exv10w4



 





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.



 









 






	 	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
	
 	 	 	
 
	

	 	Arthur J. Padovese
	 	 	 	 	Its 	President
	

	 	 	 	 	 	 	 	









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