P COM INC
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>4
<FILENAME>v05681_ex10-1.txt
<TEXT>
June 25, 2004

Sam Smookler
President and Chief Executive Officer
P-Com, Inc.
3175 South Winchester Boulevard
Campbell, CA 95008

Dear Sam:

We are pleased to confirm that the Compensation Committee has approved a special
performance-based  compensation  plan created to incentivize you to drive P-Com,
Inc.'s  short-term  business  success thereby helping to ensure the viability of
P-Com,  Inc. (the  "Company").  The substantive  terms of the plan are described
below. If you agree to the terms outlined in this letter, please countersign the
enclosed copy of this letter and return it to the Corporate Secretary.

1.    Under the plan,  the Company will issue  5,000,000  warrants to purchase
      the  Company's  Common Stock at the market  price on the issuance  date.
      After two performance  criteria have been  satisfied,  the warrants will
      become  exercisable.  First,  the  cash  balance  at the end of the 2004
      fiscal  year  must be at  least  $2,000,000.  If this  criterion  is not
      satisfied,  then none of the warrants shall become  exercisable and they
      shall   automatically   expire.   Once  the  cash  level   criterion  is
      satisfied,  the  Company's  revenue  level  achieved for the 2004 fiscal
      year  shall   determine   the  number  of  warrants  that  shall  become
      executable.  Therefore, if the revenue achieved:

       a. is at least $30,000,000, then 2,000,000 warrants will be eligible; or
       b. is at least $33,000,000, then 3,000,000 warrants will be eligible; or
       c. is at least $36,000,000, then 4,000,000 warrants will be eligible; or
       d. is at least $40,000,000, then 5,000,000 warrants will be eligible.

      The eligible  warrants  shall become  executable  in  accordance  with the
      following schedule:

       a. one-fourth of the warrants shall become executable upon the completion
          of twelve (12) months of continuous  service measured from the date of
          grant (the "Initial Vesting Period"); and
       b. the balance of the warrants shall become executable in thirty-six (36)
          successive  equal  monthly  installments  subject  to  your  continued
          services after the end of the Initial Vesting Period.

<PAGE>

This   performance-based   compensation   plan  is  in  addition  to  any  other
compensation to which you are entitled under your employment  agreement with the
Company.

Sincerely,

THE COMPENSATION COMMITTEE
OF P-COM, INC.


/s/ Frederick Fromm
-----------------------------------------
Frederick Fromm


/s/ John Hawkins
-----------------------------------------
John Hawkins


AGREED:


/s/ Sam Smookler
-----------------------------------------
Sam Smookler
President & Chief Executive Officer

</TEXT>
</DOCUMENT>
