Exhibit 10.1

WILSONS THE LEATHER EXPERTS INC.
2000 LONG TERM INCENTIVE PLAN

Including August 24, 2000, March 21, 2002 and June 11, 2003 Amendments

     1.     Purpose. The purpose of this 2000 Long Term Incentive Plan (the
“Plan”) is to motivate key personnel to produce a superior return to the
shareholders of the Company and its Affiliates by offering such individuals an
opportunity to realize Stock appreciation, by facilitating Stock ownership, and
by rewarding them for achieving a high level of corporate performance. This Plan
is also intended to facilitate recruiting and retaining key personnel of
outstanding ability.

     2.     Definitions. The capitalized terms used in this Plan have the
meanings set forth below.

       (a) “Affiliate” means any corporation that is a “parent corporation” or
“subsidiary corporation” of the Company, as those terms are defined in
Sections 424(e) and (f) of the Code, or any successor provision, and, for
purposes other than the grant of Incentive Stock Options, any joint venture in
which the Company or any such “parent corporation” or “subsidiary corporation”
owns an equity interest.          (b) “Agreement” means a written contract
entered into between the Company or an Affiliate and a Participant containing
the terms and conditions of an Award in such form (not inconsistent with this
Plan) as the Committee approves from time to time, together with all amendments
thereof, which amendments may be unilaterally made by the Company (with the
approval of the Committee) unless such amendments are deemed by the Committee to
be materially adverse to the Participant and are not required as a matter of
law.          (c) “Associate” means any full-time or part-time employee
(including an officer or director who is also an employee) of the Company or an
Affiliate. Except with respect to grants of Incentive Stock Options, “Associate”
shall also include any member of the Board or other individual or entity who is
not an “employee” of the Company or an Affiliate but who provides services to
the Company or an Affiliate as a consultant or adviser. References in this Plan
to “employment” and related terms (except for references to “employee” in this
definition of “Associate” or in Section 7(a)(1)) shall include the providing of
services in any such capacity.          (d) “Award” means a grant made under
this Plan in the form of Options, Stock Appreciation Rights, Restricted Stock,
Performance Shares or any Other Stock-Based Award, whether singly, in
combination or in tandem.          (e) “Board” means the Board of Directors of
the Company.          (f) “Change in Control” means:

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

 

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  (A)   for whose election proxies shall have been solicited by the Board or    
(B)   who are then serving as directors appointed by the Board to fill vacancies
on the Board caused by death or resignation (but not by removal) or to fill
newly-created directorships,  

  (ii)   more than 33-1/3% of the (1) combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (“Outstanding Company Voting Securities”) or (2) the then
outstanding Shares of Stock (“Outstanding Company Common Stock”) is directly or
indirectly acquired or beneficially owned (as defined in Rule 13d-3 under the
Exchange Act, or any successor rule thereto) by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act),
provided, however, that the following acquisitions and beneficial ownership
shall not constitute Changes in Control pursuant to this paragraph 2(f)(ii):  

  (A)   any acquisition or beneficial ownership by the Company or a Subsidiary,
or     (B)   any acquisition or beneficial ownership by any employee benefit
plan (or related trust) sponsored or maintained by the Company or one or more of
its Subsidiaries, or     (C)   any acquisition or beneficial ownership by a
Parent or its wholly-owned Subsidiaries, as long as they shall remain
wholly-owned Subsidiaries, of 100% of the Outstanding Company Voting Securities
as a result of a merger or statutory share exchange which complies with
paragraph 2(f)(iii)(A)(2) or the exception in paragraph 2(f)(iii)(B) hereof in
all respects,  

  (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 or (2) a merger in which  

  (a)   the Company is the surviving corporation,     (b)   no Outstanding
Company Voting Securities or Outstanding Company Common Stock (other than
fractional shares) held by shareholders of the Company immediately prior to the
merger is converted into cash, securities, or other property (except (i) voting
stock of a Parent owning directly, or indirectly through wholly-owned
Subsidiaries, both beneficially and of record 100% of the Outstanding

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      Company Voting Securities immediately after the Merger or (ii) cash upon
the exercise by holders of Outstanding Company Voting Securities or Outstanding
Company Common Stock of statutory dissenters’ rights),     (c)   the persons who
were the beneficial owners, respectively, of the Outstanding Company Voting
Securities and Outstanding Company Common Stock immediately prior to such merger
beneficially own, directly or indirectly, immediately after the merger, 66-2/3%
or more of, respectively, the then outstanding common stock and the voting power
of the then outstanding voting securities of the surviving corporation or its
Parent entitled to vote generally in the election of directors, and     (d)   if
voting securities of the Parent are exchanged for Outstanding Company Voting
Securities in the merger, all holders of any class or series of Outstanding
Company Voting Securities immediately prior to the merger have the right to
receive substantially the same per share consideration in exchange for their
Outstanding Company Voting Securities as all other holders of such class or
series),  

  (B)   exchange, pursuant to a statutory share exchange, Outstanding Company
Voting Securities of any one or more classes or series held by shareholders of
the Company immediately prior to the exchange for cash, securities or other
property, except for (a) voting stock of a Parent owning directly, or indirectly
through wholly-owned Subsidiaries, both beneficially and of record 100% of the
Outstanding Company Voting Securities immediately after the statutory share
exchange if (i) the persons who were the beneficial owners, respectively, of the
Outstanding Company Voting Securities and Outstanding Company Common Stock
immediately prior to such statutory share exchange own, directly or indirectly,
immediately after the statutory share exchange 66-2/3% or more of, respectively,
the then outstanding common stock and the voting power of the then outstanding
voting securities of such Parent entitled to vote generally in the election of
directors, and (ii) all holders of any class or series of Outstanding Company
Voting Securities immediately prior to the statutory share exchange have the
right to receive substantially the same per share consideration in exchange for
their Outstanding Company Voting Securities as all other holders of such class
or series or (b) cash with respect to fractional shares of Outstanding Company
Voting Securities

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      or payable as a result of the exercise by holders of Outstanding Company
Voting Securities of statutory dissenters’ rights,     (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.

       (g) “Code” means the Internal Revenue Code of 1986, as amended and in
effect from time to time, or any successor statute.          (h) “Committee”
means two or more Non-Employee Directors designated by the Board to administer
this Plan under Section 3 hereof and constituted so as to permit this Plan to
comply with Exchange Act Rule 16b-3; provided that if no Committee is designated
by the Board, the board shall constitute the Committee.          (i) “Company”
means Wilsons The Leather Experts Inc., a Minnesota corporation, or any
successor to all or substantially all of its businesses by merger,
consolidation, purchase of assets or otherwise.          (j) “Disability” means
any physical or mental incapacitation whereby a Participant is unable for a
period of twelve consecutive months or for an aggregate of twelve months in any
twenty-four consecutive month period to perform his or her duties for the
Company or any Affiliate. “Disabled,” with respect to any Participant, shall
mean that such Participant has incurred a Disability.          (k) “Exchange
Act” means the Securities Exchange Act of 1934, as amended; “Exchange Act
Rule 16b-3” means Rule 16b-3 promulgated by the Securities and Exchange
Commission under the Exchange Act as in effect with respect to the Company or
any successor regulation.          (l) “Fair Market Value” as of any date means,
unless otherwise expressly provided in this Plan:

       (i) (A) the closing sale price of a Share on the composite tape for New
York Stock Exchange (“NYSE”) listed shares, or if Shares are not quoted on the
composite tape for NYSE listed shares, on the Nasdaq National Market or any
similar system then in use or, (B) if clause (i)(A) is not applicable, the mean
between the closing “bid” and the closing “asked” quotation of a Share on the
Nasdaq SmallCap Market or any similar system then in use, or (C) if the Shares
are not quoted on the NYSE composite tape or on the Nasdaq National Market or
the Nasdaq SmallCap Market or any similar system then in use, the closing sale
price of a Share on the principal United States securities exchange registered
under the Exchange Act on which the Shares are listed, in any case on the date
immediately preceding that date, or, if no sale of Shares shall have occurred on
that date, on the next preceding day on which a sale of Shares occurred, or    
     (ii) if clause (i) is not applicable, what the Committee determines in good
faith to be 100% of the fair market value of a Share on that date.

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       However, if the applicable securities exchange or system has closed for
the day at the time the event occurs that triggers a determination of Fair
Market Value, all references in this paragraph to the “date immediately
preceding that date” shall be deemed to be references to “that date.” In the
case of an Incentive Stock Option, if such determination of Fair Market Value is
not consistent with the then current regulations of the Secretary of the
Treasury, Fair Market Value shall be determined in accordance with said
regulations. The determination of Fair Market Value shall be subject to
adjustment as provided in Section 12(f) hereof.          (m) “Fundamental
Change” means a dissolution or liquidation of the Company, a sale of
substantially all of the assets of the Company, a 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.          (n) “Incentive Stock Option” means any Option
designated as such and granted in accordance with the requirements of
Section 422 of the Code or any successor to such section.          (o)
“Non-Employee Director” means a member of the Board who is considered a
non-employee director within the meaning of Exchange Act Rule 16b-3.    
     (p) “Non-Qualified Stock Option” means an Option other than an Incentive
Stock Option.          (q) “Other Stock-Based Award” means an Award of Stock or
an Award based on Stock other than Options, Stock Appreciation Rights,
Restricted Stock or Performance Shares.          (r) “Option” means a right to
purchase Stock (or, if the Committee so provides in an applicable Agreement,
Restricted Stock), including both Non-Qualified Stock Options and Incentive
Stock Options.          (s) “Parent” means a “parent corporation,” as that term
is defined in Section 424(e) of the Code, or any successor provision.    
     (t) “Participant” means an Associate to whom an Award is made.          (u)
“Performance Period” means the period of time as specified in an Agreement over
which Performance Shares are to be earned.          (v) “Performance Shares”
means a contingent award of a specified number of Performance Shares, with each
Performance Share equivalent to one or more Shares or a fractional Share or a
Unit expressed in terms of one or more Shares or a fractional Share, as
specified in the applicable Agreement, a variable percentage of which may vest
depending upon the extent of achievement of specified performance objectives
during the applicable Performance Period.          (w) “Plan” means this 2000
Long Term Incentive Plan, as amended and in effect from time to time.

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       (x) “Restricted Stock” means Stock granted under Section 10 hereof so
long as such Stock remains subject to one or more restrictions.          (y)
“Share” means a share of Stock.          (z) “Stock” means the Company’s common
stock, $0.01 par value per share (as such par value may be adjusted from time to
time).          (aa) “Stock Appreciation Right” means a right, the value of
which is determined relative to appreciation in value of Shares pursuant to an
Award granted under Section 8 hereof.          (bb) “Subsidiary” means a
“subsidiary corporation,” as that term is defined in Section 424(f) of the Code,
or any successor provision.          (cc) “Successor” with respect to a
Participant means the legal representative of an incompetent Participant and, if
the Participant is deceased, the legal representative of the estate of the
Participant or the person or persons who may, by bequest or inheritance, or
under the terms of an Award or of forms submitted by the Participant to the
Committee under Section 12(i) hereof, acquire the right to exercise an Option or
Stock Appreciation Right or receive cash and/or Shares issuable in satisfaction
of an Award in the event of a Participant’s death.          (dd) “Term” means
the period during which an Option or Stock Appreciation Right may be exercised
or the period during which the restrictions placed on Restricted Stock or any
other Award are in effect.          (ee) “Unit” means a bookkeeping entry that
may be used by the Company to record and account for the grant of Stock, Stock
Appreciation Rights and Performance Shares expressed in terms of Units of Stock
until such time as the Award is paid, cancelled, forfeited or terminated.    
     Except when otherwise indicated by the context, reference to the masculine
gender shall include, when used, the feminine gender and any term used in the
singular shall also include the plural.

     3.     Administration.

       (a) Authority of Committee. The Committee shall administer this Plan. The
Committee shall have exclusive power, subject to the limitations contained in
this Plan, to make Awards and to determine when and to whom Awards will be
granted, and the form, amount and other terms and conditions of each Award,
subject to the provisions of this Plan. The Committee, subject to the
limitations contained in this Plan, may determine whether, to what extent and
under what circumstances Awards may be settled, paid or exercised in cash,
Shares or other Awards or other property, or canceled, forfeited or suspended.
The Committee shall have the authority to interpret this Plan and any Award or
Agreement made under this Plan, to establish, amend, waive and rescind any rules
and regulations relating to the administration of this Plan, to determine the
terms and provisions of any Agreements entered into hereunder (not inconsistent
with this Plan), and to make all other determinations necessary or advisable for
the administration of this Plan. The Committee may correct any defect, supply
any omission or reconcile any

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  inconsistency in this Plan or in any Award in the manner and to the extent it
shall deem desirable. The determinations of the Committee in the administration
of this Plan, as described herein, shall be final, binding and conclusive. A
majority of the members of the Committee shall constitute a quorum for any
meeting of the Committee.          (b) Delegation of Authority. The Committee
may delegate all or any part of its authority under this Plan to officers of the
Company or other persons who are not Non-Employee Directors for purposes of
determining and administering Awards solely to Associates who are not then
subject to the reporting requirements of Section 16 of the Exchange Act. Any
officer to whom the Committee delegates such authority may, in turn, delegate
such authority to such other officer of the Company as the officer delegating
such authority may determine.          (c) Rule 16b-3 Compliance. It is intended
that this Plan and all Awards granted pursuant to it shall be administered by
the Committee so as to permit this Plan and Awards to comply with Exchange Act
Rule 16b-3. If any provision of this Plan or of any Award would otherwise
frustrate or conflict with the intent expressed in this Section 3(c), that
provision to the extent possible shall be interpreted and deemed amended in the
manner determined by the Committee so as to avoid such conflict. To the extent
of any remaining irreconcilable conflict with such intent, the provision shall
be deemed void as applicable to Participants who are then subject to the
reporting requirements of Section 16 of the Exchange Act to the extent permitted
by law and in the manner deemed advisable by the Committee.    
     (d) Indemnification. To the full extent permitted by law, (a) each member
and former member of the Committee and each person to whom the Committee
delegates or has delegated authority under this Plan shall be entitled to
indemnification by the Company against and from any loss, liability, judgment,
damage, cost and reasonable expense incurred by such member, former member or
other person by reason of any action taken, failure to act or determination made
in good faith under or with respect to this Plan, and (b) no member or former
member of the Committee or any person to whom the Committee delegates or has
delegated authority under this Plan shall be liable for any act or determination
made in good faith under or with respect to this Plan.

     4.     Shares Available; Maximum Payouts.

       (a) Shares Available. The number of Shares available for distribution
under this Plan is 1,250,000 (subject to adjustment under Section 12(f) hereof).
         (b) Shares Again Available. Any Shares subject to an Award under this
Plan which are not used because the Award expires without all Shares subject to
such Award having been issued or because the terms and conditions of the Award
are not met may again be used for an Award under this Plan. Any Shares that are
the subject of Awards which are subsequently forfeited to the Company pursuant
to the restrictions applicable to such Award may again be used for an Award
under this Plan. If a Participant exercises a Stock Appreciation Right, any
Shares covered by the Stock Appreciation Right in excess of the number of Shares
issued (or, in the case of a settlement in cash or any other form of property,
in excess of the number of Shares equal in value to the amount of such
settlement, based on the Fair Market Value of such Shares on the date of such
exercise) may again be used for an Award under this Plan. If, in accordance with
the Plan, a Participant uses Shares to (i) pay a purchase or exercise price,
including an Option

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  exercise price, or (ii) satisfy tax withholdings, such Shares may again be
used for an Award under this Plan.          (c) Unexercised Awards. Any
unexercised or undistributed portion of any terminated, expired, exchanged, or
forfeited Award or any Award settled in cash in lieu of Shares (except as
provided in Section 4(b) hereof) shall be available for further Awards.    
     (d) No Fractional Shares. No fractional Shares may be issued under this
Plan; fractional Shares will be rounded to the nearest whole Share, for which
purpose a one-half Share shall be rounded to up the next highest whole Share.  
       (e) Maximum Payouts. No more than 600,000 Shares subject to this Plan
(subject to adjustment under Section 12(f) hereof) may be granted in the
aggregate pursuant to Restricted Stock (if vesting is based on a period of time
without regard to the attainment of specified performance conditions) and Other
Stock-Based Awards.

     5.     Eligibility. Awards may be granted under this Plan to any Associate
at the discretion of the Committee.

     6.     General Terms of Awards.

       (a) Awards. Awards under this Plan may consist of Options (either
Incentive Stock Options or Non-Qualified Stock Options), Stock Appreciation
Rights, Performance Shares, Restricted Stock and Other Stock-Based Awards.
Awards of Restricted Stock may, in the discretion of the Committee, provide the
Participant with dividends or dividend equivalents and voting rights prior to
vesting (whether vesting is based on a period of time, the attainment of
specified performance conditions or otherwise).          (b) Amount of Awards.
Each Agreement shall set forth the number of Shares of Restricted Stock, Stock
or Performance Shares subject to such Agreement, or the number of Shares to
which the Option applies or with respect to which payment upon the exercise of
the Stock Appreciation Right is to be determined, as the case may be, together
with such other terms and conditions applicable to the Award (not inconsistent
with this Plan) as determined by the Committee in its sole discretion.    
     (c) Term. Each Agreement, other than those relating solely to Awards of
Stock without restrictions, shall set forth the Term of the Award and any
applicable Performance Period for Performance Shares, as the case may be, but in
no event shall the Term of an Award or the Performance Period be longer than ten
years after the date of grant. An Agreement with a Participant may permit
acceleration of vesting requirements and of the expiration of the applicable
Term upon such terms and conditions as shall be set forth in the Agreement,
which may, but, unless otherwise specifically provided in this Plan, need not,
include, without limitation, acceleration resulting from the occurrence of a
Change in Control, a Fundamental Change, or the Participant’s death or
Disability. Acceleration of the Performance Period of Performance Shares shall
be subject to Section 9(b) hereof.          (d) Agreements. Each Award under
this Plan shall be evidenced by an Agreement setting forth the terms and
conditions, as determined by the Committee, that shall apply to such Award, in
addition to the terms and conditions specified in this Plan.

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       (e) Transferability. During the lifetime of a Participant to whom an
Award is granted, only such Participant (or such Participant’s legal
representative or, if so provided in the applicable Agreement in the case of a
Non-Qualified Stock Option, a permitted transferee as hereafter described) may
exercise an Option or Stock Appreciation Right or receive payment with respect
to Performance Shares or any other Award. No Award of Restricted Stock (prior to
the expiration of the restrictions), Options, Stock Appreciation Rights,
Performance Shares or other Award (other than an award of Stock without
restrictions) may be sold, assigned, transferred, exchanged, or otherwise
encumbered, and any attempt to do so shall be of no effect. Notwithstanding the
immediately preceding sentence, (i) an Agreement may provide that an Award shall
be transferable to a Successor in the event of a Participant’s death and,
(ii) an Agreement may provide that a Non-Qualified Stock Option shall be
transferable to any member of a Participant’s “immediate family” (as such term
is defined in Rule 16a-1(e) promulgated under the Exchange Act, or any successor
rule or regulation) or to one or more trusts whose beneficiaries are members of
such Participant’s “immediate family” or partnerships in which such family
members are the only partners and (iii) an Agreement may provide that a
Non-Qualified Stock Option shall be transferable 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; provided, however, that
the Participant receives no consideration for the transfer. Any Non-Qualified
Stock Option held by a permitted transferee shall continue to be subject to the
same terms and conditions that were applicable to such Non-Qualified Stock
Option immediately prior to its transfer and 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 this Plan
relating to notice to a Participant or to vesting or termination of a
Non-Qualified Stock Option upon the termination of employment of a Participant,
the references to “Participant” shall mean the original grantee of the
Non-Qualified Stock Option and not any permitted transferee.    
     (f) Termination of Employment. Except as otherwise determined by the
Committee or provided by the Committee in an applicable Agreement (which may,
without limitation, in the sole discretion of the Committee, provide for an
extension of the exercisability of Options and Stock Appreciation Rights beyond
the periods set forth in paragraphs 1(i) through (iii) below, subject in all
events to paragraph 1(iv) below), in case of a Participant’s termination of
employment, the following provisions shall apply:

       (1) Options and Stock Appreciation Rights.

       (i) Death. If a Participant’s employment terminates because of his or her
death, then any Option or Stock Appreciation Right that has not expired or been
terminated shall become exercisable in full, and may be exercised by the
Participant’s Successor at any time, or from time to time, within one year after
the date of the Participant’s death.          (ii) Disability. If a
Participant’s employment terminates because of Disability, then any Option or
Stock Appreciation Right that has not expired or been terminated shall become
exercisable in full, and the Participant or the Participant’s Successor may
exercise such Option or

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  Stock Appreciation Right at any time, or from time to time, within one year
after the date of the Participant’s Disability.          (iii) Reasons other
than Death or Disability. If a Participant’s employment terminates for any
reason other than death or Disability, then any Option or Stock Appreciation
Right that has not expired or been terminated shall remain exercisable for three
months after termination of the Participant’s employment, but only to the extent
that such Option or Stock Appreciation Right was exercisable immediately prior
to such Participant’s termination of employment.          (iv) Expiration of
Term. Notwithstanding the foregoing paragraphs (i)-(iii), in no event shall an
Option or a Stock Appreciation Right be exercisable after expiration of the Term
of such Award. Any Option or Stock Appreciation Right that is not exercised
within the periods set forth in the foregoing paragraphs (i)-(iii), except as
otherwise provided by the Company in the applicable Agreement, shall terminate
as of the end of the periods described in such paragraphs.

       (2) Performance Shares. If a Participant’s employment with the Company or
any of its Affiliates terminates during a Performance Period because of death or
Disability, or under other circumstances provided by the Committee in its
discretion in the applicable Agreement or otherwise, the Participant, unless the
Committee shall otherwise provide in the applicable Agreement, shall be entitled
to a payment of Performance Shares at the end of the Performance Period based
upon the extent to which achievement of performance targets was satisfied at the
end of such period (as determined at the end of the Performance Period) and
prorated for the portion of the Performance Period during which the Participant
was employed by the Company or any Affiliate. Except as provided in this
Section 6(f)(2) or in the applicable Agreement, if a Participant’s employment
with the Company or any of its Affiliates terminates during a Performance
Period, then such Participant shall not be entitled to any payment with respect
to that Performance Period.          (3) Restricted Stock. Unless otherwise
provided in the applicable Agreement, in case of a Participant’s death or
Disability, the Participant shall be entitled to receive a number of shares of
Restricted Stock under outstanding Awards that has been pro rated for the
portion of the Term of the Awards during which the Participant was employed by
the Company or any Affiliate, and with respect to such Shares all restrictions
shall lapse. Any shares of Restricted Stock as to which restrictions do not
lapse under the preceding sentence shall terminate at the date of the
Participant’s termination of employment and such shares of Restricted Stock
shall be forfeited to the Company.

       (g) Rights as Shareholder. A Participant shall have no rights as a
shareholder with respect to any securities covered by an Award until the date
the Participant becomes the holder of record.

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     7.     Stock Options.

       (a) Terms of All Options.

       (1) Grants. Each Option shall be granted pursuant to an Agreement as
either an Incentive Stock Option or a Non-Qualified Stock Option. Only
Non-Qualified Stock Options may be granted to Associates who are not employees
of the Company or an Affiliate.          (2) Purchase Price. The purchase price
of each Share subject to an Option shall be determined by the Committee and set
forth in the applicable Agreement, but shall not be less than 85% of the Fair
Market Value of a Share as of the date the Option is granted; provided that with
respect to Incentive Stock Options, the purchase price of each Share subject to
such an Option shall not be less than 100% of the Fair Market Value of a Share
as of the date the Option is granted. The purchase price of the Shares with
respect to which an Option is exercised shall be payable in full at the time of
exercise, provided that, to the extent permitted by law, Participants may
simultaneously exercise Options and sell 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. The purchase price may be paid in cash or, if
the Committee so permits, through a reduction of the number of Shares delivered
to the Participant upon exercise of the Option or delivery or tender to the
Company of Shares held by such Participant (in each case, such Shares having a
Fair Market Value as of the date the Option is exercised equal to the purchase
price of the Shares being purchased pursuant to the Option), or a combination
thereof, unless otherwise provided in the Agreement.          (3) Reload
Options. If the Committee so determines, the Agreement relating to any Option
may provide for the issuance of “reload” Options pursuant to which, subject to
the terms and conditions established by the Committee and any applicable
requirements of Exchange Act Rule 16b-3 or any other applicable law, the
Participant will, either automatically or subject to subsequent Committee
approval, be granted a new Option when the payment of the exercise price of the
original Option, or the payment of tax withholdings pursuant to Section 12(d)
hereof, is made through the delivery or tender to the Company of Shares held by
such Participant, such new “reload” Option (i) being an Option to purchase the
number of Shares provided as consideration for the exercise price and in payment
of taxes in connection with the exercise of the original Option, and (ii) having
a per Share exercise price equal to the Fair Market Value as of the date of
exercise of the original Option.          (4) Exercisability. Each Option shall
be exercisable in whole or in part on the terms provided in the Agreement,
provided that if a Change in Control shall occur, then any Option that has not
expired or been terminated shall become exercisable in full. In no event shall
any Option be exercisable at any time after its Term. When an Option is no
longer exercisable, it shall be deemed to have lapsed or terminated.    
     (5) Maximum Annual Options Per Participant. No Participant may receive any
combination of Options and Stock Appreciation Rights relating to more

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       than 350,000 Shares in the aggregate pursuant to Awards in any fiscal
year of the Company under this Plan (subject to adjustment under Section 12(f)
hereof).

       (b) Incentive Stock Options. In addition to the other terms and
conditions applicable to all Options:

       (i) the aggregate Fair Market Value (determined as of the date the Option
is granted) of the Shares with respect to which Incentive Stock Options held by
an individual first become exercisable in any calendar year (under this Plan and
all other incentive stock option plans of the Company and its Affiliates) shall
not exceed $100,000 (or such other limit as may be required by the Code), if
such limitation is necessary to qualify the Option as an Incentive Stock Option,
and to the extent an Option or Options granted to a Participant exceed such
limit, such Option or Options shall be treated as a Non-Qualified Stock Option;
         (ii) an Incentive Stock Option shall not be exercisable and the Term of
the Award shall not be more than ten years after the date of grant (or such
other limit as may be required by the Code) if such limitation is necessary to
qualify the Option as an Incentive Stock Option;          (iii) the Agreement
covering an Incentive Stock Option shall contain such other terms and provisions
which the Committee determines necessary to qualify such Option as an Incentive
Stock Option; and          (iv) notwithstanding any other provision of this Plan
to the contrary, no Participant may receive an Incentive Stock Option under this
Plan if, at the time the Award is granted, the Participant owns (after
application of the rules contained in Section 424(d) of the Code, or its
successor provision) Shares possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or its
subsidiaries, unless (A) the option price for such Incentive Stock Option is at
least 110% of the Fair Market Value of the Shares subject to such Incentive
Stock Option on the date of grant and (B) such Option is not exercisable after
the date five years from the date such Incentive Stock Option is granted.

     8.     Stock Appreciation Rights. An Award of a Stock Appreciation Right
shall entitle the Participant, subject to terms and conditions determined by the
Committee, to receive upon exercise of the Stock Appreciation Right all or a
portion of the excess of (i) the Fair Market Value of a specified number of
Shares as of the date of exercise of the Stock Appreciation Right over (ii) a
specified price which shall not be less than 50% of the Fair Market Value of
such Shares as of the date of grant of the Stock Appreciation Right. A Stock
Appreciation Right may be granted in connection with a previously or
contemporaneously granted Option, or independent of any Option. If issued in
connection with an Option, the Committee may impose a condition that exercise of
a Stock Appreciation Right cancels the Option with which it is connected and
exercise of the connected Option cancels the Stock Appreciation Right. Each
Stock Appreciation Right may be exercisable in whole or in part on the terms
provided in the applicable Agreement, provided that if a Change in Control shall
occur, then any Stock Appreciation Right that has not expired or been terminated
shall become exercisable in full. No Stock Appreciation Right shall be
exercisable at any time after its Term. When a Stock Appreciation Right is no
longer exercisable, it shall be deemed to have lapsed or terminated. Except as
otherwise provided in the applicable Agreement, upon exercise of a Stock
Appreciation Right, payment to the Participant (or to his or her Successor)
shall be made in the form of cash, Stock or a combination of cash and Stock as

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promptly as practicable after such exercise. The Agreement may provide for a
limitation upon the amount or percentage of the total appreciation on which
payment (whether in cash and/or Stock) may be made in the event of the exercise
of a Stock Appreciation Right. As specified in Section 7(a) hereof, no
Participant may receive any combination of Options and Stock Appreciation Rights
relating to more than 350,000 Shares in the aggregate pursuant to Awards in any
fiscal year of the Company under this Plan (subject to adjustment under
Section 12(f) hereof).

     9.     Performance Shares.

       (a) Initial Award. An Award of Performance Shares shall entitle a
Participant (or a Successor) to future payments based upon the achievement of
performance targets established in writing by the Committee. Payment shall be
made in Stock, or a combination of cash and Stock, as determined by the
Committee. With respect to those Participants who are “covered employees” within
the meaning of Section 162(m) of the Code and the regulations thereunder, such
performance targets shall consist of one or any combination of two or more of
earnings or earnings per share before income tax (profit before taxes), net
earnings or net earnings per share (profit after tax), inventory, total, or net
operating asset turnover, operating income, total shareholder return, return on
equity, pre-tax and pre-interest expense return on average invested capital,
which may be expressed on a current value basis, or sales growth, and any such
targets may relate to one or any combination of two or more of corporate, group,
unit, division, Affiliate or individual performance. The Agreement may establish
that a portion of the maximum amount of a Participant’s Award will be paid for
performance which exceeds the minimum target but falls below the maximum target
applicable to such Award. The Agreement shall also provide for the timing of
such payment. Following the conclusion or acceleration of each Performance
Period, the Committee shall determine the extent to which (i) performance
targets have been attained, (ii) any other terms and conditions with respect to
an Award relating to such Performance Period have been satisfied, and
(iii) payment is due with respect to a Performance Share Award. No Participant
may receive Performance Shares relating to more than 200,000 Shares (or cash
equivalents), or receive more than 200,000 Shares (or cash equivalents) pursuant
to Awards of Performance Shares in any fiscal year of the Company under this
Plan (subject to adjustment under Section 12(f) hereof).    
     (b) Acceleration and Adjustment. The applicable Agreement may permit an
acceleration of the Performance Period and an adjustment of performance targets
and payments with respect to some or all of the Performance Shares awarded to a
Participant, upon such terms and conditions as shall be set forth in the
Agreement, upon the occurrence of certain events, which may, but, unless
otherwise specifically provided in this Plan, need not, include, without
limitation, a Change in Control, a Fundamental Change, the Participant’s death
or Disability, a change in accounting practices of the Company or its
Affiliates, or, with respect to payments in Stock for Performance Share Awards,
a reclassification, stock dividend, stock split or stock combination as provided
in Section 12(f) hereof.          (c) Valuation. To the extent that payment of a
Performance Share is made in cash, a Performance Share earned after conclusion
of a Performance Period shall have a value equal to the Fair Market Value of a
Share on the last day of such Performance Period.

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     10.     Restricted Stock. Subject to Section 4(e), Restricted Stock may be
granted in the form of Shares registered in the name of the Participant but held
by the Company until the restrictions on the Restricted Stock Award lapse,
subject to forfeiture as provided in the applicable Agreement. Any employment
conditions, performance conditions, restrictions on transferability and the Term
of the Award shall be established by the Committee in its discretion and
included in the applicable Agreement. The Committee may provide in the
applicable Agreement for the lapse or waiver of any such restriction or
condition based on such factors or criteria as the Committee, in its sole
discretion, may determine, which may, but need not, include without limitation a
Change in Control, a Fundamental Change or the Participant’s death or
Disability. The Committee, in the applicable Agreement, may, in its sole
discretion, award all or any of the rights of a shareholder with respect to the
Shares of Restricted Stock during the period that they remain subject to
restrictions, including, without limitation, the right to vote the Shares and
receive dividends. With respect to those Participants who are “covered
employees” within the meaning of Section 162(m) of the Code and the regulations
thereunder, any performance conditions to the lapse of restrictions on
restricted stock shall be based on performance targets that consist of one or
any combination of two or more of earnings or earnings per share before income
tax (profit before taxes), net earnings or net earnings per share (profit after
tax), inventory, total, or net operating asset turnover, operating income, total
shareholder return, return on equity, pre-tax and pre-interest expense return on
average invested capital, which may be expressed on a current value basis, or
sales growth, and any such targets may relate to one or any combination of two
or more of corporate, group, unit, division, Affiliate or individual
performance. No participant may receive more than 200,000 Shares of Restricted
Stock subject to performance conditions or be entitled to have restrictions
lapse with respect to more than 200,000 Shares of Restricted Stock subject to
performance conditions in any fiscal year of the Company under this Plan
(subject to adjustment under Section 12(f) hereof).

     11.     Other Stock-Based Awards. Subject to Section 4(e), the Committee
may from time to time grant Awards of Stock, and other Awards under this Plan
(collectively herein defined as “Other Stock-Based Awards”), including without
limitation those Awards pursuant to which Shares may be acquired in the future,
such as Awards denominated in Stock, Stock Units, securities convertible into
Stock and phantom securities. The Committee, in its sole discretion, shall
determine, and provide in the applicable Agreement for, the terms and conditions
of such Awards provided that such Awards shall not be inconsistent with the
terms and purposes of this Plan. The Committee may, in its sole discretion,
direct the Company to issue Shares subject to restrictive legends and/or stop
transfer instructions which are consistent with the terms and conditions of the
Award to which such Shares relate.

     12.     General Provisions.

       (a) Effective Date of this Plan. This Plan shall become effective as of
March 23, 2000, provided that this Plan is approved and ratified by the
affirmative vote of the holders of a majority of the outstanding Shares of Stock
present or represented and entitled to vote in person or by proxy at a meeting
of the shareholders of the Company held no later than June 30, 2000. If this
Plan is not so approved, any Award granted under this Plan subject to such
approval shall be cancelled and be null and void.          (b) Duration of this
Plan; Date of Grant. This Plan shall remain in effect until all Stock subject to
it shall be distributed or all Awards have expired or lapsed, whichever is
latest to occur, or this Plan is terminated pursuant to Section 12(e) hereof. No
Award of an Incentive Stock Option shall be made more than ten years after the
effective date

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  provided in Section 12(a) hereof (or such other limit as may be required by
the Code) if such limitation is necessary to qualify the Option as an Incentive
Stock Option. The date and time of approval by the Committee of the granting of
an Award shall be considered the date and time at which such Award is made or
granted, notwithstanding the date of any Agreement with respect to such Award;
provided, however, that the Committee may grant Awards other than Incentive
Stock Options to Associates or to persons who are about to become Associates, to
be effective and deemed to be granted on the occurrence of certain specified
contingencies, provided that if the Award is granted to a non-Associate who is
about to become an Associate, such specified contingencies shall include,
without limitation, that such person becomes an Associate.          (c) Right to
Terminate Employment. Nothing in this Plan or in any Agreement shall confer upon
any Participant who is an employee of the Company the right to continue in the
employment of the Company or any Affiliate or affect any right which the Company
or any Affiliate may have to terminate or modify the employment of the
Participant with or without cause.          (d) Tax Withholding. The Company may
withhold from any payment of cash or Stock to a Participant or other person
under this Plan an amount sufficient to cover any required withholding taxes,
including the Participant’s social security and Medicare taxes (FICA) and
federal, state and local income tax with respect to income arising from payment
of the Award. The Company shall have the right to require the payment of any
such taxes before issuing any Stock pursuant to the Award. In lieu of all or any
part of a cash payment from a person receiving Stock under this Plan, the
Committee may, in the applicable Agreement or otherwise, permit a person to
cover all or any part of the required withholdings, and to cover any additional
withholdings up to the amount needed to cover the person’s full FICA and
federal, state and local income tax with respect to income arising from payment
of the Award, through a reduction of the number of Shares delivered to such
person or a delivery or tender to the Company of Shares held by such person, in
each case valued in the same manner as used in computing the withholding taxes
under applicable laws.          (e) Amendment, Modification and Termination of
this Plan. Except as provided in this Section 12(e), the Board may at any time
amend, modify, terminate or suspend this Plan. Except as provided in this
Section 12(e), the Committee may at any time alter or amend any or all
Agreements under this Plan to the extent permitted by law, in which event, as
provided in Section 2(b), the term “Agreement” shall mean the Agreement as so
amended. Amendments are subject to approval of the shareholders of the Company
only if such approval is necessary to maintain this Plan in compliance with the
requirements of Exchange Act Rule 16b-3, Section 422 of the Code, their
successor provisions, or any other applicable law or regulation. No termination,
suspension or modification of this Plan may materially and adversely affect any
right acquired by any Participant (or a Participant’s legal representative) or
any Successor or permitted transferee under an Award granted before the date of
termination, suspension or modification, unless otherwise provided in an
Agreement or otherwise or required as a matter of law. It is conclusively
presumed that any adjustment for changes in capitalization provided for in
Section 9(b) or 12(f) hereof does not adversely affect any right of a
Participant or other person under an Award.          (f) Adjustment for Changes
in Capitalization. Appropriate adjustments in the aggregate number and type of
securities available for Awards under this Plan, in the

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  limitations on the number and type of securities that may be issued to an
individual Participant, in the number and type of securities and amount of cash
subject to Awards then outstanding, in the Option exercise price as to any
outstanding Options and, subject to Section 9(b) hereof, in outstanding
Performance Shares and payments with respect to outstanding Performance Shares
may be made by the Committee in its sole discretion to give effect to
adjustments made in the number or type of Shares through a Fundamental Change
(subject to Section 12(g) hereof), recapitalization, reclassification, stock
dividend, stock split, stock combination, spin-off or other relevant change,
provided that fractional Shares shall be rounded to the nearest whole Share, for
which purpose a one-half Share shall be rounded to the next highest whole Share.
         (g) Fundamental Change. In the event of a proposed Fundamental Change,
the Committee may, but shall not be obligated to:

       (i) with respect to a Fundamental Change that involves a merger,
consolidation or statutory share exchange, make appropriate provision for the
protection of the outstanding Options and Stock Appreciation Rights by the
substitution of options, stock appreciation rights and appropriate voting common
stock of the corporation surviving any such merger or consolidation or, if
appropriate, the Parent of such surviving corporation, in lieu of Options, Stock
Appreciation Rights and capital stock of the Company, or          (ii) with
respect to any Fundamental Change, including, without limitation, a merger,
consolidation or statutory share exchange,

  declare, at least twenty days prior to the occurrence of the Fundamental
Change, and provide written notice to each holder of an Option or Stock
Appreciation Right of the declaration, that each outstanding Option and Stock
Appreciation Right, whether or not then exercisable, shall be canceled at the
time of, or immediately prior to the occurrence of, the Fundamental Change in
exchange for payment to each holder of an Option or Stock Appreciation Right,
within 20 days after the Fundamental Change, of cash (or with respect to an
Option, if the Committee so elects in lieu of solely cash, of such form(s) of
consideration, including cash and/or property, singly or in such combination as
the Committee shall determine, that such holder of an Option would have received
as a result of the Fundamental Change if such holder had exercised such holder’s
Option immediately prior to the Fundamental Change) equal to (i) for each Share
covered by the canceled Option, the amount, if any, by which the Fair Market
Value (as defined in this Section 12(g)) per Share exceeds the exercise price
per Share covered by such Option or (ii) for each Stock Appreciation Right, the
price determined pursuant to Section 8 hereof, except that Fair Market Value of
the Shares as of the date of exercise of the Stock Appreciation Right, as used
in clause (i) of Section 8, shall be deemed to mean Fair Market Value for each
Share with respect to which the Stock Appreciation Right is calculated
determined in the manner hereinafter referred to in this Section 12(g). At the
time of the declaration provided for in the immediately preceding sentence, each
Stock Appreciation Right and each Option shall immediately become exercisable in
full and each person holding an Option or a Stock Appreciation Right shall have
the right, during the period preceding the time of cancellation of the Option or
Stock Appreciation Right, to exercise the Option as to all or any part of the
Shares covered thereby or the Stock Appreciation Right in whole or in part, as
the case may be. In the event of a declaration pursuant to this Section 12(g),
each outstanding Option and Stock Appreciation Right that shall not have been
exercised prior to the Fundamental Change shall be canceled at the

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  time of, or immediately prior to, the Fundamental Change, as provided in the
declaration. Notwithstanding the foregoing, no person holding an Option or Stock
Appreciation Right shall be entitled to the payment provided for in this
Section 12(g) if such Option or Stock Appreciation Right shall have terminated,
expired or been cancelled. For purposes of this Section 12(g) only, “Fair Market
Value” per Share means the cash plus the fair market value, as determined in
good faith by the Committee, of the non-cash consideration to be received per
Share by the shareholders of the Company upon the occurrence of the Fundamental
Change, notwithstanding anything to the contrary provided in this Plan.    
     (h) Other Benefit and Compensation Programs. Payments and other benefits
received by a Participant under an Award shall not be deemed a part of a
Participant’s regular, recurring compensation for purposes of any termination,
indemnity or severance pay laws and shall not be included in, nor have any
effect on, the determination of benefits under any other employee benefit plan,
contract or similar arrangement provided by the Company or an Affiliate, unless
expressly so provided by such other plan, contract or arrangement or the
Committee determines that an Award or portion of an Award should be included to
reflect competitive compensation practices or to recognize that an Award has
been made in lieu of a portion of competitive cash compensation.    
     (i) Beneficiary Upon Participant’s Death. To the extent that the transfer
of a Participant’s Award at death is permitted by this Plan or under an
Agreement, (i) a Participant’s Award shall be transferable to the beneficiary,
if any, designated on forms prescribed by and filed with the Committee and
(ii) upon the death of the Participant, such beneficiary shall succeed to the
rights of the Participant to the extent permitted by law and this Plan. If no
such designation of a beneficiary has been made, the Participant’s legal
representative shall succeed to the Awards, which shall be transferable by will
or pursuant to laws of descent and distribution to the extent permitted by this
Plan or under an Agreement.          (j) Unfunded Plan. This Plan shall be
unfunded and the Company shall not be required to segregate any assets that may
at any time be represented by Awards under this Plan. Neither the Company, its
Affiliates, the Committee, nor the Board shall be deemed to be a trustee of any
amounts to be paid under this Plan nor shall anything contained in this Plan or
any action taken pursuant to its provisions create or be construed to create a
fiduciary relationship between the Company and/or its Affiliates, and a
Participant or Successor. To the extent any person acquires a right to receive
an Award under this Plan, such right shall be no greater than the right of an
unsecured general creditor of the Company.          (k) Limits of Liability.

       (i) Any liability of the Company to any Participant with respect to an
Award shall be based solely upon contractual obligations created by this Plan
and the Agreement.          (ii) Except as may be required by law, neither the
Company nor any member or former member of the Board or of the Committee, nor
any other person participating (including participation pursuant to a delegation
of authority under Section 3(b) hereof) in any determination of any question
under this Plan, or in the interpretation, administration or application of this
Plan, shall have any liability to any party for any action taken, or not taken,
in good faith under this Plan.

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       (l) Compliance with Applicable Legal Requirements. No certificate for
Shares distributable pursuant to this Plan shall be issued and delivered unless
the issuance of such certificate complies with all applicable legal requirements
including, without limitation, compliance with the provisions of applicable
state securities laws, the Securities Act of 1933, as amended and in effect from
time to time or any successor statute, the Exchange Act and the requirements of
the exchanges, if any, on which the Company’s Shares may, at the time, be
listed.          (m) Deferrals and Settlements. The Committee may require or
permit Participants to elect to defer the issuance of Shares or the settlement
of Awards in cash under such rules and procedures as it may establish under this
Plan. It may also provide that deferred settlements include the payment or
crediting of interest on the deferral amounts.

     13.     Substitute Awards. Awards may be granted under this Plan from time
to time in substitution for Awards held by employees of other corporations who
are about to become Associates, or whose employer is about to become a
Subsidiary of the Company, as the result of a merger or consolidation of the
Company or a Subsidiary of the Company with another corporation, the acquisition
by the Company or a Subsidiary of the Company of all or substantially all the
assets of another corporation or the acquisition by the Company or a Subsidiary
of the Company of at least 50% of the issued and outstanding stock of another
corporation. The terms and conditions of the substitute Awards so granted may
vary from the terms and conditions set forth in this Plan to such extent as the
Board at the time of the grant may deemed appropriate to conform, in whole or in
part, to the provisions of the Awards in substitution for which they are
granted, but with respect to Awards which are Incentive Stock Options, no such
variation shall be permitted which affects the status of any such substitute
option as an Incentive Stock Option.

     14.     Governing Law. To the extent that federal laws do not otherwise
control, this Plan and all determinations made and actions taken pursuant to
this Plan shall be governed by the laws of Minnesota and construed accordingly.

     15.     Severability. In the event any provision of this Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of this Plan, and this Plan shall be construed and enforced
as if the illegal or invalid provision had not been included.

     16.     Prior Plans. Notwithstanding the adoption of this Plan by the Board
and approval of this Plan by the Company’s shareholders as provided by Section
12(a) hereof, the Company’s 1996 Stock Option Plan and 1998 Stock Option Plan,
as the same may have been amended from time to time (the “Prior Plans”), shall
remain in effect and the Committee may continue to make grants of stock options
pursuant to and subject to the limitations of the Prior Plans. All grants and
awards heretofore or hereafter made under the Prior Plans shall be governed by
the terms of the Prior Plans.

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