EXHIBIT 10.5

WILSONS THE LEATHER EXPERTS INC.
1996 STOCK OPTION PLAN

Non-Statutory Stock Option Agreement
(Associate)

Full Name of Optionee:
No. of Shares Covered:
Date of Grant:
Exercise Price Per Share:      $

This is a Non-Statutory Stock Option Agreement (“Agreement”) between Wilsons The
Leather Experts Inc., a Minnesota corporation (the “Company”), and the optionee
identified above (the “Optionee”) effective as of the date of grant specified
above.

Recitals

WHEREAS, the Company maintains the Wilsons The Leather Experts Inc. 1996 Stock
Option Plan (“Plan”); and

WHEREAS, pursuant to the Plan, a committee (the “Committee”), which shall be the
Board of Directors if no separate committee has been appointed by the Board of
Directors, has the authority to determine the awards to be granted under the
Plan; and

WHEREAS, the Committee has determined that the Optionee is eligible to receive
an award under the Plan in the form of a non-statutory stock option (the
“Option”).

NOW, THEREFORE, the Company hereby grants this Option to the Optionee under the
terms and conditions as follows.

Terms and Conditions*

1.   Grant. The Optionee is granted this Option to purchase the number of Shares
specified at the beginning of this Agreement.

2.   Exercise Price. The price of each Share subject to this Option shall be the
exercise price specified at the beginning of this Agreement.

     

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*    Unless the context indicates otherwise, terms that are not defined in this
Agreement shall have the meaning set forth in the Plan as it currently exists or
as it is amended in the future.

 

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3.   Non-Statutory Stock Option. This Option is not intended to be an “incentive
stock option” within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”).

4.   Exercise Schedule. This Option shall vest, cumulatively, as to one-third of
the Shares covered hereby, on each of the first, second and third anniversaries
of the date of grant of this Option. If this Option has not expired prior
thereto, it may be exercised in whole or in part with respect to any Shares as
to which this Option has vested.       This Option may be exercised in full
under the circumstances described in Section 8 of this Agreement if it has not
expired prior thereto.

5.   Expiration. This Option shall expire at 5:00 p.m. Central Time on the
earliest of:

  (a)   The date occurring ten years after the date of grant of this Option;    
(b)   The last day of the period following the termination of employment of the
Optionee during which this Option can be exercised (as specified in Section 7 of
this Agreement); or     (c)   The date (if any) fixed for cancellation pursuant
to Section 8 of this Agreement.

    In no event may anyone exercise this Option, in whole or in part, after it
has expired, notwithstanding any other provision of this Agreement.

6.   Procedure to Exercise Option.       Notice of Exercise. This Option may be
exercised by delivering written notice of exercise to the Company at the
principal executive office of the Company, to the attention of the Company’s
Vice President, Human Resources, in the form attached to this Agreement. The
notice shall state the number of Shares to be purchased, and shall be signed by
the person exercising this Option. If the person exercising this Option is not
the Optionee, he/she also must submit appropriate proof of his/her right to
exercise this Option.       Tender of Payment. Upon giving notice of any
exercise hereunder, the person exercising this Option shall provide for payment
of the purchase price of the Shares being purchased through one or a combination
of the following methods:

  (a)   Cash;     (b)   To the extent permitted by law, a broker-assisted
cashless exercise in which the person exercising this Option irrevocably
instructs a broker to deliver proceeds of a sale of all or a portion of the
Shares to be issued pursuant to the exercise (or a loan secured by such Shares)
to the Company in payment of the purchase price of such Shares;

 

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  (c)   By delivery to the Company of unencumbered Shares having an aggregate
Fair Market Value (as defined in paragraph 7 of the Plan) on the date of
exercise equal to the purchase price of such Shares; or     (d)   By a reduction
in the number of Shares delivered to the person exercising this Option upon
exercise, such number of Shares having an aggregate Fair Market Value on the
date of exercise equal to the purchase price of such Shares.

    Notwithstanding the foregoing, the person exercising this Option shall not
be permitted to pay any portion of the purchase price with Shares if, in the
opinion of the Committee, payment in such manner could have adverse financial
accounting consequences for the Company.       Delivery of Certificates. As soon
as practicable after the Company receives the notice and purchase price provided
for above, it shall deliver to the person exercising the Option, in the name of
such person, a certificate or certificates representing the Shares being
purchased. The Company shall pay any original issue or transfer taxes with
respect to the issue or transfer of the Shares and all fees and expenses
incurred by it in connection therewith. All Shares so issued shall be fully paid
and nonassessable. Notwithstanding anything to the contrary in this Agreement,
the Company shall not be required to issue or deliver any Shares prior to the
completion of such registration or other qualification of such Shares under any
state or federal law, rule or regulation as the Company shall determine to be
necessary or desirable.

7.   Employment Requirement. This Option may be exercised only while the
Optionee remains employed with the Company or a parent or subsidiary thereof,
and only if the Optionee has been continuously so employed since the date of
this Agreement; provided that:

  (a)   This Option may be exercised for three months (or such later date, if
any, as the Committee, in its sole discretion, may determine) following the day
the Optionee’s employment by the Company ceases if such cessation of employment
is for a reason other than death or disability, but only to the extent that it
was exercisable immediately prior to termination of employment.     (b)   This
Option may be exercised within one year after the Optionee’s employment by the
Company ceases if such cessation of employment is because of death or
disability.     (c)   If the Optionee’s employment terminates after a
declaration made pursuant to Section 8 of this Agreement in connection with an
Event, this Option may be exercised at any time permitted by such declaration.

    Notwithstanding the above, this Option may not be exercised after it has
expired.

 

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8.   Acceleration of Option.       Death or Disability. This Option may be
exercised in full, regardless of whether such exercise occurs prior to a date on
which this Option would otherwise vest, upon the death or disability of the
Optionee; provided that the Optionee shall have been continuously employed by
the Company or a parent or subsidiary thereof between the date of this Agreement
and the date of such death or disability.       Change in Control. In the event
of a Change in Control as defined in paragraph 11 of the Plan, then, without any
action by the Committee, this Option, to the extent not already exercised in
full or otherwise expired, shall become immediately exercisable in full and the
Committee may, as provided in paragraph 11(c) of the Plan, make certain cash
payments with respect to this Option.       Event. In the event of an Event as
defined in paragraph 12 of the Plan, 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 this Option by the substitution
for this Option of options or voting common stock of the corporation surviving
any merger or consolidation or, if appropriate, the parent corporation of the
Company or such surviving corporation, as provided in paragraph 12 of the Plan;
or     (b)   at least 20 days prior to the occurrence of the Event, declare, and
provide written notice to Optionee of the declaration, that this Option, whether
or not then exercisable, shall be canceled at the time of, or immediately prior
to the occurrence of the Event (unless it shall have been exercised prior to the
occurrence of the Event). In connection with any such declaration, the Committee
may, but shall not be obligated to, cause payment to be made to the holder of
this Option of cash equal to, for each Share covered by the canceled Option, the
amount, if any, by which the Event Proceeds per Share, as defined in paragraph
12 of the Plan, exceeds the exercise price per Share covered by this Option. At
the time of any such declaration, this Option shall immediately become
exercisable in full and the holder of this Option shall have the right, during
the period preceding the time of cancellation of the Option, to exercise this
Option as to all or any part of the Shares covered by this Option. In the event
of a declaration pursuant to this subsection, to the extent this Option has not
been exercised prior to the Event, the unexercised part of this Option shall be
canceled at the time of, or immediately prior to, the Event, as provided in the
declaration. Notwithstanding the foregoing, the holder of this Option shall not
be entitled to the payment provided for in this subsection if this Option shall
have expired pursuant to Section 5 above.

    Discretionary Acceleration. The Committee has the power, in its sole
discretion, to declare at any time that this Option shall be immediately
exercisable.

 

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9.   Limitation on Transfer. While the Optionee is alive, only the Optionee or
his/her guardian or legal representative may exercise this Option. This Option
may not be assigned or transferred other than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined by
the Code or Title I of the Employee Retirement Income Security Act, or the rules
thereunder.

10.   No Shareholder Rights Before Exercise. No person shall have any of the
rights of a shareholder of the Company with respect to any Share subject to this
Option until the Share actually is issued to him/her upon exercise of this
Option.

11.   Discretionary Adjustment. In the event of any reorganization, merger,
consolidation, recapitalization, liquidation, reclassification, stock dividend,
stock split, combination of shares, rights offering, or extraordinary dividend
or divestiture (including a spin-off), or any other change in the corporate
structure or Shares of the Company, the Committee (or if the Company does not
survive any such transaction, a comparable committee of the Board of Directors
of the surviving corporation) may, without the consent of the holder of this
Option, make such adjustment as it determines in its discretion to be
appropriate, as to the number and kind of securities subject to and reserved
under the Plan and, in order to prevent dilution or enlargement of rights of the
holder of this Option, the number and kind of securities issuable upon exercise
of this Option and the exercise price hereof.

12.   Tax Withholding. Delivery of Shares upon exercise of this Option shall be
subject to any required withholding taxes. As a condition precedent to receiving
Shares upon exercise of this Option, the Optionee may be required to pay to the
Company, in accordance with the provisions of paragraph 9 of the Plan, an amount
equal to the amount of any required withholdings.

13.   Interpretation of This Agreement. All decisions and interpretations made
by the Committee with regard to any question arising hereunder or under the Plan
shall be binding and conclusive upon the Company and the holder of this Option.
If there is any inconsistency between the provisions of this Agreement and the
Plan, the provisions of the Plan shall govern.

14.   Discontinuance of Employment. This Agreement shall not give the Optionee a
right to continued employment with the Company or any parent or subsidiary of
the Company, and the Company or any such parent or subsidiary employing the
Optionee may terminate his/her employment and otherwise deal with the Optionee
without regard to the effect it may have upon him/her under this Agreement.

15.   Option Subject to Plan, Articles of Incorporation and By-Laws. The holder
of this Option acknowledges that this Option and the exercise thereof is subject
to the Plan, the Articles of Incorporation, as amended from time to time, and
the By-Laws, as amended from time to time, of the Company, and any applicable
federal or state laws, rules or regulations.

 

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16.   Obligation to Reserve Sufficient Shares. The Company shall at all times
during the term of this Option reserve and keep available a sufficient number of
Shares to satisfy this Agreement.   17.   Binding Effect. This Agreement shall
be binding in all respects on the heirs, representatives, successors and assigns
of the Optionee.

18.   Choice of Law. This Agreement is entered into under the laws of the State
of Minnesota and shall be construed and interpreted thereunder (without regard
to its conflict of law principles).

    IN WITNESS WHEREOF, the Optionee and the Company have executed this
Agreement as of        .

              OPTIONEE          
 
           

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                                WILSONS THE LEATHER EXPERTS INC.
 
                 

  By    

   

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     Its Vice President, Human Resources