**CONFIDENTIAL****AGREEMENTS**     **1.**     **Resignation.** By signing this Agreement, Executive confirms his resignation as anemployee, officer and director of the Company, effective April 3, 2008. Executive will sign suchother documents as deemed reasonably necessary to accurately reflect such resignations in theCompany’s corporate records.     **2.**     **Final Pay/Benefits Continuation.** Executive confirms that he has been paid in fullfor his base salary, compensation, and benefits owing to him to date, and the Company will payExecutive’s final base salary and accrued and unused vacation time in the amount of $3,018.31(10.46 hours), earned through the Separation Date, in accordance with the regular payroll practicesof the Company. Executive acknowledges and agrees that he will not receive an incentive bonusaward under the Wilsons Leather Corporate Leadership Team Incentive Plan for the fiscal year endingFebruary 2, 2008 or under any other annual incentive bonus plan. Executive will have the right tocontinue his group health, dental and/or vision insurance coverage after the Separation Date undersuch terms as are made available to similarly-situated former employees of the Company, pursuant tothe terms of the applicable plan documents and laws regarding continuation coverage. Except asprovided in subparagraph 5.b of this Agreement, such continuation coverage will be at Executive’sown expense. To the extent that Executive is currently a participant in any retirement, pension,or profit sharing plans of the Company, Executive will be entitled to his rights and benefits underthese plans at the times and under the terms and conditions set forth in any such plan.     **3.**     **Expense Reimbursement****.**The Company will reimburse Executive for his regular andnecessary business expenses incurred through the Separation Date in accordance
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**CONFIDENTIAL**with the Company’s regular policies and practices. Executive will submit all requests forreimbursement to the Company no later than April 30, 2008.     **4.**     **Release by Executive.** At the same time that Executive executes this Agreement, heshall execute a Release in the form attached to this Agreement as Exhibit A (the “Release”). ThisAgreement will not be interpreted or construed to limit the Release in any manner.     **5.**     **Severance Arrangements****.**The Company will make the severance payments and otherconsideration set forth in subparagraphs 5.a. and 5.b. below in lieu of any further payments orcompensation that Executive would otherwise be entitled to receive under any agreement with theCompany or any affiliate or as an employee, officer or director of the Company or any Affiliate.The Company will make such payments and provide such consideration only if (i) Executive has signedthis Agreement and the Release and has not rescinded this Agreement or the Release within therescission period set forth in paragraph 23 below (the “Rescission Period”), and (ii) Executive hasnot breached his obligations pursuant to this Agreement, the Release or the continuing provisionsof the Employment Agreement.              **a.**     **Salary Continuation****.**The Company will pay Executive as salary continuation anamount equal to Executive’s monthly base salary as of the Separation Date for a period of six (6)months. Payment will be made in accordance with the Company’s regular payroll schedule for the payperiod commencing after expiration of the Rescission Period and continuing for six (6) monthsthereafter.              **b.**     **Health Insurance****.**If Executive elects to continue his group health, dental and/orvision insurance under the terms of paragraph 2 above and the terms of the applicable plans,Executive will complete all paperwork necessary to carry out such election
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**CONFIDENTIAL**effective April 30, 2008, as specified by the Company or its agents in accordance with theapplicable plans. Upon such election by Executive, the Company will pay on Executive’s behalf aportion of the cost of the premiums that he is required to pay to maintain such continuationcoverage for a period of up to six (6) months following the Separation Date, or, if earlier, untilsuch continuation coverage ceases in accordance with the terms and conditions of the applicableplans and laws. The premium portion to be paid by the Company will be equal to the portion of thehealth, dental and/or vision insurance premiums that would be paid by the Company if Executive werean employee of the Company, at the same level of coverage that was in effect on the SeparationDate. The Company will deduct Executive’s portion of such premiums from payments to Executivepursuant to subparagraph 5.a., provided, however, if payments owed to Executive pursuant tosubparagraph 5.a. are not sufficient to cover Executive’s portion of the premiums, Executive willpay such portion to the Company in accordance with the requirements of continuation coverage.     **6.**     **Stock Options****.**Executive acknowledges and agrees that the options listed in thisparagraph below are Executive’s only options to purchase shares of the common stock of the Company,and that such options are exercisable only to the extent reflected in the “Amount Exercisable”column below. All such options were granted pursuant to the Company’s 2000 Long Term IncentivePlan, as amended and restated (the “Plan”). Executive further agrees and acknowledges that all ofthe options to purchase common stock of the Company will expire and cease to be outstanding inaccordance with the terms of the applicable Stock Option Agreements and the Plan.             Date of Exercise Number of AmountGrant      Price Shares Exercisable12/01/04 $5.00   350,000    350,000        06/02/05 $5.88   450,000    300,000        12/13/07 $1.10   100,000   0        
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**CONFIDENTIAL**              **b.**     **Restricted Stock****.**Executive acknowledges and agrees that he owns no restrictedstock of the Company.     **7.**     **Confidential Information and Restrictive Covenants.** Executive acknowledges andconfirms his continuing obligations following the Separation Date to comply with the provisions ofthe Employment Agreement that continue and survive after termination of his employment, includingwithout limitation the obligations set forth in Sections 6, 8, 9, 12 and 13 of the EmploymentAgreement, except that Executive and the Company agree that the obligations of Executive underSection 8(a) of the Employment Agreement shall end six (6) months following the Separation Date andthe obligations of Executive under Sections 8(b) and 8(c) of the Employment Agreement shall endtwelve (12) months following the Separation Date.     **8.**     **Cooperation; Consulting Services****.**At any time upon reasonable request and noticefrom the Company, Executive will, without further consideration but at no expense to Executive, (a)timely execute and deliver such acknowledgements, instruments, certificates, and other ministerialdocuments (including without limitation, certification as to specific actions performed byExecutive in his capacity for the Company or any of its affiliates) as may be necessary orappropriate to formalize and complete the Company’s or any affiliate’s corporate records; provided,however, that nothing in this paragraph 8 will require Executive to take any action that hereasonably believes to be unlawful or unethical or to make any inaccurate statement of actualfacts, and (b) provide complete and truthful information to, and otherwise cooperate fully with,the Company, any of its affiliates, and any of its or their legal counsel, agents, insurers andrepresentatives in connection with any investigations, litigation or other matters relating to theCompany or any of its affiliates in which the
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**CONFIDENTIAL**Company determines that Executive may have relevantinformation. In addition, at theCompany’s reasonable request and upon reasonable notice, for a period of six (6) monthsfollowing the Separation Date, Executive will make himself reasonably available, without furtherconsideration, to discuss and consult with the Company regarding business matters, includingwithout limitation matters with which he was directly and substantially involved while employed bythe Company, and to assist in transitioning his duties as Chief Executive Officer.     **9.**     **Claims Involving the Company****.**Executive will not recommend or suggest to anypotential claimants or plaintiffs or their attorneys or agents that they initiate claims orlawsuits against the Company, any of its affiliates, or any of its or their directors, officers,employees, or agents, nor will Executive voluntarily aid, assist, or cooperate with any claimantsor plaintiffs or their attorneys or agents in any claims or lawsuits now pending or commenced inthe future against the Company, any of its affiliates, or any of its or their directors, officers,employees, or agents; provided, however, that this paragraph 9 will not be interpreted or construedto prevent Executive from providing information to any governmental or law enforcement agency orfrom giving testimony in response to questions asked pursuant to a legally enforceable subpoena,deposition notice or other legal process.     **10.    ****Records, Documents, and Property****.**Executive confirms that he has delivered to theCompany any and all Company or affiliate records and any and all Company or affiliate property inhis possession or under his control, including without limitation, manuals, books, blank forms,documents, letters, memoranda, notes, notebooks, reports, printouts, computer disks, computertapes, digital storage media, data, tables, or calculations and all copies thereof, documents thatin whole or in part contain any trade secrets or confidential, proprietary, or other secretinformation of the Company or of any of its
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**CONFIDENTIAL**affiliates, and all copies thereof, and keys, accesscards, access codes, source codes,passwords, raw materials, products, product samples, credit cards, personal computers, telephones,and other electronic equipment belonging to the Company or any of its affiliates; provided,however, that Executive may retain the laptop computer and BlackBerry he used in connection withhis employment but prior to the Separation Date will allow the Company to inspect such equipmentand to remove all Company software and information.     **11.**     **Non-Disparagement****.**Executive will not at any time disparage, defame or besmirchthe reputation, character, image, products or services of the Company, any of its affiliates, orthe reputation or character of any of their current or former directors, officers, employees oragents.     **12.**     **Actions Taken by Executive****.**Executive represents and warrants that, during theentire period that he has been an employee or officer of the Company or any of its affiliates, heacted in good faith and had no reasonable cause to believe that his conduct was unlawful.     **13.**     **Indemnification****.**Notwithstanding Executive’s separation from the Company, withrespect to events that occurred during his tenure as an employee, officer or director of theCompany, Executive will be entitled, as a former employee, officer or director of the Company, tothe same rights that are afforded to other current or former employees, officers or directors ofthe Company, now or in the future, to indemnification and advancement of expenses as provided inthe charter documents of the Company and under applicable law, and to indemnification and a legaldefense to the extent provided from time to time to current officers or directors by any applicablegeneral liability and/or directors’ and officers’ liability insurance policies maintained by theCompany.     **14.**     **Confidentiality****.**
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**CONFIDENTIAL**              **a.**     **General Standard****.**It is understood and agreed that this Agreement and summariesthereof may be disclosed in filings with the Securities and Exchange Commission and summarized inproxy statements disseminated to shareholders of the Company. Notwithstanding such public filings,in order to minimize disruption and distraction from on-going business operations, it is the intentof the parties that the terms of Executive’s separation from the Company, including the provisionsof this Agreement and the Release (collectively “Confidential Separation Information”), will beforever treated as confidential. Accordingly, except as provided in subparagraph 14.b. below,Executive will not disclose Confidential Separation Information to anyone at any time and will notcomment on Confidential Separation Information to anyone at any time.              **b.**     **Exceptions****.** i. It will not be a violation of this Agreementfor Executive to disclose Confidential Separation Information inreports to governmental agencies as required by law, including, but notlimited to, any federal or state tax authority.  ii. It will not be a violation of this Agreementfor Executive to disclose Confidential Separation Information to hisimmediate family, his attorneys, his accountants or tax advisors.  iii. It will not be a violation of this Agreementfor Executive to disclose Confidential Separation Information inconnection with any litigation proceeding involving the parties’ rightsor obligations under this Agreement or the Release.  iv. It will not be a violation of this Agreementfor Executive to disclose Confidential Separation Information in thecourse of any job search, in response to questions from prospectiveemployers about Executive’s departure from the Company or Executive’sobligations under paragraph 7 of this Agreement, or under theEmployment Agreement.     **15.**     **Full Compensation****.**Executive understands that the payments made and otherconsideration provided by the Company under this Agreement will fully compensate
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**CONFIDENTIAL**Executive for and extinguish any and all of the potential claims Executive is releasing in theRelease, including without limitation, his claims for attorneys’ fees and costs and any andall claims for any type of legal or equitable relief.     **16.**     **Withholding of Taxes****.**The Company shall withhold from payments and benefitshereunder income and employment taxes and other amounts to the extent required by law. It is theintention of the parties that no amounts payable hereunder constitute deferred compensation subjectto the requirements of Section 409A of the Internal Revenue Code, and this Agreement should beinterpreted accordingly.     **17.**     **No Admission of Wrongdoing****.**Executive understands that this Agreement does notconstitute an admission that the Company, any of its affiliates, or any of its or their directors,officers, employees, or agents has violated any local ordinance, state or federal statute, orprinciple of common law, or that the Company, any of its affiliates, or any of its or theirdirectors, officers, employees, or agents has engaged in any unlawful or improper conduct towardExecutive. Executive will not characterize this Agreement or the payment of any money or otherconsideration in accordance with this Agreement as an admission that the Company or any of itsaffiliates has engaged in any unlawful or improper conduct toward him or treated him unfairly.     **18.**     **Authority****.**Executive represents and warrants that he has the authority to enterinto this Agreement and the Release, and that no causes of action, claims, or demands releasedpursuant to this Agreement and the Release have been assigned to any person or entity not a partyto this Agreement and the Release.     **19.**     **Legal Representation****.**Executive acknowledges that he has been advised by theCompany to consult with his own attorney before executing this Agreement and the Release, that hehas had a full opportunity to consider this Agreement and the Release, that
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**CONFIDENTIAL**he has had a full opportunity to ask any questions that he may have concerning thisAgreement, the Release, or the settlement of his potential claims against the Company and others,and that he has not relied upon any statements or representations made by the Company, itsaffiliates or its or their attorneys, written or oral, other than the statements andrepresentations that are explicitly set forth in this Agreement, the Release, and any qualifiedemployee benefit plans sponsored by the Company in which Executive is a participant.     **20.**     **Assignment****.**This Agreement shall not be assignable, in whole or in part, byExecutive without the prior written consent of the Company. The Company may, without the consentof Executive, assign its rights and obligations under this Agreement.     **21.**     **Entire Agreement****.**This Agreement, the Release, the continuing provisions of theEmployment Agreement and any qualified employee benefit plans sponsored by the Company in whichExecutive is a participant are intended to define the full extent of the legally enforceableundertakings of the parties, and no promises or representations, written or oral, that are not setforth explicitly in this Agreement, the Release, the Employment Agreement or any qualified employeebenefit plans sponsored by the Company in which Executive is a participant are intended by eitherparty to be legally binding. All other agreements and understandings between Executive and theCompany or any of its affiliates are hereby cancelled, terminated, and superseded.     **22.**     **Period to Consider the Release and the Agreement****.**Executive understands that hehas 21 days to consider whether to sign this Agreement and the Release. If Executive signs thisAgreement and the Release before the end of the 21-day period, it will be his voluntary decision todo so because he has decided he does not need any additional time to decide whether to sign thisAgreement and the Release.
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**CONFIDENTIAL**     **23.**     **Right to Rescind or Revoke****.**Executive understands that he has the right torescind or revoke this Agreement and the Release for any reason within fifteen (15) calendardays after he signs them. Executive understands that this Agreement will not become effective orenforceable unless and until he has not rescinded this Agreement or the Release and the RescissionPeriod has expired. Executive understands that if he wishes to rescind, the rescission must be inwriting and hand-delivered or mailed to the Company. If hand-delivered, the rescission must be (a)addressed to Corrie Lapinsky, Director Legal Services, 7401 Boone Avenue North, Brooklyn Park,Minnesota 55428, and (b) delivered to Corrie Lapinsky within the fifteen-day period. If mailed,the rescission must be (a) postmarked within the fifteen-day period and (b) addressed to CorrieLapinsky at the address in the preceding sentence.     **24.**     **Headings****.**The descriptive headings of the paragraphs and subparagraphs of thisAgreement are inserted for convenience only and do not constitute a part of this Agreement.     **25.**     **Counterparts****.**This Agreement may be executed simultaneously in two or morecounterparts, each of which will be deemed an original, but all of which together will constituteone and the same instrument.     **26.**     **Governing Law****.**This Agreement and the Release will be interpreted and construedin accordance with, and any dispute or controversy arising from any breach or asserted breach ofthis Agreement or the Release will be governed by, the laws of the State of Minnesota.
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**CONFIDENTIAL**               IN WITNESS WHEREOF, the parties have executed this Agreement on the date stated below.         Dated: March 26, 2008   /s/ Michael M. Searles      Michael M. Searles           Dated: March 28, 2008   **Wilsons The Leather Experts Inc.**       BY: /s/ Michael T. Sweeney                 Michael T. Sweeney      Its Chairman of the Board
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**CONFIDENTIAL****RELEASE BY MICHAEL M. SEARLES****Definitions****.**I intend all words used in this Release to have their plain meanings inordinary English. Specific terms that I use in this Release have the following meanings: A. I, me, and my include both me and anyone who has orobtains any legal rights or claims through me.  B. Wilsons means Wilsons The Leather Experts Inc., any company related toWilsons The Leather Experts Inc. in the present or past (including without limitationany of their predecessors, parents, subsidiaries, affiliates, and joint venturepartners), and any successors of Wilsons The Leather Experts Inc.  C. Company means Wilsons; the present and past officers, directors,committees, and employees of Wilsons; any company providing insurance to Wilsons in thepresent or past; the present and past fiduciaries of any employee benefit plansponsored or maintained by Wilsons (other than multiemployer plans); the attorneys forWilsons; and anyone who acted on behalf of Wilsons or on instructions from Wilsons.  D. Agreement means the Agreement between Wilsons and me that I haveexecuted on the same date as I am executing this Release, including all of thedocuments attached to the Agreement.  E. My Claims mean all of my rights that I now have to any relief of anykind from the Company, whether or not I now know about those rights, including withoutlimitation: 1. all claims arising out of or relating to my employment withWilsons, my status as an officer and/or director of Wilsons, or the terminationof such relationships;  2. all claims arising out of or relating to the statements,actions, or omissions of the Company;  3. all claims for any alleged unlawful discrimination, harassment,retaliation or reprisal, or other alleged unlawful practices arising under anyfederal, state, or local statute, ordinance, or regulation, including withoutlimitation, claims under Title VII of the Civil Rights Act of 1964, the AgeDiscrimination in Employment Act, the Americans with Disabilities Act, 42U.S.C. § 1981, the Employee Retirement Income Security Act, the Equal Pay Act,the Worker Adjustment and Retraining Notification Act, the Family and MedicalLeave Act, the Sarbanes-Oxley Act, the Fair Credit Reporting Act, the MinnesotaHuman Rights Act, and workers’ compensation non-interference or non-retaliationstatutes (such as Minn. Stat. § 176.82);**EXHIBIT A**
 

 
**CONFIDENTIAL** 4. all claims for alleged wrongful discharge; breach of contract;breach of implied contract; failure to keep any promise; breach of a covenantof good faith and fair dealing; breach of fiduciary duty; estoppel; myactivities, if any, as a “whistleblower”; defamation; infliction of emotionaldistress; fraud; misrepresentation; negligence; harassment; retaliation orreprisal; constructive discharge; assault; battery; false imprisonment;invasion of privacy; interference with contractual or business relationships;any other wrongful employment practices; and violation of any other principleof common law;  5. all claims for compensation of any kind, including withoutlimitation, bonuses, commissions, stock-based compensation or stock options,vacation pay, relocation expenses, perquisites, and expense reimbursements;  6. all claims for back pay, front pay, reinstatement, otherequitable relief, compensatory damages, damages for alleged personal injury,liquidated damages, and punitive damages;  7. all rights I have under California Civil Code section 1542,which states that: “A general release does not extend to claims which thecreditor does not know or suspect to exist in his favor at the time ofexecuting the release, which if known by him must have materially affected hissettlement with the debtor;” and  8. all claims for attorneys’ fees, costs, and interest.However, My Claims do not include any claims that the law does not allow tobe waived, any claims that may arise after the date on which I sign this Release, orany claims for breach of the Agreement.**Agreement to Release My Claims****.**I will receive consideration from Wilsons as set forth inthe Agreement if I sign and do not rescind this Release as provided below. I understand andacknowledge that the consideration is in addition to anything of value that I would be entitled toreceive from Wilsons if I did not sign this Release or if I rescinded this Release. In exchangefor that consideration I give up and release all of My Claims (including but not limited to anyrights under California Civil Code section 1542). I will not make any demands or claims againstthe Company for compensation or damages relating to My Claims. The consideration that I amreceiving is a fair compromise for the release of My Claims.**Additional Agreements and Understandings****.**Even though Wilsons will provide considerationfor me to settle and release My Claims, the Company does not admit that it is responsible orlegally obligated to me. In fact, the Company denies that it is responsible or legally obligatedto me for My Claims, denies that it engaged in any unlawful or improper conduct toward me, anddenies that it treated me unfairly.**Confidentiality.** I understand that the terms of this Release are confidential and that Imay not disclose those terms to any person except under the circumstances described in theAgreement.
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**CONFIDENTIAL****Advice to Consult with an Attorney****.**I understand and acknowledge that I am hereby beingadvised by the Company to consult with an attorney prior to signing this Release and I have doneso. My decision whether to sign this Release is my own voluntary decision made with full knowledgethat the Company has advised me to consult with an attorney.**Period to Consider the Release****.**I understand that I have 21 days from the day that Ireceive this Release, not counting the day upon which I receive it, to consider whether I wish tosign this Release. If I sign this Release before the end of the 21-day period, it will be myvoluntary decision to do so because I have decided that I do not need any additional time to decidewhether to sign this Release. I also agree that any changes made to this Release or the Agreementbefore I sign it, whether material or immaterial, will not restart the 21-day period.**My Right to Rescind this Release****.**I understand that I may rescind this Release at any timewithin 15 days after I sign it, not counting the day upon which I sign it. This Release will notbecome effective or enforceable unless and until the 15-day rescission period has expired withoutmy rescinding it.**Procedure for Accepting or Rescinding the Release.** To accept the terms of this Release, Imust deliver the Release, after I have signed and dated it, to Wilsons by hand or by mail withinthe 21-day period that I have to consider this Release. To rescind my acceptance, I must deliver awritten, signed statement that I rescind my acceptance to Wilsons by hand or by mail within the15-day rescission period. All deliveries must be made to Wilsons at the following address:Corrie Lapinsky