Document:

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                                                                   EXHIBIT 10.31

                        WILSONS THE LEATHER EXPERTS INC.
                          2000 LONG TERM INCENTIVE PLAN

                      INCLUDING AUGUST 24, 2000 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

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                              (except (i) 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 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

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                         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 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

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          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.

          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.

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          (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.

          (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.

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     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 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

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     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 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).

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          (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.

          (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; 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

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     "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 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

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          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.

     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

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          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 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;

                                       12
<PAGE>

               (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
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

                                       13
<PAGE>

     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.

     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

                                       14
<PAGE>

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 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

                                       15
<PAGE>

     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 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

                                       16
<PAGE>

     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 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

                                       17
<PAGE>

     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

                                       18
<PAGE>

          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.

          (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.

                                       19<PAGE>

                                                                   Exhibit 10.32

                          UNQUALIFIED RELEASE AGREEMENT

Agreement made this 2nd day of November, 2000, by and between Lisa Stanley, an
individual, on behalf of herself, her heirs, and anyone else who has or obtains
legal rights through her (hereafter referred to as "I", "me" or "Releasor") and
RIVER HILLS WILSONS, INC., a Minnesota corporation, and any organization related
to RIVER HILLS WILSONS, INC. in the past or present. In exchange for my
Promises, as set forth below, Wilsons has promised to do the following things
for, and past or present officers, directors, employees (with the exception of
Releasor), shareholders, committees, insurers, agents, successors and assigns of
River Hills Wilsons, Inc. or any past or present related organization or entity
(hereafter referred to as "Wilsons").

DEFINITIONS. All the words in this Unqualified Release Agreement ("Release")
have their meaning in ordinary English.

PAYMENTS AND PROMISES me:

1.   Keep me on the payroll through February 3, 2001, paying me my regular base
     pay ($10,192.31 bi-weekly, less all applicable deductions, including
     deductions for any insured benefits, 401(k) contributions and any other
     applicable deductions). Until February 3, 2001, I shall be entitled to all
     fringe benefits afforded regular Wilsons officers, such as employee
     discount privileges, participation in Wilsons' employee stock purchase plan
     and continued coverage through its group medical, dental, disability and
     life insurance plans. I will be a consultant to Wilsons during this period,
     and Wilsons agrees to reimburse me for any necessary and proper expenses I
     incur in carrying out the consulting duties requested of me. Wilsons'
     records will reflect that my separation from employment, effective February
     5, 2001, was voluntary.

2.   Pay me a lump sum equal to the amount of Two Hundred Thirty-five Thousand
     Dollars ($235,000.00) less applicable Federal and State deductions, which
     net amount shall be paid on January 5, 2001, provided no notice of
     revocation or rescission is received. I agree that I will assume all
     responsibility for and costs of my relocation and moving of my household
     goods.

3.   Pay me the amount of Six Thousand Three Hundred Three and 70/100 Dollars
     ($6,303.70) toward my payment of COBRA premiums for March 2001 through
     December 2001, for the medical and dental benefits for which I am currently
     enrolled, provided I properly elect COBRA coverage, which amount will be
     paid on January 5, 2001.

4.   Pay me the amount equal to what I would have received as a bonus for
     calendar year 2000 under the Wilsons Executive and Key Management Incentive
     Plan (the "Incentive Plan") at the 100% targeted bonus level (for which
     bonus I am no longer eligible but which Wilsons will pay as part of the
     consideration for this Release),
<PAGE>

Release
Page 2

     which would be a gross amount of $68,900, less applicable Federal and State
     taxes and FICA, such net amount payable on January 5, 2001.

5.   Arrange for all issued and outstanding stock options (i.e., the unvested
     portion of the 36,000 options granted on January 13, 1999, at an exercise
     price of $7.4167) to fully vest as of my termination date, February 5,
     2001, and allow me until June 30, 2002, (rather than the usual 90 days
     after termination) to exercise any or all of those options. Wilsons shall
     take all necessary and appropriate action (e.g., Board of Directors and/or
     Compensation Committee approval) to effectuate the terms of this provision.

6.   Pay into my 401(k) account the amount of the profit-sharing contribution
     for which I would have been eligible for the 2000 calendar year, which
     contribution amount cannot be estimated at this time but which shall be
     consistent with the payout to other eligible participants and in accordance
     with the Wilsons 401(k) Plan.

7.   Provide me with executive level outplacement services, through Right &
     Associates, for up to twelve (12) months after my termination date. In the
     event I relocate to a state in which Right & Associates or an affiliate is
     not available, Wilsons shall provide comparable executive level
     outplacement services through another agency selected by Wilsons, through
     the end of said twelve-month period.

8.   In the event I die before any payment of money required under this Release
     is fully paid to me, Wilsons shall pay each sum or the balance thereof to
     my estate.

PAYMENTS CONTINGENT ON RELEASE. I understand and agree that I would not receive
the Payments and Promises set forth above as item numbers 1, 2, 3, 4, 5, 6, 7
and/or 8, except for my execution of this Release and the fulfillment of my
Promises as set forth herein.

RELEASOR'S CLAIMS. The claims I am releasing below include all rights to any
relief of any kind to date, including but not limited to:

1. all claims I now have against Wilsons, whether or not now known;

2. all claims I have against Wilsons for alleged discrimination against me under
any federal, state or local law, including for example Title VII of the Civil
Rights Act of 1964, as amended ("Title VII"), the Age Discrimination in
Employment Act ("ADEA"), the Fair Labor Standards Act ("FLSA"), the Americans
with Disabilities Act ("ADA") or the Minnesota Human Rights Act ("MHRA");

3. all claims arising out of the hiring process used by Wilsons or arising out
of my termination, including but not limited to, any alleged breach of contract,
defamation or intentional infliction of emotional distress;

4. all claims for attorneys' fees; and
<PAGE>

Release
Page 3

5. all claims for any other alleged unlawful employment practices arising out of
or relating to my employment or the termination of my employment.

MY PROMISES. In exchange for receiving the payments and other consideration set
forth in this Release, I hereby promise to fully and finally release, give up
and otherwise relinquish all my claims against Wilsons, including but not
limited to claims under Title VII, ADEA, FLSA, ADA and MHRA I will not bring any
lawsuits or make any other demands against Wilsons except if necessary to
enforce the provisions of this Release. The payments and other consideration I
will receive as set forth in this Release is full and fair payment for the
release of all my claims. Wilsons does not owe me anything in addition to what I
will receive under this Release. I further promise that I must continue to meet
the reporting requirements for an officer of a publicly held company, and comply
with all applicable laws and regulations and company policy with regard to my
officer status, through my termination date of February 5, 2001.

ADDITIONAL AGREEMENTS AND UNDERSTANDINGS. I acknowledge that Wilsons' position
is that even though it has paid me to release my claims, Wilsons does not admit
that it is responsible or legally obligated to me and, in fact, Wilsons denies
any wrongdoing or legal obligation to me. Wilsons acknowledges that I have been
covered under Wilsons' Directors and Officers Liability insurance coverage, and
nothing in this Release shall be deemed a waiver of my rights to indemnification
under the terms of such insurance coverage.

CONFIDENTIALITY. I agree not to disclose any information regarding the existence
or substance of this Release or the payments and other consideration given in
exchange for the Release except to my immediate family, financial advisor,
attorney, physician or therapist with whom I may choose to consult regarding my
consideration of this Release, or as otherwise required by law. It shall be a
condition of any disclosure to any such individuals that they also maintain the
confidentiality of the Release.

RIGHTS TO CONSIDER, REVOKE AND RESCIND. I understand that I have twenty-one (21)
days to consider my release of rights and claims of age discrimination under the
ADEA, beginning the date on which I receive this Release. If I sign this
Release, I understand that I am entitled to revoke my release of rights or
claims of age discrimination under the ADEA within seven (7) days of executing
it, and it shall not become legally binding or enforceable until the seven-day
period has expired.

I further understand that, pursuant to Minnesota law as set forth below, I may
rescind this Agreement for a period of fifteen (15) days following the date of
this Agreement. Any revocation within this period must be submitted in writing
to Corrine G. Lapinsky, Director of Legal Services, Wilsons The Leather Experts,
7401 Boone Avenue No., Brooklyn Park, Minnesota 55428, and the revocation must
state, " I hereby revoke my acceptance of the Unqualified Release Agreement."
The revocation must be either personally delivered or mailed and postmarked
within fifteen (15) days of execution of the Unqualified Release Agreement. This
Unqualified Release Agreement shall not become effective or enforceable until
the revocation period has expired. If the last day of the revocation period is a
Saturday,
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Release
Page 4

Sunday or legal holiday in Minnesota, then the revocation period shall not
expire until the next following day which is not a Saturday, Sunday or legal
holiday.

RELEASOR IS SPECIFICALLY ADVISED PURSUANT TO MINNESOTA STATUTES SECTION 363.031
THAT RELEASOR HAS THE RIGHT TO RESCIND THIS AGREEMENT WITHIN FIFTEEN (15)
CALENDAR DAYS OF ITS EXECUTION. TO BE EFFECTIVE, THE RESCISSION MUST BE IN
WRITING AND DELIVERED TO WILSONS EITHER BY HAND DELIVERY OR BY MAIL, PROPERLY
ADDRESSED TO CORRINE G. LAPINSKY AT THE ADDRESS GIVEN ABOVE AND SENT BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, WITHIN SAID FIFTEEN (15) DAY PERIOD.

RIGHTS TO COUNSEL AND CONSIDER. I understand that I am advised by Wilsons to
consult an attorney prior to signing this Release. I have read this Release
carefully and understand all of its terms. I have had the opportunity to discuss
this Release with my own attorney. In agreeing to sign this Release, I have not
relied on any statements or explanations made by Wilsons, its agents or its
attorneys, other than Wilsons' promises as set forth in this Release.

                  (Remainder of Page Intentionally Left Blank)
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Release
Page 5

IN WITNESS WHEREOF, the parties have signed this Release on this 2nd day of
November 2000.

LISA STANLEY (on behalf of herself, her heirs, successors and assigns)

/s/ Lisa Stanley                                    11-2-00
----------------------------------                  --------------------------
Lisa Stanley                                        Date

STATE OF MINNESOTA                  )
                                    ) ss.
COUNTY OF HENNEPIN                  )

On this 2nd day of November, 2001, personally appeared before me, a Notary
Public within and for said County, Lisa Stanley, known to be the person
described in and who executed the foregoing Unqualified Release Agreement and
who acknowledged such execution to be her free act and deed for the purposes
therein expressed.

(Stamped or Sealed)                           /s/ Arlene Zamora
                                              ----------------------------------
                                              Notary Public

RIVER HILLS WILSONS, INC. (on behalf of itself, its parent, subsidiary and
affiliated corporations, concerns, successors and assigns)

By: /s/ Betty Goff
   --------------------------------------------------
        Betty Goff
        Vice President, Human Resources

STATE OF MINNESOTA                  )
                                    ) ss.
COUNTY OF HENNEPIN                  )

On this 3rd day of November, 2001, personally appeared before me, a Notary
Public within and for said County, Betty Goff, Vice President Human Resources,
of River Hills Wilsons, Inc., known to be the person described in and who
executed the foregoing Unqualified Release Agreement and who acknowledged that
she executed the same as her free act and deed for the purposes therein
expressed.

(Stamped or Sealed)                           /s/ Katherine G. Wodtke
                                              ----------------------------------
                                              Notary Public

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