1) There can be no assurance provided to any executive officer or any other
holder of the Company's securities that the actual stock price
appreciation over the ten-year option term will be at the assumed 5% and
10% levels or at any other defined level. Unless the market price of the
Common Stock appreciates over the option term, no value will be realized
from the option grants made to the executive officers.

(2) Each option is immediately exercisable for all the option shares, but any
shares purchased under the option will be subject to repurchase by the
Company, at the option exercise price paid per share, should the
individual cease service with the Company prior to vesting in those
shares. 25% of the option shares will vest upon the optionee's
continuation in service through one year following the grant date and the
balance of the shares will vest in 36 successive equal monthly
installments upon the optionee's completion of each of the next 36 months
of service thereafter. The shares subject to the option will immediately
vest in full should (i) the Company be acquired by merger or asset sale in
which the option is not assumed or replaced by the acquiring entity or
(ii) the optionee's employment be involuntarily terminated within 18
months after certain changes in control or ownership of the Company. The
grant date for all of these options to purchase shares of the Company's
Common Stock was September 18, 1998.

Option Grants in 1999 Fiscal Year

The following table contains information concerning the stock option grants
made to each of the 1999 Named Executive Officers for the 1999 Fiscal Year. No
stock appreciation rights were granted to these individuals during such fiscal
year.

<TABLE>
<CAPTION>
Potential
Realizable Value
at Assumed Annual
Rates of Stock
% of Total Price
Number of Options Appreciation for
Securities Granted to Individual Grant Option Term(1)
Underlying Employees ----------------------- -----------------
Options in Fiscal Exercise Expiration
Granted (#) Year Price ($/Sh) Date 5% ($) 10% ($)
----------- ---------- ------------ ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
John R. Wood ........... 20,000(2) 1.32 3.97 08/17/09 48,914 126,498

Robert E. Collins....... 19,161(2) 1.32 5.22 04/19/09 62,887 159,369
155,839(2) 10.72 5.22 04/19/09 511,470 1,296,166

Paul T. Obert........... 30,000(2) 2.12 3.97 08/17/09 74,882 189,767

Sunil B. Poduval........ 75,000(2) 5.31 3.97 08/17/09 187,206 474,417
</TABLE>
--------
(1) There can be no assurance provided to any executive officer or any other
holder of the Company's securities that the actual stock price
appreciation over the ten-year option term will be at the assumed 5% and
10%

10
<PAGE>

levels or at any other defined level. Unless the market price of the Common
Stock appreciates over the option term, no value will be realized from the
option grants made to the executive officers.

(2) Each option is immediately exercisable for all the option shares, but any
shares purchased under the option will be subject to repurchase by the
Company, at the option exercise price paid per share, should the
individual cease service with the Company prior to vesting in those
shares. Twenty-five percent (25%) of the option shares will vest upon the
optionee's continuation in service through one year following the grant
date and the balance of the shares will vest in 36 successive equal
monthly installments upon the optionee's completion of each of the next 36
months of service thereafter. The shares subject to the option will
immediately vest in full should (i) the Company be acquired by merger or
asset sale in which the option is not assumed or replaced by the acquiring
entity or (ii) the optionee's employment be involuntarily terminated
within 18 months after certain changes in control or ownership of the
Company.

1998 Aggregated Option Exercises and 1998 Fiscal Year-End Values

The table below sets forth certain information with respect to the Company's
Chief Executive Officer and the other 1998 Named Executive Officers concerning
the exercise of options during the 1998 Fiscal Year and unexercised options
held by such individuals as of the end of such fiscal year. No SARs were
exercised during the 1998 Fiscal Year, nor were any SARs outstanding at the
end of such fiscal year.

<TABLE>
<CAPTION>
Number of Securities
Aggregate Underlying Unexercised Value of Unexercised in-the-Money
Shares Value Options at FY-End (#) Options at FY-End(1)
Acquired on Realized ------------------------------ ---------------------------------
Exercise (#) ($)(2) Exerciseable (3) Unexercisable Exercisable ($) Unexercisable ($)
------------ --------- ---------------- ------------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
George P. Roberts ...... 60,000 1,136,250 521,039 892,293 927,764 2,683,488
Pier G. Antoniucci...... 120,000 1,647,344 151,540 478,128 75,558 1,212,711
Michael J. Sophie....... 79,759 763,590 82,588 405,212 40,896 1,216,902
John R. Wood ........... 53,332 1,075,240 45,415 59,585 146,693 280,030
Kenneth E. Bean, II..... 8,194 92,504 36,388 138,544 21,620 538,739
</TABLE>
--------
<TABLE>
<S> <C>
</TABLE>
(1) Based on the fair market value of the option shares at the 1998 Fiscal
Year-end ($3.984 per share based on the closing selling price on the
Nasdaq National Market as of December 31, 1998) less the exercise price.

(2) Based on the fair market value of the shares on the exercise date less the
exercise price paid for those shares.

(3) The exercisable options are immediately exercisable for all the option
shares. However, any shares purchased under the options are subject to
repurchase by the Company, at the original exercise price paid per share,
upon the optionee's cessation of service prior to vesting in such shares.
As of December 31, 1998, the following number of shares were unvested: Mr.
Roberts--892,293 shares; Mr. Antoniucci--478,128 shares; Mr. Bean--138,544
shares; Mr. Sophie--405,212 shares; and Mr. Wood--59,585 shares.

11
<PAGE>

1999 Aggregated Option Exercises and 1999 Fiscal Year-End Values

The table below sets forth certain information with respect to the Company's
Chief Executive Officer and the other 1999 Named Executive Officers concerning
the exercise of options during 1999 and unexercised options held by such
individuals as of the end of such fiscal year. No SARs were exercised during
1999 nor were any SARs outstanding at the end of such fiscal year.

<TABLE>
<CAPTION>
Number of Securities
Aggregate Underlying Unexercised Value of Unexercised in-the-Money
Shares Value Options at FY-End (#) Options at FY-End(1)
Acquired on Realized ------------------------------ ---------------------------------
Exercise (#) ($)(2) Exerciseable (3) Unexercisable Exercisable ($) Unexercisable ($)
------------ --------- ---------------- ------------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
George P. Roberts....... 0 0 869,164 544,168 1,795,644 1,815,609
Pier G. Antoniucci...... 84,744 258,993 0 0 0 0
Paul T. Obert........... 0 0 22,395 67,605 89,857 308,577
Sunil B. Poduval........ 39,750 138,106 5,344 128,542 10,460 624,592
Michael J. Sophie....... 54,639 151,212 161,879 0 76,597 0
John R. Wood............ 0 0 68,644 56,356 245,928 278,292
Robert E. Collins....... 0 0 0 175,000 0 634,384
</TABLE>
--------
(1) Based on the fair market value of the option shares at the 1999 Fiscal
Year-end ($8.844 per share based on the closing selling price on the
Nasdaq National Market as of December 31, 1999) less the exercise price.

(2) Based on the fair market value of the shares on the exercise date less the
exercise price paid for those shares.

(3) The exercisable options are immediately exercisable for all the option
shares. However, any shares purchased under the options are subject to
repurchase by the Company, at the original exercise price paid per share,
upon the optionee's cessation of service prior to vesting in such shares.
As of December 31, 1999, the following number of shares were unvested: Mr.
Roberts--544,168 shares; Mr. Wood--56,356 shares; Mr. Collins--175,000
shares; Mr. Bean--114,793; Mr. Poduval--128,542; Mr. Obert--67,605.

Employment Contracts, Termination of Employment Arrangements and Change of
Control Agreements

The Compensation Committee of the Board of Directors, as Plan Administrator
of the 1995 Stock Option/Stock Issuance Plan, has the authority to provide for
accelerated vesting of the shares of Common Stock subject to any outstanding
options held by the Chief Executive Officer and any other executive officer or
any unvested share issuances actually held by such individual, in connection
with certain changes in control of the Company or the subsequent termination
of the officer's employment following the change in control event.

The Company has entered into severance agreements (the "Agreements") with
George Roberts, Chairman of the Board of Directors and Chief Executive
Officer, and James Sobczak, President and Chief Operating Officer
(individually, the "Officer" and collectively the "Officers"), dated December
15, 1997 and September 10, 1999, respectively. Each of these Agreements
provides for the following benefits should the Officer's employment terminate,
either voluntarily or involuntarily, for any reason within 24 months following
a Change in Control: (a) a severance payment in an amount equal to 2 times his
annual rate of base salary; (b) a bonus in an amount equal to the greater of
either (i) 2 times the full amount of the Officer's target bonus for the
fiscal year in which the termination occurs or (ii) 2 times the full amount of
his target bonus for the fiscal year in which a Change in Control occurs; (c)
the shares subject to each outstanding option held by the Officer (to the
extent not then otherwise fully vested) will automatically vest so that each
such option will become immediately exercisable for all the option shares as
fully-vested shares (notwithstanding anything in this Proxy Statement to the
contrary); and (d) the Company will, at its own expense, provide (i) Mr.
Sobczak and his dependents with continued health care coverage for a period of
up to 24 months following his termination of employment, and (ii) Mr. Roberts
and his dependents with continued health care coverage for life. A Change in
Control will be deemed to occur under the Agreements upon: (a) a merger or
consolidation in which securities possessing 50% or more of the total combined
voting power of the Company's outstanding securities are transferred to person
or persons different from the persons holding those securities immediately
prior to such transaction, (b) the sale, transfer or

12
<PAGE>

other disposition of all or substantially all of the assets of the Company in
complete liquidation or dissolution of the Company; (c) a hostile take-over of
the Company, whether effected through a tender offer for more than 25% of the
Company's outstanding voting securities or a change in the majority of the
Board by one or more contested elections for Board membership; or (d) the
acquisition, directly or indirectly by any person or related group of persons
(other than the Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company), of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act of
1934) of securities possessing more than 30% of the total combined voting
power of the Company's outstanding securities pursuant to a tender or exchange
offer made directly to the Company's stockholders. In addition, each Officer
will be entitled to a full tax gross-up to the extent one or more of the
severance benefits provided under his Agreement are deemed to constitute
excess parachute payments under the federal income tax laws.

In addition, the Company entered into a separation agreement with Robert
Collins, Former Chief Financial Officer/Vice President of Finance and
Administration, calling for continuation of his salary ($200,000 per annum)
from August 29, 2000 through August 14, 2001. The Company also agreed to pay
the required premium for COBRA fringe benefits coverage for Mr. Collins and
his eligible dependents for the same period (or, if sooner, until he commences
new employment with equivalent or better benefits coverage). In addition, Mr.
Collins will vest, over the same period, in 43,750 of his stock options which
were unvested at the date his employment terminated.

The Company does not have any existing agreements with the Chief Executive
Officer or any other 1998 or 1999 Named Executive Officer that establish a
specific term of employment for them, and their employment may accordingly be
terminated at any time at the discretion of the Board of Directors. The
Compensation Committee of the Board of Directors has the authority as Plan
Administrator of the 1995 Plan to provide for the accelerated vesting of the
shares of Common Stock subject to outstanding options held by the Company's
executive officers, whether granted under that plan or any predecessor plan,
in the event their employment were to be terminated (whether involuntarily or
through a forced resignation) following certain changes in control or
ownership of the Company.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee of the Company's Board of Directors currently
consists of Mr. Josling and Mr. Hawkins. Neither of these individuals was an
officer or employee of the Company at any time during the 1998 or 1999 Fiscal
Year or at any other time.

No current executive officer of the Company has ever served as a member of
the board of directors or compensation committee of any other entity that has
or has had one or more executive officers serving as a member of the Company's
Board of Directors or Compensation Committee.

13
<PAGE>

REPORT OF THE COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS ON 1998 EXECUTIVE COMPENSATION

"The Compensation Committee of the Board of Directors is responsible for
establishing the base salary and incentive cash bonus programs for the
Company's executive officers. The Committee also has the exclusive
responsibility for the administration of the Company's 1995 Stock Option/Stock
Issuance Plan, under which grants may be made to executive officers and other
key employees of the Company.

Compensation Philosophy

Since the initial public offering of the Company's Common Stock in March
1995, it has been the Committee's policy and objective to provide the
Company's executive officers and other key employees with competitive
compensation opportunities based upon their contribution to the financial
success of the Company, the enhancement of corporate and stockholder values,
the market levels of compensation in effect at companies with which the
Company competes for executive talent and the personal performance of such
individuals. The primary factors that the Committee considered in establishing
the compensation levels of the executive officers for the 1998 fiscal year are
summarized below. The Committee may, however, in its discretion, apply
different factors in setting executive compensation for future fiscal years.

It is the Committee's current objective to have a significant portion of
each officer's compensation contingent upon the Company's performance as well
as upon the officer's own level of performance. Accordingly, the compensation
package for each executive officer and key employee is comprised of three
elements: (i) base salary that reflects individual performance and is designed
primarily to be competitive with salary levels in effect at a select group of
companies with which the Company competes for executive talent, (ii) annual
performance awards payable in cash and based upon the Company's financial
performance and the market performance of the Company's common stock and (iii)
long-term equity incentive awards with overlapping vesting schedules that
strengthen the mutuality of interests between the executive officers and the
Company's stockholders while fostering retention of existing personnel.

The Committee recognizes that the highly-specialized industry sector in
which the Company operates is both extremely competitive and globally-
challenging, with the result that there is substantial demand for high-
caliber, seasoned executives with a high level of industry-specific knowledge
and industry contacts, especially overseas contacts. It is crucial that the
Company reward and be assured of retaining the executive personnel essential
to the attainment of the Company's performance goals. For these reasons, the
Committee believes the Company's executive compensation arrangements must
remain competitive with those offered by other companies of similar magnitude,
complexity and performance records (the "peer group") in order to provide
adequate incentive to the Company's executive officers to continue to provide
services to the Company.

Cash Compensation

A key objective of the Company's current executive compensation program is
to position its key executives to earn annual cash compensation (base salary
plus bonus) equaling or exceeding that which the executive would earn at other
peer group companies. During 1998, the Committee reviewed and relied on
technology industry compensation surveys in its assessment of appropriate
compensation levels.

The Fiscal Year 1998 base salaries for the named executive officers are
based upon a number of factors, including, without limitation, each
executive's performance and contribution to overall Company performance and
the levels of base salary in effect for comparable positions with the peer
group companies. Base salary decisions are made as part of a formal review
process. Generally, the base salaries of the Company's executive officers for
the 1998 fiscal year ranged from the 10th percentile to the 75th percentile of
the salaries surveyed for comparable positions at the peer group companies. In
defining "peer group companies," the Company considered companies with
revenues between $100 million and $200 million. In 1998, the Company was, and
at the beginning of 1999, the Company expected to be in 1999, in the range
from $200 million to $500 million in

14
<PAGE>

revenues. In comparison to other companies in the $200 million to $500 million
range, the base salaries for the Company's executive officers as of the
beginning of the 1999 fiscal year ranged from the 10th percentile to the 50th
percentile. This should not be construed as a prediction that the Company's
1999 revenues will exceed $200 million.

For purposes of the stock price performance graph that appears later in this
Proxy Statement, the Company has selected the Standard & Poor's Communications
Equipment Manufacturers Index as the industry index. Several of the companies
included in that index were also among the companies that the Committee
surveyed as part of the peer group for comparative compensation purposes.
However, in selecting companies to survey for such compensation purposes, the
Committee focused primarily on whether those companies were actually
competitive with the Company in seeking executive talent and whether those
companies had a management style and corporate culture and annual revenues
similar to the Company's. For this reason, the number of companies surveyed
for compensation data was substantially less than the number of companies
included in the Standard & Poor's Communications Equipment Manufacturers
Index.

The annual incentive compensation provided to the Company's executive
officers is in the form of cash bonuses based on the Committee's assessment of
the Company's financial performance for the year and the individual officer's
contribution to that performance. For the 1998 fiscal year, the Committee
determined not to award any cash bonus to the executive officers.

Stock Options

Equity incentives are provided primarily through stock option grants under
the 1995 Plan. The grants are designed to align the interests of each
executive officer with those of the stockholders and provide each individual
with a significant incentive to manage the Company from the perspective of an
owner with an equity stake in the business. Each grant allows the individual
to acquire shares of the Company's Common Stock at a fixed price per share
(the market price on the grant date) over a specified period of time (up to 10
years). The shares subject to each option generally vest in installments over
a two-to-four-year period, contingent upon the executive officer's continued
employment with the Company. Accordingly, the option will provide a return to
the executive officer only if the executive officer remains employed by the
Company during the applicable vesting period, and then only if the market
price of the underlying shares appreciates over the option term.

The number of shares subject to each option grant is set at a level intended
to create a meaningful opportunity for stock ownership based on the officer's
current position with the Company, the base salary associated with that
position, the size of comparable awards made to individuals in similar
positions within the industry, the individual's potential for increased
responsibility and promotion over the option term, and the individual's
personal performance in recent periods. The Committee will also take into
account the executive officer's existing holdings of the Company's Common
Stock and the number of vested and unvested options held by that individual in
order to maintain an appropriate level of equity incentive. However, the
Committee does not intend to adhere to any specific guidelines as to the
relative option holdings of the Company's executive officers.

Chief Executive Officer Performance and Compensation

In setting the base salary for Mr. Roberts for the 1998 fiscal year, the
Committee sought to achieve two objectives: (i) make his base salary
competitive with the base salaries paid to the chief executive officers of the
same peer group of companies that the Committee surveyed for comparative
compensation purposes for all other executive officers of the Company and (ii)
make a significant percentage of his total compensation package contingent
upon Company performance. For the 1998 fiscal year, the base salary of Mr.
Roberts was set at the 75th percentile of the base salary levels in effect for
those other chief executive officers. In comparison to companies in the range
from $200 million to $500 million in revenues, Mr. Roberts' base salary was at
the 50th percentile of the base salary levels for those chief executive
officers. As indicated above, the Committee decided not to award any cash
bonus to Mr. Roberts or any other executive officer for the 1998 fiscal year.

15
<PAGE>

However, the Committee did grant Mr. Roberts options to purchase an
additional 450,000 shares of the Company's Common Stock during the 1998 fiscal
year. The options have an exercise price equal to the fair market value of the
underlying shares on the grant date, and those shares will vest in a series of
installments over his continued period of employment with the Company and are
accordingly designed to serve as a meaningful incentive for him to remain in
the Company's employ and to further align his interests with those of the
stockholders. Accordingly, the options will have value only if Mr. Roberts
remains in the Company's employ and then only if the market price of the
underlying securities appreciates over the option term.

It is the Committee's view that the total compensation package provided Mr.
Roberts for the 1998 fiscal year is competitive with the typical compensation
packages awarded to chief executive officers in the Company's peer group.

Compliance with Internal Revenue Code Section 162(m)

Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to publicly held companies for compensation exceeding $1 million
paid to certain of the corporation's executive officers. The limitation
applies only to compensation that is not considered to be performance-based.
The non-performance based compensation to be paid to the Company's executive
officers for the 1998 fiscal year did not exceed the $1 million limit per
officer, nor is it expected that the non-performance based compensation to be
paid to the Company's executive officers for fiscal 1999 will exceed that
limit. Options granted under the Company's 1995 Plan are structured so that
any compensation deemed paid to an executive officer in connection with the
exercise of those options will qualify as performance-based compensation that
will not be subject to the $1 million limitation. Because it is very unlikely
that the cash compensation payable to any of the Company's executive officers
in the foreseeable future will approach the $1 million limit, the Compensation
Committee has decided at this time not to take any other action to limit or
restructure the elements of cash compensation payable to the Company's
executive officers. The Compensation Committee will reconsider this decision
should the individual compensation of any executive officer ever approach the
$1 million level.

It is the opinion of the Compensation Committee that the executive
compensation policies and programs in effect for the Company's executive
officers provide an appropriate level of total remuneration that properly
aligns the Company's performance and the interests of the Company's
stockholders with competitive and equitable executive compensation in a
balanced and reasonable manner, for both the short and long-term."

Brian T. Josling
Member, Compensation Committee

John A. Hawkins
Member, Compensation Committee

16
<PAGE>

REPORT OF THE COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS ON 1999 EXECUTIVE COMPENSATION

Compensation Philosophy

Since the initial public offering of the Company's Common Stock in March
1995, it has been the Committee's policy and objective to provide the
Company's executive officers and other key employees with competitive
compensation opportunities based upon their contribution to the financial
success of the Company, the enhancement of corporate and stockholder values,
the market levels of compensation in effect at companies with which the
Company competes for executive talent and the personal performance of such
individuals. The primary factors that the Committee considered in establishing
the compensation levels of the executive officers for the 1999 fiscal year are
summarized below. The Committee may, however, in its discretion, apply
different factors in setting executive compensation for future fiscal years.

Cash Compensation

A key objective of the Company's current executive compensation program is
to position its key executives to earn annual cash compensation (base salary
plus bonus) equaling or exceeding that which the executive would earn at other
peer group companies. During 1999, the Committee reviewed and relied on
technology industry compensation surveys in its assessment of appropriate
compensation levels.

The Fiscal Year 1999 base salaries for the named executive officers are
based upon a number of factors, including, without limitation, each
executive's performance and contribution to overall Company performance and
the levels of base salary in effect for comparable positions with the peer
group companies. Base salary decisions are made as part of a formal review
process. Generally, the base salaries of the Company's executive officers for
the 1999 fiscal year ranged from the 10th percentile to the 75th percentile of
the salaries surveyed for comparable positions at the peer group companies. In
defining "peer group companies," the Company considered companies with
revenues between $100 million and $200 million. In 1999, the Company was, and
at the beginning of 2000, the Company expected to be in 2000, in the range
from $200 million to $500 million in

17
<PAGE>

revenues. In comparison to other companies in the $200 million to $500 million
range, the base salaries for the Company's executive officers as of the
beginning of the 2000 fiscal year ranged from the 10th percentile to the 50th
percentile. This should not be construed as a prediction that the Company's
2000 revenues will exceed $200 million.

The annual incentive compensation provided to the Company's executive
officers is in the form of cash bonuses based on the Committee's assessment of
the Company's financial performance for the year and the individual officer's
contribution to that performance. For the 1999 fiscal year, the Committee
determined not to award any cash bonus to the executive officers.

Stock Options

Chief Executive Officer Performance and Compensation

In setting the base salary for Mr. Roberts for the 1999 fiscal year, the
Committee sought to achieve two objectives: (i) make his base salary
competitive with the base salaries paid to the chief executive officers of the
same peer group of companies that the Committee surveyed for comparative
compensation purposes for all other executive officers of the Company and (ii)
make a significant percentage of his total compensation package contingent
upon Company performance. For the 1999 fiscal year, the base salary of Mr.
Roberts was set at the 75th percentile of the base salary levels in effect for
those other chief executive officers. In comparison to companies in the range
from $200 million to $500 million in revenues, Mr. Roberts' base salary was at
the 50th percentile of the base salary levels for those chief executive
officers. As indicated above, the Committee decided not to award any cash
bonus to Mr. Roberts or any other executive officer for the 1999 fiscal year.

18
<PAGE>

It is the Committee's view that the total compensation package provided Mr.
Roberts for the 1999 fiscal year is competitive with the typical compensation
packages awarded to chief executive officers in the Company's peer group.

Compliance with Internal Revenue Code Section 162(m)

Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to publicly held companies for compensation exceeding $1 million
paid to certain of the corporation's executive officers. The limitation
applies only to compensation that is not considered to be performance-based.
The non-performance based compensation to be paid to the Company's executive
officers for the 1999 fiscal year did not exceed the $1 million limit per
officer, nor is it expected that the non-performance based compensation to be
paid to the Company's executive officers for fiscal 1999 will exceed that
limit. Options granted under the Company's 1995 Plan are structured so that
any compensation deemed paid to an executive officer in connection with the
exercise of those options will qualify as performance-based compensation that
will not be subject to the $1 million limitation. Because it is very unlikely
that the cash compensation payable to any of the Company's executive officers
in the foreseeable future will approach the $1 million limit, the Compensation
Committee has decided at this time not to take any other action to limit or
restructure the elements of cash compensation payable to the Company's
executive officers. The Compensation Committee will reconsider this decision
should the individual compensation of any executive officer ever approach the
$1 million level.

Brian T. Josling
Member, Compensation Committee

John A. Hawkins
Member, Compensation Committee

19
<PAGE>

Stock Performance Graph

The graph depicted below shows a comparison of cumulative total stockholder
returns for the Company, the Standard & Poor's 500 Index and the Standard &
Poor's Communications Equipment Manufacturers Index.

[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
S&P Communications
S&P 500 Equipment Index P-Com
<S> <C> <C> <C>
Mar-95 500.71 91.16 4.813
Jun-95 544.75 107.58 5.906
Sep-95 584.41 124.72 11.188
Dec-95 615.93 125.77 10
Mar-96 645.5 131.43 10.063
Jun-96 670.63 151.67 15.75
Sep-96 687.31 162.1 12.375
Dec-96 740.74 166.24 14.813
Mar-97 757.12 142.65 13
Jun-97 885.14 190.87 16.5
Sep-97 947.28 212.12 23.938
Dec-97 970.43 200.74 17.25
Mar-98 1101.75 268.43 20
Jun-98 1133.84 324.71 9.156
Sep-98 1017.01 279.2 3.906
Dec-98 1229.23 427.74 3.984
Mar-99 1286.37 465.57 7.625
Jun-99 1372.71 578.61 5.234
Sep-99 1282.71 599.18 7
Dec-99 1469.25 943.56 8.844
</TABLE>
--------
(1) The graph covers the period from March 2, 1995, the date of the Company's
initial public offering of shares of its Common Stock, to December 31,
1999.

(2) The graph assumes that $100 was invested on March 2, 1995, in the
Company's Common Stock and in each index, and that all dividends were
reinvested. No cash dividends have been declared on the Company's Common
Stock.

(3) Stockholder returns over the indicated period should not be considered
indicative of future stockholder returns.

Notwithstanding anything to the contrary set forth in any of the Company's
previous filings made under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings made by the Company under those statutes, neither the preceding Stock
Performance Graph nor the Compensation Committee Report is to be incorporated
by reference into any such prior filings, nor shall such graph or report be
incorporated by reference into any future filings made by the Company under
those statutes.

20
<PAGE>

CERTAIN TRANSACTIONS

In addition to the indemnification provisions contained in the Company's
Restated Certificate of Incorporation and Bylaws, the Company has entered into
separate indemnification agreements with each of its directors and officers.
These agreements require the Company, among other things, to indemnify such
director or officer against expenses (including attorneys' fees), judgments,
fines and settlements (collectively, "Liabilities") paid by such individual in
connection with any action, suit or proceeding arising out of such
individual's status or service as a director or officer of the Company (other
than Liabilities arising from willful misconduct or conduct that is knowingly
fraudulent or deliberately dishonest) and to advance expenses incurred by such
individual in connection with any proceeding against such individual with
respect to which such individual may be entitled to indemnification by the
Company.

Mr. Roberts' adult son and Mr. Antoniucci's adult daughter each held a
minority interest in a private company that supplied synthesizers to the
Company for use in its products. To date, the Company has purchased
approximately $10.5 million of synthesizers from such supplier, including
approximately $298,324 in 1999, which is down from $965,000 in 1998. Due to
the fact that such supplier ceased operation in 1999, the percentage of sales
from P-Com of such supplier cannot be ascertained. The terms of the Company's
purchase agreement with such supplier were no less favorable to the Company
than could be obtained from an unaffiliated third party supplier. The Company
also purchased synthesizers from several unaffiliated entities, including
Geritel S.p.A., Communication Techniques, Inc. and SPC Electronics Corp., at
competitive prices approximately equal to those of such supplier. Each such
adult is financially independent of his or her parent and resides at a
different address from his or her parent.

In connection with certain relocation expenses, the Company issued a
promissory note in the amount of $250,000 to Mr. Sobczak. This note is
interest free and payable one year after Mr. Sobczak leaves the Company. In
addition, P-Com agreed to pay for certain fees and services in connection with
the sale of Mr. Sobczak's home in Pennsylvania so that he may complete his
relocation to California. We anticipate these fees and services to amount to
approximately $55,000.

All future transactions between the Company and its officers, directors,
principal stockholders and affiliates will be approved by a majority of the
independent and disinterested members of the Board of Directors, and will be
on terms no less favorable to the Company than could be obtained from
unaffiliated third parties.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

The members of the Board of Directors, the executive officers of the Company
and persons who hold more than 10% of the Company's outstanding Common Stock
are subject to the reporting requirements of Section 16(a) of the Securities
Exchange Act of 1934, as amended, that require them to file reports with
respect to their ownership of the Common Stock and their transactions in such
Common Stock. Mr. Roberts did not file his Form 4 required for April 1998
until February 1999, due to an oversight. Otherwise, based upon (i) the copies
of Section 16(a) reports that the Company received from such persons for their
1998 Fiscal Year transactions in the Common Stock and their Common Stock
holdings, and (ii) the written representations received from one or more of
such persons that no annual Form 5 reports were required to be filed by them
for the 1998 Fiscal Year, the Company believes that all reporting requirements
under Section 16(a) for such fiscal year were met in a timely manner by its
directors, executive officers and greater than ten percent beneficial owners.

21
<PAGE>

more of such persons that no annual Form 5 reports were required to be filed
by them for the 1999 Fiscal Year, the Company believes that all reporting
requirements under Section 16(a) for such fiscal year were met in a timely
manner by its directors, executive officers and greater than ten percent
beneficial owners.

INDEPENDENT ACCOUNTANTS

The Board of Directors has appointed the firm of PricewaterhouseCoopers LLP
independent public auditors for the Company during the 1998 and 1999 Fiscal
Years, to serve in the same capacity for the fiscal year ending December 31,
2000.

A representative of PricewaterhouseCoopers LLP is expected to be present at
the Annual Meeting, will have the opportunity to make a statement if he or she
desires to do so, and will be available to respond to appropriate questions.

ANNUAL REPORT

A copy of the Annual Report of the Company for the 1998 Fiscal Year has been
mailed concurrently with this Proxy Statement to all stockholders entitled to
notice of and to vote at the Annual Meeting. The 1998 Annual Report is not
incorporated into this Proxy Statement and is not considered proxy
solicitation material.

A copy of the Annual Report of the Company for the 1999 Fiscal Year has been
mailed concurrently with this Proxy Statement to all stockholders entitled to
notice of and to vote at the Annual Meeting. The 1999 Annual Report is not
incorporated into this Proxy Statement and is not considered proxy
solicitation material.

FORM 10-K

The Company filed an Annual Report on Form 10-K/A (for the year ended
December 31, 1998) with the Securities and Exchange Commission on April 5,
2000. Stockholders may obtain a copy of this report, without charge, by
writing to Mr. Leighton Stephenson, Chief Financial Officer and Vice
President, Finance and Administration of the Company, at the Company's
principal executive offices that are located at 3175 South Winchester
Boulevard, Campbell, California 95008.

The Company filed an Annual Report on Form 10-K/A (for the year ended
December 31, 1999) with the Securities and Exchange Commission on April 24,
2000. Stockholders may obtain a copy of this report, without charge, by
writing to Mr. Leighton Stephenson, Chief Financial Officer and Vice
President, Finance and Administration of the Company, at the Company's
principal executive offices that are located at 3175 South Winchester
Boulevard, Campbell, California 95008.

THE BOARD OF DIRECTORS OF P-COM,
INC.

Dated: October 30, 2000

Appendix: Audit Committee Charter

22
<PAGE>

P-COM, INC.

AUDIT COMMITTEE CHARTER

I. PURPOSE

The primary function of the Audit Committee is to assist the Board of
Directors in monitoring and overseeing the (i) integrity of the financial
statements of the Corporation,(ii) independence and performance of the
Corporation's internal and external auditors and (iii) compliance by the
Corporation with legal and regulatory requirements.

The independent accountants' ultimate responsibility is to the Board of
Directors and the Audit Committee, as representatives of the shareholders.
These representatives have the ultimate authority to select, evaluate, and,
where appropriate, replace the independent accountants.

The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities enumerated in Section IV of this Charter.

II. COMPOSITION

The Audit Committee shall be appointed by the Board of Directors and
comprised of three or more independent directors who meet the requirements of
the Nasdaq Stock Market.

All members of the Committee shall have a working familiarity with basic
finance and accounting practices, and at least one member of the Committee
shall have accounting or related financial management expertise.

III. MEETINGS

The Audit Committee shall meet at least quarterly, or more frequently as
circumstances dictate.

The Audit Committee should meet at least annually with management, the
director of the internal auditing department and the independent accountants
separately to discuss any matters that the Audit Committee or each of these
groups believes should be discussed privately.

IV. RESPONSIBILITIES AND DUTIES

To fulfill its responsibilities and duties the Audit Committee shall:

1.Review this Charter at least annually and recommend any changes to the
Board.

2. Review the Corporation's annual financial statements and any other
relevant reports or other financial information.

3. Review with management and the independent accountants the Form 10-Q
prior to its filing or prior to the release of earnings. The Chairperson
of the Audit Committee may represent the entire Audit Committee for
purposes of this review.

4. Review the regular internal financial reports prepared by management and
any internal auditing department.

5. Recommend to the Board of Directors the selection of the independent
accountants. On an annual basis, the Committee shall obtain a formal
written statement from the independent accountants delineating all
relationships between the accountants and the Corporation consistent
with Independence Standards Board Standard 1, and shall review and
discuss with the accountants all significant relationships the
accountants have with the Corporation to determine the accountants'
independence.

23
<PAGE>

6. Review the performance of the independent accountants and approve any
proposed discharge of the independent accountants when circumstances
warrant.

7. Following completion of the annual audit, review separately with the
independent accountants, the internal auditing department, if any, and
management any significant difficulties encountered during the course
of the audit.

8. Based on the review and discussions referred to in section IV.2 and
IV.5, the Audit Committee shall determine whether to recommend to the
Board that the Corporation's audited financial statements be included
in the Corporation's Annual Report on Form 10-K for the last fiscal
year for filing with the Securities and Exchange Commission.

9. Establish regular systems of reporting to the Audit Committee by each
of management, the independent accountants and the internal auditors
regarding any significant judgments made in management's preparation of
the financial statements and any significant difficulties encountered
during the course of the review or audit, including any restrictions on
the scope of the work or access to required information.

10. Review any significant disagreement among management and the
independent accountants or the internal auditing department in
connection with the preparation of the financial statements.

11. Review with the Corporation's counsel, any legal matter that could have
a significant impact on the Corporation's financial statements.

12 Report.through its Chairperson to the Board following meetings of the
Audit Committee.

13. Maintain minutes or other records of meetings and activities of the
Audit Committee.

14. Perform any other activities consistent with this Charter, the
Corporation's By-laws and governing law, as the Committee or the Board
deems necessary or appropriate

24
<PAGE>

4940-PF-99
<PAGE>

P-COM, INC.
PROXY
"1999" ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 30, 2000

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints George P. Roberts and Leighton J. Stephenson and
each of them as Proxyholders of the undersigned, with full power of
substitution, and hereby authorizes them to represent and to vote, as designated
below, all of the shares of Common Stock of P-Com, Inc. (the "Company"), held of
record by the undersigned on October 16, 2000 at the Annual Meeting of
Stockholders of P-Com, Inc. to be held on November 30, 2000, or at any
adjournment or postponement thereof.

The Board of Directors recommends a vote FOR Proposal No. 1. This Proxy,
when properly executed, will be voted as specified below. This Proxy will be
voted FOR Proposal No. 1 if no specification is made.

1. To elect two directors to serve for "three-year" terms ending upon the 2002
annual meeting of stockholders or until their successors are duly elected.
FOR all nominees WITHHOLD AUTHORITY EXCEPTIONS
listed below
[_] [_] [_]

INSTRUCTION: To withhold authority to vote for any individual nominee mark the
"EXCEPTIONS" box, and strike a line through the nominee's name in the list
below:

George P. Roberts
Brian T. Josling

________________________________________________________________________________
In their discretion, the Proxyholders are authorized to vote upon such other
matters as may properly come before the meeting, including the election of any
director if either of the above nominees is unable to serve or for good cause
will not serve.

Please sign exactly as your name(s) is (are) shown on the share certificate
to which the Proxy applies. When shares are held by joint tenants, both should
sign. When signing as an attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign in full corporate
name by President or other authorized officer. If a partnership, please sign in
partnership name by authorized person.

DATED:___________________________________, 2000

_________________________________________
Signature
_________________________________________
(Additional signature if held jointly)

PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.