EX-10.2








Exhibit 10.2




WILSONS THE LEATHER EXPERTS INC.




2000 LONG TERM INCENTIVE PLAN




Non-Statutory Stock Option Agreement

(Associate)




Full Name of Optionee: Michael M. Searles



No. of Shares Covered: 350,000



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. 2000 Long Term
Incentive Plan (“Plan”); and



WHEREAS, pursuant to the Plan, a committee (the “Committee”) 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*




*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.







1




	 	1.	 	Grant. Subject to the terms and conditions of the Plan and this Agreement, 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.






	 	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;




(c) By delivery to the Company of unencumbered Shares having an aggregate Fair
Market Value (as defined in Section 2(l) 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 pursuant to (c) or (d), above, if, in the
opinion of the Committee, payment in such manner could have adverse financial accounting
consequences for the Company or adverse tax consequences for the Optionee.




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 a Fundamental Change, 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.



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
(as defined in Section 2(c) of the Plan) 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 Section 2(f) 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.




Fundamental Change. In the event of a Fundamental Change as defined in Section 2(m) of the
Plan, the Committee may, but shall not be obligated to:




(a) if the Fundamental Change 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 Section 12(g) of the Plan;
or




(b) declare at least twenty days prior to the occurrence of the Fundamental Change,
and provide written notice to the 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 Fundamental Change (unless it shall have been
exercised prior to the occurrence of the Fundamental Change). Upon any such
declaration, the holder of this Option shall become entitled to a payment, within
twenty days after the Fundamental Change, of cash or, in the discretion of the
Committee, such other form or forms of consideration, including cash and/or
property, singly or in such combination as the Committee shall determine, that the
Optionee would have received as a result of the Fundamental Change if the Optionee
had exercised this Option immediately prior to the Fundamental Change, such payment
being, for each Share covered by the canceled Option, equal to the amount, if any,
by which the Fair Market Value per Share (for this purpose as defined in Section
12(g) of the Plan) exceeds the exercise price per Share covered by this Option. At
the time of the 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 this Option, to exercise this Option as to all or any
part of the Shares covered thereby. In the event of such declaration, this Option,
to the extent not exercised prior to the Fundamental Change, shall be canceled at
the time of, or immediately prior to, the Fundamental Change, as provided in the
declaration. Notwithstanding the foregoing, the holder of this Option shall not be
entitled to the payment provided for in the declaration if this Option shall have
terminated, expired or been canceled.




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




Limitation on Change in Control Payments. Notwithstanding any provision to the contrary
contained herein, if any acceleration of the exercisability of the Option (which
acceleration could be deemed a “payment” within the meaning of Section 280G(b)(2) of the
Code), either alone or together with other payments in the nature of compensation to the
Optionee that are contingent on a change in the ownership or effective control of Company or
in the ownership of a substantial portion of the assets of the Company or otherwise, would
constitute a “parachute payment” as defined in Section 280G of the Code or any successor
provision thereto, then the Company will compute the net after-tax proceeds to the Optionee
(i) if such acceleration and/or such other benefits and payments would be reduced (but not
below zero) to the largest aggregate amount as will result in no portion thereof being
subject to the excise tax imposed under Section 4999 of the Code (or any successor provision
thereto) or being non-deductible to the Company for federal income tax purposes pursuant to
Section 280G of the Code (or any successor provision thereto) and (ii) taking into account
the excise tax imposed by Section 4999 of the Code, if such acceleration and/or such other
benefits and payments would not be reduced. If the reduction of the acceleration and/or
such other benefits and payments as described in clause (i) of the preceding sentence would
result in greater net after-tax proceeds to the Optionee than the net after-tax proceeds to
the Optionee after taking into account the excise tax imposed by Section 4999 of the Code as
described in clause (ii) of the preceding sentence, then the acceleration and/or such other
benefits and payments shall be reduced as described in clause (i); otherwise, there shall be
no reduction of the nature described in clause (i), and Optionee shall pay all applicable
taxes, including any excise tax imposed by Section 4999 of the Code. If the Company
determines that the reduction applies, the Company shall notify the Optionee of its
determination and the Optionee in good faith shall select from among the foregoing benefits
and payments those which shall be reduced and, if the Optionee fails to make such selection
within 15 calendar days following notification by the Company, the Company shall make such
selection.




	 	9.	 	Limitation on Transfer. During the lifetime of the Optionee, only the Optionee
(except as provided below) may exercise this Option. This Option may not 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) this Option shall be
transferable to a Successor (as defined in Section 2(cc) of the Plan) in the event of the
Optionee’s death and (ii) this 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 Optionee receives no consideration
for the transfer. If this Option is held by a permitted transferee, this Option shall
continue to be subject to the same terms and conditions that were applicable to it immediately
prior to its transfer and may be exercised by such permitted transferee as and to the extent
that this Option has become exercisable and has not terminated in accordance with the
provisions of the Plan and this Agreement.






	 	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. The Committee in its sole discretion may make appropriate
adjustments in the number and type of securities issuable upon exercise of this Option, in the
Option exercise price as to this Option, in the aggregate number and type of securities
available for Awards under the Plan, and in the limitations on the number and type of
securities that may be issued to an individual Participant to give effect to adjustments made
in the number or type of Shares through a Fundamental Change (subject to Section 12(g) of the
Plan), recapitalization, reclassification, stock dividend, stock split, stock combination,
spin-off or other relevant change in the number and type of Shares of the Company.






	 	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 Section 12(d) 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
Amended and Restated Articles of Incorporation, as amended from time to time, and the Restated
By-Laws, as amended from time to time, of the Company, and any applicable federal or state
laws, rules or regulations.






	 	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. This Agreement shall be binding on
and inure to the benefit of any successor of the Company.






	 	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).






	 	19.	 	Miscellaneous. This Agreement is entered into pursuant to the Plan and is subject to
all of the terms and conditions contained in the Plan. The Optionee acknowledges that a copy
of the Plan has been made available to him or her; and, by execution hereof, the Optionee
agrees and accepts this Agreement subject to the terms of the Plan. This Agreement contains
all terms and conditions with respect to the subject matter hereof.





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




OPTIONEE




WILSONS THE LEATHER EXPERTS INC.




By


Its



2




______________, ______




WILSONS THE LEATHER EXPERTS INC.


7401 Boone Avenue North


Brooklyn Park, Minnesota 55428


Attention: Vice President, Human Resources



Ladies and Gentlemen:



I hereby exercise the following option (the “Option”) granted under the Wilsons The Leather
Experts Inc. 2000 Long Term Incentive Plan (the “Plan”) with respect to the number of shares of
Common Stock, par value $.01 (“Shares”), of Wilsons The Leather Experts Inc. (the “Company”),
indicated below:



Name of Option Holder: 


Date of Grant of Option:


Exercise Price Per Share:


Number of Shares With Respect to Which the Option is Hereby Exercised:


Total Exercise Price:



o Enclosed with this letter is a check, bank draft or money order in the amount of the Total
Exercise Price.



o I hereby agree to pay the Total Exercise Price within three business days of the date
hereof and, as stated in the attached Broker’s Letter, I have delivered irrevocable instructions to
to promptly deliver to the Company the amount of sale or loan proceeds from
the Shares to be issued pursuant to this exercise necessary to satisfy my obligation hereunder to
pay the Total Exercise Price.



o Enclosed with this letter is a certificate evidencing unencumbered Shares (duly endorsed in
blank) having an aggregate Fair Market Value (as defined in the Plan) equal to or in excess of the
Total Exercise Price.



o Enclosed with this letter is a certificate attesting to my ownership of unencumbered Shares
having an aggregate Fair Market Value (as defined in the Plan) equal to or in excess of the Total
Exercise Price, and I hereby tender such Shares in payment of the Total Exercise Price.



o I elect to pay the Total Exercise Price through a reduction in the number of Shares
delivered to me upon this exercise of the Option as provided in Section 6 of the Non-Statutory
Stock Option Agreement dated as of      , 2004, between the Company and me.



If I am enclosing or tendering Shares, I hereby represent and warrant that I am the owner of
such Shares free and clear of all liens, security interests and other restrictions or encumbrances.
I agree that I will pay any required withholding taxes in connection with this exercise as
provided in Section 12(d) of the Plan.



Please issue a certificate (the “Certificate”) for the number of Shares with respect to which
the Option is being exercised in the name of the person indicated below and deliver the Certificate
to the address indicated below:



Name in Which to Issue Certificate:


Address to Which Certificate Should be Delivered:


Principal Mailing Address for Certificate of Registration (if different from above):




Very truly yours,




Signature




Name, please print




Social Security Number



3




__________________, ______




WILSONS THE LEATHER EXPERTS INC.


7401 Boone Avenue North


Brooklyn Park, Minnesota 55428


Attention: Vice President, Human Resources



Ladies and Gentlemen:



Name of Option Holder: 


Date of Grant of Option:


Exercise Price Per Share:


Number of Shares With Respect to Which the Option is to be Exercised:


Total Exercise Price:



The above Option holder has requested that we finance the exercise of the above Option to
purchase Shares of common stock of Wilsons The Leather Experts Inc. (the “Company”) and has given
us irrevocable instructions to promptly deliver to the Company the amount of sale or loan proceeds
from the Shares to be issued pursuant to such exercise to satisfy the Option holder’s obligation to
pay the Total Exercise Price.




Very truly yours,




Broker Name



By




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