Agreement - David L. Rogers

Exhibit 10.3

CONFIDENTIAL

AGREEMENT

               THIS AGREEMENT (“Agreement”) is made and entered into on this 29th day of July, 2004 by and between David L. Rogers, a Minnesota resident (“Rogers”), and Wilsons The Leather Experts, Inc., a Minnesota corporation (the “Company”).

BACKGROUND

          A.     Rogers has been employed by the Company as its President and Chief Operating Officer and currently serves as a director of the Company.

          B.     Rogers was employed under the terms and conditions of an Employment Agreement dated May 25, 1996 between Rogers and the Company, as amended by the First Amendment to Employment Agreement, dated March 23, 2000, and the Second Amendment to Employment Agreement, dated April 5, 2004 (collectively the “Amended Employment Agreement”). During his employment, Rogers also was eligible to participate in other plans and programs of the Company, including but not limited to the Executive and Key Management Incentive Plan (“Incentive Plan”), the 1996 Stock Option Plan, as amended (“1996 Plan”), and the 2000 Long Term Incentive Plan, as amended (“2000 Plan”).

          C.     Rogers and the Company are parties to certain stock option agreements (the “Option Agreements”), which grant to Rogers certain options to purchase shares of the Company’s common stock (the “Options”) under circumstances specified in the Option Agreements and the 1996 Plan or the 2000 Plan, as applicable, and to certain restricted stock agreements (“Restricted Stock Agreements”), which grant to Rogers certain shares of restricted stock (“Restricted Stock”) under circumstances and subject to restrictions described in the Restricted Stock Agreements and the 2000 Plan.

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          D.     The parties have agreed that it is in their mutual interests that Rogers resign as an employee and officer of the Company effective at the end of the day on August 2, 2004 (the “Separation Time”).

          E.     The parties are concluding their employment relationship amicably, but mutually recognize that such a relationship may give rise to potential claims or liabilities.

          F.     The parties expressly deny that they may be liable to each other on any basis or that they have engaged in any unlawful or improper conduct toward each other or treated each other unfairly.

          G.     The parties have agreed to a full settlement of all issues potentially in dispute between them.

          H.     The Company acknowledges that Rogers is an officer of Peninsula Investment Partners, L.P. (“Peninsula”) and agrees that his association with Peninsula does not violate any provision of this Agreement.

          NOW THEREFORE, in consideration of the mutual promises and provisions contained in this Agreement and in the Releases referred to below, the parties, intending to be legally bound, agree as follows:

AGREEMENTS

          1.     Resignations. By executing this Agreement, Rogers confirms his resignation of all positions held by Rogers as an employee and officer of the Company and as a director and officer of all subsidiaries of the Company, and the Company confirms its acceptance of Rogers’ resignations, effective as of the Separation Time. Rogers shall be paid his base salary through the Separation Time, in bi-weekly installments, at the rate in effect as of the date of this Agreement. Following the Separation Time, the Company will pay Rogers for any accrued and

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unused paid time off in accordance with the regular payroll practices of the Company. Rogers will remain as a director of the Company in accordance with the charter documents of the Company, and nothing in this Agreement shall affect his continued service as a director.

          2.     Limited Continuation of Amended Employment Agreement.

                  a.     As of the Separation Time, the Amended Employment Agreement shall terminate and the parties’ obligations thereunder shall cease; provided, however, that Sections 3(b) (but only to the extent necessary to determine rights and benefits under Section 6(c) of the Amended Employment Agreement), 6(c), 6(d), 6(e), 6(f), 6(g), 8, 9, 10, 11, 14, 15, 16, 17 and 22 (the “Continuing Provisions”) of the Amended Employment Agreement shall continue in full force and effect.

                  b.     The Company and Rogers agree that it is in their mutual interests that Rogers resign as an employee and officer of the Company and that they provide for a smooth transition in connection with Rogers’ resignation from the Company up to the Separation Time. Accordingly, the Company shall provide to Rogers the pay and benefits specified in Sections 3(b), 6(c), 6(d), 6(e), 6(f), and 6(g) of the Continuing Provisions of the Amended Employment Agreement as if Rogers’ resignation hereunder constituted a resignation by Rogers for Good Reason or a termination by the Company without Cause (as such terms are defined in the Amended Employment Agreement).

                  c.     The existence of any dispute respecting the interpretation of this Agreement, the Rogers Release (as defined below), or the Company Release (as defined below); the alleged breach of this Agreement, the Rogers Release, or the Company Release; or the rescission by Rogers of the Rogers Release (as provided below) will not nullify or otherwise

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affect the parties’ obligations under the Continuing Provisions of the Amended Employment Agreement or subparagraph 2(b) of this Agreement.

                      d. The benefits to be provided to Rogers under Section 6(c)(iv) of the Continuing Provisions of the Amended Employment Agreement shall be implemented as follows:

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          3.       Release of Claims by Rogers. It is the intention of the parties that, at or within twenty-one (21) days after the Separation Time, Rogers will execute a Release, in the form attached to this Agreement as Exhibit A (the “Rogers Release”).

          4.       Release of Claims by the Company. Promptly upon receipt by the Company of the Rogers Release signed by Rogers, the Company will execute a Release, in the form attached to this Agreement as Exhibit B (the “Company Release”). The Company Release shall not become effective or enforceable unless and until Rogers signs and does not revoke or rescind the Rogers Release pursuant to its terms.

          5.       Additional Terms. If (i) Rogers signs the Rogers Release as provided in paragraph 3 above and does not revoke or rescind the Rogers Release within the applicable period set forth in the Rogers Release (the “Rescission Period”), (ii) the Company has received written confirmation from Rogers, in the form attached to this Agreement as Exhibit C, dated not earlier than the day after the expiration of the Rescission Period, that Rogers has not rescinded and will not rescind the Rogers Release, and (iii) Rogers is in material compliance with the terms of paragraph 6 of this Agreement and the Rogers Release, then:

                    a.       Incentive Award. The Company will pay, or cause one or more of its Subsidiaries to pay, Rogers the difference between (i) the full amount of the incentive award for the Incentive Plan Year in which the Separation Time occurs that would have been payable to

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Rogers pursuant to the terms and conditions of the Incentive Plan had Rogers remained employed by the Company for the duration of such Plan Year and (ii) the amount paid to Rogers pursuant to Section 6(c)(iii) of the Continuing Provisions of the Amended Employment Agreement. This payment shall be made on the same date and in the same manner that awards under the Incentive Plan for such year are paid to the other participants in the Incentive Plan.

               b.             Outplacement. The Company will retain Right Management Consultants (“Right”) to provide Rogers with Right’s full “Key Executive Service,” provided that Rogers commences such services no later than November 1, 2004 by contacting Right directly. The maximum cost of such services to be paid by the Company to Right shall not exceed $30,000.

               c.             Extension of Option Exercise Period. Contemporaneous with the Company’s receipt of Exhibit C signed by Rogers, the Company and Rogers shall enter into amendments to the Option Agreements (“Extension Amendments”), in the forms attached to this Agreement as Exhibit D, extending the time for Rogers to exercise the Options following termination of his employment with the Company.

               d.             Attorneys’ Fees. The Company will reimburse Rogers for the reasonable attorneys’ fees and expenses he incurs in conjunction with the negotiation and review of this Agreement and the attached exhibits, up to a maximum of $20,000, provided that Rogers submits a request for reimbursement, and applicable statements and receipts, on or before August 31, 2004.

     6.       Non-Competition Agreement.

               a.             Agreement Not to Compete.For a period of twelve (12) consecutive months after the Separation Time, Rogers will not, without the express written

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authorization of the Board of Directors of the Company, directly or indirectly, in North America, (i) provide services for or hold any interest in (including without limitation as a proprietor, owner, principal, agent, partner, officer, director, stockholder, employee, member, consultant or otherwise) any person or entity primarily engaged in or planning to enter into the business of manufacturing, designing, marketing, distributing, or selling leather outerwear, apparel, or accessories; or (ii) provide any services relating to the manufacturing, designing, marketing, distributing, or selling of leather outerwear, apparel or accessories for any person or entity, including but not limited to any business in which he is a proprietor, owner, principal, partner, stockholder or member.

                  b.       Limitation on Covenant. Ownership by Rogers, as a passive investment, of less than 1.0% of the outstanding shares of capital stock of any corporation listed on a national securities exchange or publicly traded on NASDAQ will not itself constitute a breach of this paragraph 6.

                  c.       Acknowledgment. Rogers agrees that the restrictions and agreements contained in this paragraph 6 are reasonable and necessary to protect the legitimate interests of the Company and that any violation of this paragraph 6 will cause substantial and irreparable harm to the Company that would not be quantifiable and for which no adequate remedy would exist at law. Rogers acknowledges that it would be difficult to fully compensate the Company for damages resulting from any breach by him of the provisions of paragraph 6 of this Agreement. Accordingly, in the event of any actual or threatened breach of such provisions, the Company will (in addition to any other remedies it may have) be entitled to temporary and/or permanent injunctive and other equitable relief to enforce such provisions, and such relief may be granted without the necessity of proving actual damages.

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                             d.     Blue Pencil Doctrine. If the duration or geographical extent of, or business activities covered by, this paragraph 6 are in excess of what is valid and enforceable under applicable law, such provision will be construed to cover only that duration, geographical extent, or activities that are valid and enforceable. Rogers acknowledges the uncertainty of the law in this respect and expressly stipulates that this paragraph 6 be given the construction which renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable laws.

                    7.     Restricted Stock. The Company and Rogers acknowledge and agree that the grants of Restricted Stock listed in this paragraph below are Rogers’ only holdings of restricted stock of the Company and that, as of the Separation Time, all shares of the Restricted Stock shall have vested:

                     8.     Stock Options. The Company and Rogers acknowledge and agree that the Options listed in this paragraph below are Rogers’ only options to purchase shares of the Company’s common stock and that, as of the Separation Time, the Options shall have fully vested and be immediately exercisable:

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                  9.     Retirement Plans. To the extent that Rogers is currently a participant in any retirement, pension, or profit sharing plans of the Company, Rogers will be entitled to his rights and benefits under these plans at the times and under the terms and conditions set forth in any such plan.

                  10.     Payments/Benefits in Event of Death. In the event of Rogers’ death, the payments to Rogers pursuant to Section 6(c) of the Continuing Provisions of the Amended Employment Agreement and subparagraphs 5(a) and 5(d) of this Agreement shall be payable to Rogers’ estate, and the health and dental benefits provided pursuant to Section 6(c) of the Continuing Provisions of the Amended Employment Agreement shall be continued for Rogers’ dependents.

                  11.     Public Announcement. A public announcement of Rogers’ resignation as President of the Company shall be made at a time and in a manner determined by the Company in consultation with Rogers and shall be limited to the text mutually agreed upon for such announcement by the Company and Rogers.

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                  12.     Indemnification. Notwithstanding Rogers’ separation from the Company, with respect to events that occurred during his tenure as an employee or officer of the Company, Rogers will be entitled, as a former employee or officer of the Company, to the same rights that are afforded to other current or former employees or officers of the Company, now or in the future, to indemnification and advancement of expenses as provided in the charter documents of the Company and under applicable law, and to indemnification and a legal defense to the extent provided from time to time to current officers by any applicable general liability and/or directors’ and officers’ liability insurance policies maintained by the Company.

                  13.     Cooperation. At the Company’s reasonable request and upon reasonable notice, Rogers will, from time to time and without further consideration: (a) timely execute and deliver such acknowledgements, instruments, certificates, and other ministerial documents as may be necessary or appropriate to formalize and complete the Company’s corporate records; and (b) for up to five (5) hours in any calendar month (on a non-cumulative basis) until August 1, 2006, at such times as shall be convenient for Rogers, discuss and consult with the Company regarding other matters relating to his responsibilities while employed by the Company.

                  14.     Mutual Confidentiality.

                            a.     General Standard. It is the intent of the parties that the terms of Rogers’ separation from the Company, including the provisions of this Agreement and the Rogers Release and the Company Release (collectively “Confidential Separation Information”), will be forever treated as confidential. Accordingly, Rogers and the Company will not disclose Confidential Separation Information to anyone at any time, except as provided in subparagraph 14.b. below. Confidential Separation Information does not include the fact that Rogers resigned

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his employment with the Company or the compensation and benefits he was receiving in connection with his employment with the Company immediately prior to the Separation Time.

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                  15.     Records, Documents, and Property. Notwithstanding the provisions of Section 8(b) of the Amended Employment Agreement, so long as Rogers serves as a director of the Company, Rogers may retain in his possession his Company computer and documents of the Company reasonably related and necessary to the performance of his obligations as a director and his duty to cooperate under paragraph 13 of this Agreement.

                  16.     Full Compensation. Rogers and the Company understand and agree that the payments made and other consideration provided to such party under this Agreement in excess of the benefits of the Continuing Provisions of the Amended Employment Agreement will fully compensate such party for and extinguish any and all of the potential claims Rogers and the Company are releasing in the Rogers Release and the Company Release, including, but not limited to, claims for attorneys’ fees and costs and any and all claims for any type of legal or equitable relief.

                  17.     Withholding of Taxes, Etc. The Company shall withhold from payments and benefits hereunder income and employment taxes and other amounts to the extent required by law. If there is any dispute over the taxation of any such payment or benefit, the Company and Rogers will cause their respective tax advisors to cooperate in an effort to resolve such dispute.

                  18.     No Admission of Wrongdoing. Rogers and the Company understand that this Agreement does not constitute an admission by either of them that he or it has violated any local ordinance, state or federal statute, or principle of common law, that either has engaged in any unlawful or improper conduct toward the other, or that either has treated the other unfairly. Neither will characterize this Agreement or the payment of any money or furnishing of other

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consideration in accordance with this Agreement as an admission that either party has engaged in any unlawful or improper conduct toward the other or treated the other unfairly.

                  19.     Authority. Rogers represents and warrants that he has the authority to enter into this Agreement and the Rogers Release, and that no causes of action, claims, or demands released pursuant to this Agreement and the Rogers Release have been assigned by Rogers to any person or entity not a party to this Agreement and the Rogers Release. The Company represents and warrants that it has the authority to enter into this Agreement, and that no causes of action, claims, or demands released pursuant to this Agreement and the Company Release have been assigned by the Company to any person or entity not a party to this Agreement and the Company Release.

                  20.     Representation. Rogers hereby acknowledges that he has been advised by the Company to consult with his own attorney before executing this Agreement and the Rogers Release. The parties each acknowledge that they have had the opportunity to be represented by their own counsel in this matter, that each has had a full opportunity to consider this Agreement and the attachments, that each has had a full opportunity to ask any questions that they may have concerning this Agreement, the Rogers Release, the Company Release, or the settlement of potential claims against the other, and that neither has relied upon any statements or representations made by the other or their respective attorneys, written or oral, other than the statements and representations that are explicitly set forth in this Agreement, the Rogers Release, the Company Release, and any other employee benefit plans or programs sponsored by the Company in which Rogers is a participant.

                  21.     Successors and Assigns.This Agreement will be binding upon and inure to the benefit of the parties and their respective heirs, administrators, representatives, successors,

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and assigns, including, but not limited to, a purchaser of substantially all the business or assets of the Company, but will not be assignable by either party (except by the Company to a purchaser of substantially all the business or assets of the Company) without the prior written consent of the other party. No assignment by either party will relieve the assigning party of any of his or its obligations under this Agreement.

                  22.     Invalidity. In the event that any provision of this Agreement other than paragraph 2 of this Agreement, the Rogers Release, or the Company Release is determined by an arbitrator or a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such a determination will not affect the validity, legality, or enforceability of the remaining provisions of this Agreement, the Rogers Release, or the Company Release, and the remaining provisions of this Agreement, the Rogers Release, and the Company Release will continue to be valid and enforceable, and any arbitrator or court of competent jurisdiction may modify the objectionable provision so as to make it valid and enforceable.

                  23.     Entire Agreement. Before signing this Agreement, the Rogers Release, and the Company Release, the parties engaged in discussions and generated certain documents, in which the parties considered the matters that are the subject of this Agreement, the Rogers Release, and the Company Release. In such discussions and documents, the parties may have expressed their judgments and beliefs concerning the intentions, capabilities, and practices of the parties, and may have forecast future events. The parties recognize, however, that all business transactions, including the transactions upon which the parties’ judgments, beliefs, and forecasts are based, contain an element of risk, and that it is normal business practice to limit the legal obligations of contracting parties only to those promises and representations that are essential to the transaction so as to provide certainty as to their respective future rights and remedies.

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Accordingly, this Agreement, the Rogers Release, the Company Release, the Option Agreements (as amended), the Restricted Stock Agreements, the Continued Provisions of the Amended Employment Agreement, and any employee benefit plans or programs sponsored by the Company in which Rogers is a participant are intended to define the full extent of the legally enforceable contractual undertakings of the parties, and no promises or representations, written or oral, that are not set forth explicitly in this Agreement, the Rogers Release, the Company Release, the Option Agreements (as amended), the Restricted Stock Agreements, the Continued Provisions of the Amended Employment Agreement, or any employee benefit plans or programs sponsored by the Company in which Rogers is a participant are intended by either party to be legally binding, and all other agreements and understandings between the parties are hereby superseded, including but not limited to provisions of the Amended Employment Agreement other than the Continuing Provisions.

                  24.     Arbitration. Except for the Company’s claims to injunctive relief as provided in paragraph 6 above, and as further limited below, if any dispute arises between the parties with respect to the application, interpretation or termination of this Agreement, then such dispute shall be submitted to arbitration for resolution. The arbitrator shall be selected and the arbitration shall be conducted pursuant to the Employment Dispute Resolution Rules of the American Arbitration Association (“AAA”) (effective January 1, 1993). All fees and expenses of the arbitrator will be shared equally by Rogers and the Company. Any request for arbitration must be made in writing by the party seeking arbitration and must be delivered by hand or sent by registered or certified mail, return receipt requested, postage prepaid, to both the other party and the AAA. The decision of the arbitrator regarding any such dispute shall be final and binding on both parties, and any court of the competent jurisdiction may enter judgment upon the award.

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Notwithstanding anything to the contrary in this paragraph 24, and without prejudice to the above procedures, either party may apply to any court of competent jurisdiction for temporary injunctive relief or other provisional judicial relief if in such party’s sole judgment such action is necessary to avoid irreparable damage or to preserve the status quo until such time as the arbitration award is rendered or the controversy is otherwise resolved.

                  25.     Headings. The descriptive headings of the paragraphs and subparagraphs of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

                  26.     Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

                  27.     Governing Law. This Agreement, the Rogers Release, the Company Release, and the other exhibits to this Agreement will be interpreted and construed in accordance with, and any dispute or controversy arising from any breach or asserted breach of this Agreement, the Rogers Release, the Company Release, or the other exhibits to this Agreement will be governed by, the laws of the State of Minnesota.

     IN WITNESS WHEREOF, the parties have executed this Agreement on the date stated above.