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                                                                   EXHIBIT 10.1

                                   APPENDIX B
                           COLUMBIA SPORTSWEAR COMPANY
                      1997 STOCK INCENTIVE PLAN, AS AMENDED

        1. PURPOSE. The purpose of this 1997 Stock Incentive Plan (the "Plan")
is to enable Columbia Sportswear Company (the "Company") to attract and retain
the services of (i) selected employees, officers and directors of the Company or
any parent or subsidiary of the Company and (ii) selected nonemployee agents,
consultants, advisors and independent contractors of the Company or any parent
or subsidiary of the Company. For purposes of this Plan, a person is considered
to be employed by or in the service of the Company if the person is employed by
or in the service of the Company or any parent or subsidiary of the Company (in
which case, the Company, parent or subsidiary is referred to as an "Employer").

        2. SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided below
and in Section 10, the shares to be offered under the Plan shall consist of
Common Stock of the Company, and the total number of shares of Common Stock that
may be issued under the Plan shall be 5,400,000 shares. If an option or
Performance-based Award granted under the Plan expires, terminates or is
cancelled, the unissued shares subject to that option or Performance-based Award
shall again be available under the Plan. If shares awarded as a bonus pursuant
to Section 7 or sold pursuant to Section 8 under the Plan are forfeited to or
repurchased by the Company, the number of shares forfeited or repurchased shall
again be available under the Plan.

        3. EFFECTIVE DATE AND DURATION OF PLAN.

           3.1 EFFECTIVE DATE. The Plan shall become effective as of March 12,
1997. No Incentive Stock Option (as defined in Section 5 below) granted under
the Plan shall become exercisable and no payments shall be made under a
Performance-based Award, however, until the Plan is approved by the affirmative
vote of the holders of a majority of the shares of Common Stock represented at a
shareholders meeting at which a quorum is present and the exercise of any
Incentive Stock Options granted under the Plan before such approval shall be
conditioned on and subject to such approval. Subject to this limitation, options
and Performance-based Awards may be granted and shares may be awarded as bonuses
or sold under the Plan at any time after the effective date and before
termination of the Plan.

           3.2 DURATION. The Plan shall continue in effect until all shares
available for issuance under the Plan have been issued and all restrictions on
such shares have lapsed. The Board of Directors may suspend or terminate the
Plan at any time except with respect to options, Performance-based Awards and
shares subject to restrictions then outstanding under the Plan. Termination
shall not affect any outstanding options, any outstanding Performance-based
Awards or any right of the Company to repurchase shares or the forfeitability of
shares issued under the Plan.

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        4. ADMINISTRATION.

           4.1 BOARD OF DIRECTORS. The Plan shall be administered by the Board
of Directors of the Company, which shall determine and designate from time to
time the individuals to whom awards shall be made, the amount of the awards and
the other terms and conditions of the awards. Subject to the provisions of the
Plan, the Board of Directors may from time to time adopt and amend rules and
regulations relating to administration of the Plan, advance the lapse of any
waiting period, accelerate any exercise date, waive or modify any restriction
applicable to shares (except those restrictions imposed by law) and make all
other determinations in the judgment of the Board of Directors necessary or
desirable for the administration of the Plan. The interpretation and
construction of the provisions of the Plan and related agreements by the Board
of Directors shall be final and conclusive. The Board of Directors may correct
any defect or supply any omission or reconcile any inconsistency in the Plan or
in any related agreement in the manner and to the extent it shall deem expedient
to carry the Plan into effect, and it shall be the sole and final judge of such
expediency.

           4.2 COMMITTEE. The Board of Directors may delegate to any committee
of the Board of Directors (the "Committee") any or all authority for
administration of the Plan. If authority is delegated to the Committee, all
references to the Board of Directors in the Plan shall mean and relate to the
Committee, except (i) as otherwise provided by the Board of Directors and (ii)
that only the Board of Directors may amend or terminate the Plan as provided in
Sections 3 and 11.

           4.3 OFFICERS. The Board of Directors may delegate to any officer or
officers of the Company authority to grant awards under the Plan, subject to any
restrictions imposed by the Board of Directors.

        5. TYPES OF AWARDS; ELIGIBILITY. The Board of Directors may, from time
to time, take the following actions, separately or in combination, under the
Plan: (i) grant Incentive Stock Options, as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), as provided in Sections
6.1 and 6.2; (ii) grant options other than Incentive Stock Options
("Non-Statutory Stock Options") as provided in Sections 6.1 and 6.3; (iii) award
stock bonuses as provided in Section 7; (iv) sell shares subject to restrictions
as provided in Section 8; and (v) award Performance-based Awards as provided in
Section 9. Awards may be made to employees, including employees who are officers
or directors, and to other individuals described in Section 1 who the Board of
Directors believes have made or will make an important contribution to the
Company; provided, however, that only employees of the Company or any parent or
subsidiary of the Company (as defined in subsections 424(e) and 424(f) of the
Code) shall be eligible to receive Incentive Stock Options under the Plan. The
Board of Directors shall select the individuals to whom awards shall be made and
shall specify the action taken with respect to each individual to whom an award
is made. At the discretion of the Board of Directors, an individual may be given
an election to surrender an award in exchange for the grant of a new award. No
employee may be granted options for more than an aggregate of 100,000

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shares of Common Stock in connection with the hiring of the employee or 100,000
shares of Common Stock in any calendar year otherwise.

        6. OPTION GRANTS.

           6.1 GENERAL RULES RELATING TO OPTIONS.

               6.1-1 TERMS OF GRANT. The Board of Directors may grant options
under the Plan. With respect to each option grant, the Board of Directors shall
determine the number of shares subject to the option, the option exercise price,
the period of the option, the time or times at which the option may be exercised
and whether the option is an Incentive Stock Option or a Non-Statutory Stock
Option. At the time of the grant of an option or at any time thereafter, the
Board of Directors may provide that an optionee who exercised an option with
Common Stock of the Company shall automatically receive a new option to purchase
additional shares equal to the number of shares surrendered and may specify the
terms and conditions of such new options.

               6.1-2 EXERCISE OF OPTIONS. Except as provided in Section 6.1-4 or
as determined by the Board of Directors, no option granted under the Plan may be
exercised unless at the time of such exercise the optionee is employed by or in
the service of the Company and shall have been so employed or provided such
service continuously since the date the option was granted. Except as provided
in Sections 6.1-4 and 10, options granted under the Plan may be exercised from
time to time over the period stated in each option in such amounts and at such
times as shall be prescribed by the Board of Directors, provided that options
shall not be exercised for fractional shares. Unless otherwise determined by the
Board of Directors, if an optionee does not exercise an option in any one year
with respect to the full number of shares to which the optionee is entitled in
that year, the optionee's rights shall be cumulative and the optionee may
purchase those shares in any subsequent year during the term of the option.

               6.1-3 NONTRANSFERABILITY. Each Incentive Stock Option and, unless
otherwise determined by the Board of Directors, each other option granted under
the Plan by its terms (i) shall be nonassignable and nontransferable by the
optionee, either voluntarily or by operation of law, except by will or by the
laws of descent and distribution of the state or country of the optionee's
domicile at the time of death, and (ii) during the optionee's lifetime, shall be
exercisable only by the optionee.

               6.1-4 TERMINATION OF EMPLOYMENT OR SERVICE.

                     6.1-4(a) GENERAL RULE. Unless otherwise determined by the
Board of Directors, in the event an optionee's employment or service with the
Company terminates for any reason other than because of total disability or
death as provided in Sections 6.1-4(b) and (c), his or her option may be
exercised at any time before the expiration date of the option or the expiration
of 30 days after the date of termination, whichever is the shorter period, but
only if and to the extent the optionee was entitled to exercise the option at
the date of termination.

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                     6.1-4(b) TERMINATION BECAUSE OF TOTAL DISABILITY. Unless
otherwise determined by the Board of Directors, in the event an optionee's
employment or service with the Company terminates because of total disability,
his or her option may be exercised at any time before the expiration date of the
option or before the date 12 months after the date of termination, whichever is
the shorter period, but only if and to the extent the optionee was entitled to
exercise the option at the date of termination. The term "total disability"
means a medically determinable mental or physical impairment that is expected to
result in death or has lasted or is expected to last for a continuous period of
12 months or more and that causes the optionee to be unable, in the opinion of
the Company and two independent physicians, to perform his or her duties as an
employee, director, officer or consultant of the Employer and unable to be
engaged in any substantial gainful activity. Total disability shall be deemed to
have occurred on the first day after the two independent physicians have
furnished their written opinion of total disability to the Company and the
Company has reached an opinion of total disability.

                     6.1-4(c) TERMINATION BECAUSE OF DEATH. Unless otherwise
determined by the Board of Directors, in the event of an optionee's death while
employed by or providing service to the Company, his or her option may be
exercised at any time before the expiration date of the option or before the
date 12 months after the date of death, whichever is the shorter period, but
only if and to the extent the optionee was entitled to exercise the option at
the date of death and only by the person or persons to whom the optionee's
rights under the option shall pass by the optionee's will or by the laws of
descent and distribution of the state or country of domicile at the time of
death.

                     6.1-4(d) AMENDMENT OF EXERCISE PERIOD APPLICABLE TO
TERMINATION. The Board of Directors may at any time extend the 30-day and
12-month exercise periods any length of time not longer than the original
expiration date of the option. The Board of Directors may at any time increase
the portion of an option that is exercisable, subject to such terms and
conditions as the Board of Directors may determine.

                     6.1-4(e) FAILURE TO EXERCISE OPTION. To the extent that the
option of any deceased optionee or any optionee whose employment or service
terminates is not exercised within the applicable period, all further rights to
purchase shares pursuant to the option shall cease and terminate.

                     6.1-4(f) LEAVE OF ABSENCE. Absence on leave approved by the
Employer or on account of illness or disability shall not be deemed a
termination or interruption of employment or service. Unless otherwise
determined by the Board of Directors, vesting of options shall continue during a
medical, family or military leave of absence, whether paid or unpaid, and
vesting of options shall be suspended during any other unpaid leave of absence.

               6.1-5 PURCHASE OF SHARES.

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                     6.1-5(a) NOTICE OF EXERCISE. Unless the Board of Directors
determines otherwise, shares may be acquired pursuant to an option granted under
the Plan only upon the Company's receipt of written notice from the optionee of
the optionee's binding commitment to purchase shares, specifying the number of
shares the optionee desires to purchase under the option and the date on which
the optionee agrees to complete the transaction, and, if required in order to
comply with the Securities Act of 1933, as amended, containing a representation
that it is the optionee's present intention to acquire the shares for investment
and not with a view to distribution.

                     6.1-5(b) PAYMENT. Unless the Board of Directors determines
otherwise, on or before the date specified for completion of the purchase of
shares pursuant to an option exercise, the optionee must have paid the Company
the full purchase price of those shares in cash or by check or, with the consent
of the Board of Directors, in whole or in part, in Common Stock of the Company
valued at fair market value, restricted stock, or other contingent awards
denominated in either stock or cash, promissory notes and other forms of
consideration. Unless otherwise determined by the Board of Directors, any Common
Stock provided in payment of the purchase price must have been previously
acquired and held by the optionee for at least six months. The fair market value
of Common Stock provided in payment of the purchase price shall be the closing
price of the Common Stock last reported before the time payment in Common Stock
is made or, if earlier, committed to be made, if the Common Stock is publicly
traded, or another value of the Common Stock as shall be specified by the Board
of Directors. No shares shall be issued until full payment for the shares has
been made, including all amounts owed for tax withholding. With the consent of
the Board of Directors, an optionee may request the Company to apply
automatically the shares to be received upon the exercise of a portion of a
stock option (even though stock certificates have not yet been issued) to
satisfy the purchase price for additional portions of the option.

                     6.1-5(c) TAX WITHHOLDING. Each optionee who has exercised
an option shall, immediately upon notification of the amount due, if any, pay to
the Company in cash or by check amounts necessary to satisfy any applicable
federal, state and local tax withholding requirements. If additional withholding
is or becomes required (as a result of exercise of an option or as a result of
disposition of shares acquired pursuant to exercise of an option) beyond any
amount deposited before delivery of the certificates, the optionee shall pay
such amount, in cash or by check, to the Company on demand. If the optionee
fails to pay the amount demanded, the Company or the Employer may withhold that
amount from other amounts payable to the optionee, including salary, subject to
applicable law. With the consent of the Board of Directors an optionee may
satisfy this obligation, in whole or in part, by instructing the Company to
withhold from the shares to be issued upon exercise or by delivering to the
Company other shares of Common Stock; provided, however, that the number of
shares so withheld or delivered shall not exceed the minimum amount necessary to
satisfy the required withholding obligation.

                     6.1-5(d) REDUCTION OF RESERVED SHARES. Upon the exercise of
an option, the number of shares reserved for issuance under the Plan shall be
reduced by the

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number of shares issued upon exercise of the option (less the number of any
shares surrendered in payment for the exercise price or withheld to satisfy
withholding requirements).

               6.1-6 LIMITATIONS ON GRANTS TO NON-EXEMPT EMPLOYEES. Unless
otherwise determined by the Board of Directors, if an employee of the Company or
any parent or subsidiary of the Company is a non-exempt employee subject to the
overtime compensation provisions of Section 7 of the Fair Labor Standards Act
(the "FLSA"), any option granted to that employee shall be subject to the
following restrictions: (i) the option price shall be at least 85 percent of the
fair market value, as described in Section 6.2-4, of the Common Stock subject to
the option on the date it is granted; and (ii) the option shall not be
exercisable until at least six months after the date it is granted; provided,
however, that this six-month restriction on exercisability will cease to apply
if the employee dies, becomes disabled or retires, there is a change in
ownership of the Company, or in other circumstances permitted by regulation, all
as prescribed in Section 7(e)(8)(B) of the FLSA.

           6.2 INCENTIVE STOCK OPTIONS. Incentive Stock Options shall be subject
to the following additional terms and conditions:

               6.2-1 LIMITATION ON AMOUNT OF GRANTS. If the aggregate fair
market value of stock (determined as of the date the option with respect to such
stock is granted) with respect to which Incentive Stock Options granted under
this Plan (and any other stock incentive plan of the Company or its parent or
subsidiary corporations) are exercisable for the first time by an employee
during any calendar year exceeds $100,000, the portion of the option or options
not exceeding $100,000 will be treated as an Incentive Stock Option and the
portion of the option exceeding $100,000 will be treated as a Non-Statutory
Stock Option. The preceding sentence will be applied by taking options into
account in the order in which they were granted. The Company may designate stock
that is treated as acquired pursuant to exercise of an option that is in part an
Incentive Stock Option and in part a Non-Statutory Stock Option as Incentive
Stock Option stock by issuing a separate certificate for that stock and
identifying the certificate as Incentive Stock Option stock in its stock
records. In the absence of such a designation, each share of stock issued
pursuant to exercise of the option will be treated in part as Incentive Stock
Option stock and in part as Non-Statutory Stock Option stock.

               6.2-2 LIMITATIONS ON GRANTS TO 10 PERCENT SHAREHOLDERS. An
Incentive Stock Option may be granted under the Plan to an employee possessing
more than 10 percent of the total combined voting power of all classes of stock
of the Company or any parent or subsidiary (as defined in subsections 424(e) and
424(f) of the Code) only if the option price is at least 110 percent of the fair
market value, as described in Section 6.2-4, of the Common Stock subject to the
option on the date it is granted and the option by its terms is not exercisable
after the expiration of five years from the date it is granted.

               6.2-3 DURATION OF OPTIONS. Subject to Sections 6.1-2, 6.1-4 and
6.2-2, Incentive Stock Options granted under the Plan shall continue in effect
for the period fixed by the

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Board of Directors, except that no Incentive Stock Option shall be exercisable
after the expiration of 10 years from the date it is granted.

               6.2-4 OPTION PRICE. The option price per share shall be
determined by the Board of Directors at the time of grant. Except as provided in
Section 6.2-2, the option price shall not be less than 100 percent of the fair
market value of the Common Stock covered by the Incentive Stock Option at the
date the option is granted. The fair market value shall be the closing price of
the Common Stock last reported before the time the option is granted, if the
stock is publicly traded, or, another value of the Common Stock as shall be
specified by the Board of Directors.

               6.2-5 LIMITATION ON TIME OF GRANT. No Incentive Stock Option
shall be granted on or after the tenth anniversary of the last action by the
Board of Directors adopting the Plan or approving an increase in the number of
shares available for issuance under the Plan, which action was subsequently
approved within 12 months by the shareholders.

               6.2-6 EARLY DISPOSITIONS. If within two years after an Incentive
Stock Option is granted or within 12 months after an Incentive Stock Option is
exercised, the optionee sells or otherwise disposes of Common Stock acquired on
exercise of the Option, the optionee shall within 30 days of the sale or
disposition notify the Company in writing of (i) the date of the sale or
disposition, (ii) the amount realized on the sale or disposition and (iii) the
nature of the disposition (e.g., sale, gift, etc.).

           6.3 NON-STATUTORY STOCK OPTIONS. Non-Statutory Stock Options shall be
subject to the following terms and conditions, in addition to those set forth in
Section 6.1 above:

               6.3-1 OPTION PRICE. The option price for Non-Statutory Stock
Options shall be determined by the Board of Directors at the time of grant and
may be any amount determined by the Board of Directors.

               6.3-2 DURATION OF OPTIONS. Non-Statutory Stock Options granted
under the Plan shall continue in effect for the period fixed by the Board of
Directors.

        7. STOCK BONUSES. The Board of Directors may award shares under the Plan
as stock bonuses. Shares awarded as a bonus shall be subject to the terms,
conditions and restrictions determined by the Board of Directors. The
restrictions may include restrictions concerning transferability and forfeiture
of the shares awarded, together with such other restrictions as may be
determined by the Board of Directors. The Board of Directors may require the
recipient to sign an agreement as a condition of the award, but may not require
the recipient to pay any monetary consideration other than amounts necessary to
satisfy tax withholding requirements. The agreement may contain any terms,
conditions, restrictions, representations and warranties required by the Board
of Directors. The certificates representing the shares awarded shall bear any
legends required by the Board of Directors. The Company may require any
recipient of a stock bonus to pay to the Company in cash or by check upon demand
amounts necessary to

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satisfy any applicable federal, state or local tax withholding requirements. If
the recipient fails to pay the amount demanded, the Company or the Employer may
withhold that amount from other amounts payable to the recipient, including
salary, subject to applicable law. With the consent of the Board of Directors, a
recipient may satisfy this obligation, in whole or in part, by instructing the
Company to withhold from any shares to be issued or by delivering to the Company
other shares of Common Stock; provided, however, that the number of shares so
withheld or delivered shall not exceed the minimum amount necessary to satisfy
the required withholding obligation. Upon the issuance of a stock bonus, the
number of shares reserved for issuance under the Plan shall be reduced by the
number of shares issued, less the number of shares withheld or delivered to
satisfy withholding obligations.

        8. RESTRICTED STOCK. The Board of Directors may issue shares under the
Plan for such consideration (including promissory notes and services) as
determined by the Board of Directors. Shares issued under the Plan shall be
subject to the terms, conditions and restrictions determined by the Board of
Directors. The restrictions may include restrictions concerning transferability,
repurchase by the Company and forfeiture of the shares issued, together with
such other restrictions as may be determined by the Board of Directors. All
Common Stock issued pursuant to this Section 8 shall be subject to a purchase
agreement, which shall be executed by the Company and the prospective purchaser
of the shares before the delivery of certificates representing such shares to
the purchaser. The purchase agreement may contain any terms, conditions,
restrictions, representations and warranties required by the Board of Directors.
The certificates representing the shares shall bear any legends required by the
Board of Directors. The Company may require any purchaser of restricted stock to
pay to the Company in cash or by check upon demand amounts necessary to satisfy
any applicable federal, state or local tax withholding requirements. If the
purchaser fails to pay the amount demanded, the Company or the Employer may
withhold that amount from other amounts payable to the purchaser, including
salary, subject to applicable law. With the consent of the Board of Directors, a
purchaser may satisfy this obligation, in whole or in part, by instructing the
Company to withhold from any shares to be issued or by delivering to the Company
other shares of Common Stock; provided, however, that the number of shares so
withheld or delivered shall not exceed the minimum amount necessary to satisfy
the required withholding obligation. Upon the issuance of restricted stock, the
number of shares reserved for issuance under the Plan shall be reduced by the
number of shares issued, less the number of shares withheld or delivered to
satisfy withholding obligations.

        9. PERFORMANCE-BASED AWARDS. The Board of Directors may grant awards
intended to qualify as qualified performance-based compensation under Section
162(m) of the Code and the regulations thereunder ("Performance-based Awards").
Performance-based Awards shall be denominated at the time of grant either in
Common Stock ("Stock Performance Awards") or in dollar amounts ("Dollar
Performance Awards"). Payment under a Stock Performance Award or a Dollar
Performance Award shall be made, at the discretion of the Board of Directors, in
Common Stock ("Performance Shares"), or in cash or in any combination thereof.
Performance-based Awards shall be subject to the following terms and conditions:

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           9.1 AWARD PERIOD. The Board of Directors shall determine the period
of time for which a Performance-based Award is made (the "Award Period").

           9.2 PERFORMANCE GOALS AND PAYMENT. The Board of Directors shall
establish in writing objectives ("Performance Goals") that must be met by the
Company or any subsidiary, division or other unit of the Company ("Business
Unit") during the Award Period as a condition to payment being made under the
Performance-based Award. The Performance Goals for each award shall be one or
more targeted levels of performance with respect to one or more of the following
objective measures with respect to the Company or any Business Unit: earnings,
earnings per share, stock price increase, total shareholder return (stock price
increase plus dividends), return on equity, return on assets, return on capital,
economic value added, revenues, operating income, inventories, inventory turns,
cash flows or any of the foregoing before the effect of acquisitions,
divestitures, accounting changes, and restructuring and special charges
(determined according to criteria established by the Board of Directors). The
Board of Directors shall also establish the number of Performance Shares or the
amount of cash payment to be made under a Performance-based Award if the
Performance Goals are met or exceeded, including the fixing of a maximum payment
(subject to Section 9.4). The Board of Directors may establish other
restrictions to payment under a Performance-based Award, such as a continued
employment requirement, in addition to satisfaction of the Performance Goals.
Some or all of the Performance Shares may be issued at the time of the award as
restricted shares subject to forfeiture in whole or in part if Performance Goals
or, if applicable, other restrictions are not satisfied.

           9.3 MAXIMUM AWARDS. No participant may receive in any fiscal year
Stock Performance Awards under which the aggregate amount payable under the
Awards exceeds the equivalent of 100,000 shares of Common Stock or Dollar
Performance Awards under which the aggregate amount payable under the Awards
exceeds $3,000,000.

           9.4 TAX WITHHOLDING. Each participant who has received Performance
Shares shall, upon notification of the amount due, pay to the Company in cash or
by check amounts necessary to satisfy any applicable federal, state and local
tax withholding requirements. If the participant fails to pay the amount
demanded, the Company or the Employer may withhold that amount from other
amounts payable to the participant, including salary, subject to applicable law.
With the consent of the Board of Directors, a participant may satisfy this
obligation, in whole or in part, by instructing the Company to withhold from any
shares to be issued or by delivering to the Company other shares of Common
Stock; provided, however, that the number of shares so delivered or withheld
shall not exceed the minimum amount necessary to satisfy the required
withholding obligation.

           9.5 EFFECT ON SHARES AVAILABLE. The payment of a Performance-based
Award in cash shall not reduce the number of shares of Common Stock reserved for
issuance under the Plan. The number of shares of Common Stock reserved for
issuance under the Plan shall be reduced by the number of shares issued upon
payment of an award, less the number of shares delivered or withheld to satisfy
withholding obligations.

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        10. CHANGES IN CAPITAL STRUCTURE.

            10.1 STOCK SPLITS; STOCK DIVIDENDS. If the outstanding Common Stock
of the Company is hereafter increased or decreased or changed into or exchanged
for a different number or kind of shares or other securities of the Company by
reason of any stock split, combination of shares, dividend payable in shares,
recapitalization or reclassification, appropriate adjustment shall be made by
the Board of Directors in the number and kind of shares available for grants
under the Plan and in all other share amounts set forth in the Plan. In
addition, the Board of Directors shall make appropriate adjustment in the number
and kind of shares as to which outstanding options, or portions thereof then
unexercised, shall be exercisable, so that the optionee's proportionate interest
before and after the occurrence of the event is maintained. Notwithstanding the
foregoing, the Board of Directors shall have no obligation to effect any
adjustment that would or might result in the issuance of fractional shares, and
any fractional shares resulting from any adjustment may be disregarded or
provided for in any manner determined by the Board of Directors. Any such
adjustments made by the Board of Directors shall be conclusive.

            10.2 MERGERS, REORGANIZATIONS, ETC. In the event of a merger,
consolidation, plan of exchange, acquisition of property or stock, split-up,
split-off, spin-off, reorganization or liquidation to which the Company is a
party or any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the Company's
assets (each, a "Transaction"), the Board of Directors shall, in its sole
discretion and to the extent possible under the structure of the Transaction,
select one of the following alternatives for treating outstanding options under
the Plan:

                10.2-1 Outstanding options shall remain in effect in accordance
with their terms.

                10.2-2 Outstanding options shall be converted into options to
purchase stock in one or more of the corporations, including the Company, that
are the surviving or acquiring corporations in the Transaction. The amount, type
of securities subject thereto and exercise price of the converted options shall
be determined by the Board of Directors of the Company, taking into account the
relative values of the companies involved in the Transaction and the exchange
rate, if any, used in determining shares of the surviving corporation(s) to be
held by holders of shares of the Company following the Transaction. Unless
otherwise determined by the Board of Directors, the converted options shall be
vested only to the extent that the vesting requirements relating to options
granted hereunder have been satisfied.

                10.2-3 The Board of Directors shall provide a period of 30 days
or less before the consummation of the Transaction during which outstanding
options may be exercised to the extent then exercisable, and upon the expiration
of that period, all unexercised options shall immediately terminate. The Board
of Directors may, in its sole discretion, accelerate the exercisability of
options so that they are exercisable in full during that period.

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            10.3 DISSOLUTION OF THE COMPANY. In the event of the dissolution of
the Company, options shall be treated in accordance with Section 10.2-3.

            10.4 RIGHTS ISSUED BY ANOTHER CORPORATION. The Board of Directors
may also grant options and stock bonuses and Performance-based Awards and issue
restricted stock under the Plan having terms, conditions and provisions that
vary from those specified in this Plan, provided that any such awards are
granted in substitution for, or in connection with the assumption of, existing
options, stock bonuses, Performance-based Awards and restricted stock granted,
awarded or issued by another corporation and assumed or otherwise agreed to be
provided for by the Company pursuant to or by reason of a Transaction.

        11. AMENDMENT OF THE PLAN. The Board of Directors may at any time,
modify or amend the Plan in such respects as it shall deem advisable because of
changes in the law while the Plan is in effect or for any other reason. Except
as provided in Section 10, however, no change in an award already granted shall
be made without the written consent of the holder of the award if the change
would adversely affect the holder.

        12. APPROVALS. The Company's obligations under the Plan are subject to
the approval of state and federal authorities or agencies with jurisdiction in
the matter. The Company will use its best efforts to take steps required by
state or federal law or applicable regulations, including rules and regulations
of the Securities and Exchange Commission and any stock exchange on which the
Company's shares may then be listed, in connection with the grants under the
Plan. The foregoing notwithstanding, the Company shall not be obligated to issue
or deliver Common Stock under the Plan if such issuance or delivery would
violate applicable state or federal securities laws.

        13. EMPLOYMENT AND SERVICE RIGHTS. Nothing in the Plan or any award
pursuant to the Plan shall (i) confer upon any employee any right to be
continued in the employment of an Employer or interfere in any way with the
Employer's right to terminate such employee's employment at will at any time,
for any reason, with or without cause, or to decrease such employee's
compensation or benefits, or (ii) confer upon any person engaged by an Employer
any right to be retained or employed by the Employer or to the continuation,
extension, renewal or modification of any compensation, contract or arrangement
with or by the Employer.

        14. RIGHTS AS A SHAREHOLDER. The recipient of any award under the Plan
shall have no rights as a shareholder with respect to any Common Stock until the
date the recipient becomes the holder of record of those shares. Except as
otherwise expressly provided in the Plan, no adjustment shall be made for
dividends or other rights for which the record date occurs before the date the
recipient becomes the holder of record.

Adopted March 12, 1997

                                       11<PAGE>   1
                                                                   EXHIBIT 10.16

                      REIMBURSEMENT AND SECURITY AGREEMENT

         This REIMBURSEMENT AND SECURITY AGREEMENT, dated as of March 15, 2001
(this "Agreement") , is entered into by and between DAVID C. KING ("Obligor")
and PROXIM, INC., a Delaware corporation ("Proxim").

                                    RECITALS

         A. The Bear Stearns Companies, Inc., Bear Stearns Securities Corp. or
Bear Stearns & Co. Inc. (including any of their respective affiliate
organizations, the "Bear Stearns Entities") has entered into a Customer
Agreement with Obligor dated as of ____________, ___ (the "Customer Agreement")
which provides for, among other things, the ability of Obligor to obtain margin
loans, which obligations are secured by, among other things, shares of Proxim
common stock owned by Obligor.

         B. The Board of Directors of Proxim has determined that it is the best
interests of Proxim and its stockholders that Proxim execute a Guaranty in favor
of the Bear Stearns Entities dated as of March 15, 2001, to guaranty the
obligations of Mr. King under the Customer Agreement up to a maximum of
$5,000,000 (the "Guaranty").

         C. In order to induce Proxim to guaranty the obligations of Obligor
under the Customer Agreement, Obligor has agreed to enter into this Agreement.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Obligor hereby agrees with Proxim as follows:

         1. REIMBURSEMENT. If Proxim shall at any time or from time to time make
any payment to the Bear Stearns Entities after demand by the Bear Stearns
Entities under the Guaranty, Obligor shall immediately reimburse Proxim (a) for
all amounts paid to the Bear Stearns Entities under the Guaranty, and (b) any
costs or expenses, including without limitation reasonable attorneys fees and
costs (including the fees of attorneys employed by Proxim), incurred by Proxim
in connection with any demand made by the Bear Stearns Entities under the
Guaranty or the enforcement of or attempt to enforce any of the obligations of
Obligor which are not performed as and when required by this Agreement. The
Obligations under this Agreement shall be absolute, unconditional and
irrevocable and shall not be reduced by any set-off or any event or occurrence
including any action or inaction by the Bear Stearns Entities or the
unenforceability of the agreements under which the Loan was made. "Obligations"
shall mean and include all amounts due Proxim under this Agreement or applicable
law in connection with the Guaranty and the obligations thereunder, now existing
or hereafter arising, whether direct or indirect, absolute or contingent, due or
to become due. Any Obligations not paid when due shall bear interest a rate per
annum equal to the "prime rate" as set forth in the "Money Rates" column of The
Wall Street Journal from time to time, plus 4%, and such interest shall become
part of the Obligations.

         2. GUARANTY FEE. In consideration of Proxim's delivery of the Guarantee
to the Bear Stearns Entities, Obligor agrees that for so long as the Guaranty
has not been terminated he shall pay on the last day of

                                       1
<PAGE>   2
each calendar month a guarantee fee for each month equal to 0.25% of the maximum
amount of the Guarantee. The fee shall be pro-rated for any portion of a month
in which it is outstanding.

         3. SATISFACTION OF LOAN OR RELEASE OF GUARANTY. Obligor agrees that if
Obligor's continued employment by Proxim shall terminate for any reason
(including without limitation by reason of resignation, death or disability),
Obligor shall within [10] days of such termination, at Obligor's expense, either
(i) satisfy in full his obligations under the Customer Agreement or (ii) cause
the Bear Stearns Entities to release Proxim from the Guaranty. Obligor agrees to
take any such action as is necessary to obtain a release of Proxim's Guaranty
notwithstanding any additional expense associated with such release.

         4. COVENANTS OF OBLIGOR. Obligor agrees:

                  (a)      To timely perform all of his obligations to the Bear
                           Stearns Entities entered into in connection with the
                           Customer Agreement.

                  (b)      To give Proxim prompt notice of any default in the
                           observance of Obligor's obligations to the Bear
                           Stearns Entities under the Customer Agreement and to
                           immediately cure any such default.

                  (c)      To transfer all of Obligor's other investment
                           property consisting of liquid securities, money
                           market funds and similar assets, as soon as
                           reasonably practicable, into the account with the
                           Bear Stearns Entities to secure the obligations under
                           the Customer Agreement and to take all other
                           reasonably practicable steps prevent the Guaranty
                           from being called by the Bear Stearns Entities.

                  (d)      To sell any and all securities and other assets
                           necessary, including without limitation the orderly
                           sale of shares of Proxim common stock in compliance
                           with Proxim's insider trading policy and take all
                           actions reasonably necessary to terminate and cause
                           the Bear Stearns Entities to release Proxim from the
                           Guaranty;

                  (e)      Within 10 business days or as soon as practicable, to
                           obtain a home equity loan on his principal residence
                           at 345 Hermosa, Menlo Park, California, and apply the
                           proceeds thereof to the obligations under the
                           Customer Agreement, or in the alternative, to deliver
                           a second deed of trust to Proxim securing the
                           obligations under this Agreement.

                  (f)      While the Guaranty is outstanding, not to deliver any
                           orders with respect to the Customer Agreement to the
                           Bear Stearns Entities other than liquidation orders.

                  (f)      To give Proxim prompt notice of any change of address
                           by Obligor.

         5. SECURITY. As security for the Obligations, Obligor hereby pledges
and grants to Proxim a security interest in all right, title and interest of
Obligor in and to the property described in Attachment 1 hereto (collectively
and severally, the "Collateral"), which Attachment 1 is incorporated herein by
this reference.

         6. AUTHORIZED ACTION BY PROXIM.

         (a) Obligor hereby authorizes Proxim to request and the Bear Stearns
Entities to provide periodic

                                       2
<PAGE>   3
reports on the status of the obligations under the Customer Agreement, Obligor's
payment record and any other credit information with respect to Obligor or the
obligations under the Customer Agreement. Obligor hereby irrevocably appoints
Proxim as its attorney-in-fact and agrees that Proxim may perform (but Proxim
shall not be obligated to and shall incur no liability to Obligor or any third
party for failure so to do) any act which Obligor is obligated by this Agreement
to perform, and to exercise such rights and powers as Obligor might exercise
with respect to the Collateral, including the right to (a) collect by legal
proceedings or otherwise and endorse, receive and receipt for all distributions,
dividends, interest, payments, proceeds and other sums and property now or
hereafter payable on or on account of the Collateral; (b) enter into any
extension, reorganization, deposit, merger, consolidation or other agreement
pertaining to, or deposit, surrender, accept, hold or apply other property in
exchange for the Collateral; (c) insure, process and preserve the Collateral;
(d) make any compromise or settlement, and take any action it deems advisable,
with respect to the Collateral; and (e) execute UCC financing statements and
other documents, instruments and agreements required hereunder; provided,
however, that Proxim shall not exercise any such powers prior to the occurrence
of an Event of Default and shall only exercise such powers during the
continuance of an Event of Default. Obligor agrees to reimburse Proxim upon
demand for any reasonable costs and expenses, including attorneys' fees, which
Proxim may incur while acting as Obligor's attorney-in-fact hereunder, all of
which costs and expenses are included in the Obligations. It is further agreed
and understood between the parties hereto that such care as Proxim gives to the
safekeeping of its own property of like kind shall constitute reasonable care of
the Collateral when in Proxim's possession; provided, however, that Proxim shall
not be required to make any presentment, demand or protest, or give any notice
and need not take any action to preserve any rights against any prior party or
any other person in connection with the Obligations or with respect to the
Collateral. So long as no Event of Default shall have occurred and be
continuing, Obligor shall be entitled to receive and retain free and clear of
the security interest of Proxim hereunder any and all distributions, dividends
and interest paid in respect of the Collateral.

         (b) During any period after termination of Obligor's employment in
Proxim and prior to termination and release of the Guaranty, Proxim shall have
the right to have all distributions, dividends and interest paid in respect of
the Collateral delivered to it and held as Collateral until such time as the the
Guaranty is released or until Proxim otherwise exercises its rights as a secured
party with respect thereto. Proxim shall have no responsibility for any
diminution in value of any Collateral held during such period, it being
understood that Obligor may obtain the release of any such Collateral at any
time by satisfying the Obligations under this Agreement.

         7. DEFAULT AND REMEDIES. Obligor shall be deemed in default under this
Agreement upon the occurrence and during the continuance of any of the following
events (each, an "Event of Default"):

                  (a)      Obligor shall default with respect to any obligation
                           to the Bear Stearns Entities in connection with the
                           Customer Agreement and such default shall continue
                           uncured for [30] days.

                  (b)      Obligor shall default on its obligations under
                           Section 2 of this Agreement or Obligor shall default
                           with respect to any other obligation to Proxim under
                           this Agreement and such default shall continue
                           uncured for 30 days.

                  (c)      The Bear Stearns Entities shall make any demand for
                           payment under the Guaranty.

                  (d)      Obligor shall become the subject of any bankruptcy or
                           insolvency proceeding.

                                       3
<PAGE>   4
                  (e)      Obligor shall resign or otherwise terminate his
                           employment as Proxim's Chief Executive Officer.

Upon the occurrence and during the continuance of any such Event of Default,
Proxim shall have all of the rights set forth under this Agreement and all of
the rights of a secured creditor under the California Uniform Commercial Code
and other applicable law. Obligor acknowledges and recognizes that Proxim may be
unable to effect a public sale of all or a part of the Collateral and may be
compelled to resort to one or more private sales to a restricted group of
purchasers who will be obligated to agree, among other things, to acquire the
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Obligor acknowledges that any such private sales
may be at prices and on terms less favorable than those of public sales, and
agrees that so long as such sales are made in good faith such private sales
shall be deemed to have been made in a commercially reasonable manner and that
Proxim has no obligation to delay sale of any Collateral to permit the issuer
thereof to register it for public sale under the Securities Act of 1933, as
amended or under any state securities law.

         8. MISCELLANEOUS.

                  (a) Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Obligor or Proxim under this Agreement shall be in writing and delivered to each
party at the address most recently provided by such party to the other party.

                  (b) Nonwaiver. No failure or delay on Proxim's part in
exercising any right hereunder shall operate as a waiver thereof or of any other
right nor shall any single or partial exercise of any such right preclude any
other further exercise thereof or of any other right.

                  (c) Amendments and Waivers. This Agreement may not be amended
or modified, nor may any of its terms be waived, except by written instruments
signed by Obligor and Proxim. Each waiver or consent under any provision hereof
shall be effective only in the specific instances for the purpose for which
given.

                  (d) Assignments. This Agreement shall be binding upon and
inure to the benefit of Proxim and Obligor and their respective successors and
assigns; provided, however, that Obligor may not assign or delegate rights and
obligations hereunder without the prior written consent of Proxim.

                  (e) Cumulative Rights, etc. The rights, powers and remedies of
Proxim under this Agreement shall be in addition to all rights, powers and
remedies given to Proxim by virtue of any applicable law, rule or regulation of
any governmental authority or any other agreement, all of which rights, powers,
and remedies shall be cumulative and may be exercised successively or
concurrently without impairing Proxim's rights hereunder.

                  (f) Partial Invalidity. If at any time any provision of this
Agreement is or becomes illegal, invalid or unenforceable in any respect under
the law or any jurisdiction, neither the legality, validity or enforceability of
the remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.

                  (g) Expenses. Obligor shall pay on demand all reasonable fees
and expenses, including reasonable attorneys' fees and expenses, incurred by
Proxim in connection with any demand by the Bear Stearns Entities under the
Guaranty related to the Loan, or the enforcement or attempt to enforce any of
the obligations of Obligor which are not performed as and when required by this
Agreement.

                                       4
<PAGE>   5
                  (h) Entire Agreement. This Agreement constitutes and contains
the entire agreement of Obligor and Proxim with respect to the subject matter
hereof and supersedes any and all prior agreements, negotiations,
correspondence, understandings and communications among the parties, whether
written or oral, respecting the subject matter hereof.

                  (i) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California without
reference to conflicts of law rules.

                  (j) Jury Trial. EACH OF OBLIGOR AND PROXIM, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

                  (k) Arbitration.

                           (i) Obligor and Proxim agree that any dispute or
         controversy arising out of, relating to, or in connection with this
         Agreement and the transaction contemplated hereby shall be subject to
         binding arbitration to be held in Santa Clara County, California, in
         accordance with the National Rules for the Resolution of Employment
         Disputes then in effect of the American Arbitration Association (the
         "Rules"), unless otherwise required by law. The arbitrator may grant
         injunctions or other relief in such dispute or controversy. The
         decision of the arbitrator shall be final, conclusive and binding on
         the parties to the arbitration. Judgment may be entered on the
         arbitrator's decision in any court having jurisdiction.

                           (ii) The arbitrator(s) shall apply California law to
         the merits of any dispute or claim, without reference to rules of
         conflict of law. Obligor hereby expressly consents to the personal
         jurisdiction of the state and federal courts located in California for
         any action or proceeding arising from or relating to this Agreement
         and/or relating to any arbitration in which the parties are
         participants.

                           (iii) The parties may apply to any court of competent
         jurisdiction for a temporary restraining order, preliminary injunction,
         or other interim or conservatory relief, as necessary, without breach
         of this arbitration agreement and without abridgment of the powers of
         the arbitrator.

                           (iv) OBLIGOR HAS CAREFULLY READ AND UNDERSTANDS THE
         ARBITRATION PROVISIONS OF THIS AGREEMENT. OBLIGOR IS EXECUTING THIS
         AGREEMENT VOLUNTARILY AND WITHOUT DURESS OR UNDUE INFLUENCE. OBLIGOR
         UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, OBLIGOR AGREES TO SUBMIT
         ANY FUTURE CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH
         THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY TO BINDING
         ARBITRATION TO THE EXTENT PERMITTED BY LAW, AND THAT THIS ARBITRATION
         CLAUSE CONSTITUTES A WAIVER OF OBLIGOR'S RIGHT TO A JURY TRIAL AND
         RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF
         THIS AGREEMENT.

                                       5
<PAGE>   6
                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first written above.

                             -------------------------
                             -------------------------

                             PROXIM, INC.

                             A DELAWARE CORPORATION

                             By: /s/ Keith E. Glover
                                 -----------------------------------------------
                             Name:  Keith E. Glover
                             Title: Vice President of Finance and Administration
                                    and Chief Financial Officer

                             By: /s/ David C. King
                                 -----------------------------------------------
                             Name:  David C. King
                             Title: Chairman of the Board of Directors,
                                    President and Chief Executive Officer

                                       6
<PAGE>   7
                       ATTACHMENT 1 TO SECURITY AGREEMENT

         All right, title and interest of Obligor, now owned or hereafter
acquired, in and to, the following:

         (a) All goods and equipment now owned or hereafter acquired, including,
without limitation, all laboratory equipment, computer equipment, office
equipment, machinery, fixtures, vehicles (including motor vehicles and
trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;

         (b) All inventory now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is in transit and including any returns upon any accounts or other
proceeds, including insurance proceeds, resulting from the sale or disposition
of any of the foregoing and any documents of title representing any of the
above, and books relating to any of the foregoing;

         (c) All contract rights, general intangibles, health care insurance
receivables, payment intangibles and commercial tort claims, now owned or
hereafter acquired, including, without limitation, goodwill, license agreements,
franchise agreements, blueprints, drawings, purchase orders, customer lists,
route lists, infringements, claims, computer programs, computer disks, computer
tapes, literature, reports, catalogs, design rights, income tax refunds,
payments of insurance and rights to payment of any kind;

         (d) All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Obligor
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Obligor (subject, in each case, to the contractual
rights of third parties to require funds received by Obligor to be expended in a
particular manner), whether or not earned by performance, and any and all credit
insurance, guaranties, and other security therefor, as well as all merchandise
returned to or reclaimed by Obligor and Obligor's books relating to any of the
foregoing;

         (e) All documents, cash, deposit accounts, letters of credit, letter of
credit rights, supporting obligations, certificates of deposit, instruments,
chattel paper, electronic chattel paper, tangible chattel paper and investment
property, including, without limitation, all securities, whether certificated or
uncertificated, security entitlements, securities accounts, commodity contracts
and commodity accounts, and all financial assets held in any securities account
or otherwise, wherever located, now owned or hereafter acquired and Obligor's
books relating to the foregoing; and

         (f) Any and all claims, rights and interests in any of the above and
all substitutions for, additions and accessions to and proceeds thereof,
including, without limitation, insurance, condemnation, requisition or similar
payments and the proceeds thereof.

                                       7

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