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                                                                    EXHIBIT 10.1

                          SALARY CONTINUATION AGREEMENT

         THIS SALARY CONTINUATION AGREEMENT (this "Agreement") made as of the
7th day of November, 2003, by and between ValueVision Media, Inc., a Minnesota
corporation (the "Company"), and Liz Byerly Haesler, a resident of Minnesota
("Employee").

                                   BACKGROUND

         A. The Company considers the establishment and maintenance of a sound
and vital management to be essential to protecting and enhancing the best
interests of the Company and its shareholders.

         B. The Company wishes to provide Employee with severance arrangements
in the event of Employee's termination of employment under certain
circumstances, and to receive from Employee certain agreements and covenants, as
set forth in this Agreement.

         C. In consideration of the premises and mutual promises contained in
this Agreement, the parties hereto agree as follows.

                                    AGREEMENT

1.       Termination of Employment.

         (a)      Termination Date. Employee's employment with the Company or
                  any affiliate of the Company may be terminated by the Company
                  or by Employee at any time for any reason. Employee's
                  employment will terminate immediately upon the death or
                  Disability of Employee. The date upon which Employee's
                  termination of employment is effective shall be the
                  "Termination Date."

         (b)      Termination By the Company For Cause or By Employee Without
                  Good Reason. If the Company terminates Employee's employment
                  for Cause, or if Employee terminates Employee's employment
                  without Good Reason, the Company will pay to Employee the base
                  salary and other compensation, if any, earned through the
                  Termination Date, in accordance with the regular policies and
                  practices of the Company. Employee will not be entitled to
                  receive any other salary or compensation from the Company
                  following the Termination Date.

         (c)      Termination By Employee for Good Reason or By Company Without
                  Cause.

                  (1)      Payments. Subject to Section 18(a), if Employee gives
                           written notice of intention to terminate Employee's
                           active employment for Good Reason or

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                           if the Company gives written notice of intention to
                           terminate Employee's active employment for any reason
                           other than Cause, death or Disability (the date of
                           delivery of such notice to the other party, the
                           "Notice Date"), then Employee will continue as an
                           inactive employee on the Company's payroll during the
                           Severance Period (as defined below), and during the
                           Severance Period will provide the consultation
                           services to the Company pursuant to Section 19, and
                           the Company will pay to Employee the base salary and
                           other compensation, if any, earned through the Notice
                           Date, in accordance with the regular policies and
                           practices of the Company, and, subject to Section 2
                           below, will also:

                           (A)      pay to Employee the actual bonus award,
                                    under any bonus plan or program in which
                                    Employee is a participant as of the Notice
                                    Date, that Employee would have received for
                                    the fiscal year in which the Notice Date
                                    occurs, prorated for the number of days from
                                    the beginning of the fiscal year until the
                                    Notice Date, and payable at the time that
                                    bonus payments for such fiscal year are paid
                                    to other executive employees of the Company;

                           (B)      pay to Employee, in a lump-sum payment
                                    within 25 business days following the Notice
                                    Date, an amount equal to the annual bonus
                                    objective or target for such Employee for
                                    the fiscal year in which the Notice Date
                                    occurs;

                           (C)      continue to pay to Employee as severance
                                    pay, in accordance with the regular payroll
                                    practices of the Company for a period of
                                    twenty-four (24) months following the Notice
                                    Date (the "Severance Period"), an amount
                                    equal to Employee's base salary plus auto
                                    allowance, at the rates in effect on the
                                    Notice Date or at such higher rates, if any,
                                    in effect during the one-year period
                                    immediately preceding the Notice Date;

                           (D)      if Employee is eligible for and elects
                                    continuation coverage under the Company's
                                    group medical, dental or life insurance
                                    plans, pay on Employee's behalf or reimburse
                                    Employee for (such payment method to be at
                                    the Company's option) the premiums Employee
                                    is required to pay to continue such coverage
                                    from the Notice Date until the earlier of
                                    (i) twenty-four (24) months following the
                                    Notice Date, (ii) the date on which Employee
                                    becomes eligible for other group medical,
                                    dental or life insurance benefits from
                                    another employer, and (iii) the date on
                                    which such continuation coverage ends in
                                    accordance with the terms of the applicable
                                    plans and laws, provided that if the
                                    Company's payments hereunder are taxable to
                                    Employee the Company shall gross up such
                                    premium payments to

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                                    cover estimated federal, state, and local
                                    taxes on such payments as determined in good
                                    faith by the Company. For the avoidance of
                                    doubt, Employee will not be eligible to
                                    participate in the Company's 401(k) plan
                                    following the Notice Date; and

                           (E)      pay to Employee, in a lump sum in accordance
                                    with the Company's regular policies and
                                    practices, all accrued and unused vacation
                                    time earned through the Notice Date.

                  (2)      Options and Restricted Stock. Subject to Section
                           18(a), if Employee terminates Employee's employment
                           for Good Reason or if the Company terminates
                           Employee's employment for any reason other than
                           Cause, death or Disability, and if Employee has been
                           granted any stock options or restricted stock by the
                           Company, unless otherwise provided in any plan or
                           agreement applicable to any stock options or
                           restricted stock granted to Employee prior to the
                           date of this Agreement:

                           (A)      the vesting of such options or stock which
                                    have not yet vested will accelerate and vest
                                    in full as of the last day of the Severance
                                    Period; and

                           (B)      Employee will have a period of 90 days from
                                    the last day of the Severance Period in
                                    which to exercise any stock options granted
                                    by the Company, and after such date, any
                                    stock options which have not been exercised
                                    will be cancelled and be null and void.

         (d)      Termination Due to Disability. Employee's employment with the
                  Company or any affiliate of the Company will be deemed to
                  terminate immediately upon a Disability of Employee. If
                  Employee's employment terminates due to Disability, the
                  Company will pay to Employee the base salary and other
                  compensation, if any, earned through the Termination Date, in
                  accordance with the regular policies and practices of the
                  Company, and will also pay the actual bonus award, under any
                  bonus plan in which Employee is a participant as of the
                  Termination Date, that Employee would have received for the
                  fiscal year in which the Termination Date occurs, prorated for
                  the number of days from the beginning of the fiscal year until
                  the Termination Date, and payable at the time that bonus
                  payments for such fiscal year are paid to other executive
                  employees of the Company. Employee will not be entitled to
                  receive any other salary or compensation from the Company
                  following the Termination Date, but may receive long-term
                  disability benefits to the extent eligible in accordance with
                  the terms and conditions of any plan or program in which
                  Employee is a participant;

         (e)      Termination Due to Death. Employee's employment with the
                  Company or any affiliate of the Company will end immediately
                  upon Employee's death. If

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                  Employee's employment terminates due to death, the Company
                  will pay to Employee's estate the base salary and other
                  compensation, if any, earned through the Termination Date, in
                  accordance with the regular policies and practices of the
                  Company, and, subject to Section 2 below, will also pay to
                  Employee's estate the actual bonus award, under any bonus plan
                  in which Employee is a participant as of the Termination Date,
                  that Employee would have received for the fiscal year in which
                  the Termination Date occurs, prorated for the number of days
                  from the beginning of the fiscal year until the Termination
                  Date, and payable at the time that bonus payments for such
                  fiscal year are paid to other executive employees of the
                  Company;

         (f)      Cause. "Cause" means:

                  (1)      a material act or acts of fraud which result in or
                           are intended to result in Employee's personal
                           enrichment at the direct expense of the Company,
                           including without limitation, theft or embezzlement
                           from the Company;

                  (2)      material violation by Employee of any written Company
                           policy, regulation or practice;

                  (3)      conviction of Employee of a felony; or

                  (4)      material breach by Employee of any provision of this
                           Agreement, of any employment agreement between
                           Employee and the Company, or of Employee's
                           obligations as an officer or employee of the Company.

         (g)      Good Reason. "Good Reason" means the occurrence of any one or
                  more of the following events without Employee's express
                  written consent:

                  (1)      the Company reduces, diminishes or changes in an
                           adverse manner to the Employee the title or executive
                           duties and responsibilities of Employee, or reduces
                           the base salary, automobile allowance, bonus
                           objective, and/or benefits of Employee, except as
                           part of an across-the-board compensation reduction or
                           change in benefits or bonus plan applicable on the
                           same basis to all executives of the Company (provided
                           that any such reduction(s) or change(s) shall not in
                           the aggregate during the three (3) years following
                           the date of this Agreement exceed an amount equal to
                           ten percent (10%) of Employee's total cash
                           compensation during the 12 month period immediately
                           preceding the first such reduction or change);

                  (2)      the Company materially breaches its obligations to
                           pay Employee, and such failure to pay is not a result
                           of a good faith dispute between the Company and
                           Employee; or

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                  (3)      the Company requires Employee to be based at any
                           office or location greater than 60 miles from the
                           location of Employee's primary work location as of
                           the date hereof;

                  provided, however, that such occurrences will not be deemed to
                  be Good Reason unless and until the Company has received from
                  Employee written notice of such occurrence stating the basis
                  for the Employee's determination that Good Reason for
                  termination exists, the Company has not cured such occurrence
                  within 30 days (ten days with regard to any occurrence
                  described in Section 1(g)(2) above) following receipt by the
                  Company of such notice; and provided further that in the case
                  of Section 1(g)(3) above, that Employee will be obligated to
                  continue to perform his duties at Employee's current location
                  until released by the Company.

         (h)      Disability. "Disability" means a continuing condition of
                  Employee that has been determined to meet the criteria set
                  forth in the Company's Long Term Disability Plan, or similar
                  successor long-term disability insurance plan, to render a
                  participant eligible for long-term disability benefits under
                  such plan, whether or not Employee is in fact covered by such
                  plan. The determination shall be made by the insurer of the
                  plan or, if Employee is not covered by the plan, by the
                  Company in its sole discretion.

         (i)      Company Obligations. In the event of termination of Employee's
                  employment, the sole obligation of the Company hereunder is
                  its obligation to make the payments called for by this Section
                  1, as applicable, and to honor the terms of existing stock
                  option and restricted stock agreements, together with
                  applicable plans, including any accelerated vesting thereof as
                  provided in this Agreement, and the Company will have no other
                  obligation to Employee or to Employee's beneficiary or
                  Employee's estate, except as otherwise provided by law, under
                  the terms of any other applicable agreement between Employee
                  and the Company, or under the terms of any employee benefit
                  plans or programs then maintained by the Company in which
                  Employee participates.

         (j)      Tax Withholding. All payments made to Employee or on
                  Employee's behalf under this Agreement shall be subject to
                  withholding for all applicable federal, state and other taxes
                  and other withholdings required by law.

2.       Conditions for Receipt of Severance. Notwithstanding the foregoing
         provisions of this Agreement, the Company is not obligated to make any
         payments to Employee under Sections 1(c), or pay the bonus amounts
         referred to in Sections 1(d) or 1(e), as the case may be, unless and
         until Employee or, if applicable, the legal representative on behalf of
         Employee's estate, signs a release of claims in favor of the Company
         and its affiliates in a form to be prescribed by the Company, all
         applicable consideration and rescission periods

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         provided by law shall have expired, and Employee is in strict
         compliance with the terms of this Agreement as of the dates of such
         payments.

3.       Confidential Information. Employee acknowledges that the confidential
         information and data obtained by Employee during the course of
         Employee's employment by the Company or any affiliate of the Company
         concerning the business or affairs of the Company or any affiliate is
         the property of the Company and will be confidential to the Company.
         Such confidential information may include, but is not limited to,
         customer data or lists, vendor data or lists, contracts with vendors or
         other third parties, business plans, prospects or opportunities,
         software codes or development work, financial information, including
         the financial terms with or performance of vendors, and trade secrets,
         but does not include Employee's general business or direct marketing
         knowledge (the "Confidential Information"). All the Confidential
         Information shall remain the property of the Company and Employee
         agrees that Employee will not disclose to any unauthorized persons or
         use for Employee's own account or for the benefit of any third party
         any of the Confidential Information without the Company's written
         consent. Employee agrees to deliver to the Company at the termination
         of employment, all memoranda, notes, plans, records, reports, video and
         audio tapes and any and all other documentation (and copies thereof),
         whether in electronic, written, photographic or video form, relating to
         the business of the Company or any affiliate, which Employee may then
         possess or have under Employee's direct or indirect control.
         Notwithstanding any provision herein to the contrary, Confidential
         Information does not include information which is publicly available to
         Employee and others by proper means, readily ascertainable from public
         sources, known to Employee at the time the information was disclosed or
         which is rightfully obtained from a third party; information required
         to be disclosed by law, provided Employee provides notice to the
         Company to permit the Company to seek a protective order; or
         information disclosed by Employee to Employee's attorney regarding
         litigation with the Company.

4.       Inventions and Patents.

         (a)      Assignment of Rights. Employee agrees that all inventions,
                  innovations or improvements in the method of conducting the
                  Company's business or otherwise related to the Company's
                  business (including new contributions, improvements, ideas and
                  discoveries, whether patentable or not) ("Inventions")
                  conceived or made by Employee during Employee's employment
                  with the Company or any affiliate of the Company. Employee
                  will promptly disclose any and all Inventions to the Company,
                  assign to the Company Employee's entire right, title and
                  interest in and to any and all Inventions and any and all
                  letters patent filed or issued in connection with such
                  Inventions, and perform all actions reasonably requested by
                  the Company to establish and confirm such ownership.

         (b)      Exception. This Section 4 does not apply to any invention for
                  which no equipment, supplies, facilities, confidential,
                  proprietary or secret knowledge or

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                  information, or other trade secret information of the Company
                  was used and that was developed entirely on Employee's own
                  time, and (i) that does not relate (A) directly to the
                  business of the Company or any affiliate of the Company, or
                  (B) to the Company's or any affiliate's actual or demonstrably
                  anticipated research or development, or (ii) that does not
                  result from any work performed by Employee for the Company or
                  any affiliate of the Company.

5.       Noncompete and Related Agreements.

         (a)      Covenants of Employee. Employee agrees that during the
                  Noncompetition Period (as herein defined), Employee will not:
                  (i) directly or indirectly own, manage, control, participate
                  in, lend Employee's name to, act as consultant or advisor to
                  or render services for, alone or in association with any other
                  person, firm, corporation or other business organization, any
                  other person or entity engaged as a competitor to the Company
                  or any of its affiliates in the live television home shopping
                  business or an ecommerce business affiliated with a live
                  television home shopping business (the "Restricted Business"),
                  anywhere within the United States that the Company or any of
                  its affiliates operates during Employee's employment (the
                  "Restricted Area"); (ii) have any interest directly or
                  indirectly in any business engaged in the Restricted Business
                  in the Restricted Area other than the Company (provided that
                  nothing herein will prevent Employee from owning in the
                  aggregate not more than 1.0% of the outstanding stock of any
                  class of a corporation engaged in the Restricted Business in
                  the Restricted Area which is publicly traded, so long as
                  Employee has no participation in the management or conduct of
                  business of such corporation); (iii) induce or attempt to
                  induce any employee of the Company or of any affiliate of the
                  Company to leave his or her employ, or in any other way
                  interfere with the relationship between the Company or any
                  affiliate of the Company and any other employee; or (iv)
                  induce or attempt to induce any customer, supplier,
                  franchisee, licensee, other business relation of the Company
                  or any affiliate of the Company to cease doing business with
                  the Company or any affiliate of the Company, or in any way
                  interfere with the relationship between any customer,
                  franchisee or other business relation and the Company or any
                  affiliate of the Company, without the prior written consent of
                  the Company. For purposes of this Agreement, the
                  "Noncompetition Period" shall mean the period commencing as of
                  the date of this Agreement and ending on the date that is 180
                  days following the later of the Termination Date or the last
                  day of the Severance Period.

         (b)      Acknowledgement. Employee acknowledges that the provisions of
                  this Section 5 are reasonable and necessary to protect the
                  legitimate interests of the Company. If, at the time of
                  enforcement of any provisions of this Section 5, a court of
                  competent jurisdiction holds that the restrictions stated
                  herein are unreasonable and not enforceable under applicable
                  law, such provision shall be construed to cover only that
                  duration, scope or activity that is determined to be valid and

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                  enforceable. The parties hereto agree that the duration, scope
                  and activities reasonable under such circumstances will be
                  substituted for any unenforceable provisions.

6.       Termination of Existing Agreements. Except as specifically provided
         herein, this Agreement supersedes and replaces in their entirety any
         and all prior understandings, employment or other agreements or
         representations, written or oral, by or between Employee and the
         Company or any affiliate of the Company, relating to the payment of or
         containing any provisions regarding any severance or termination
         benefits to or for Employee upon the termination of the employment
         relationship, and as of the date of this Agreement, all such
         understandings, agreements and representations shall terminate and
         shall be of no further force or effect. Notwithstanding the preceding
         sentence, nothing in this Agreement shall be construed or interpreted
         as terminating or canceling (i) any written stock option or restricted
         stock agreement signed by the Company and Employee in effect as of the
         date of this Agreement, or (ii) the terms of any stock option or
         restricted stock granted to Employee by the Company prior to the date
         of this Agreement.

7.       Dispute Resolution. If Employee disputes any determination made by the
         Company regarding Employee's eligibility for any payments under this
         Agreement, the amount or terms of any payment under this Agreement, or
         the Company's application of any provision of this Agreement, then
         Employee will, before pursuing any other remedies that may be available
         to Employee, seek to resolve such dispute by submitting a written claim
         notice to the Company. The notice by Employee shall explain the
         specific reasons for Employee's claim and all bases therefor. The Board
         of Directors of the Company or its Compensation Committee will review
         such claim and the Company will notify Employee in writing of its
         response within 60 days of the date on which Employee's notice of claim
         was given. The notice responding to Employee's claim will explain the
         specific reasons for the decision. Employee agrees to submit a written
         claim hereunder and will not pursue any other process for resolution of
         such claim until Employee receives the Company's response to such
         claim, provided that if Employee does not receive a response to such
         claim within 70 days after giving notice to the Company of the claim,
         Employee may pursue any other process for resolution of such claim.
         This Section 7 does not otherwise affect any rights that Employee or
         the Company may have in law or equity to seek any right or benefit
         under this Agreement.

8.       Remedies. Employee acknowledges that a breach of this Agreement by
         Employee will cause substantial and irreparable harm to the Company and
         money damages would be inadequate to fully compensate the Company.
         Accordingly, in the event of any actual breach or threatened breach of
         Employee's obligations under this Agreement, the Company will be
         entitled to injunctive and other equitable relief without the necessity
         of proving actual monetary damages. Such equitable remedies, however,
         will be cumulative and nonexclusive and will be in addition to any
         other remedy to which the Company may be entitled.

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9.       Sale, Consolidation or Merger. In the event of a sale of all or
         substantially all of the stock of the Company, or consolidation or
         merger of the Company with or into another corporation or entity, or
         the sale of all or substantially all of the operating assets of the
         Company to another corporation, entity or individual, the Company may
         assign its rights and obligations under this Agreement to its
         successor-in-interest and such successor-in-interest will be deemed to
         have acquired all rights and assumed all obligations of the Company
         hereunder.

10.      No Offset - No Mitigation. Employee shall not be required to mitigate
         damages under this Agreement by seeking other comparable employment.
         The amount of any payment provided for in this Agreement shall not be
         reduced by any compensation or benefits earned by or provided to
         Employee as the result of employment by another employer.

11.      Waiver. The failure of either party to insist, in any one or more
         instances, upon performance of the terms or conditions of this
         Agreement will not be construed as a waiver or relinquishment of any
         right granted hereunder or of the future performance of any such term,
         covenant or condition.

12.      Attorney's Fees. In the event of any action for breach of, to enforce
         the provisions of, or otherwise arising out of or in connection with
         this Agreement, the prevailing party in such action, as determined by a
         court of competent jurisdiction in such action, will be entitled to
         receive its reasonable attorney fees and costs from the other party.

13.      Notices. Any notice to be given hereunder shall be deemed sufficient if
         given in writing and delivered personally or delivered by registered or
         certified mail: (i) in the case of the Company, to the Company's
         principal business office with attention to the General Counsel, and
         (ii) in the case of Employee, to Employee's last known address
         appearing on the records of the Company, or to such other address as
         such party may designate in writing to the other party.

14.      Severability. In the event that any provision of this Agreement is held
         to be invalid or unenforceable for any reason whatsoever, the parties
         agree that such invalidity or unenforceability will not affect any
         other provision of this Agreement and the remaining covenants,
         restrictions and provisions hereof will remain in full force and effect
         and any court of competent jurisdiction may modify any objectionable
         provision to make it valid, reasonable and enforceable.

15.      Amendment. This Agreement may be amended only by an agreement in
         writing signed by both parties.

16.      Benefit. This Agreement is binding upon and inures to the benefit of
         and is enforceable by and against Employee's heirs, beneficiaries and
         legal representatives. The rights and obligations of Employee may not
         be delegated or assigned except as specifically set forth in this
         Agreement.

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17.      Governing Law. This Agreement shall be governed by and construed in
         accordance with the laws of Minnesota.

18.      Term of Certain Obligations. Unless extended by mutual written
         agreement of the parties prior to or upon the third anniversary of the
         date of this Agreement: (a) the Company's obligations to make the
         payments or provide the benefits set forth in Sections 1(c)(1)(A)
         through 1(c)(1)(D) of this Agreement or to pay the bonus amounts
         referred to in Section 1(d) and 1(e), and any acceleration of vesting
         of stock option or restricted stock grants authorized pursuant to
         Section 1(c)(2)(A) of this Agreement, shall only be effective and
         enforceable with respect to terminations of employment where the
         Termination Date, or the Notice Date with respect to terminations by
         Employee for Good Reason or by Company without Cause, is prior to or
         upon the third (3rd) anniversary of the date of this Agreement; and (b)
         the Employee's obligations pursuant to Section 5 of this Agreement
         shall terminate on the Termination Date, notwithstanding Section 5(a)
         of this Agreement, with respect of terminations of employment where the
         Termination Date is subsequent to the third (3rd) anniversary of the
         date of this Agreement.

19.      Consultation Services. Employee agrees that, during the Severance
         Period, the Company may from time to time seek Employee's advice or
         consult with Employee, at reasonable times mutually agreed by the
         parties, with respect to matters that Employee handled or issues with
         which Employee has particular knowledge or expertise.

20.      Guaranteed Bonus. Employee is hereby guaranteed a minimum bonus payment
         in the amount of One Hundred Thousand Dollars ($100,000) for the
         Company's fiscal year ending January 31, 2004; in the event that the
         bonus payout for Employee under the targets established for the fiscal
         year ending January 31, 2004 and Employee's Bonus Objective of $200,000
         for such fiscal year is greater than $100,000, then Employee shall be
         entitled to receive such greater amount.

21.      Employment Agreement. The Employment Agreement dated November 6, 2002
         by and between the parties herein shall expire and terminate upon the
         parties' execution of this Salary Continuation Agreement.

         IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed as of the day, month and year first above written.

COMPANY:                  VALUEVISION MEDIA, INC.

                          By : /s/ W. Stann Leff
                               ---------------------------------------------
                               Name: W. Stann Leff
                                     ---------------------------------------
                               Its:  Senior Vice President - Human Resources
                                     ---------------------------------------

EMPLOYEE:                      /s/ Liz Byerly Haesler
                               ---------------------------------------------
                               Liz Byerly Haesler

                                       10<PAGE>

                                                                    EXHIBIT 10.3

                       HUTCHINSON TECHNOLOGY INCORPORATED
                            1988 STOCK OPTION PLAN(1)

         1. Purpose of Plan. The purpose of this 1988 Stock Option Plan (the
"Plan") is to promote the interests of Hutchinson Technology Incorporated, a
Minnesota corporation (the "Company"), and its shareholders by providing
employees of the Company and its subsidiaries, if any, with an opportunity to
acquire a proprietary interest in the Company and thereby develop a stronger
incentive to put forth maximum effort for the continued success and growth of
the Company and its subsidiaries, if any. In addition, the opportunity to
acquire a proprietary interest in the Company will aid in attracting and
retaining personnel of outstanding ability. Options granted under the Plan may
be either nonqualified stock options or incentive stock options meeting the
requirements of Section 422A of the Internal Revenue Code of 1986, or any
amendment thereto (the "Code").

         2. Administration of Plan. The Plan shall be administered by a
Committee (the "Committee") consisting of not less than three directors who are
not employees of the Company or any of its subsidiaries and who have not been
employees of the Company during the preceding twelve months. A majority of the
members of the Committee shall constitute a quorum for any meeting of the
Committee, and the acts of a majority of the members present at any meeting at
which a quorum is present or the acts unanimously approved in writing by all
members of the Committee shall be the acts of the Committee. Subject to the
provisions of the Plan, the Committee may from time to time establish such rules
for the administration of the Plan as it deems appropriate. The decision of the
Committee on any matter affecting the Plan or the rights and obligations arising
under the Plan or any option granted thereunder or any related Limited Right, as
hereinafter defined, shall be final, conclusive and binding upon all persons,
including without limitation the Company, shareholders, employees, and
optionees. To the full extent permitted by law, no member of the Committee shall
be liable for any action or determination taken or made in good faith with
respect to the Plan or any option or Limited Right granted thereunder.

         3. Shares Subject to Plan. The shares that may be made subject to
options granted under the Plan shall be authorized but previously unissued
shares of common stock ("Common Shares") of the Company, of the par value of
$.01 per share, and they shall not exceed 3,000,000 Common Shares in the
aggregate, except that, if any option lapses or terminates for any reason before
being completely exercised, the shares covered by the unexercised portion of
such option may again be made subject to options granted under the Plan.
Appropriate adjustments in the number of shares and in the option price per
share may be made by the Committee in its sole discretion to give effect to
adjustments made in the number of Common Shares of the Company through a merger,
consolidation, recapitalization, reclassification, combination, stock dividend,
stock split or other relevant change, provided that fractional shares shall be
rounded to the nearest whole share.

--------
(1) Conformed copy, which includes all amendments through November 19, 2003.

<PAGE>
         4. Eligible Employees. Options may be granted under the Plan to any
employee of the Company or any subsidiary thereof, including any employee who is
also an officer or director of the Company or any subsidiary thereof, who is
not, on the date of grant, a member of the Committee.

         5. Granting of Options. Subject to the terms and conditions of the
Plan, the Committee may, from time to time prior to May 31, 1998, grant to such
eligible employees as the Committee may determine options to purchase such
number of Common Shares of the Company on such terms and conditions as the
Committee may determine; provided, however, that no employee may be granted
options with respect to more than 300,000 Common Shares during any calendar year
under this Plan. In determining the employees to whom options shall be granted
and the number of Common Shares to be covered by each option, the Committee may
take into account the nature of the services rendered by the respective
employees, their present and potential contributions to the success of the
Company, and such other factors as the Committee in its sole discretion shall
deem relevant. More than one option may be granted to the same employee. The
date and time of approval by the Committee of the granting of an option shall be
considered the date and time of the grant of such option. Notwithstanding
anything stated herein, in the case of any incentive stock option, the aggregate
Fair Market Value, as defined in paragraph 6, determined at the time the option
is granted to an individual, of the Common Shares with respect to which
incentive stock options held by such individual first become exercisable in any
calendar year (under this Plan and all other incentive stock option plans of
such individual's employer corporation, and its parent corporations and
subsidiaries) shall not exceed $100,000.

         6. Option Price. The purchase price of each Common Share subject to an
option shall be fixed by the Committee, but shall not be less than 100% of the
Fair Market Value of a Common Share at the time the option is granted. The
purchase price of each Common Share subject to an incentive stock option within
the meaning of Section 422A of the Code that is granted to an employee who owns,
or is deemed under Section 425(d) of the Code to own, at the time the incentive
stock option is granted, stock of the Company (or of any parent or subsidiary of
the Company) possessing more than 10% of the total combined voting power of all
classes of stock therein (a "10% Shareholder") shall, notwithstanding anything
stated in the immediately preceding sentence, be not less than 110% of the Fair
Market Value of a Common Share at the time the option is granted.

         For purposes of the Plan, the "Fair Market Value" of a Common Share at
the time the option is granted shall, unless otherwise expressly provided in the
Plan, mean the closing price of a Common Share on the date immediately preceding
the date the option is granted or, if no sale of Common Shares shall have
occurred on that date, on the next preceding day on which a sale occurred of
Common Shares, on the composite tape for New York Stock Exchange listed shares,
or, if the Common Shares are not quoted on the composite tape for New York Stock
Exchange listed shares, on the principal United States Securities Exchange
registered under the Securities Exchange Act of 1934, as amended, on which the
shares are listed, or, if the shares are not listed on any such exchange, on the
National Association of Securities Dealers, Inc. Automated Quotations National
Market System or, if the Common Shares are not quoted on the National
Association of Securities Dealers, Inc. Automated Quotations National Market
System, the mean between the closing "bid" and the closing "asked" quotation of
a Common Share on the date immediately preceding the date the option is granted,
or, if no closing bid or asked quotation

                                       2
<PAGE>

is made on that date, on the next preceding day on which a quotation is made, on
the National Association of Securities Dealers, Inc. Automated Quotations System
or any system then in use, provided that if the Common Shares are not quoted on
any such system, Fair Market Value shall be what the Committee determines in
good faith to be 100% of the fair market value of a Common Share at the time the
option is granted. Notwithstanding anything stated in this paragraph, if the
applicable securities exchange or system has closed for the day at the time of
grant of an option, all references in this paragraph to the "date immediately
preceding the date the option is granted" shall be deemed to be references to
"the date the option is granted".

         7. Option Period. Each option granted under the Plan shall expire and
all rights to purchase shares thereunder shall cease on the earliest of (i) ten
years after the date such option is granted (or in the event an incentive stock
option is granted to a 10% Shareholder, five years after the date such option is
granted) or on such date prior thereto as may be fixed by the Committee on or
before the date such option is granted; (ii) March 1, 1989, in the event that
the shareholders of the Company shall not have approved the Plan prior to that
date at a duly held shareholders' meeting; or (iii) the date, if any, fixed for
cancellation pursuant to paragraph 14(b) of the Plan.

         8. Transferability and Termination of Options.

         (a) (i) During the lifetime of an individual to whom an option is
granted, only such individual or his guardian or legal representative may
exercise the option (other than as provided in Section 8(a)(ii) below), and only
while such individual is an employee of the Company or of a parent or subsidiary
thereof, and only if such individual has been continuously so employed since the
date the option was granted, except that, subject to paragraph 8(d), (i) such
individual may exercise the option within three months after termination of such
individual's employment if the option was exercisable immediately prior to such
termination, and (ii) if (x) such individual has been employed by the Company or
a parent or subsidiary thereof for at least ten years (whether or not
consecutive) and (y) such individual's employment with the Company or a parent
or subsidiary thereof terminates after such individual has reached age 55, then
the option may be exercised at any time within three (3) years following the day
such individual's employment by the Company or a parent or subsidiary thereof
ceases if the option was exercisable immediately prior to termination of
employment. In the case of an employee who is disabled (within the meaning of
Section 22(e)(3) of the Code), the three month period in the immediately
preceding sentence shall be extended to three years after termination of such
individual's employment and the requirement that the option may be exercised
only with respect to the shares for which the option was exercisable immediately
prior to such termination of employment shall be eliminated in the circumstances
set forth in Section 8(c).

             (ii) Notwithstanding the provisions of Section 8(a)(i), an option
agreement may state that a non-qualified stock option shall be transferable to
(x) any member of an employee's "immediate family" (as such term is defined in
Rule 16a-1(e) promulgated under the Securities Exchange Act of 1934, as amended,
or any successor rule or regulation), (y) one or more trusts whose beneficiaries
are members of such employee's "immediate family" or such employee, or (z)
partnerships in which such family members or such employee are the only
partners; provided, however, that the employee receives no consideration for the
transfer. Any non-qualified stock option held by a permitted transferee shall
continue to be subject to the same

                                       3
<PAGE>

terms and conditions that were applicable to such non-qualified stock option
immediately prior to its transfer and any may be exercised by such permitted
transferee as and to the extent that such non-qualified stock option has become
exercisable and has not terminated in accordance with the provisions of this
Plan and the applicable agreement. For purposes of any provision of the Plan
relating to notice to a holder of an option or to vesting or termination of a
non-qualified stock option upon the termination of employment by such
individual, the references to such option holder shall mean the original grantee
of the non-qualified stock option and not any permitted transferee. Except as
set forth above, no option shall be assignable or transferable by the individual
to whom it is granted otherwise than by will or the laws of descent and
distribution.

             (b) An option may be exercised after the death of the individual to
whom it is granted, but, except as hereafter provided in this paragraph 8, only
if it was exercisable immediately prior to such individual's death, in which
case the option may be exercised only by such individual's legal
representatives, heirs or legatees, only within three years after the death of
such individual.

             (c) Notwithstanding the foregoing but subject to paragraph 8(d), in
the event of the disability or death of a holder of an outstanding option, an
option held by such individual or his or her legal representative that was not
previously exercisable will become immediately exercisable in full if the Plan
shall have been approved by the shareholders of the Company at a duly held
shareholders' meeting, a registration statement covering the Common Shares for
which the option may be exercised shall have become effective under the
Securities Act of 1933, as amended, and the disabled or deceased individual
shall have been continuously employed by the Company or a parent or subsidiary
thereof prior to such disability or death.

             (d) In no event shall any option be exercisable at any time after
its expiration date. In no event shall any option be exercisable at any time
following the termination of the employment of the individual to whom the option
has been granted unless such termination (i) is caused by the death or
disability of the individual or (ii) occurs following (A) a Change in Control,
(B) a declaration pursuant to paragraph 14(b) or (C) at least six months of
continuous employment of such individual by the Company or a parent or
subsidiary thereof after the date of grant of the option. When an option is no
longer exercisable, it shall be deemed to have lapsed or terminated and will no
longer be outstanding.

             9. Exercise of Options. A person entitled to exercise an option
granted under this Plan may, subject to its terms and conditions and the terms
and conditions of this Plan, exercise it in whole at any time, or in part from
time to time, by delivery to the Company at its principal executive office, to
the attention of its Vice President, Human Resources, of written notice of
exercise, specifying the number of shares with respect to which the option is
being exercised, or by such other means as the Board or Committee may approve,
provided that (i) no such option may be exercised prior to such time, if any, as
the shareholders of the Company shall approve the Plan at a duly held
shareholders' meeting of the Company; (ii) no such option may be exercised prior
to the time that a registration statement covering the Common Shares for which
the option may be exercised becomes effective under the Federal Securities Act
of 1933, as amended, and (iii) no option may be exercised less than six months
after the date it is granted except upon the occurrence of the death or
disability of the holder of the option while employed

                                       4
<PAGE>

by the Company or a parent or subsidiary thereof or a Change in Control as
defined in paragraph 10 of the Plan or pursuant to paragraph 14(b) of the Plan.
Subject to the limitations set forth in clauses (i) through (iii) of the
immediately preceding sentence, each option agreement provided for in paragraph
15 hereof shall specify when the option shall become exercisable. The purchase
price of each share with respect to which an option is being exercised shall be
payable in full at the time of exercise (provided that, to the extent permitted
by law, the holder of an option may simultaneously exercise an option and sell
all or a portion of the shares thereby acquired pursuant to a brokerage or
similar relationship and use the proceeds from such sale to pay the purchase
price of such shares) in cash (including check, bank draft or money order) or,
at the discretion of the holder of the option, by delivery to the Company of
unencumbered Common Shares having a Fair Market Value, as defined in paragraph 6
hereof, equal to the purchase price (except, solely for purposes of this
paragraph, that all references to the "date immediately preceding the date the
option is granted," in the definition of Fair Market Value in paragraph 6 shall
be deemed to be references to "the date the option is exercised" and the last
sentence of paragraph 6 shall be of no effect). No shares shall be issued until
full payment therefor has been made, and the granting of an option to an
individual shall give such individual no rights as a shareholder except as to
shares issued to such individual. Notwithstanding anything stated in clause
(iii) of the first sentence of this paragraph 9 of the Plan, the Committee shall
have authority to grant options under the Plan that contain terms and conditions
that provide that such options may be exercised immediately or less than six
months after being granted, provided that (A) any such option may be granted
only to an eligible employee residing in or employed in a country other than the
United States at the time of the grant, (B) the Committee, in its sole
discretion, concludes that such a grant is desirable to comply with the
provisions of the laws of such a foreign country or to increase the after-tax
benefits of the option to such eligible employee under the laws of such foreign
country and (C) no such option exercisable less than six months after being
granted (except to the extent that such an option could be exercised less than
six months after being granted under clause (iii) of the first sentence of this
paragraph 9 of the Plan in the absence of this sentence) may be granted to any
individual who is subject to the reporting requirements of Section 16 of the
Securities Exchange Act of 1934, as amended. Any option granted in compliance
with the provisions of the immediately preceding sentence that, by its terms and
conditions, is exercisable immediately or less than six months after being
granted shall not be subject to the second sentence of paragraph 8(d) of the
Plan from and after the time that such option becomes exercisable.

         10. Change in Control.

         (a) Anything to the contrary notwithstanding in the Plan, in the event
of a "Change in Control" of the Company, as defined in paragraph 10(b), an
option held by a person under this Plan that shall not have expired will become
immediately exercisable in full if the Plan shall have become approved by the
shareholders of the Company at a duly held shareholders' meeting and a
registration statement covering the Common Shares for which the option may be
exercised shall have become effective under the Federal Securities Act of 1933,
as amended.

         (b) A "Change in Control", for purposes of the Plan, means:

             (i)   A majority of the directors of the Company shall be persons
         other than persons:

                                       5
<PAGE>

                   (A) For whose election proxies shall have been solicited by
             the Board of Directors of the Company, or

                   (B) Who are then serving as directors appointed by the Board
             of Directors to fill vacancies on the Board of Directors caused by
             death or resignation (but not by removal) or to fill newly-created
             directorships,

             (ii) 30% or more of the outstanding voting stock of the Company is
     acquired or beneficially owned (as defined in Rule 13d-3 under the
     Securities Exchange Act of 1934, as amended, or any successor rule thereto)
     by any person (other than the Company, a subsidiary of the Company or the
     person holding the option) or group of persons, not including the person
     holding the option, acting in concert, or

             (iii) The shareholders of the Company approve a definitive
     agreement or plan to

                   (A) merge or consolidate the Company with or into another
             corporation (other than (1) a merger or consolidation with a
             subsidiary of the Company or (2) a merger in which the Company is
             the surviving corporation and either (a) no outstanding voting
             stock of the Company (other than fractional shares) held by
             shareholders immediately prior to the merger is converted into
             cash, securities, or other property or (b) all holders of
             outstanding voting stock of the Company (other than fractional
             shares) immediately prior to the merger have substantially the same
             proportionate ownership of the voting stock of the Company or its
             parent corporation immediately after the merger),

                   (B) exchange, pursuant to a statutory exchange of shares of
             voting stock of the Company held by shareholders of the Company
             immediately prior to the exchange, shares of one or more classes or
             series of voting stock of the Company for cash, securities, or
             other property,

                   (C) sell or otherwise dispose of all or substantially all of
             the assets of the Company (in one transaction or a series of
             transactions) or

                   (D) liquidate or dissolve the Company,

         unless a majority of the voting stock (or the voting equity interest)
         of the surviving corporation or of any corporation (or other entity)
         acquiring all or substantially all of the assets of the Company (in the
         case of a merger, consolidation or disposition of assets) or the
         Company or its parent corporation (in the case of a statutory share
         exchange) is beneficially owned by the person holding the options or a
         group of persons, including the person holding the options, acting in
         concert.

         11. Tax Withholding. Delivery of Common Shares upon exercise of a
non-qualified stock option shall be subject to any required withholding taxes. A
person exercising

                                       6
<PAGE>

such an option may, as a condition precedent to receiving the Common Shares, be
required to pay the Company a cash amount equal to the amount of required
withholdings. In lieu of all or any part of such a cash payment, the Committee
may, but is not required to, permit the individual to elect to cover all or any
part of the required withholdings, and to cover any additional withholdings up
to the amount needed to cover the individual's full FICA and federal, state and
local income tax with respect to income arising from the exercise of the option,
through a reduction of the number of Common Shares delivered to the person
exercising the option or through a subsequent return to the Company of shares
delivered to the person exercising the option. Any such election by an
individual who is subject to the reporting requirements of Section 16 ("Section
16") of the Securities Exchange Act of 1934, as amended ("Section 16
Individuals"), is also subject to the following:

         (a) Time of election. Any such election by a Section 16 Individual may
     be made only during certain specified time periods, as follows:

                   (1) The election may be made during the period beginning on
         the third business day following the date of public release of the
         Company's quarterly or annual financial statements and ending on the
         twelfth business day following such date of public release, or

                   (2) The election may be made at least six months prior to the
         date as of which the amount of tax to be withheld is determined;

         provided, however, an election by such a person pursuant to clause (1)
         or (2) may not be made within six months of the date of grant of the
         option being exercised unless death or disability of the individual to
         whom the option was granted occurs during said six month period.

             The foregoing restrictions do not apply to any person who is not
         subject to the reporting requirements of Section 16.

         (b) Committee approval; revocation. The Committee's approval of such an
     election by a Section 16 Individual, if given, may be granted in advance
     but is subject to revocation by the Committee at any time. Once such an
     election is made by a Section 16 Individual, he or she may not revoke it.

         12. Termination of Employment. Neither the transfer of employment of an
individual to whom an option is granted between any combination of the Company,
a parent corporation and a subsidiary thereof, nor a leave of absence granted to
such individual and approved by the Committee, shall be deemed a termination of
employment for purposes of the Plan. The terms "parent" or "parent corporation"
and "subsidiary" as used in the Plan shall have the meaning ascribed to "parent
corporation" and "subsidiary corporation," respectively, in Sections 425(e) and
(f) of the Code.

         13. Other Terms and Conditions. The Committee shall have the power,
subject to the limitations contained herein, to fix any other terms and
conditions for the grant or exercise of any option under this Plan. Nothing
contained in this Plan, or in any option granted pursuant to this Plan, shall
confer upon a person holding an option any right to continued

                                       7
<PAGE>

employment by the Company or limit in any way the right of the Company to
terminate an employee's employment at any time.

         14. Dissolution, Liquidation, Merger. In the event of the proposed
dissolution or liquidation of the Company or in the event of a proposed sale of
substantially all of the assets of the Company or in the event of a proposed
merger or consolidation of the Company with or into any other corporation,
regardless of whether the Company is the surviving corporation, or a statutory
share exchange involving capital stock of the Company (the actual effective date
of the dissolution, liquidation, sale, merger, consolidation or exchange being
herein called an "Event"), the Committee may, but shall not be obligated to:

         (a) if the Event is a merger or consolidation or statutory share
     exchange, make appropriate provision for the protection of the outstanding
     options granted under the Plan by the substitution of options and
     appropriate voting common stock of the corporation surviving any merger or
     consolidation or, if appropriate, the parent corporation of the Company or
     such surviving corporation, to be issuable upon the exercise of options in
     lieu of options and capital stock of the Company; or

         (b) at least 30 days prior to the occurrence of an Event, declare, and
     provide written notice to each optionee of the declaration, that each
     outstanding option, whether or not then exercisable, shall be cancelled at
     the time of, or immediately prior to the occurrence of, an Event (unless it
     shall have been exercised prior to the occurrence of the Event) in exchange
     for payment to each holder of an option, within ten days after the Event,
     of cash equal to the amount (if any), for each share covered by the
     cancelled option, by which the Fair Market Value per Common Share exceeds
     the exercise price per share of Common Shares covered by such option,
     provided that no such declaration shall be made unless the Plan shall have
     been approved by the shareholders of the Company at a duly held
     shareholders' meeting and a registration statement covering the Common
     Shares for which the option may be exercised shall have become effective
     under the Federal Securities Act of 1933, as amended. At the time of the
     declaration provided for in the immediately preceding sentence, each option
     shall immediately become exercisable in full and each person holding an
     option shall have the right, during the period preceding the time of
     cancellation of the option, to exercise his or her option as to all or any
     part of the shares covered thereby. In the event of a declaration pursuant
     to this paragraph 14(b), each outstanding option granted pursuant to the
     Plan that shall not have been exercised prior to the Event shall be
     cancelled at the time of, or immediately prior to, the Event, as provided
     in the declaration, and the Plan shall terminate at the time of such
     cancellation, subject to the payment obligations of the Company provided in
     this paragraph 14(b) or paragraph 16. For purposes of this paragraph, "Fair
     Market Value" per share shall mean the cash plus the fair market value, as
     determined in good faith by the Committee, of the non-cash consideration to
     be received per Common Share by the shareholders of the Company upon the
     occurrence of the Event.

         15. Option Agreements. All options granted under the Plan shall be
evidenced by a written agreement in such form or forms as the Committee may from
time to time determine, which agreement shall, among other things, designate
whether the options being

                                       8

<PAGE>

granted thereunder are non-qualified stock options or incentive stock options
under Section 422A of the Code.

         16. Limited Rights. The Committee may, in its discretion, grant limited
stock appreciation rights ("Limited Rights") to the holder of any option granted
hereunder (the "Related Option") with respect to all or any portion of the
shares covered by the Related Option. Each Limited Right shall relate to a
specific Related Option and may be granted at any time either concurrently with
the grant of the Related Option or (with respect to non-qualified stock options)
at any time the Related Option is outstanding. As hereafter provided in this
paragraph 16, the Limited Rights are rights which the recipients may exercise in
the circumstances set forth below, in lieu of exercising the Related Options, to
receive cash equal to the amount (if any) by which the Fair Market Value of the
Common Shares covered by the Related Option exceeds the exercise price of the
Related Option.

         Limited Rights shall be exercisable (but only if and to the extent that
the Related Option is exercisable) at any time within the thirty day period
after any Change in Control, regardless of whether the person holding the
Limited Right is an employee on the date of exercise, so long as the Optionee is
an employee immediately preceding the Change in Control.

         Notwithstanding the provisions of the immediately preceding paragraph,
no Limited Right shall be exercised within a period of six months after the date
of grant of the Limited Right and no Limited Right shall be exercised if the
Committee shall previously have made the declaration provided for in paragraph
14(b) and the Event resulting in the cancellation of all options pursuant to
paragraph 14(b) shall have occurred.

         If Limited Rights are exercised, the Related Option shall no longer be
exercisable to the extent of the number of shares with respect to which the
Limited Rights were exercised. Upon the exercise or termination of a Related
Option, Limited Rights granted with respect thereto shall terminate to the
extent of the number of shares as to which the Related Option was exercised or
terminated.

         A person entitled to exercise a Limited Right may, subject to its terms
and conditions and the terms and conditions of the Plan, exercise such Limited
Right in whole or in part by delivery to the Company at its principal office in
Hutchinson, Minnesota, to the attention of the Chief Financial Officer, of
written notice of an election to exercise such Limited Right specifying the
number of shares purchasable under the Related Option with respect to which the
Limited Right is being exercised. The date the Company receives the notice is
the exercise date. Upon exercise of Limited Rights, the holder shall promptly be
paid an amount in cash for each share with respect to which the Limited Rights
are exercised equal to the amount (if any) by which the Fair Market Value per
share of Common Shares covered by the Related Option exceeds the option exercise
price per share of Common Shares covered by the Related Option.

         For purposes of this paragraph, "Fair Market Value" shall have the
definition set forth in paragraph 6 hereof, except that all references to "the
date immediately preceding the date the option is granted" shall, solely for
purposes of this paragraph, be deemed to be references to "the date the Limited
Right is exercised" and the last sentence of paragraph 6 shall be of no effect.

                                       9

<PAGE>

         A Limited Right may not be assigned and shall be transferable only if
and to the extent that the Related Option is transferable. The Company may
withhold from any cash payment due upon exercise of a Limited Right a cash
amount sufficient to cover any required withholding taxes.

         17. Amendment and Discontinuance of Plan. The Board may at any time
amend, suspend or discontinue the Plan; provided, however, that no amendment by
the Board shall, without further approval of the shareholders of the Company,
(a) change the class of employees eligible to receive options or Limited Rights;
(b) except as provided in paragraph 3 hereof, increase the total number of
Common Shares of the Company which may be made subject to options granted under
the Plan; (c) except as provided in paragraph 3 hereof, change the minimum
purchase price for the exercise of an option; (d) increase the maximum period
during which options or Limited Rights may be exercised; (e) extend the term of
the Plan beyond May 31, 1998; or (f) permit the granting of options to employees
who are then members of the Committee. No amendment to the Plan shall, without
the consent of the holder of the option, alter or impair any option previously
granted under the Plan.

         18. Effective Date. The Plan shall be effective upon approval thereof
by the Board.

                                       10

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