Document:

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                                                                    EXHIBIT 10.2

                           THE SPORTSMAN'S GUIDE, INC.

                           DEFERRED COMPENSATION PLAN

                           EFFECTIVE SEPTEMBER 1, 2002

                                             PREPARED BY:
                                             LEONARD, STREET AND DEINARD
                                             PROFESSIONAL ASSOCIATION/AMB
                                             150 S. FIFTH STREET #2300
                                             MINNEAPOLIS, MN 55402
                                                          (612) 335-1500

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                                TABLE OF CONTENTS

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ARTICLE 1. DEFINITIONS, GENDER, AND NUMBER........................................................................1

   Section 1.1. Definitions.......................................................................................1

   Section 1.2. Gender and Number.................................................................................9

ARTICLE 2. DEFERRED COMPENSATION ACCOUNTS.........................................................................9

   Section 2.1. Establishment of Accounts.........................................................................9

   Section 2.2. Property of Company..............................................................................10

ARTICLE 3. PARTICIPATION.........................................................................................10

   Section 3.1. Who May Participate..............................................................................10

   Section 3.2. Time and Conditions of Participation.............................................................10

   Section 3.3. Termination of Participation.....................................................................10

   Section 3.4. Missing Persons..................................................................................11

   Section 3.5. Relationship to Other Plans......................................................................11

ARTICLE 4. ENTRIES TO THE ACCOUNT................................................................................11

   Section 4.1. Deferrals........................................................................................11

   Section 4.2. Company Contributions............................................................................14

   Section 4.3. Disability.......................................................................................14

   Section 4.4. Change in Eligibility Status.....................................................................15

   Section 4.5. Allocation to Accounts...........................................................................15

   Section 4.6. Earnings Crediting...............................................................................15

ARTICLE 5. DISTRIBUTION OF BENEFITS..............................................................................17

   Section 5.1. Election of Benefit Commencement.................................................................17

   Section 5.2. Benefit Commencement.............................................................................17
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   Section 5.3. Form of Benefit Payment..........................................................................19

   Section 5.4. Death Benefits...................................................................................20

   Section 5.5. Minimum Amount and Frequency of Payments.........................................................22

   Section 5.6. Section 162(m) of the Code.......................................................................22

   Section 5.7. Acceleration of Distributions....................................................................22

   Section 5.8. Withdrawals......................................................................................23

   Section 5.9. Distributions on Plan Termination................................................................24

   Section 5.10. Claims Procedure................................................................................24

ARTICLE 6. FUNDING...............................................................................................26

   Section 6.1. Source of Benefits...............................................................................26

   Section 6.2. No Claim on Specific Assets......................................................................26

ARTICLE 7 ADMINISTRATION AND FINANCES............................................................................27

   Section 7.1. Administration...................................................................................27

   Section 7.2. Powers of Committee..............................................................................27

   Section 7.3. Actions of the Committee.........................................................................27

   Section 7.4. Delegation.......................................................................................28

   Section 7.5. Reports and Records..............................................................................28

ARTICLE 8. AMENDMENTS AND TERMINATION............................................................................28

   Section 8.1. Amendments.......................................................................................28

   Section 8.2. Termination......................................................................................28

ARTICLE 9. MISCELLANEOUS.........................................................................................29

   Section 9.1. No Guarantee of Employment.......................................................................29

   Section 9.2. Release..........................................................................................29

   Section 9.3. Notices..........................................................................................30
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   Section 9.4. Nonalienation....................................................................................30

   Section 9.5. Tax Liability....................................................................................30

   Section 9.6. Parachute Payments...............................................................................31

   Section 9.7. Indemnification..................................................................................31

   Section 9.8. Captions.........................................................................................31

   Section 9.9. Applicable Law...................................................................................31
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                           THE SPORTSMAN'S GUIDE, INC.
                           DEFERRED COMPENSATION PLAN
                           EFFECTIVE SEPTEMBER 1, 2002

         Effective September 1, 2002, The Sportsman's Guide, Inc. establishes a
deferred compensation plan for the benefit of certain executive employees of the
Company. The Plan is intended to be an unfunded plan maintained primarily for
the purpose of providing deferred compensation for a select group of management
or highly compensated employees, as described in Sections 201(2), 301(a)(3) and
401(a)(1) of Title I of ERISA.

ARTICLE 1. DEFINITIONS, GENDER, AND NUMBER.

         Section 1.1. Definitions. Whenever used in the Plan, the following
words and phrases shall have the meanings set forth below unless the context
plainly requires a different meaning, and when a defined meaning is intended,
the term is capitalized.

                  1.1.1. "Account" means the bookkeeping account used to measure
         and determine the amount of deferred compensation to be paid to a
         Participant or Beneficiary under the Plan, consisting of the Company
         Account, the Retirement Deferral Account and the Scheduled Withdrawal
         Account.

                  1.1.2. "Base Compensation" of a Participant for any Plan Year
         means the total annual salary paid by the Company to such individual
         for such Plan Year, including any amount which would be included in the
         definition of Base Compensation but for the individual's election to
         defer some of the individual's compensation pursuant to this Plan or
         any other deferred compensation plan established by the Company; but
         excluding any other remuneration paid by the Company, such as Incentive
         Compensation, bonuses,

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         commissions, overtime, incentive compensation, stock options,
         distributions of compensation previously deferred, restricted stock,
         allowances for expenses (including moving expenses, travel expenses,
         and automobile allowances), severance pay, and fringe benefits, whether
         payable in cash or in a form other than cash. In the case of an
         individual who is a participant in a plan sponsored by the Company
         which is described in Section 401(k) or 125 of the Code, the term Base
         Compensation shall include any amount which would be included in the
         definition of Base Compensation but for the individual's election to
         reduce the individual's compensation and have the amount of the
         reduction contributed to or used to purchase benefits under such plan.

                  1.1.3. "Beneficiary" or "Beneficiaries" means the persons or
         trusts designated by a Participant in writing pursuant to Section 5.4.1
         of the Plan as being entitled to receive any benefit payable under the
         Plan by reason of the death of a Participant, or, in the absence of
         such designation, the persons specified in Section 5.4.2 of the Plan.

                  1.1.4. "Board" means the Board of Directors of the Company as
         constituted at the relevant time.

                  1.1.5. "Cause" means the occurrence of one of the following:
         (a) a Participant's violation in any material respect of any agreement
         or representation set forth in any employment or other agreement, if
         any, between the Company and the participant; (b) the occurrence of an
         event that would constitute "cause" (or any similar concept) under any
         employment or other agreement, plan, or program that governs the
         Participant or by which the Participant is bound; (c) a Participant's
         willful violation of any material rule or policy of the Company or any
         theft or defalcation of property committed against the Company; (d) any
         continual willful or material failure by a Participant to comply with a

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         reasonable and lawful direction of the Board or any duly authorized
         committee of the Board or the Chief Executive Officer of the Company;
         (e) the willful misconduct by Participant in the responsibilities
         reasonably assigned to the Participant; (f) conviction of or plea of
         nolo contendere by a Participant to a felony; or (g) other actions or
         omissions that reflect moral turpitude or threaten to materially and
         adversely reflect on the Company in the conduct of its business.

                  1.1.6. "Change in Control" of the Company means a change in
         control of the Company of a nature that would be required to be
         reported in response to Item 6(e) of Schedule 14A of Regulation 14A
         promulgated under the Securities Exchange Act of 1934 ("Exchange Act"),
         provided that, without limitation, such a Change in Control shall
         include and be deemed to occur upon the following events:

                           (a) Any person (as such term is defined in Sections
         13(d) and 14(d)(2) of the Exchange Act) other than the Company, its
         subsidiaries or any employee benefit plan of the Company or its
         subsidiaries, becomes the "beneficial owner" (as defined in Rule 13d-3
         under the Exchange Act), directly or indirectly, of securities of the
         Company representing 50% or more of the combined voting power of the
         then outstanding securities of the Company;

                           (b) The Incumbent Directors cease to constitute a
         majority of the Board of Directors of the Company. "Incumbent
         Directors" means the members of the Board of Directors of the Company
         at the Effective Date of the Plan and persons elected or nominated for
         election as their successors or pursuant to increases in the size of
         the Board by a vote of at least two-thirds of the Incumbent Directors
         and successors or additional members so elected or nominated;

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                           (c) The shareholders of the Company approve a merger,
         combination, consolidation, recapitalization or other reorganization of
         the Company with one or more other entities that are not wholly-owned
         subsidiaries and, as a result of the transaction, less than 50% of the
         outstanding voting securities of the surviving or resulting corporation
         shall immediately after the event be beneficially owned in the
         aggregate by shareholders of the Company, determined as of the record
         date for determination of holders entitled to vote on the action or the
         day immediately prior to the event in the absence of a vote;

                           (d) The shareholders of the Company approve a plan of
         liquidation and dissolution or sale or transfer of all or substantially
         all of the Company's assets to an entity that is not a wholly-owned
         subsidiary.

                  1.1.7. "Code" means the Internal Revenue Code of 1986, as
         amended from time to time and any successor statute. References to a
         Code section shall be deemed to be to that section or to any successor
         to that section.

                  1.1.8. "Committee" means the Committee of one or more persons
         appointed by the Company's Board, or any person or entity designated by
         the Committee to administer the Plan pursuant to Section 7.4. In the
         absence of an appointed Committee, the Board shall serve as the
         Committee. As of the Effective Date, Chuck Lingen and Berghetta Schmidt
         are the members of the Committee.

                  1.1.9. "Company" means The Sportsman's Guide, Inc. a Minnesota
         corporation.

                  1.1.10. "Company Account" means a bookkeeping account
         established for a Participant for Company Contributions made to the
         Plan under Section 4.2.

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                  1.1.11. "Company Contribution" means the contribution, if any,
         made by the Company under Section 4.2.

                  1.1.12. "Compensation" with respect to a Participant for any
         period means the sum of such Participant's Base Compensation paid, and
         Incentive Compensation accrued with respect to such period.

                  1.1.13. "Crediting Rate" with respect to any Plan Year means
         the rate or rates established by the Company to determine earnings and
         losses with respect to an Account. The Company, in its sole discretion
         may determine to permit Participants to select an investment index
         (i.e., mutual funds, annuities or bank collective funds) as a Crediting
         Rate for one or more Accounts. In such event the Crediting Rate shall
         be the performance of such index applied to amounts credited to a
         Participant's Deferral Accounts as set forth in Section 4.6. The
         Company may change such indices at any time or from time to time and
         can restrict or limit at any time and from time to time the Account(s)
         eligible for such inclusion. The Company has the discretion to
         determine the exact manner in which the Crediting Rate, including any
         investment indices, shall be calculated and applied to an Account. The
         Company also has the discretion to determine the Crediting Rate to
         apply as a default Crediting Rate to any Account for which a
         Participant fails or refuses to select a Crediting Rate. The Company
         shall not be liable to any person or entity, including the Participant,
         for losses or reduced gains associated with or relating to the
         selection or application of a particular Crediting Rate, whether as a
         default rate or otherwise.

                  1.1.14. "Deferral Account" means one or more of the Retirement
         Deferral Account or a Scheduled Withdrawal Account, according to the
         context.

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                  1.1.15. "Disabled" or "Disability" with respect to a
         Participant shall have the same definition as in the then existing
         group long term disability plan of the Participant's Employer; or if
         there is no group long term disability plan covering the Participant,
         but there is one (and only one) such plan under which the Participant
         could have elected coverage as an employee of the Employer, then
         Disability shall have the same definition as in such group long term
         group disability plan. If the conditions of the previous sentence are
         not met, then Disability shall have the same definition as in such
         group long term group disability plan as selected by the Company.
         Disability shall be determined by a physician selected by the Company.
         A Participant shall cooperate with the Company, including making the
         Participant reasonably available for examination by physicians at the
         Company's request and at the Company's expense to determine whether or
         not the Participant is Disabled.

                  1.1.16. "Effective Date" means September 1, 2002, or as soon
         thereafter as administratively feasible, the date on which this Plan
         becomes effective.

                  1.1.17. "Eligible Executive" means any employee of the Company
         who is designated by the Committee, in its sole discretion, as an
         Eligible Executive. An employee shall cease to be an Eligible Executive
         if the Committee, in its sole discretion, determines not to designate
         the employee as an Eligible Executive for the year; or if the
         Committee, in its sole discretion, determines at any time that the
         employee should no longer participate in the Plan. The Committee shall
         notify any employee who has been an Eligible Executive and who is no
         longer an Eligible Executive.

                  1.1.18. "Employer" means with respect to a Participant the
         Company that employs that Participant.

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                  1.1.19. "Enrollment Period" means the period during each Plan
         Year (ending no later than December 31st of the Plan Year) designated
         by the Committee during which new Accounts may be opened and deferral
         elections may be changed for Compensation accrued with respect to the
         immediately succeeding Plan Year. Provided, however, that for the
         initial Plan Year, the Enrollment Period shall be such time preceding
         the commencement of the initial year as the Committee shall determine;
         and for the initial year that an Employee is selected as an Eligible
         Executive, such period of time following selection as the Committee
         shall determine.

                  1.1.20. "ERISA" means the Employee Retirement Income Security
         Act of 1974, as amended from time to time and any successor statute.
         References to an ERISA section shall be deemed to be to that section or
         to any successor to that section.

                  1.1.21. "Incentive Compensation" of a Participant for any Plan
         Year means the total remuneration paid to such Participant under the
         various cash incentive compensation programs maintained by the Company
         with respect to that Plan Year, including any amount which would be
         included in the definition of Incentive Compensation but for the
         Participant's election to defer some or all of the Participant's
         Incentive Compensation pursuant to this Plan or some other deferred
         compensation plan established by the Company; but excluding any other
         remuneration paid by the Company, such as Base Compensation,
         commissions, overtime, stock options, distributions of compensation
         previously deferred, restricted stock, allowances for expenses
         (including moving expenses, travel expenses, and automobile
         allowances), severance pay, and fringe benefits whether payable in cash
         or in a form other than cash. In the case of an individual who is a
         participant in a plan sponsored by the Company which is described in
         Section 401(k) or

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         125 of the Code, the term Incentive Compensation shall include any
         amount which would be included in the definition of Incentive
         Compensation but for the individual's election to reduce the
         individual's compensation and have the amount of the reduction
         contributed to or used to purchase benefits under such plan.

                  1.1.22. "Maximum Annual Deferral" with respect to a
         Participant for a Plan Year means the sum of (i) 50% of the
         Participant's Base Compensation paid for such Plan Year; and (ii) 100%
         of the Participant's Incentive Compensation accrued for such Plan Year.

                  1.1.23. "Participant" means an Eligible Executive who has
         satisfied the requirements of Article 3.

                  1.1.24. "Plan" means The Sportsman's Guide, Inc. Deferred
         Compensation Plan, as set forth herein and as amended or restated from
         time to time.

                  1.1.25. "Plan Year" means January 1 through December 31. The
         first Plan Year shall be a short Plan Year from the Effective Date
         through December 31, 2002.

                  1.1.26. "Retirement" means a Participant's termination of
         employment with the Company at any age as a result of death or
         Disability; or a Participant's termination of employment with the
         Company on or after age 55. Provided, however, that except as set forth
         in a written termination agreement between the Participant and the
         Company, a Participant will not be considered to have attained
         "Retirement" if the Participant is or could have been terminated from
         employment for Cause.

                  1.1.27. "Retirement Account" means one or both of the
         Retirement Deferral Account or the Company Account, according to the
         context.

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                  1.1.28. "Retirement Deferral Account" means a bookkeeping
         account that a Participant may have established for deferral of
         Compensation made to the Plan under Section 4.1.3.

                  1.1.29. "Scheduled Withdrawal Account" means one or both of
         the bookkeeping accounts that a Participant may have established for
         deferral of Compensation made to the Plan under Section 4.1.3. When a
         Participant opens a Scheduled Withdrawal Account, the Participant shall
         specify the date on which benefits are to commence pursuant to Section
         5.1.2. A Participant may have open no more than two Scheduled
         Withdrawal Accounts with positive balances at any time.

                  1.1.30. "Specified Date" means the date on which the
         Participant wishes to receive distributions from a Scheduled Withdrawal
         Account, as specified at the time that the Participant opens the
         Account.

                  1.1.31. "Trust" means the Trust under The Sportsman's Guide,
         Inc. Deferred Compensation Plan as amended from time to time.

         Section 1.2. Gender and Number. Except as otherwise indicated by
context, masculine terminology used herein also includes the feminine and
neuter, and terms used in the singular may also include the plural.

ARTICLE 2. DEFERRED COMPENSATION ACCOUNTS.

         Section 2.1. Establishment of Accounts. The Company shall establish one
or more (but no more than four) Accounts for each Participant which shall be
utilized solely as a device to measure and determine the amount of deferred
compensation to be paid under the Plan to the Participant or the Participant's
Beneficiaries.

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         Section 2.2. Property of Company. Any amounts so set aside for benefits
payable under the Plan are the property of the Company, except, and to the
extent, provided in the Trust.

ARTICLE 3. PARTICIPATION.

         Section 3.1. Who May Participate. Participation in the Plan is limited
to those Eligible Executives selected by the Committee for participation in the
Plan.

         Section 3.2. Time and Conditions of Participation. An Eligible
Executive shall become a Participant only upon the Eligible Executive's
compliance with such terms and conditions as the Committee may from time to time
establish for the implementation of the Plan, including but not limited to, any
condition the Committee may deem necessary or appropriate for the Company to
meet its obligations under the Plan. The Company may, in its sole discretion,
purchase insurance on the lives of each Participant. The Committee may, in its
sole discretion, reject for participation in the Plan Eligible Executives who
fail or refuse to cooperate with the Company in obtaining insurance on their
lives.

         Section 3.3. Termination of Participation. Once an individual has
become a Participant in the Plan, participation shall continue until the first
to occur of (a) payment in full of all benefits to which the Participant or the
Participant's Beneficiary is entitled under the Plan, or (b) the occurrence of
the event specified in Section 3.4 which results in loss of benefits. Except as
otherwise specified in the Plan, the Company may not terminate an individual's
participation in the Plan; provided, however, that if the Committee, in its
discretion, determines that it is likely that a Participant would not be
considered to be a member of a select group of management or highly compensated
employees, within the meaning of Sections 201(2), 301(a)(3) and 401(a)(l)

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of ERISA, for any period, the Committee may require that no contributions be
made to the Plan by or on behalf of such Participant during such period.

         Section 3.4. Missing Persons. If the Company is unable to locate the
Participant or the Participant's Beneficiary for purposes of making a
distribution, the amount of a Participant's benefits under the Plan that would
otherwise be considered as nonforfeitable shall be forfeited on the first to
occur of the following dates: (a) effective four years after the last date a
payment of said benefit was made, if at least one such payment was made; (b)
effective four years after the first date a payment of said benefit was directed
to be made by the Company pursuant to the terms of the Plan, if no payments have
been made; or (c) effective on the date of termination of the Plan. If a person
is located after the date of such forfeiture, the benefits for such Participant
or Beneficiary shall not be reinstated under the Plan.

         Section 3.5. Relationship to Other Plans. Participation in the Plan
shall not preclude participation of the Participant in any other fringe benefit
program or plan sponsored by the Company for which such Participant would
otherwise be eligible.

ARTICLE 4. ENTRIES TO THE ACCOUNT.

         Section 4.1. Deferrals.

                  4.1.1. Deferral Elections. Each Participant wishing to defer
         Compensation under the Plan shall enter into a deferral election, which
         shall specify the amount of Compensation the Participant wishes to have
         deducted from the Participant's pay and contributed to the Plan.
         Deferral elections must specify the percentage (stated as an integer),
         or the dollar amount, or a combination of percentage and dollar amount,
         as

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         determined by the Committee in its discretion, of the Compensation that
         the Participant wishes to have deducted for a Plan Year.

                  4.1.2. Timing of Elections. For Eligible Executives who wish
         to participate in the Plan as of the Effective Date, the deferral
         election shall be entered into before the Effective Date. For Eligible
         Executives who become eligible to participate in the Plan after the
         Effective Date, the deferral election may be entered into during any
         Enrollment Period, which election shall then be effective for the
         portion of the Plan Year following the Enrollment Period. A
         Participant's deferral election shall remain in effect unless and until
         changed by the Participant. A Participant may change a deferral
         election only during an Enrollment Period, in which case the change
         shall be effective for Compensation earned and accrued during the
         immediately following Plan Year. Provided, however, that to the extent
         required by any other benefit plan of the Company, deferral elections
         under this Plan shall be suspended after a hardship withdrawal under
         the other benefit plan of the Company. Unless changed during the
         applicable Enrollment Period, the suspended deferral election shall be
         applied as soon as reasonably practicable after the termination of the
         suspension. A deferral election will be effective to defer Compensation
         earned after the deferral election is entered into, and not before.
         Provided, however, that for Eligible Executives eligible to participate
         in the Plan as of the Effective Date, the deferral election with
         respect to Incentive Compensation may also apply to Incentive
         Compensation earned or accrued before the Effective Date but paid
         during the Plan Year that begins on the Effective Date or the
         immediately following Plan Year. Provided, further, that for Eligible
         Executives who become eligible to participate after the Effective Date,
         the deferral election made during the first Enrollment Period after
         selection as an Eligible

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         Executive may apply with respect to Incentive Compensation earned or
         accrued before the date of the deferral election but paid after the
         deferral election.

                  4.1.3. Allocation Between Accounts. At the time a Participant
         makes the Participant's initial deferral election, the Participant
         shall specify the Deferral Account(s) the Participant wishes to open in
         the Plan. A Participant with a deferral election shall always have at
         least one Deferral Account in the Plan and may, at the Participant's
         election, have up to three Deferral Accounts, specifically, a
         Retirement Deferral Account and two Scheduled Withdrawal Accounts. A
         Participant may open a new Deferral Account (up to a total of the three
         Deferral Accounts) during an Enrollment Period. A Participant shall
         specify in the Participant's deferral election the proportions in which
         the Participant's deferrals are to be allocated between the
         Participant's Retirement Deferral Account and the Participant's
         Scheduled Withdrawal Account(s). Provided, however, that no deferrals
         may be contributed to a Participant's Scheduled Withdrawal Account in
         the calendar year in which a distribution is to be made from said
         Account.

                  4.1.4. Limitation on Deferral Elections. A Participant may
         make a deferral election for any Plan Year provided that: (a) in no
         event may the amount deferred by a Participant for a Plan Year under
         the Participant's Deferral Account(s) exceed the Maximum Annual
         Deferral; (b) in no event may the amount deferred by a Participant for
         a Plan Year under the Participant's Deferral Account(s) be less than
         one percent of Base Salary, with respect to deferrals of Base Salary,
         or one percent of Incentive Compensation, with respect to deferrals of
         Incentive Compensation; (c) the Participant's remaining Compensation,
         after all deferrals, is sufficient to enable the Employer to withhold
         from the Participant's Compensation (i) any amounts necessary to
         satisfy

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         withholding requirements under applicable tax law; (ii) the amount of
         any contributions which the Participant may be required to make or may
         have elected to make under the various benefit plans of the Company;
         and (iii) any other payroll deduction from Compensation required by law
         or authorized by the Participant; and (d) the Participant's remaining
         compensation is sufficient to classify the Participant as a highly
         compensated employee under Section 414(q) of the Code.

         Section 4.2. Company Contributions. For each Plan Year that commences
on or after the Effective Date, the Company may, but is not required to make a
contribution to the Plan on behalf of any Participant who was an Eligible
Employee during the Plan Year. The amount of the contribution shall be the
amount determined by the Company in its sole discretion. Such amount is not
required to be uniform among the Eligible Employees, and the Company is
permitted to make Company Contributions for some Eligible Employees and not for
other Eligible Employees. Such Company Contributions can be expressed as a fixed
dollar amount; a percentage of Compensation, Base Compensation, or Incentive
Compensation; or as a matching contribution based on the Deferrals made by the
Eligible Employee. A Company Contribution on behalf of a Participant pursuant to
this Section 4.2 shall be allocated to the Company Account of the Participant on
whose behalf the contribution is made.

         Section 4.3. Disability. If a Participant becomes Disabled, deferrals
and Company Contributions shall continue to be allocated as described in
Sections 4.1 and 4.2 during the period in which the Participant is entitled to
receive Compensation from the Company, other than compensation under a long term
disability plan. If a Participant continues to be Disabled after such period,
deferrals and other Plan contributions will cease.

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         Section 4.4. Change in Eligibility Status. If a Participant in the Plan
ceases to be an Eligible Executive, the Participant's deferrals to the Plan
shall cease. No further Company Contributions under Section 4.2 shall be made to
the Plan unless and until the employee again becomes an Eligible Executive. The
Participant's Account(s) shall continue to be credited with earnings and losses
under Section 4.6 and shall be paid in accordance with Article 5.

         Section 4.5. Allocation to Accounts. During each Plan Year, the Company
shall post to the appropriate Deferral Account(s) of each Participant the amount
of Compensation to be deferred under such Deferral Account(s) as designated by
the Participant in the Participant's deferral election in effect for that Plan
Year. Such allocation shall occur as of the dates that the Compensation would
have been paid to the Participant. The Company shall post to the Company Account
the allocation under Section 4.2 as of the last day of the Plan Year for which
the Company Contribution is made. The Company shall also post to the appropriate
Account(s) amounts to be allocated to the Participant pursuant to Sections 4.3.

         Section 4.6. Earnings Crediting.

                  4.6.1. Earnings Credits for Accounts. Each Participant may
         request that an Account or Accounts be allocated to one or more
         Crediting Rates made available under the Plan and credited or debited,
         as the case may be, with such earnings or losses as the Account would
         have been credited or debited had it been actually invested in such
         Crediting Rates. The initial allocation request may be made at the time
         of opening of an Account. Once made, an investment allocation request
         shall remain in effect for all subsequent contributions until changed
         by the Participant. The Participant may change the investment
         allocation election by submitting a written request to the Committee.
         Participants may change elections no more than once in any calendar
         quarter. Such

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<PAGE>

         changes shall become effective as of the first day of the next quarter
         that is administratively feasible after the Committee receives such
         written request. Provided, however, that during the Plan Year in which
         a final distribution of a Participant's Account is expected to occur
         and for any Account for which no investment allocation has been made,
         the Committee may apply to that Account the default rate as described
         in Section 1.1.13 for that Plan Year. Allocation requests shall be
         subject to such other requirements as established by the Committee.

                  4.6.2. Period of Crediting Rates. Crediting Rates shall
         continue to be credited or debited until the payment of all amounts
         owed to the Participant under all Account(s).

                  4.6.3. No Guarantee of Account Value. The Participant agrees
         on behalf of the Participant and any Beneficiary to assume all risk in
         connection with any decrease in value of the Accounts resulting from
         the Participant's request and selection of any particular investment
         index under the Plan or from the application of any default Crediting
         Rate in accordance with the terms of this Plan.

                  4.6.4. No Actual Investment. The Company is under no
         obligation to make investments or change investments in a manner
         consistent with the investment indices available under the Plan. The
         elections made by the Participant are for purposes of determining
         earnings and losses to be credited to the Accounts and not for the
         purpose of determining any actual investment of the assets of the
         Company or the Trust, if any.

                  4.6.5. Participant Statements. At least annually, the Company
         shall provide each Participant with a statement of the Participant's
         Account(s).

                                       16
<PAGE>

ARTICLE 5. DISTRIBUTION OF BENEFITS.

         Section 5.1. Election of Benefit Commencement.

                  5.1.1. Distribution on Change in Control During a
         Participant's first Enrollment Period under this Plan, the Participant
         may elect to commence distribution of all Accounts upon a Change in
         Control, if such a Change in Control should occur before the Account
         would otherwise be payable under this Plan. If such election is not
         made at such time, then no acceleration of any Account shall occur upon
         a Change in Control under the Plan. If such an election is made and if
         distribution of an Account has commenced in installments before a
         Change in Control, the balance of the Account shall be paid in a lump
         sum within 90 days of the date of the Change in Control.

                  5.1.2. Scheduled Withdrawal Account. At the time a Participant
         opens a Scheduled Withdrawal Account under the Plan, the Participant
         shall establish the Specified Date for that Account. The Specified Date
         must be at least two years following the beginning of the Plan Year in
         which deferrals under the Scheduled Withdrawal Account commence.

         Section 5.2. Benefit Commencement.

                  5.2.1. Scheduled Withdrawal Account. Distribution of a
         Scheduled Withdrawal Account will be made in a lump sum during March of
         the calendar year in which the Specified Date occurs unless any of the
         following occurs before the Specified Date: (a) the Participant
         terminates employment for reason other than Retirement, in which event
         distributions will be made in a lump sum within 90 days following the
         Participant's termination of employment; (b) the Participant dies, in
         which event distributions will commence in the manner specified in
         Section 5.4.4; (c) there occurs a Change in Control

                                       17
<PAGE>

         and the Participant requested distribution to commence upon the Change
         in Control (as described in Section 5.1.1), in which event distribution
         will be made in a lump sum within 90 days following the Change in
         Control; (d) the Participant's Retirement occurs (other than by reason
         of death), in which event distribution will be made in a lump sum
         within 90 days following the date of Retirement; or (e) the Plan
         terminates, in which event distributions will be made in the manner
         specified in Section 8.2.

                  5.2.2. Retirement Deferral Account. Distribution of a
         Retirement Deferral Account will commence as of January of the Plan
         Year following Retirement (other than by reason of death) unless any of
         the following occurs before the Participant's Retirement (other than by
         reason of death): (a) the Participant terminates employment for reasons
         other than Retirement, in which event distributions will be made in a
         lump sum within 90 days following the Participant's termination of
         employment; (b) the Participant dies, in which event distributions will
         commence in the manner specified in Section 5.4.4; (c) there occurs a
         Change in Control and the Participant requested distribution to
         commence upon the Change in Control (as described in Section 5.1.1), in
         which event distribution will be made in a lump sum within 90 days
         following the Change in Control); or (d) the Plan terminates, in which
         event distributions will be made in the manner specified in Section
         8.2.

                  5.2.3. Company Account. Distribution of a Company Account will
         be made in full if the Participant remains employed with the Company or
         an Affiliate until Retirement, a Change in Control, or termination of
         the Plan. Distribution will commence as of January of the Plan Year
         following Retirement (other than by reason of death) unless any of the
         following occurs before the Participant's Retirement (other than by
         reason of death): (a)

                                       18
<PAGE>

         the Participant dies, in which event distribution will commence in the
         manner specified in Section 5.4.4; (b) there occurs a Change in Control
         and the Participant requested distribution to commence upon the Change
         in Control (as described in Section 5.1.1), in which event distribution
         will be made in a lump sum within 90 days following the Change in
         Control); or (c) the Plan terminates, in which event distributions will
         be made in the manner specified in Section 8.2. Provided, however, that
         if the Participant terminates employment before there occurs a
         Retirement, Change in Control, or termination of the Plan, then the
         Participant will be paid in a lump sum within 90 days following the
         termination of employment the vested portion of the Participant's
         Company Account. The vested portion of the Participant's Company
         Account shall be 20% upon the Participant's completing one Year of
         Service, increasing 20% for each Year of Service thereafter so that the
         Participant becomes 100% vested after completing five Years of Service.
         For purposes of this Plan, "Year of Service" shall have the meaning
         given to it in The Sportsman's Guide, Inc. 401(k) Plan with respect to
         vesting in plan benefits. Provided, however, that a Participant who is
         or could have been terminated for Cause shall forfeit 100% of the
         Participant's Company Account. Upon Retirement, a Change in Control, or
         termination of the Plan, the Participant shall become 100% vested in
         the Company Account.

         Section 5.3. Form of Benefit Payment. At the time a Retirement Account
under the Plan is opened for a Participant, the Participant shall select the
period over which payments from the Account will be made. The Participant may
elect to receive payment in the form of a lump sum or in annual installments
over 5 to 20 years, or in a combination of lump sum and installments, except
that a distribution upon a Change in Control or upon termination of employment
(other

                                       19
<PAGE>

than Retirement) will be distributed in the form of a lump sum only. The
Participant may make an election with respect to distribution on death that is
different from the election made with respect to distribution on Disability or
Retirement for other reason. If no election is made at the time a Retirement
Account is opened, the Participant shall be deemed to have made an election to
receive payments from the Retirement Account in a lump sum. The Participant's
selection of a method of benefit payment may be changed with an election filed
with the Committee at least 13 months in advance of the date that benefit
payments would otherwise commence to the Participant. A Participant's Account
will continue to be credited during the payment period with earnings and losses
as set forth in Section 4.6.

         Section 5.4. Death Benefits.

                  5.4.1. Beneficiary Designation. At the time a Participant
         begins participation in the Plan, the Participant may designate primary
         and contingent Beneficiaries for death benefits payable under the Plan.
         Such Beneficiaries may be individuals or trusts for the benefit of
         individuals. If the Participant is married at the time of the
         Participant's death, the designation of a primary Beneficiary other
         than the Participant's spouse as sole primary Beneficiary shall be
         valid only if the Participant's spouse has consented in writing to the
         naming of such primary Beneficiary and only if the spouse's consent has
         been notarized. A Beneficiary designation by a Participant shall be in
         writing on a form acceptable to the Committee and shall only be
         effective upon delivery to the Committee. A Beneficiary designation may
         be revoked by a Participant at any time by delivering to the Company a
         new Beneficiary designation form. The Beneficiary designation form last
         delivered to the Committee before the death of a Participant, if valid,
         shall control.

                                       20
<PAGE>

                  5.4.2. Failure to Designate. If there is no valid Beneficiary
         designation on file with the Company, or if all Beneficiaries
         designated by a Participant have predeceased the Participant, the
         benefits payable under the Plan by reason of the death of the
         Participant shall be paid to the Participant's spouse, if living; if
         the Participant does not leave a surviving spouse, to the Participant's
         issue by right of representation; or, if there are no such issue then
         living, to the Participant's estate. If there are benefits remaining
         unpaid at the death of a sole Beneficiary (who died after the
         Participant) under the Plan and if no successor Beneficiary has been
         designated, the remaining balance of the benefits under the Plan shall
         be paid to the deceased Beneficiary's estate, unless the Beneficiary
         designation form provides to the contrary. If there are benefits
         remaining unpaid at the death of a Beneficiary (who died after the
         Participant) who is one of multiple concurrent Beneficiaries, such
         remaining benefits shall be paid proportionally to the surviving
         Beneficiaries, unless the Beneficiary designation form provides to the
         contrary.

                  5.4.3. Death After Benefit Commencement. If a Participant dies
         after benefits have commenced pursuant to Section 5.2, the
         Participant's Account balance(s), if any, shall be paid to the
         Participant's Beneficiary in the same manner that benefits would have
         been paid to the Participant had the Participant survived. The
         Committee may, at its sole discretion, accelerate the timing of
         payments to the Beneficiary. Any Beneficiary may request such
         acceleration in writing to the Committee.

                  5.4.4. Death Before Benefit Commencement. If the Participant
         dies before distribution has commenced to the Participant, distribution
         to the Beneficiary shall be paid as elected by the Participant under
         Section 5.3, or in the absence of an election, in a lump sum within 90
         days of death. The Committee may, at its sole discretion, accelerate

                                       21
<PAGE>

         payments to the Beneficiary. Any Beneficiary may request such
         acceleration in writing to the Committee.

                  5.4.5. Marital Deduction. If any benefits are payable under
         the Plan to the surviving spouse of a deceased Participant, the estate
         of the Participant's spouse shall be entitled to all remaining
         benefits, if any, at the spouse's death, unless specifically directed
         to the contrary by an effective Beneficiary designation.

         Section 5.5. Minimum Amount and Frequency of Payments. Notwithstanding
anything in this Article 5 to the contrary, the Committee may adjust the length
of the distribution period under this Article 5 in order to assure that any
monthly installment is not less than $500. If the value of all Accounts at the
date of initial distribution is less than $30,000, then, notwithstanding any
other provision of the Plan to the contrary, the Committee may pay the Account
in a lump sum.

         Section 5.6. Section 162(m) of the Code. Notwithstanding anything to
the contrary in this Plan, a Participant's Employer may defer payment of any
amounts otherwise required to be paid under this Plan in order to preserve the
deduction for such payment under Section 162(m) of the Code.

         Section 5.7. Acceleration of Distributions. If the Internal Revenue
Service determines that a Participant or Beneficiary has received an economic
benefit or is in constructive receipt of a benefit under the Plan and has made a
final assessment of an income tax deficiency with respect to such benefit or if
a final judicial determination has been entered that an income tax deficiency
exists, the Committee shall distribute to such Participant an amount equal to
the taxable income recognized.

                                       22
<PAGE>

         Section 5.8. Withdrawals.

                  5.8.1. Hardship Withdrawal. Upon the application of any
         Participant, the Committee may permit such Participant to withdraw some
         or all of the amount in one or more of the Participant's Accounts,
         other than the Company Account. A Participant must provide the
         Committee with a written petition of the intent to withdraw from the
         Participant's Account at least 60 days (or such shorter time as
         permitted by the Committee in its discretion) before the date of
         withdrawal. No withdrawal shall be made under the provisions of this
         Section except for the purpose of enabling a Participant to meet
         immediate needs created by a severe financial hardship to the
         Participant or resulting from a sudden and unexpected illness or
         accident of the Participant or of a dependent of the Participant, loss
         of the Participant's property due to casualty, the Participant's
         Disability, or other similar extraordinary and unforeseeable
         circumstances arising as a result of events beyond the control of the
         Participant. The circumstances that will constitute a severe financial
         hardship will depend upon the facts of each case, but, in any case,
         payment may not be made to the extent that such hardship is or may be
         relieved: (a) through reimbursement or compensation through insurance
         or otherwise; (b) by liquidation of the Participant's assets, to the
         extent such liquidation would not itself cause a severe financial
         hardship; or (c) by cessation of deferrals under the Plan, to the
         extent permitted under the terms of the Plan. If a withdrawal is
         permitted, the amount of the withdrawal shall be distributed to the
         Participant in a lump sum as soon as is administratively practicable
         following the requested withdrawal date. In addition, (a) the deferral
         election of the Participant for the remainder of the Plan Year shall be
         terminated and (b) the Participant may not enter into a new deferral
         election until a Plan Year that begins at least twelve months following
         the date of the withdrawal.

                                       23
<PAGE>

                  5.8.2. Early Distribution. Upon the application of any
         Participant, the Committee shall permit such Participant to receive a
         distribution of some or all of the amounts in an Account, other than
         the Company Account, before the time otherwise specified in the Plan
         for reasons other than financial hardship. Provided, however, that a
         request for a distribution of 75% or more of an Account shall be deemed
         to be and shall be treated as a request for a distribution of 100% of
         the Account. A Participant must give a written petition of the
         Participant's intent to receive such a distribution at least 60 days
         (or such shorter time as permitted by the Committee in its discretion)
         before the date of the distribution. Such a request may be made no more
         than once during any Plan Year. If a Participant elects to receive such
         a distribution a penalty shall be imposed such that the amount of the
         requested distribution shall be reduced by 10% (5% if the distribution
         occurs within 24 months following a Change in Control), which reduction
         shall be permanently forfeited by the Participant to the Company. In
         addition, (a) the deferral election of the Participant for the
         remainder of the Plan Year shall be terminated and (b) the Participant
         may not enter into a new deferral election until a Plan Year that
         begins at least twelve months following the date of the withdrawal.

         Section 5.9. Distributions on Plan Termination. Notwithstanding
anything in Article 5 to the contrary, if the Plan is terminated, distributions
shall be made in accordance with Section 8.2.

         Section 5.10. Claims Procedure.

                  5.10.1. Initial Claim for Benefits. The following shall apply
         with respect to claims of Participants for benefits under the Plan. The
         Committee shall give notice to a Participant within 90 days of the
         Participant's written application for benefits of the Participant's
         eligibility or noneligibility for benefits under the Plan. If the
         Committee

                                       24
<PAGE>

         determines that a Participant is not eligible for benefits or full
         benefits, the notice shall set forth (a) the specific reasons for such
         denial, (b) a specific reference to the provision of the Plan on which
         the denial is based, (c) a description of any additional information or
         material necessary for the claimant to perfect the claim, and a
         description of why it is needed, and (d) an explanation of the Plan's
         claims review procedure and other appropriate information as to the
         steps to be taken if the Participant wishes to have the claim reviewed.
         If the Committee determines that there are special circumstances
         requiring additional time to make a decision, the Committee shall give
         notice to the Participant of the special circumstances and the date by
         which a decision is expected to be made, and may extend the time for up
         to an additional 90-day period.

                  5.10.2. Appeal of Claim Denial. If a Participant is determined
         by the Committee to be not eligible for benefits, or if the Participant
         believes that the Participant is entitled to greater or different
         benefits, the Participant shall have the opportunity to have the claim
         reviewed by filing a petition for review within 60 days after the
         Participant has been given the notice issued by the Committee. If there
         is no Trust in place with respect to the Participant's benefit, or if
         there is a Trust, but the Trustee has not agreed to determine appeals
         from denials of claims for benefits under the Plan, then the petition
         shall be filed with the Committee. If there is a Trust in place with
         respect to the Participant's benefit and if the Trustee has agreed to
         determine appeals from denials of claims for benefits under the Plan,
         then the petition shall be filed with the Trustee of the Trust. A
         petition shall state the specific reasons the Participant believes that
         the Participant is entitled to benefits or greater or different
         benefits. Within 60 days after the petition has been filed, the
         Committee or the Trustee, as the case may be, shall afford the
         Participant an

                                       25
<PAGE>

         opportunity to present the Participant's position to the Committee or
         the Trustee, as the case may be, in writing, and the Participant shall
         have the right to review pertinent documents. The Committee or the
         Trustee, as the case may be, shall give notice to the Participant of
         its decision in writing within said 60-day period, stating specifically
         the basis of the decision written in a manner calculated to be
         understood by the Participant and the specific provisions of the Plan
         on which the decision is based. If because of special circumstances,
         the 60-day period is not sufficient, the decision may be deferred for
         up to another 60-day period at the election of the Committee or the
         Trustee, as the case may be, but notice of this deferral shall be given
         to the Participant.

ARTICLE 6. FUNDING

         Section 6.1. Source of Benefits. All benefits under the Plan shall be
paid when due by the Company out of its assets or from the Trust.

         Section 6.2. No Claim on Specific Assets. No Participant shall be
deemed to have, by virtue of being a Participant in the Plan, any claim on any
specific assets of the Company such that the Participant would be subject to
income taxation on the Participant's benefits under the Plan before
distribution. The rights of Participants and Beneficiaries to benefits to which
they are otherwise entitled under the Plan shall be those of an unsecured
general creditor of the Company.

                                       26
<PAGE>

ARTICLE 7. ADMINISTRATION AND FINANCES

         Section 7.1. Administration. The Plan shall be administered by the
Committee. The Company shall bear all administrative costs of the Plan other
than those specifically charged to a Participant or Beneficiary.

         Section 7.2. Powers of Committee. In addition to the other powers
granted under the Plan, the Committee shall have all powers necessary to
administer the Plan, including, without limitation, power exercisable in its
sole discretion, (a) to interpret the provisions of the Plan; (b) to determine
the rights of employees, Participants and Beneficiaries to benefit under the
Plan; (c) to establish and revise the method of accounting for the Plan; (d) to
maintain the Accounts; (e) to determine Crediting Rates for the Accounts; (f) to
establish rules for the administration of the Plan; and (g) to prescribe any
forms required to administer the Plan.

         Section 7.3. Actions of the Committee. Except as modified by the Board,
the Committee (including any person or entity to whom the Committee has
delegated duties, responsibilities or authority, to the extent of such
delegation) has total and complete discretionary authority to determine
conclusively for all parties all questions arising in the administration of the
Plan, to interpret and construe the terms of the Plan, and to determine all
questions of eligibility and status of employees, Participants and Beneficiaries
under the Plan and their respective interests. Subject to the claims procedures
of Section 5.10, all determinations, interpretations, rules and decisions of the
Committee (including those made or established by any person or entity to whom
the Committee has delegated duties, responsibilities or authority, if made or
established pursuant to such delegation) are conclusive and binding upon all
persons having or claiming to have any interest or right under the Plan.

                                       27
<PAGE>

         Section 7.4. Delegation. The Committee, or any officer designated by
the Committee, shall have the power to delegate specific duties and
responsibilities to officers or other employees of the Company or other
individuals or entities. Any delegation may be rescinded by the Committee at any
time. Each person or entity to whom a duty or responsibility has been delegated
shall be responsible for the exercise of such duty or responsibility and shall
not be responsible for any act or failure to act of any other person or entity.

         Section 7.5. Reports and Records. The Committee, and those to whom the
Committee has delegated duties under the Plan, shall keep records of all their
proceedings and actions and shall maintain books of account, records, and other
data as shall be necessary for the proper administration of the Plan and for
compliance with applicable law.

ARTICLE 8. AMENDMENTS AND TERMINATION.

         Section 8.1. Amendments. The Company, by action of the Board, or the
Committee to the extent authorized by the Board, may amend the Plan, in whole or
in part, at any time and from time to time. Provided, however, that for a period
of 24 months following a Change in Control, no amendment shall be effective
without the approval of a majority of the Participants in the Plan. Any
amendment shall be filed with the Plan documents. No amendment, however, may be
effective to eliminate or reduce any Account balance, determined as of the date
of such amendment, of any Participant or of any Beneficiary then eligible for
benefits, without such Participant's or Beneficiary's consent.

         Section 8.2. Termination. The Company reserves the right to terminate
the Plan at any time by action of the Board. Provided, however, that for a
period of 24 months following a Change in Control, no termination shall be
effective without the approval of a majority of the

                                       28
<PAGE>

Participants in the Plan. Upon termination of the Plan, all deferrals and
Company Contributions will cease and no future deferrals or Company
Contributions will be made. Termination of the Plan shall not operate to
eliminate or reduce any Account balance, determined as of the date of such
termination, of any Participant or of any Beneficiary then eligible for
benefits, without such Participant's or Beneficiary's consent. If the Plan is
terminated, payments from the Accounts of all Participants and Beneficiaries
shall be made as soon as administratively practicable following the termination
in a lump sum or, in the discretion of the Company, in installments over a
period of no more than three years, commencing within 90 days of the date of
termination of the Plan. Provided, however, that if the termination occurs
within 24 months following a Change in Control, distribution must be made in a
lump sum as soon as administratively practicable (but in no event longer than 90
days) following the termination. Accounts shall be credited with earnings during
the payment period in accordance with Section 4.6.

ARTICLE 9. MISCELLANEOUS

         Section 9.1. No Guarantee of Employment. Neither the adoption and
maintenance of the Plan nor the execution by the Company of a deferral or
Account election with any Participant shall be deemed to be a contract of
employment between the Company and any Participant. Nothing contained herein
shall give any Participant the right to be retained in the employ of the Company
or to interfere with the right of the Company to discharge any Participant at
any time, nor shall it give the Company the right to require any Participant to
remain in its employ or to interfere with the Participant's right to terminate
the Participant's employment at any time.

         Section 9.2. Release. Any payment of benefits to or for the benefit of
a Participant or a Participant's Beneficiaries that is made in good faith by the
Company in accordance with the

                                       29
<PAGE>

Company's interpretation of its obligations hereunder shall be in full
satisfaction of all claims against the Company for benefits under this Plan to
the extent of such payment.

         Section 9.3. Notices. Any notice or communication permitted or required
under the Plan shall be in writing and shall be delivered personally, or sent by
registered or certified mail, return receipt requested, postage prepaid, or sent
by nationally recognized overnight carrier, postage prepaid, or sent by
facsimile transmission to the principal office of the Company, if to the
Company, or to the address last shown on the records of the Company, if to a
Participant or Beneficiary. Such notice or communication shall be deemed given
(a) when delivered if personally delivered; (b) five mailing days after having
been placed in the mail, if delivered by registered or certified mail; (c) the
business day after having been placed with a nationally recognized overnight
carrier, if delivered by nationally recognized overnight carrier, and (d) the
business day after transmittal when transmitted with electronic confirmation of
receipt, if transmitted by facsimile. Any party may change the address or
facsimile number to which notices or communications are to be sent to it by
giving notice of such change in the manner herein provided for giving notice.

         Section 9.4. Nonalienation. No benefit payable at any time under this
Plan shall be subject in any manner to alienation, sale, transfer, assignment,
pledge, levy, attachment, or encumbrance of any kind by any Participant or
Beneficiary.

         Section 9.5. Tax Liability. The Company may withhold or direct the
trustee of the Trust to withhold from any payment of benefits (or from any other
amounts to be paid to the Participant or Beneficiaries) such amounts as the
Company determines are reasonably necessary to pay any taxes (and interest
thereon) required to be withheld or for which the trustee of the Trust may
become liable under applicable law. The Company may also forward or direct the

                                       30
<PAGE>

trustee of the Trust to forward to the appropriate taxing authority any amounts
required to be paid by the Company or the Trust under the preceding sentence.

         Section 9.6. Parachute Payments. No gross up or other recalculations of
amounts owed under this Plan shall be made to avoid excess parachute payments
under Section 280G of the Code or excise tax liability under Section 4995 of the
Code.

         Section 9.7. Indemnification. The Company shall indemnify and defend to
the fullest extent permitted by law any employee or former employee serving or
formerly serving as a member of the Committee against all liabilities, damages,
costs and expenses (including attorneys' fees and amounts paid in settlement of
any claims approved by the Company) occasioned by any act or omission to act in
connection with the Plan, if such act or omission is in good faith.

         Section 9.8. Captions. Article and section headings and captions are
provided for purposes of reference and convenience only and shall not be relied
upon to construe, define, modify, limit, or extend the scope of any provision of
the Plan.

         Section 9.9. Applicable Law. The Plan and all rights hereunder shall be
governed by and construed according to the laws of the State of Minnesota,
except to the extent such laws are preempted by the laws of the United States of
America. The Plan shall be interpreted in a manner consistent with all
applicable laws, including the Americans with Disabilities Act.

                                       31
<PAGE>
IN WITNESS WHEREOF, The Sportsman's Guide, Inc. has caused this Plan to be
executed by its duly authorized officers this 16th day of August, 2002.

                                    THE SPORTSMAN'S GUIDE, INC.

                                    By /s/ Charles Lingen
                                       ----------------------------------------
                                       Its CFO
                                           ------------------------------------

         The undersigned hereby consent to serve as members of the Committee
under the Plan:

                                    /s/ Chuck Lingen
                                    -------------------------------------------
                                    Chuck Lingen

                                    /s/ Berghetta Schmidt
                                    -------------------------------------------
                                    Berghetta Schmidt

                                       32<PAGE>

                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

      This Agreement is entered into by and between August Technology
Corporation ("August Technology " or the "Company"), a Minnesota corporation,
with its principal place of business at 4900 West 78th Street, Bloomington,
Minnesota 55435, and Scott Gabbard of 19820 Doonbey Circle, Prior Lake,
Minnesota 55372 USA ("Employee").

      WHEREAS, Employee desires employment with August Technology or has been
employed with August Technology and wishes to continue employment under the
terms and conditions set forth in this Agreement;

      WHEREAS, Employee acknowledges and agrees that he has and will continue to
have access to confidential, proprietary and trade secret information in the
course of his/her employment and continued employment with August Technology,
the unauthorized use or disclosure of which would cause irreparable harm to
August Technology;

      WHEREAS, August Technology and Employee wish to set forth the terms of
their agreement in writing;

      NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and for other good and valuable consideration the receipt and
sufficiency of which is specifically acknowledged by the parties, August
Technology and Employee agree as follows:

      1. EMPLOYMENT. August Technology agrees to employ or continue to employ
Employee, effective May 9, 2002, and Employee accepts employment or continued
employment, upon the terms and conditions set forth in this Agreement.

      2. TERM OF EMPLOYMENT. August Technology shall continue to employ Employee
for an indefinite duration until his/her employment is terminated in accordance
with Paragraph 8 of this Agreement.

      3. DUTIES AND RESPONSIBILITIES. Employee shall devote his/her time,
attention and best efforts to the duties and responsibilities of his/her
position, and to the business and affairs of August Technology. Employee's title
shall be as set forth in Exhibit A as "Employee's Title", reporting to the
person or office as set forth in Exhibit A as "Manager". Employee shall perform
all duties and responsibilities of the position he/she holds with August
Technology as those duties and responsibilities may change from time to time.
Employee shall comply with August Technology's standards, policies and
procedures in effect and as they may change from time to time; provided that to
the extent such policies and procedures are inconsistent with this Agreement,
the provisions of this Agreement shall control.

      4. COMPENSATION. August Technology shall pay Employee a gross annual
salary as set forth in Exhibit A as "Base Salary", less appropriate payroll
deductions. Employee may also receive incentive compensation in accordance with
the Annual Incentive Plan, as issued and as may change from time to time by the
Company, or any other similar plan authorized by the Board of Directors.
Employee's compensation may be periodically increased or adjusted as authorized
by the Board of
<PAGE>
Directors in the case of the Chief Executive Officer, or, in the case of all
others, as recommended by the Chief Executive Officer and approved by the Board
of Directors.

      5. BUSINESS EXPENSES. August Technology will, in accordance with its
policies and practices as such may change from time to time, reimburse Employee
for all ordinary and necessary business expenses after receipt of appropriate
documentation of such expenses.

      6. BENEFITS. Employee shall be entitled to insurance and other benefits
provided to key management employees in accordance with applicable plan
documents and commensurate with vice president and higher positions within the
Company. Benefits provided to employees are subject to change in the discretion
of August Technology.

      7. STOCK OPTIONS. At the discretion of August Technology, Employee may be
granted stock options from time to time, which options shall be subject to the
terms and conditions of the August Technology Corporation 1997 Stock Option
Plan, as amended from time to time, or any successor plan, and the related stock
option agreements. Further, Employee shall be eligible to participate in the
August Technology Corporation 2000 Employee Stock Purchase Plan, as amended from
time to time, or any successor plan, subject to the terms and conditions
contained therein.

      8. TERMINATION. Employee's employment under this Agreement may be
terminated:

            (a)   At any time upon mutual written agreement of the parties;

            (b)   By either Employee or August Technology at any time, with or
                  without cause, upon thirty (30) days' written notice to the
                  other;

            (c)   By August Technology immediately upon notice to Employee for
                  cause which shall be defined as:

                  (i)   Employee's material failure or neglect, or refusal to
                        perform, the duties and responsibilities of his/her
                        position and/or the reasonable direction of the Board of
                        Directors or his/her superiors;

                  (ii)  Commission by Employee of any willful, intentional or
                        negligent act that has the effect of injuring the
                        reputation, business or performance of August
                        Technology;

                  (iii) Employee's conviction of a crime, or commission
                        of any act involving moral turpitude;

                  (iv)  Any material default or nonperformance of the terms of
                        this Agreement, or any violation of Paragraphs 10, 11,
                        12, 14 and/or 15 of this Employment Agreement; or

            (d)   Employee's employment will terminate immediately upon
                  his/her death.

                                       2
<PAGE>
      Upon Employee's resignation or termination under this Paragraph 8 for any
reason, August Technology shall pay Employee his/her Base Salary through the
Employee's last date of employment, and any accrued and unused vacation or other
paid time off through the Employee's last date of employment. Employee's
entitlement to any vested pension, profit sharing or other benefits shall be
governed by applicable plan documents. In the event Employee's employment is
terminated either by Employee or August Technology under Paragraph 8 (b), August
Technology may elect, in its sole discretion, to pay Employee his/her salary for
the thirty (30) day notice period in lieu of Employee's continued performance of
duties during the notice period. In the event Employee is terminated by August
Technology in accordance with Paragraph 8 (b), August Technology shall, in
addition to the above, pay Employee a severance at his/her then current Base
Salary rate for the time period as set forth in Exhibit A as "Severance Period",
to be paid according to the normal payroll schedule, directly following the
thirty (30) day notice period, and August Technology shall, if the Employee
elects to continue group health or other group benefits as allowed by COBRA,
make the COBRA payments for the Severance Period. Employee shall not be entitled
to any further or other payments or benefits of any kind upon the Employee's
termination or resignation under this Paragraph 8. In the event, Employee is
entitled to Change in Control benefits as set forth in Paragraph 9, Employee
shall not be entitled to any severance or notice rights under this Paragraph 8.

      9. CHANGE IN CONTROL. If, within eighteen (18) months following a Change
in Control (as defined below), Employee's employment is terminated (as defined
below), then:

            (a)   Employee shall be paid his/her last Base Salary on a regular
                  payroll cycle as of the effective date for the time period as
                  set forth in Exhibit A as "Change In Control Severance Period"
                  from the effective date of such termination;

            (b)   For the same Change In Control Severance Period from the
                  effective date of such termination as set forth in Paragraph
                  9(b), the Company shall, if Employee elects to continue group
                  health or other group benefits as allowed under COBRA, make
                  the COBRA payments for the Change In Control Severance Period;

            (c)   The right to exercise all unexpired and non-vested stock
                  options in favor of Employee shall immediately vest and
                  accelerate; and

            (d)   LIMITATION ON CHANGE OF CONTROL PAYMENTS.  Employee shall
                  not be entitled to receive any Change of Control Action, as
                  defined below, which would constitute an "excess parachute
                  payment" for purposes of Code Section 280G, or any
                  successor provision, and the regulations thereunder.  In
                  the event any Change of Control Action payable to Employee
                  would constitute an "excess parachute payment," then the
                  acceleration of the exercisability of such stock options
                  and the payments to such Participant pursuant to this
                  Paragraph 9 shall be reduced to the largest extent or
                  amount as will result in no portion of such payments being
                  subject to the excise tax imposed by Section 4999 of the
                  Code.  For purposes of this Paragraph 9, a "Change of
                  Control Action" shall mean any payment, benefit or transfer
                  of property in the nature of compensation paid to or for
                  the benefit of Employee under any arrangement which is
                  considered contingent on a Change of Control for purposes
                  of Code Section 280G, including, without limitation,

                                       3
<PAGE>
                  any and all salary, bonus, incentive, restricted stock, stock
                  option, compensation or benefit plans, programs or other
                  arrangements, and shall include benefits payable under this
                  Agreement.

            (e)   "CHANGE OF CONTROL." For purposes of this Agreement, "Change
                  of Control" shall mean any of the following events occurring
                  after the date of this Agreement:

                  (1)   A merger or consolidation to which the Company is a
                        party, an acquisition by the Company involving the
                        issuance of the Company's securities as consideration
                        for the acquired business, or any combination of fully
                        closed and completed mergers, consolidations or
                        acquisitions during any consecutive twenty-four (24)
                        month period, if the individuals and entities who were
                        shareholders of the Company immediately prior to the
                        effective date of such merger, consolidation, or
                        acquisition (or prior to the effective date of the first
                        of a combination of such transactions) have, immediately
                        following the effective date of such merger,
                        consolidation or acquisition (or following the effective
                        date of the last of a combination of such transactions),
                        beneficial ownership (as defined in Rule 13d-3 under the
                        Securities Exchange Act of 1934) of less than fifty
                        percent (50%) of the total combined voting power of all
                        classes of securities issued by the surviving
                        corporation for the election of directors of the
                        surviving corporation;

                  (2)   The acquisition of direct or indirect beneficial
                        ownership (as defined in Rule 13d-3 under the Securities
                        Exchange Act of 1934) of securities of the Company by
                        any person or entity or by a group of associated persons
                        or entities acting in concert in one or a series of
                        transactions, which causes the aggregate beneficial
                        ownership of such person, entity or group to equal or
                        exceed twenty percent (20%) or more of the total
                        combined voting power of all classes of the Company's
                        then issued and outstanding securities;

                  (3)   The sale of the properties and assets of the Company
                        substantially as an entirety, to any person or entity
                        which is not a wholly-owned subsidiary of the Company;

                  (4)   The stockholders of the Company approve any plan or
                        proposal for the liquidation of the Company; or

                  (5)   A change in the composition of the Board of the Company
                        at any time during any consecutive twenty-four (24)
                        month period such that the "Continuity Directors" no
                        longer constitute at least a seventy percent (70%)
                        majority of the Board. For purposes of this event,
                        "Continuity Directors" means (i) those members of the
                        Board who were directors at the beginning of such
                        consecutive twenty-four (24) month period or at the date
                        of this Agreement if this Agreement was entered into
                        less than twenty-four months prior to the change in
                        composition of the

                                       4
<PAGE>
                        Board; and (ii) any new director whose election to the
                        Board of Directors or nominations for election to the
                        Board of Directors was approved by a vote of at least
                        two-thirds (2/3) of the directors identified in the
                        immediately preceding clause (i).

                  (6)   The Company enters into a letter of intent, an agreement
                        in principle or a definitive agreement relating to an
                        event described in Paragraph 9(e)(1), 9(e)(2), 9(e)(3),
                        9(e)(4), or 9(e)(5) that ultimately results in such a
                        Change of Control, or a tender or exchange offer or
                        proxy contest is commenced that ultimately results in an
                        event described in Paragraph 9(e)(2) or 9(e)(5).

            (f)   TERMINATION. For purposes of this Paragraph 9, "Termination"
                  shall mean any of the following events occurring within
                  eighteen (18) months after a Change of Control:

                  (1)   The termination of Employee's employment by the Company
                        for any reason, with or without cause, except for
                        termination resulting from conduct by Employee
                        constituting (a) a felony involving moral turpitude
                        under either federal law or the law of the State of
                        Minnesota, or (b) Employee's willful failure to fulfill
                        his/her employment duties with the Company; provided,
                        however, that for purposes of this clause (c), an act or
                        failure to act by Employee shall not be "willful" unless
                        it is done, or omitted to be done, in bad faith and
                        without any reasonable belief that Employee's action or
                        omission were in the best interests of the Company; or

                  (2)   The termination of employment with the Company by
                        Employee for Good Reason. Such termination shall be
                        accomplished by, and effective upon, Employee giving
                        written notice to Company of his/her decision to
                        terminate. "Good Reason" shall mean a good faith
                        determination by Employee, in Employee's sole and
                        absolute judgment, that any one or more of the following
                        events has occurred, at any time during the term of this
                        Agreement or after a Change of Control; provided,
                        however, that such event shall not constitute "Good
                        Reason" if Employee has expressly consented to such
                        event in writing or if Employee fails to provide written
                        notice of his/her decision to terminate within sixty
                        (60) days of the occurrence of such event:

                        (a)   A material change in Employee's reporting
                              responsibilities, titles or offices, or any
                              removal of Employee from or any failure to
                              re-elect Employee to any of such positions, which
                              has the effect of materially diminishing
                              Employee's responsibility or authority;

                        (b)   A reduction by the Company in Employee's base
                              salary (as increased from time to time);

                                       5
<PAGE>
                        (c)   A requirement imposed by the Company on Employee
                              that results in Employee being based at a location
                              that is outside of a twenty-five (25) mile radius
                              of Employee's prior job location;

                        (d)   Without the adoption of a replacement plan,
                              program or arrangement that provides benefits to
                              Employee that are equal to or greater than those
                              benefits that are discontinued or adversely
                              affected:

                              i.    A failure by the Company to continue in
                                    effect, within its maximum stated term,
                                    any pension, bonus, incentive, stock
                                    ownership, stock purchase, stock option,
                                    life insurance, health, accident,
                                    disability, or any other employee
                                    compensation or benefit plan, program or
                                    arrangement, in which Employee is or has
                                    been participating;

                              ii.   The taking of any action by the Company
                                    that would adversely affect Employee's
                                    participation or materially reduce
                                    Employee's benefits under any of such
                                    plans, programs or arrangements; or

                        (e)   Any action by the Company that would materially
                              adversely affect the physical conditions in or
                              under which Employee performs his/her employment
                              duties; or

                        (f)   Any material breach by the Company of this
                              Employment Agreement between Employee and the
                              Company.

                        Termination for "Good Reason" shall not include
                  Employee's death or a termination for any reason other than
                  the events specified in clauses (a) through (f) above.

      10. CONFIDENTIAL INFORMATION. During the term of this Agreement and at all
times thereafter, Employee shall not directly or indirectly use or disclose any
trade secret, proprietary or confidential information of August Technology or
any subsidiary for the benefit of any person or entity other than August
Technology or any subsidiary without prior written approval of August
Technology's Board of Directors. For purposes of this Agreement, in addition to
all materials and information protected by applicable statute or law, the
parties acknowledge that confidential information shall include any information,
whether in print, on computer disc or tape or otherwise, which is not public
information and which relates to August Technology or any subsidiary, or August
Technology's or any subsidiary's existing or reasonably foreseeable business,
including but not limited to information relating to research, development,
technology, manufacturing processes, purchasing and sales, information relating
to sales and other financial strategies, plans and/or goals, information
relating to proprietary rights and data, ideas, know-how, and/or trade secrets,
information regarding the identity and/or needs of clients or customers, client
or customer lists and other client or customer information, information
regarding active and inactive accounts of August

                                       6
<PAGE>
Technology or any subsidiary, and information relating to August Technology's or
any subsidiary's methods of operation.

      11. NONCOMPETITION OBLIGATIONS. As a condition to and in consideration of
his/her employment and continued employment, and in exchange for the severance
and Change of Control provisions as set forth in Paragraphs 8 and 9 of this
Employment Agreement, and the mutual covenants herein, Employee agrees that,
during his/her employment and for a period of one (1) year following his/her
voluntary or involuntary resignation or termination for any reason, the Employee
will not, on behalf of himself/herself or any other person or entity:

            (a)   Directly or indirectly solicit, on Employee's own behalf,
                  or on behalf of another, any of August Technology's or any
                  subsidiary's customers or potential customers with whom
                  Employee or Employee's supervisees had contact, either
                  directly or indirectly, within the twelve months
                  immediately preceding Employee's resignation or termination
                  of employment, for the purpose of providing, selling, or
                  attempting to sell any products or services competing with
                  those provided or sold by August Technology or any
                  subsidiary, or clearly contemplated thereby due to
                  research, development, engineering, applications,
                  licensing, or other like projects in process, at the time
                  of resignation or termination; or

            (b)   hire or attempt to hire, or influence or solicit, or attempt
                  to influence or solicit, either directly or indirectly, any
                  employee of August Technology or any subsidiary to leave or
                  terminate his/her or her employment, or to work for any other
                  person or entity.

      12. WORK PRODUCT AND INVENTIONS. August Technology shall be entitled to
all of the benefits, profits, results and work product arising from or incident
to all work, services, advice and activities of Employee, including without
limitation all rights in inventions (as set forth below), trademark or trade
name creations, and copyrightable materials. Employee shall not, during the term
of his/her employment by August Technology, be interested, directly or
indirectly, in any manner, including, but not limited to, as partner, officer,
advisor, or in any other capacity in any other business similar to, or in
competition with, August Technology's or any subsidiary's business.

      Employee agrees to communicate promptly and fully to August Technology all
inventions, discoveries, improvements or designs conceived or reduced to
practice by Employee during the period of his/her employment with August
Technology (alone or jointly with others), and, except as provided in this
Paragraph 12, Employee will and hereby does assign to August Technology and/or
its nominees all of the Employee's right, title and interest in such inventions,
discoveries, improvements or designs and all of his/her right, title and
interest in any patents, patent applications or copyrights based thereon without
obligation on the part of August Technology or any subsidiary to make any
further compensation, royalty or payment to Employee. Employee further agrees to
assist August Technology and/or its nominee (without charge but at no expense to
Employee) at any time and in every proper way to obtain and maintain for its
and/or their own benefit, patents for all such inventions, discoveries and
improvements and copyrights for all such designs.

      This Agreement does not obligate Employee to assign to August Technology
any invention, discovery, improvement or design for which no equipment,
supplies, facility or trade secret information of August Technology or any
subsidiary was used and which was developed entirely on

                                       7
<PAGE>
Employee's own time, and (1) which does not relate (a) directly to the business
of August Technology or any subsidiary, or (b) to August Technology's or any
subsidiary's actual or demonstrably anticipated research or development, or (2)
which does not result from any work performed by Employee for August Technology
or any subsidiary.

      13. EXEMPT INVENTIONS. Identified under Exempt Inventions in Exhibit A by
descriptive title are all of the Inventions, if any, in which Employee possesses
any right, title or interest prior to Employee's employment with August
Technology or execution of this Employment Agreement which are not subject to
the terms hereof.

      14. COPYRIGHTS. Employee acknowledges that any documents, drawings,
computer software or other work of authorship prepared by Employee within the
scope of his/her employment is a "work made for hire" under U.S. copyright laws
and that, accordingly, August Technology exclusively owns all copyright rights
in such works of authorship. For purposes of this paragraph, "scope of
employment" means that the work of authorship (a) relates to any subject matter
pertaining to his/her employment, (b) relates to or is directly or indirectly
connected with the existing or reasonably foreseeable business, products,
projects or confidential information of August Technology or any subsidiary, or
(c) involves the use of any time, material or facility of August Technology or
any subsidiary.

      15. RETURN OF PROPERTY. Employee shall, immediately upon his/her
involuntary or voluntary resignation or termination from employment for any
reason, deliver to August Technology all documents and other items, whether on
computer disc or tape or otherwise, including all copies thereof, belonging to
August Technology or any subsidiary or in any way related to the business of
August Technology or any subsidiary or the services Employee performed for
August Technology or any subsidiary, including but not limited to any documents
or items containing trade secret, proprietary, or confidential information,
documents in any way relating to any inventions or copyrights, client or
customer information, information relating to August Technology's or any
subsidiary's processes or procedures and any other materials or documents of any
sort relating to August Technology or any subsidiary. Employee shall not retain
any copies or summaries of any kind of documents and materials covered by this
Paragraph 15.

      16. REMEDY UPON VIOLATION. Employee and August Technology agree that a
breach or threatened breach of Paragraphs 10, 11, 12, 14 or 15 would cause
irreparable harm to August Technology and/or its subsidiaries, and that monetary
damages alone would not be an adequate remedy. Employee agrees that August
Technology and any subsidiary shall be entitled, in addition to any other remedy
it may have at law or in equity, to an injunction, without the posting of a bond
if allowed by applicable law or with the posting of a minimal bond if required,
enjoining or restraining Employee from any violation or violations or threatened
violation or violations of Paragraphs 10, 11, 12, 14 and 15, and/or for specific
performance of duties and obligations under such paragraphs, and Employee hereby
consents to the issuance of such injunction. If any rights or restrictions
contained in Paragraphs 10, 11, 12, 14 and 15 shall be deemed to be
unenforceable by reason of the extent, duration or geographic scope, or other
provision thereof, the parties contemplate that the Court shall reduce such
extent, duration or geographic scope or other provision and enforce Paragraphs
10, 11, 12, 14 and 15 in their reduced form for all purposes in the manner
contemplated by such Paragraphs.

      17. OTHER AGREEMENTS. By Employee's signature to this Agreement, Employee
warrants that he/she is not subject to any employment, noncompetition,
confidentiality, inventions or other obligations or agreements which would
prevent or restrict the Employee in any way from

                                       8
<PAGE>
accepting employment with August Technology and fully performing his/her duties
and responsibilities as described in this Agreement. Employee, by his/her
signature to this Agreement, further warrants that he/she has not taken and will
not take any trade secret, proprietary or confidential information of any former
employer, and will not use or disclose any such information to anyone in the
performance of duties and responsibilities under this Agreement.

      18. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of August Technology.

      19. NOTICES. All notices and other communications to be given under this
Agreement shall be in writing and shall be deemed to be given when delivered
personally, or when mailed by registered or certified mail, addressed to the
party to whom such notice is intended to be given, at the last known address for
that party or at such other address as the party may specify by written notice.

      (a)   In the case of August Technology, the notice shall be provided to:

                  General Counsel
                  August Technology Corporation
                  4900 West 78th Street
                  Bloomington, MN 55435

      (b)   In the case of Employee, the notice shall be provided to:

Scott Gabbard

                  19820 Doonbey Circle
                  Prior Lake, Minnesota 55372

      Either party may, by written notice hereunder, designate a change of
address. Any notice, if mailed properly addressed, postage prepaid, registered
or certified mail, shall be deemed dispatched on the registered date or that
stamped on the certified mail receipt, and shall be deemed received within the
fifth business day thereafter, or when it is actually received, whichever is
sooner.

      20. SURVIVAL OF PROVISIONS. Employee acknowledges and agrees that the
restrictions and obligations set forth in Paragraphs 10, 11, 12, 13, 14, 15 and
16 of this Agreement are reasonable, shall survive his/her resignation from or
the termination of his/her employment, and shall apply to him/her whether
his/her resignation or termination from employment is voluntary or involuntary
and regardless of the reason for such resignation or termination.

      21. NONWAIVERS. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
right or remedy granted hereby or by any related document or by law.

      22.   GOVERNING LAW.  This Agreement shall be construed and interpreted
according to the laws of the State of Minnesota, without reference to its
conflict of laws provisions.

      23.   PARAGRAPH HEADINGS.  Paragraph headings are included in this
Agreement for convenience of reference only, and are not intended to be full
or accurate descriptions of the contents hereof.

                                       9
<PAGE>
      24.   COUNTERPARTS.  This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which
shall constitute one (1) and the same instrument.

      25. ENTIRE AGREEMENT. This Agreement states the entire Agreement of the
parties on the subjects set forth herein, and merges and supersedes all prior
agreements and understandings between the parties. No modification, termination,
or attempted waiver of any provision of this Agreement will be valid unless it
is made in writing and signed by the party against whom the same is sought to be
enforced, and is specifically identified as a modification, termination,
release, waiver or discharge of this Agreement. If any term, clause or provision
of this Agreement shall for any reason be adjudged invalid, unenforceable or
void, the same shall not impair or invalidate any of the other provisions
contained herein, all of which shall be performed in accordance with their
respective terms.

                                                 AUGUST TECHNOLOGY CORPORATION

Dated:  July 11, 2002                        By: /s/ JEFF L. O'DELL
                                                 -------------------------------
                                             Its Chief Executive Officer
                                                 -------------------------------

Dated:  July 11, 2002                        By: /s/ SCOTT A. GABBARD
                                                 -------------------------------
                                             EMPLOYEE

                                       10
<PAGE>
EXHIBIT A

Employee's Name                     =     Scott Gabbard

Employee's Title                    =     V.P. Finance

Manager                             =     Chief Executive Officer

Base Salary                         =     $135,000

Severance Period                    =     twelve (12) months

Change In Control Severance Period  =     eighteen (18) months

Exempted Inventions                 =     ____________________________________

                                          ____________________________________

                                          ____________________________________

                                          ____________________________________

Initials of approval of Exhibit:    AUGUST TECHNOLOGY CORP. _______

                                    EMPLOYEE                _______

                                       11

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