Exhibit 10.4

STAY BONUS AGREEMENT

     This Agreement is made as of April 5, 2004 by and between Wilsons The
Leather Experts Inc., a Minnesota corporation (hereinafter, “Wilsons”) and
Arthur J. Padovese (hereinafter, the “Executive”).

RECITALS

          A. Wilsons has determined that it is in the best interests of Wilsons
to retain the services of the Executive, and

          B. Wilsons has determined to increase the likelihood of retaining the
Executive and to provide further incentives for the Executive to assist Wilsons
in achieving its objectives by agreeing to make certain bonus payments to the
Executive if certain conditions are satisfied, and

          C. Wilsons desires to set out in writing the terms and conditions
under which those bonuses will be paid, and

          D. By signing this Agreement, the Executive is accepting the terms and
conditions of those bonuses.

          NOW, THEREFORE, the parties agree as follows:

1.   Total Bonus Payment. The total amount of bonuses that are potentially
payable to the Executive under this Agreement is $123,000 (hereinafter, the
“Bonus Amount”). Each payment of any portion of the Bonus Amount under this
Agreement will be reduced by applicable withholdings for taxes and other legally
required items.   2.   Payment of Bonuses. The Executive will receive the
following payments with respect to the Bonus Amount, provided the conditions
specified for each payment are satisfied.

  a.   The Executive will be entitled to payment of $30,000 if (i) the Chief
Executive Officer and President of Wilsons determine that satisfactory progress
has been made by the Executive as of October 1, 2004 (the “October Measurement
Date”) with respect to the performance criteria contained in subparagraph
2(c)(i) below (the “Performance Criteria”) and the specific position performance
criteria contained in subparagraph 2(c)(ii) (the “Position Criteria”) and
Executive is employed by Wilsons on October 1, 2004 or (ii) the Executive is
terminated by Wilsons without Cause prior to October 1, 2004.         Any
payment due to the Executive under the provisions of this subparagraph 2(a) will
be made as soon as administratively feasible following October 1, 2004.     b.  
The Executive will be entitled to payment of $93,000 if (i) the Performance
Criteria and the Position Criteria are achieved on or before January 29, 2005,
as determined by the Chief Executive Officer and President of Wilsons, (the
“Year-End Measurement Date”) and Executive is employed by Wilsons on January 29,
2005 or (ii) the Executive is terminated by Wilsons without Cause prior to
January 29, 2005.         Any payment due to Executive under the provisions of
this subparagraph 2(b) will be made as soon as administratively feasible
following January 29, 2005.

 

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  c.   As used in this paragraph 2, the following defined terms have the
meanings indicated below:

  (i)   Performance Criteria shall mean:

  (a)   Executive shall demonstrate effective leadership in a difficult
environment;     (b)   Executive shall collaborate effectively with others on
the leadership team;     (c)   Executive shall proactively engage in the
strategies and tactical plans to deliver results;     (d)   Executive shall
model appropriate behavior and require the same of direct reports; and     (e)  
Executive shall prepare regular status reports identifying progress toward goals
and objectives.

  (ii)   Position Criteria shall mean:

  (a)   Executive shall increase UPTs by 5% over the fiscal year ending
January 31, 2004;     (b)   Executive shall create and implement training to
increase associates’ knowledge directly focused on accessories; and     (c)  
Executive shall build and train a sales staff that is female friendly.

  d.   If the Executive becomes disabled while employed by Wilsons after the
date hereof and remains so disabled until the date a bonus is payable under
either subparagraph 2(a) or 2(b), the Executive will be deemed to be employed by
Wilsons on the applicable date solely for purposes of applying subparagraph(s)
2(a) and/or 2(b), as the case may be, and the Performance Criteria and Position
Criteria shall be deemed to have been achieved on the October Measurement Date
or the Year-End Measurement Date, as the case may be. To be “disabled” for
purposes of this subparagraph 2(c), the Executive must be prevented from
engaging in active employment by an illness or injury that meets the
requirements for receiving benefits under the short term disability program
sponsored by Wilsons during the period that program applies, and thereafter must
meet the requirements for receiving disability benefits under the Social
Security Act.     e.   If the Executive dies while employed by Wilsons during
the period commencing on the date hereof through and including January 29, 2005,
the Executive will be deemed to have survived and continued in the employ of
Wilsons solely for purposes of applying subparagraph 2(a) and/or 2(b), as the
case may be, and the Performance Criteria and Position Criteria shall be deemed
to have been achieved on the October Measurement Date or the Year-End
Measurement Date, as the case may be, but any bonus payable under such
subparagraphs shall be paid to the Executive’s estate.

3.   Incentive Plan. Any Bonus Amount payable to Executive pursuant to this
Agreement shall be in addition to, and not in lieu of, any incentive award
payable to Executive under Wilsons’ Executive and Key Management Incentive Plan.

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     4. Not an Employment Contract. This Agreement does not constitute a
contract of employment with Wilsons or guarantee that the Executive will remain
employed by Wilsons for any particular period of time. Nothing in this Agreement
changes the Executive’s status as an “at will” employee of Wilsons or interferes
in any way with the right of Wilsons to terminate the Executive’s employment at
any time, with or without Cause and with or without notice.

     5. Cause Definition. “Cause” shall mean:

  a.   the commission by the Executive of any act of embezzlement against
Wilsons or any of its subsidiaries;     b.   the conviction of the Executive
for, or entry by the Executive of a guilty plea to, any felony which has a
material adverse effect upon the business, operating results, financial
condition or employee, supplier or customer relations generally of Wilsons and
its subsidiaries, taken as a whole, or which precludes the Executive from
performing her duties for at least 90 days;     c.   the conviction of the
Executive for any crime involving dishonesty with respect to Wilsons
(i) intended by the Executive to result in personal enrichment of the Executive
at the expense of Wilsons or its subsidiaries or (ii) which has a material
adverse effect upon the business, operating results, financial condition or
employee, supplier or customer relations generally of Wilsons and its
subsidiaries, taken as a whole;     d.   the absence by the Executive from
employment with Wilsons for a period of more than 90 days after the date of this
Agreement without the approval of the Board of Directors of Wilsons other than
for vacations, illness, injury or disability; or     e.   willful misconduct by
the Executive, which misconduct has not been cured within 20 days following
notification thereof to the Executive (or if such misconduct is cured within
20 days after such notice of misconduct is received, but the same misconduct
occurs again at any time thereafter).

6.   Assignment. Wilsons may in its sole discretion assign this Agreement to any
entity or individual which succeeds to some or all of the business of Wilsons
through merger, consolidation, a sale of some or all of the assets of Wilsons,
or any similar transaction. The Executive acknowledges that the services to be
rendered by Executive to Wilsons are unique and personal, and that the Executive
therefore may not assign any of Executive’s rights or obligations under this
Agreement to anyone.   7.   Successors. Subject to Paragraph 6, the provisions
of this Agreement shall be binding on the parties hereto, on any successor or
assign of Wilsons, and on Executive’s heirs or any personal representative of
the Executive or the Executive’s estate.   8.   Governing Law. This Agreement
shall be interpreted and enforced in accordance with the laws of the State of
Minnesota, without giving effect to conflict of law principles.   9.  
Amendment. This Agreement may be amended only in writing, signed by both
parties.

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          IN WITNESS HEREOF, the parties have executed this Agreement effective
as of the date set forth above.

                  EXECUTIVE   WILSONS THE LEATHER EXPERTS INC.   /s/ Arthur J.
Padovese   By  /s/ David L. Rogers

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  Arthur J. Padovese         Its  President

             

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