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                                                                    Exhibit 10.5




                             [WILSONS LEATHER LOGO]




                          Executive and Key Management

                                 Incentive Plan




                        As adopted effective May 26, 1996
                             (Updated May 23, 2002)

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                                 WILSONS LEATHER

                   EXECUTIVE AND KEY MANAGEMENT INCENTIVE PLAN

A.   INTRODUCTION AND PURPOSE

     This Plan has been developed to provide opportunities for Wilsons The
Leather Experts Inc. (hereinafter "Wilsons") to motivate and reward key home
office and distribution center management associates through annual incentive
awards. Eligible participants include the Executive Officers, all Vice
Presidents, Directors and certain designated key management associates below the
Director level. Cash awards are based on actual results measured against
pre-established corporate financial objectives for consolidated earnings before
federal and state income taxes of Wilsons and its direct and indirect
subsidiaries ("EBT"). Selected positions below the level of President may also
have position-specific measures in addition to the corporate financial
performance measure. Awards are paid in cash to provide an immediate reward and
supplement our base compensation program. Generally, payments are made in March
or April following the end of each Plan Year.

     This plan is intended to be as simple as possible so that the goals are
very clear to all parties. Important features of the Plan are described in this
document. Any questions regarding the interpretation of this Plan, or any
details not covered in this document, will be determined by the Incentive
Committee in its sole discretion.

B.   INCENTIVE PLAN PROVISIONS

     1.   ADMINISTRATION

          The Human Resources group administers the Plan. An Incentive
     Committee, consisting of the Vice President-Human Resources, the President
     and the Chairman, selects the participants in the Plan, establishes
     position-specific goals, if any, for the participants and targeted award
     amounts for participants who are not Executive Officers, and resolves
     disputes on interpretation and application of the Plan. The Compensation
     Committee establishes targeted award amounts for participants at the
     Executive Officer level. The budgeted EBT for each Plan Year will be
     established by the Board of Directors of Wilsons (the "Board").

     2.   TERMS OF PARTICIPATION AND PAYOUT

          Incentive-eligible positions, targeted award amounts, Wilsons' EBT
     goals and any applicable position-specific goals will be established and
     communicated, as early as practicable, after the beginning of each Plan
     Year.


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          a.   Eligibility Requirements.

               You must be actively employed by Wilsons or one of its direct or
          indirect subsidiaries as of the last day of the Plan Year (not the
          calendar year) in order to receive an incentive award for that year.
          In addition, in order to receive an incentive award for a Plan Year,
          you must be in an incentive eligible position as of the last day of
          the Plan Year, so that associates who transfer during a Plan Year from
          an incentive eligible position to an ineligible position will receive
          no incentive payout for that year. Incentive awards generally will be
          distributed in March or April following the close of financial records
          for the Plan Year.

               Associates on written warning status either at the end of the
          Plan Year or on the date of payout will receive no incentive payout
          for that year. Further, associates terminated on or after the last day
          of a Plan Year but prior to the date of award payout for such Plan
          Year for a reason that Wilsons determines to be for cause will receive
          no incentive award payout for that year.

               For participants at the level of Vice President or below,
          functional area Vice President's budget/expense plan(s) must be met
          for the Plan Year in order to participate in a payout under this Plan
          for that year. Failure to achieve functional area Vice President's
          budget disqualifies you from eligibility for an award/payout under
          this Plan for the year, unless otherwise determined by the Incentive
          Committee.

          b.   Pro-rated Awards.

               Associates who become participants during a Plan Year will be
          eligible to receive a pro-rated bonus for that year reflecting their
          time as an eligible participant.

               Associates who transfer from an eligible position to another
          eligible position during a Plan Year will receive a pro-rata award
          based on the time spent in each of the eligible positions. In this
          situation, the ending base salary in, and targeted award percentage
          for, each position will be used to calculate the pro-rata award for
          the portion of the Plan Year in that position.

               In each case, a pro-rated award will be paid for a Plan Year only
          if all the requirements of subsection a. above are satisfied for that
          year. For purposes of pro-rating awards under the preceding two
          paragraphs, a transfer or other event that occurs prior to the 15th
          day of a month will be deemed to have occurred on the first day of
          that month, and a transfer or other event that occurs on or after the
          15th day of a month will be deemed to occur on the first day of the
          following month.

               Company-paid leave-of-absence which exceeds eight weeks will
          result in the award being pro-rated to reflect time on leave which is
          greater than eight weeks. Unpaid leave-of-absence will result in the
          award being pro-rated for time on unpaid-leave status.


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     3.   PERFORMANCE MEASURES

          The basis for award payment will be EBT as established herein or by
     the Board in accordance herewith. Select associates below the level of
     President may have additional position-specific performance measures,
     including without limitation sales or gross margin. Foremost is the intent
     to motivate and reward our associates for contributions that successfully
     drive Wilsons' businesses. A personalized award sheet will be provided to
     each participant, which outlines the basis upon which incentives will be
     awarded.

     4.   INCENTIVE AWARDS

          A targeted award amount is established as provided in B.1 for each
     participant each Plan Year expressed as a percentage of base salary at the
     beginning of the Plan Year. While your targeted award amount communicated
     to you at the beginning of each Plan Year is based on your base salary at
     the beginning of that year, your actual award will be based on your base
     salary on the last day of the Plan Year (subject to the pro-ration
     provisions set forth in B.2b).

          Your targeted award amount is the amount of the incentive award which
     will be earned by you with respect to a Plan Year (assuming no change in
     your base salary and no transfer between positions during the year) if 100%
     of budgeted EBT for such Plan Year is achieved, 100% of your
     position-specific goals, if any, are met, and if the other conditions to
     your receipt of such award set forth in or established pursuant to this
     Plan are satisfied. However, the program is structured to include a
     flexible scale ranging from a payout level equal to from 60% to 200% of the
     target award amount, as such percentage of the target award amount is
     determined by the Incentive Committee.

     5.   GENERAL PROVISIONS

          The plan operates on a "Plan Year" that ends on the Saturday nearest
     January 31st of each year.

C.   RIGHTS OF THE PARTICIPANT

     This Plan is not an employment agreement and does not ensure or evidence to
any degree the continued employment of any participant for any time, period or
position. If a participant is covered by a written employment agreement that
specifically refers to this Plan, the participant's rights and benefits shall be
governed by the terms of the employment agreement to the extent inconsistent
with this Plan.

     No participant shall, by virtue of this Plan, have any interest in any
specific asset or assets of Wilsons or any of its direct or indirect
subsidiaries. A participant has only an unsecured right to receive an Incentive
Plan payout in accordance with, and at the time specified by, the Plan.


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D.   RIGHTS OF WILSONS

     Wilsons reserves the right to change, amend, or terminate this Plan at any
time, with or without notice to participants. Any changes, amendments or Plan
termination may be made only by the Board.



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