Exhibit 10.42

UNQUALIFIED RELEASE AGREEMENT

Agreement made this 9th day of December, 2002, by and between John Serino, an
individual, on behalf of himself, his heirs, and anyone else who has or obtains
legal rights through him (hereafter referred to as “I”, “me” or “Releasor”) and
River Hills Wilsons, Inc., a Minnesota corporation, and any organization related
to River Hills Wilsons, Inc. in the past or present, and past or present
officers, directors, employees (with the exception of Releasor), shareholders,
committees, insurors, agents, successors and assigns of River Hills Wilsons,
Inc. or any past or present related organization or entity (hereafter referred
to as “Wilsons”).

Definitions. All the words in this Unqualified Release Agreement (“Release”)
have their meaning in ordinary English.

Payments and Promises. In exchange for my Promises, as set forth below, Wilsons
has promised to do the following things for me:

1.   Pay me the gross lump sum amount of $471,692.31, less all applicable
federal and state tax deductions and other applicable deductions, which net
amount shall be paid during the first full pay period after my termination date,
provided I have properly executed this Release (and providing that the
revocation and rescission periods have passed without my revoking or rescinding
this Release in whole or in part);   2.   Pay me the lump sum of $6,000.00,
which represents the estimated cost of COBRA coverage premiums (both the
employer and employee portions) for a six-month period. I acknowledge and agree
that in order to obtain COBRA continuation of the medical and/or dental coverage
for which I am eligible and currently enrolled as of my termination date, I must
timely elect COBRA coverage. Based on my termination date of February 7, 2003, I
understand that my insured benefits coverage will end on February 28, 2003;
therefore, I must timely and properly elect COBRA coverage effective March 1,
2003. I acknowledge and agree that if I fail to timely and properly elect COBRA
coverage, or if I fail to timely pay the COBRA invoices, Wilsons shall not be
liable for any lapse in medical and/or dental coverage or COBRA coverage;   3.  
Pay my car allowance in the amount of $600.00 for the month of January 2003;  
4.   Allow me until February 6, 2005, (rather than the 90 days after termination
provided under the stock option plan), to exercise any of the following vested
stock options that are not yet exercised: (i) 92,500 shares, issued on
January 28, 1998 at an exercise price of $5.83333; (ii) 10,000 shares, issued on
August 24, 2000 at an exercise price of $20.6875; and (iii) 3,750 shares, issued
on March 29, 2001 at an exercise price of $18.9375. I acknowledge and agree that
any unvested stock options shall not be vested and shall be forfeited. I further
acknowledge and agree that the 6,000 shares of unvested restricted stock options
(granted on March 29, 2002) shall not vest and shall be forfeited; and

 

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5.   Provide me executive-level career transition support through Right
Associates or an alternative agency selected by Wilsons.

Payments Contingent on Release. I understand and agree that I would not receive
the Payments and Promises set forth above as item numbers 1, 2, 3, 4 and/or 5
except for my execution of this Release and the fulfillment of my Promises as
set forth herein.

Releasor’s Claims. The claims I am releasing below include all rights to any
relief of any kind to date, including but not limited to:

1.   all claims I now have against Wilsons, whether or not now known;   2.   all
claims I have against Wilsons for alleged discrimination against me under any
federal, state or local law, including but not limited to Title VII of the Civil
Rights Act of 1964, as amended (“Title VII”), 42 U.S.C. §1981, the Civil Rights
Act of 1991, the Fair Labor Standards Act (“FLSA”), the Americans with
Disabilities Act (“ADA”), Executive Order 11246, the Age Discrimination in
Employment Act, as amended (“ADEA”), or the Minnesota Human Rights Act, as
amended (“MHRA”);   3.   all claims arising out of the hiring process used by
Wilsons or arising out of my termination, including but not limited to, any
alleged breach of contract, defamation or intentional infliction of emotional
distress;   4.   all claims for attorneys’ fees; and   5.   all claims for any
other alleged unlawful employment practices arising out of or relating to my
employment or the termination of my employment.

My Promises. In exchange for receiving the payments and other consideration set
forth in this Release, I hereby promise to fully and finally release, give up
and otherwise relinquish all my claims against Wilsons, including but not
limited to claims under Title VII, 42 U.S.C. §1981, the Civil Rights Act of
1991, FLSA, ADA, Executive Order 11246, ADEA and MHRA. I promise that I have not
filed and will not file any charges, complaints or civil actions against Wilsons
with any court, arbitration board or administrative agency and that I will not
bring any lawsuits or make any other demands against Wilsons except if necessary
to enforce the provisions of this Release. Further, I will not participate in
any complaints, demands or civil actions against Wilsons brought by third
parties. The payments and other consideration I will receive as set forth in
this Release is full and fair payment for the release of all my claims. Wilsons
does not owe me anything in addition to what I will receive under this Release.
I further promise to return all company property to Wilsons, including but not
limited to cell phone, company-provided credit card(s) and security card(s), any
company vehicle, any company equipment and any proprietary company documents
and/or information that may be in my possession.

Additional Agreements and Understandings. I acknowledge that Wilsons’ position
is that even though it has paid me to release my claims, Wilsons does not admit
that it is responsible

 

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or legally obligated to me and, in fact, Wilsons denies any wrongdoing or legal
obligation to me.

Confidentiality. I agree not to disclose any information regarding the existence
or substance of this Release (specifically including but not limited to the
information contained in Attachment A) or the payments and other consideration
given in exchange for the Release except to my spouse, a financial advisor and
an attorney or attorneys with whom I may choose to consult regarding my
consideration of this Release. It shall be a condition of any disclosure to any
such individuals that they also maintain the confidentiality of the Release.

Rights to Counsel, Consider, Revoke and Rescind. I understand that I am advised
by Wilsons to consult an attorney prior to signing this Release. I have read
this Release carefully and understand all of its terms. I have had the
opportunity to discuss this Release with my own attorney. In agreeing to sign
this Release, I have not relied on any statements or explanations made by
Wilsons, its agents or its attorneys, other than Wilsons’ promises as set forth
in this Release.

I further understand that I have forty-five (45) days to consider my release of
rights and waiver of claims beginning the date on which I receive this Release.
I agree that any changes in this Release made prior to signing, whether material
or not, do not restart or otherwise affect the 45-day period for consideration.

If I sign this Release, I understand that I am entitled to revoke my release of
rights or claims of age discrimination under the ADEA within seven (7) days of
executing it, and it shall not become legally binding or enforceable until the
seven-day period has expired. Any revocation within this period must be
submitted in writing to Corrine G. Lapinsky, Director of Legal Services, Wilsons
Leather, 7401 Boone Avenue No., Brooklyn Park, Minnesota 55428. The revocation
must be either personally delivered or mailed and postmarked within seven
(7) days of execution of the Unqualified Release Agreement. This Unqualified
Release Agreement shall not become effective or enforceable until the revocation
period has expired.

I further understand that, pursuant to Minnesota law as set forth below, I may
rescind this Release for a period of fifteen (15) days following the date of
this Agreement. Any rescission within this period must be submitted in writing
to Corrine G. Lapinsky, Director of Legal Services, Wilsons Leather, 7401 Boone
Avenue No., Brooklyn Park, Minnesota 55428, and the rescission must state, “ I
hereby rescind my acceptance of the Unqualified Release Agreement.” The
rescission must be either personally delivered or mailed and postmarked within
fifteen (15) days of execution of the Unqualified Release Agreement. This
Unqualified Release Agreement shall not become effective or enforceable until
the rescission period has expired. If the last day of the rescission period is a
Saturday, Sunday or legal holiday in Minnesota, then the rescission period shall
not expire until the next following day which is not a Saturday, Sunday or legal
holiday.

Releasor is further specifically advised pursuant to Minnesota Statutes Section
363.031 that Releasor has the right to rescind this Agreement within fifteen
(15) calendar days of its execution. To be effective, the rescission must be in
writing and delivered to

 

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Wilsons either by hand delivery or by mail, properly addressed to Corrine G.
Lapinsky at the address given above and sent by certified mail, return receipt
requested, within said fifteen (15) day period.

Attachment A. I understand that as part of the closure of the El Portal and
Bentley’s travel businesses, all Home Office personnel who have been notified of
termination are eligible for and have been offered a separation incentive,
contingent upon execution of a Release. I understand that in order to receive
the separation incentive set forth in this Release, I must sign and return this
Release to Wilsons within forty-five (45) days after receiving it and not revoke
my release of rights and claims of age discrimination under the ADEA within the
seven (7) day period described above nor rescind this Release within the 15-day
period provided under Minnesota law. I acknowledge that I have been provided, in
the attached Attachment A, with the following information: (1) the job
classification group offered the separation incentive; (2) the eligibility
requirements of the group; (3) the time limits applicable to the separation
incentive; (4) the job titles and ages of the employees eligible or selected for
the separation incentive; and (5) the job titles and ages of the employees in
the same job classification who are not selected for the separation incentive.

(Remainder of Page Intentionally Left Blank)

 

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IN WITNESS WHEREOF, the parties have signed this Release on this 9th day of
December, 2002.

John Serino (on behalf of himself, his heirs, successors and assigns)

          /s/ John Serino   12/9/02    

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    John Serino   Date               STATE OF MINNESOTA                  )      
                                                               )ss.        
COUNTY OF  Hennepin                     )        

On this 9th day of December, 2002, personally appeared before me, a Notary
Public within and for said County, John Serino, known to be the person named in
and who executed the foregoing Unqualified Release Agreement and who
acknowledged such execution to be his free act and deed for the purposes therein
expressed.

          /s/ Phebe McCormack (Stamp or Seal)  

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Notary Public

River Hills Wilsons, Inc. (on behalf of itself, its parent, subsidiary and
affiliated corporations, concerns, successors and assigns)

          By:  /s/ Betty Goff

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             Betty Goff              Vice President, Human Resources            
      STATE OF MINNESOTA                     )                    
                                                    )ss.         COUNTY OF
HENNEPIN                    )        

On this 10th day of December, 2002, personally appeared before me, a Notary
Public within and for said County, Betty Goff, Vice President Human Resources,
of River Hills Wilsons, Inc., known to be the person named in and who executed
the foregoing Unqualified Release Agreement and who acknowledged that she
executed the same as her free act and deed for the purposes therein expressed.

          /s/ Heather L. Irwin (Stamp or Seal)  

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Notary Public