WELLCO ENTERPRISES, INC.
150 Westwood Circle
P.O. Box 188
Waynesville, North Carolina 28786
October 16, 1998
NOTICE OF ANNUAL MEETING
OF
STOCKHOLDERS
The annual meeting of stockholders of Wellco Enterprises, Inc. will be held in
the cafeteria of the Company's Waynesville, North Carolina, plant, located at
150 Westwood Circle, on Tuesday, November 17, 1998, at 3:00 P.M., EST, for the
purpose of taking action on the election of directors as more particularly
described in the accompanying Proxy Statement and such other matters as may
properly come before the meeting.
Only stockholders of record at the close of business on October 16, 1998, will
be entitled to vote at the meeting. This Notice and the accompanying Proxy
Statement are being mailed to stockholders on approximately October 23, 1998.
By Order of the Board of Directors
RICHARD A. WOOD, JR.
SECRETARY
YOUR VOTE IS IMPORTANT. EVEN IF YOU DO NOT PLAN TO
ATTEND THE MEETING, PLEASE RETURN YOUR SIGNED
PROXY!
Please complete and promptly return your Proxy in the postpaid envelope
provided. This will not prevent you from voting in person at the meeting. It
will, however, help to assure a quorum and avoid added proxy solicitation costs.
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Wellco Enterprises, Inc.
150 Westwood Circle
P.O. Box 188
Waynesville, North Carolina 28786
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of Wellco
Enterprises, Inc. (the "Company") for use at the 1998 Annual Stockholders
Meeting of the Company, to be held on November 17, 1998, and at any adjournment
thereof. The cost of solicitation will be borne by the Company. ChaseMellon
Shareholder Services, the transfer agent for the Company, has been retained to
assist in obtaining proxies, including proxies from brokerage houses and others
with respect to shares registered in their names but beneficially owned by
others, by such means as ChaseMellon deems appropriate, at a cost to the Company
presently estimated at $1,800. Such brokerage houses and others will be
reimbursed for their out-of-pocket expenses incurred. Proxies may also be
solicited by some directors, officers or employees of the Company, in person or
by mail, telephone or telefax, without extra compensation to them.
The shares represented by the proxies received will be voted at the meeting, or
any adjournment thereof. On matters coming before the meeting as to which a
choice has been specified by the stockholder by means of the ballot on the
proxy, the shares represented will be voted accordingly. If no choice is so
specified, the shares will be voted in favor of the matters set forth in the
foregoing notice of meeting. Management does not know of any other matters which
will be presented for action at the meeting, but the persons named in the
accompanying proxy intend to vote or act with respect to any other proposal
which may be presented for action, and matters incident to the conduct of the
meeting, according to their judgment in light of conditions then prevailing
except as to election of substitute nominees for director, as to which proxies
will be voted for nominees designated as hereinafter stated. Executed proxies
may be revoked by written revocation or later dated proxy delivered to the
Secretary prior to or at the meeting. Also, stockholders who are present at the
meeting may withdraw their proxies and vote in person if they so desire.
Stockholders of record at the close of business on October 16, 1998, will be
entitled to vote at the meeting. On that date, there were outstanding 1,163,246
shares of the Company's common stock. Each stockholder is entitled to one vote
for each share of stock on all matters to be presented at the meeting. A
plurality vote of the shares represented at the meeting, in person or by proxy,
is necessary for the election of each director. Cumulative voting is not
available at the meeting.
Mr. James T. Emerson, a Director of the Company, owns 55% of total shares
outstanding (640,272 shares as of September 30, 1998). For further information
concerning such matters see page 11 of this Proxy Statement.
Stockholders having questions concerning the matters to be considered at the
meeting are invited to telephone the Company at (828) 456-3545, extension 102.
BOARD OF DIRECTORS
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<PAGE>
The Company's Board of Directors consists of nine directors divided into three
classes with each class having three directors serving for a term of three
years.
Your Board of Directors unanimously recommends the reelection of Messrs. William
M. Cousins, Jr., J. Aaron Prevost and William D. Schubert. All of said nominees
have consented in writing to serve if elected.
The class, period of service as a director, age and principal occupation for at
least the past five years of each nominee for director and each person whose
term of office as a director will continue after the meeting are as follows:
NOMINEES FOR ELECTION:
Class I Directors Whose Term Expires in 2001:
William M. Cousins, Jr. has been a Director of the Company since 1990 and is 74
years of age. He is President (since 1974) of William M. Cousins, Jr., Inc.
(management consultants), a Director (since 1991) of Alba-Waldensian, Inc. (an
apparel manufacturing company) and a director of BioSepra, Inc. (since 1994).
J. Aaron Prevost has been a Director of the Company since 1973 and is 87 years
of age. He is a retired Senior Vice President of First Union National Bank of
North Carolina, Waynesville, N.C.
A Final Judgement of Permanent Injunction was filed on July 23, 1996 in the U.
S. District Court for the Western District of North Carolina, under which Mr.
Prevost and an associate voluntarily consented to permanently restrain and
enjoin themselves from violating Section 10(b) of the Securities Exchange Act of
1934, as amended, and the rules promulgated thereunder. The Judgement was
entered after the filing of a Complaint by the Securities and Exchange
Commission alleging that in 1993 Mr. Prevost gave said associate certain
non-public information about the Company that was used by the associate to
purchase the Company's stock. The Judgement required Mr. Prevost to pay a
disgorgement amount of $3,387 plus prejudgement interest and a like amount in
civil penalty.
William D. Schubert has been a Director of the Company since 1990 and is 74
years of age. He is the Principal of Advanced Management Concepts (consultant to
the apparel and textile industry) since 1989 and is a Director (since 1991) of
Sunstates Corporation (formerly Acton Corporation). He was President and Chief
Executive Officer of Alba-Waldensian, Inc. (1973-1988).
DIRECTORS CONTINUING IN OFFICE:
Class II Directors Whose Term Expires in 1999:
James T. Emerson has been a Director of the Company since January, 1996 and
previously served as a Director from 1988 until 1993, and is 76 years of age. He
was an industrial instrumentation engineer and consultant (retired 1983), and is
an investor. He is the uncle of Fred K. Webb, Jr., also a Director.
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<PAGE>
David Lutz has been a Director of the Company since January, 1996 and previously
served as a Director from 1984 until 1992. He is President and Chief Operating
Officer and Treasurer of the Company (since October 1996) and is 53 years of
age. He served as Executive Vice President and Treasurer of the Company from May
until October, 1996, as Secretary/Treasurer from 1986 until May 1996 and as
Controller from 1974 until 1986.
Fred K. Webb, Jr. has been a Director of the Company since January, 1996. He is
the Special Projects Manager of the Company (since August 1998) and is 38 years
of age. He was previously employed as an Accounting Team Leader (since 1995) and
Senior Staff Accountant (since 1989) for United Guaranty Corporation (an
insurance holding company). He is the nephew of James T.
Emerson, also a Director.
Class III Directors for Term Expiring in 2000:
Claude S. Abernethy, Jr. has been a Director of the Company since 1997 and
previously served as a Director from 1976 until 1994 and is 71 years of age. He
is Senior Vice President of Interstate/Johnson Lane (a securities brokerage
firm), and a Director of Ridgeview, Inc., Air Transportation Holdings, Inc. and
Director Emeritus of Interstate/Johnson Lane, Inc.
Horace Auberry has been a Director of the Company since 1964 and is 67 years of
age. He is Chairman, Board of Directors and Chief Executive Officer of the
Company (since October, 1996) and was Chairman of the Board of Directors and
joint Chief Executive Officer from 1968 until October, 1996.
Rolf Kaufman has been a Director of the Company since 1962 and is 68 years of
age. He was President of the Company and joint Chief Executive Officer from 1968
until October 1996. Upon his retirement from the position of President on
September 30, 1996, Mr. Kaufman was elected by the Board of Directors to the
position of Vice Chairman, Board of Directors. As Vice Chairman, Mr. Kaufman is
retired from full time employment as President, while still being significantly
involved in several areas of the Company's business affairs.
It is intended that shares represented by the accompanying Proxy will be voted
for election of the above nominees unless authority for such vote is withheld.
In the event that any nominees should become unable to serve or for good cause
will not serve, it is intended that such shares will be voted for substitute
nominees designated by the present Board of Directors of the Company.
Section 16(a) Beneficial Ownership Reporting Compliance:
In August, 1998, Director Cousins filed Form 5 with the Securities and Exchange
Commission disclosing that a transaction in the Company's stock should have been
reported previously on Form 4. The Form 5 indicated that one Form 4 should have
been filed reporting one transaction involving Mr. Cousins' purchase, under a
stock option plan of the Company, of a total of 2,000 shares of the Company's
stock.
BOARD AND COMMITTEE MEETINGS
During the Company's last full fiscal year, there was one regular (the 1997
Annual) and two special
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<PAGE>
meetings of the Board of Directors. In addition, the Company has for a number of
years followed the practice, permissible under North Carolina corporation law,
of approving corporate resolutions by unanimous written consent without meeting.
One such resolution was adopted by the Board of Directors during the Company's
last full fiscal year.
The Company has a standing Audit Committee of the Board of Directors. All
directors not otherwise associated with the Company as an officer, employee or
consultant are designated as members of the Audit Committee. Accordingly,
Directors Cousins, Emerson, Abernethy, and Schubert are presently the members of
such Committee with Director Prevost serving as Chairman. During the fiscal year
of 1998, Director Webb was a member of the Audit Committee, until which he
became employed by the Company in August 1998. The Audit Committee held two
meetings during the Company's last fiscal year, at which representatives of the
Company's independent auditors, Deloitte & Touche LLP were present. The Audit
Committee recommends to the Board the firm to be designated as the Company's
auditors, reviews and approves the scope of the annual audit and is responsible
for considering any differences of opinion or disputes between management and
said auditors which may arise and which are called to the Committee's attention.
The Board has a standing Compensation Committee, consisting of the same members
as the Audit Committee with Director Emerson serving as Chairman. The
Compensation Committee met once during the Company's last fiscal year to review
and approve the compensation of officers and related matters.
The Company has not established a standing Nominating Committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee has ever served as an officer or
employee of the Company or had any relationship requiring disclosure by the
Company under any paragraph of Item 404 of Regulation S-K of the Securities and
Exchange Commission. No executive officer of the Company has ever served as a
director or member of the compensation committee of any other entity one of
whose executive officers has ever been a member to the Company's Compensation
Committee or Board of Directors.
COMPENSATION OF DIRECTORS
Directors' fees are $3,750 per year; $1,000 per meeting for each Board meeting
attended in person; $1,000 per meeting for each committee meeting attended in
person that is held apart from the day of a Board meeting; and $500 for each
committee and Board phone meeting. Directors who are full-time employees of the
Company do not receive any directors' fees. Travel expenses of directors
incurred traveling to and from meetings are reimbursed by the Company.
INDEPENDENT AUDITORS
The firm of Deloitte & Touche LLP served as the Company's independent auditors
for the fiscal year ended June 27, 1998. Deloitte & Touche LLP and its
predecessor firm, Touche Ross & Co., have served in this capacity since the
Company's 1979-80 fiscal year. The Board of Directors has not selected
independent auditors for the fiscal year beginning June 28, 1998. The Board of
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Directors has a policy of selecting and engaging independent auditors a few
months prior to the end of the Company's fiscal year. A representative of
Deloitte & Touche LLP has been requested and is expected to be present at the
stockholders meeting. Such representative will have the opportunity to make a
statement if he or she desires to do so and will be available to respond to
appropriate questions.
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<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Company's common stock to the Standard & Poor's 500 Stock Index and an index of
peer companies that produce nonathletic footwear. The Standard & Poor's 500
Stock Index is a broad equity market index published by Standard & Poor's. The
index of peer companies was constructed by the Company and includes the Company
and R. G. Barry; Brown Group, Inc.; Genesco, Inc.; Daniel Green Co.; Justin
Industries; McRae Industries; Penobscot Shoe; Rocky Shoes & Boots, Inc.; Stride
Rite Corp.; Timberland Co.; Weyco Group, Inc; and Wolverine World Wide. In
constructing the peer index, the return of each component company was weighted
according to its respective stock market capitalization. The graph assumes the
investment of $100 in the Company's common stock, the Standard and Poor's 500
Stock Index and the peer index at the end of the Company's 1993 fiscal year.
<TABLE>
<CAPTION>
Total Stockholder Return (These are the numbers in the graph)
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
WELLCO ............. $100 $123 $135 $188 $330 $291
S & P 500 .......... $100 $101 $128 $161 $217 $282
PEER GROUP ......... $100 $101 $ 84 $ 93 $156 $160
</TABLE>
EXECUTIVE COMPENSATION
Compensation Summary
The following Summary Compensation Table shows certain information concerning
the compensation of each of the Company's highly compensated executive officers
whose total annual salary and bonus exceeded $100,000 during the last fiscal
year:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
LONG TERM
OTHER COMPENSA-
ANNUAL TION-STOCK ALL OTHER
NAME AND PRINCIPAL COMPEN- OPTION COMPEN-
POSITION: YEAR SALARY BONUS SATION(1) GRANTS SATION(2)
<S> <C> <C> <C> <C> <C> <C>
Horace Auberry,
Chairman of the Board
and Chief Executive
Officer 1998 $152,636 $3,305 (3)35,000 $964
1997 $150,000 $20,847 $195,661 $964
1996 $104,104 $35,658 $5,833 22,500 $964
David Lutz, President,
Chief Operating Officer
and Treasurer 1998 $101,766 $3,690 (4)20,000
1997 $94,825 $12,508 $3,605
1996 $77,402 $21,395 15,000
</TABLE>
(1) Of the 1997 amounts, $193,075 for Mr. Auberry represents the excess of
market price at the date of stock option exercise over the exercise price.
All other amounts represent reimbursement for income taxes.
(2) Life insurance premiums paid by the Company for benefit of the named
executive officer.
(3) Options for 15,000 shares were immediately exercisable, with the remaining
options exercisable in 1999 - 8,300; 2000 - 8,300; and 2001 - 3,400. See
Stock Option granted section.
(4) Options for 16,600 shares were immediately exercisable, with the remaining
options exercisable in 1999. See Stock Option granted section.
Stock Options
The table below shows the individual grants of stock options to the named
executive officers during the fiscal year ended June 27, 1998:
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<TABLE>
<CAPTION>
% OF TOTAL POTENTIAL REALIZABLE
OPTIONS EXPIR- VALUE AT ASSUMED
OPTIONS GRANTED EXERCISE ATION RATES OF STOCK PRICE
NAME GRANTED IN 1998 PRICE (1) DATE APPRECIATION (2)
<S> <C> <C> <C> <C> <C> <C>
5% 10%
Horace Auberry (3) 35,000 32.71% $12.00 7/2/07 $264,136 $669,372
David Lutz (4) 20,000 18.69% $12.00 7/2/07 $150,935 $382,498
</TABLE>
(1) Market price on date of grant.
(2) Hypothetical future values of stock purchasable upon exercise of the
options. Computed as the difference between the exercise price's assumed
price at the option's expiration date, using the annual compounded growth
as shown, and the exercise price, times options granted. This calculation
is pursuant to proxy rules and does not necessarily reflect management's
assessment of the Company's future stock price performance.
(3) Options for 15,000 shares were immediately exercisable, with the remaining
options exercisable in 1999 - 8,300; 2000 - 8,300; and 2001 - 3,400.
(4) Options for 16,600 shares were immediately exercisable, with the remaining
options exercisable in 1999.
The following table shows, on an aggregated basis, for executive officers named
in the Summary Compensation Table, each exercise of stock options during the
1998 fiscal year and the fiscal year-end value of unexercised options.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTION OPTIONS
SHARES SHARES EXERCISABLE/
ACQUIRED ON VALUE EXERCISABLE/ UNEXERCISEABLE
NAME EXERCISE (1) REALIZED UNEXERCISEABLE (2) AND (3)
<S> <C> <C>
Horace Auberry 15,000/20,000 $0/$0
David Lutz 31,600/3,400 $86,250/$0
</TABLE>
(1) The were no exercises of options for the executive officers named in the
Summary Compensation Table.
(2) If no value given, the fair market value of options at June 26, 1998 do not
exceed the exercise price of the options.
(3) Excess of the total market value at June 26, 1998 of the shares over the
total exercise price.
Employment Contracts and Termination of Employment and Change-in-Control
Agreements
The Company does not have employment contracts with any executive officer. There
are no compensation plans or arrangements that will result from the resignation,
retirement or termination of any executive officer, or that will result from a
change-in-control of the Company or a change in any executive officer's
responsibilities following a change-in-control.
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Long-Term Incentive Plans
The Company does not have any type of long-term incentive plans for any
executive officer or other employee.
Pension Plan
The Company's executive officers and all other salaried employees participate in
an Administrative Employee Pension Plan (the Plan). Benefits under the Plan are
based on years of service and average annual earnings. The following table
illustrates the amount of annual pension benefits based on the years of service
and average annual compensation levels shown:
<TABLE>
<CAPTION>
PENSION PLAN TABLE
YEARS OF SERVICE
AVERAGE
ANNUAL
COMPENSATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
<S> <C> <C> <C> <C> <C>
$125,000 $15,700 $20,900 $26,100 $31,300 $36,500
$150,000 19,000 25,400 31,700 38,100 44,400
$175,000 22,400 29,900 37,400 44,800 52,300
$200,000 25,800 34,400 43,000 51,600 60,200
</TABLE>
The Plan provides benefits based on final average compensation, defined in the
Plan as the average of the consecutive five highest of the last ten years
compensation, and on years of service. Compensation under the Plan is
essentially equivalent to the aggregate amounts reported as annual salary and
bonus compensation in the Summary Compensation Table above. Total years of
service are limited to 35 and benefits are computed on a straight life annuity
basis. Mr. Auberry named in the Summary Compensation Table has more than the
maximum 35 years of service. Mr. Lutz would have more than 35 years of service
under the plan, assuming his employment to age 65.
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<PAGE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee (the Committee) of the Board of Directors submits
recommendations to the Board of Directors as to the type and amount of
compensation for two executive officers of the Company (Mr. Auberry, Chairman,
Board of Directors and Chief Executive Officer and Mr. Lutz, President and Chief
Operating Officer and Treasurer). The Committee consists of all directors not
otherwise associated with the Company and, in the 1998 fiscal year, consisted of
six members. Mr.
Webb, now an employee, no longer is a member of the Committee.
The Committee usually meets once during a year to consider and make
recommendations to the Board of Directors. In the 1998 fiscal year, the Board of
Directors did not modify or reject any action or recommendation of the
Compensation Committee.
The Committee does not use any compensation consultants in making its decisions
and recommendations, and does not relate compensation of the above named
executive officers to that of any other entity or industry grouping.
Each of the named executive officers receives an annual cash bonus which is
based on a specified percentage of consolidated net income, as defined. Each
executive officer's percentage has remained constant for the past several years.
This results in a significant amount of each executive officer's total cash
compensation being dependent on the Company's operations. No one of the above
named executive officers has a guaranteed or minimum amount of bonus. Although
not a frequent occurrence, the Committee from time to time may give
discretionary additional bonuses for extraordinary achievement.
All officers of the Company participate in fringe benefit plans (group health
insurance, group life insurance and long-term disability) to the same extent and
under the same terms as all other salaried employees of the Company. Mr. Auberry
and Mr. Lutz each receive perquisites whose value aggregates much less than 10%
of their total annual salary and bonus.
Submitted by the Compensation Committee of the Board of Directors
James T. Emerson Chairman
William M. Cousins, Jr. J. Aaron Prevost
William D. Schubert Claude S. Abernethy, Jr.
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SECURITY OWNERSHIP
The number of shares of common stock (the Company's only voting security)
beneficially owned or held under option by (a) all executive officers, directors
and nominees for director and (b) each person or entity owning more than 5% of
the outstanding shares of common stock (including persons or entities who may be
deemed a group for purposes of the federal securities laws), as known by
management of the Company, based upon information furnished to the Company by or
on behalf of such person or entity, as "beneficial ownership" is defined under
Rule 13d-3 under the Securities Exchange Act of 1934, is set forth in the
following table:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP ON SEPTEMBER 30, 1998
SOLE
VOTING SHARED
AND VOTING AND TOTAL PERCENT
DISPOSITIVE DISPOSITIVE BENEFICIAL OF
NAME POWER POWER (1) OWNERSHIP CLASS (4)
<S> <C> <C> <C> <C>
Officers and Directors:
Horace Auberry (2) and (3) 67,015 1,500 68,555 5.44%
David Lutz (2) and (3) 31,600 4,500 36,100 2.87%
Directors :
James T. Emerson 640,272 640,272 50.84%
Rolf Kaufman (3) 50,720 6,600 57,320 4.54%
Claude S. Abernethy, Jr. (3) 2,000 7,000 9,000 0.71%
J. Aaron Prevost* (3) 5,500 5,500 0.44%
William M. Cousins, Jr.* 2,000 2,000 0.16%
William D. Schubert (3) 2,000 2,000 0.16%
Fred K. Webb, Jr. (3) 2,200 2,200 0.17%
Officers:
Sven E. Oberg (3) 7,800 7,800 0.62%
Richard A. Wood, Jr. 3,600 3,600 0.29%
Tammy Francis (3) 10,000 10,000 0.79%
All Officers and Directors as a
Group (12) 67.03%
Owners of More Than 5% of
the Company's Common
Shares:
Barclays Global Investors, N.A.
45 Fremont Street
San Francisco, CA (5) 76,883 6.10%
Dimensional Fund Advisors Inc.
1299 Ocean Ave., 11th Floor,
Santa Monica, CA (6) 59,400 4.72%
</TABLE>
* Nominee for election to the Board of Directors.
(1) Shares owned jointly with spouse and shares held by spouse and children
over whom the listed person may have substantial influence by reason of
the relationship are shown as shared voting and dispositive power.
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<PAGE>
(2) Employees of the Company participate in a September 6, 1990 plan approved
by the Board of Directors under which any employee-stockholder has the
option of redeeming shares beneficially owned as of said date and shares
subsequently issued under stock options outstanding at that date. The
redemption right occurs at the employee's death or other separation from
employment other than for cause and the redemption price is the Company's
net book value per share, as defined in said plan, at the time of
termination ($6.09 at June 27, 1998). The total of shares owned by all
officers subject to this plan are: Auberry, 15,450; Kaufman, 55,320; and
Lutz, 4,500.
(3) The following officers and directors beneficially own the following shares
from an unexercised fully exercisable option to acquire these shares:
Auberry - 15,000; Lutz - 31,600; Kaufman - 2,000; Abernethy -2,000; Prevost
- 2,000; Schubert - 2,000; Webb - 2,000; Oberg - 5,000 and Francis -
10,000.
(4) Percent of total shares outstanding (1,163,246) and shares issuable under
options exercisable within 60 days (96,100).
(5) According to information contained in a Schedule 13G dated February 13,
1998 and information provided to the Company by Barclays Global Investors,
N.A. (Barclays), a bank as defined in section 3(a) (6) of the SEC Act of
1934, is deemed to have beneficial ownership of 76,883 shares of the
Company's common stock as of June 30, 1998, all of which shares are held in
portfolios of Barclays Global Investors. Barclays has beneficial ownership
of all such shares and has sole voting power with respect to 76,883 shares.
Barclays has sole dispositive power over all 76,883 shares.
(6) According to information contained in a Schedule 13G dated February 7, 1997
and information provided to the Company by Dimensional Fund Advisors Inc.
(Dimensional), a registered investment advisor, is deemed to have
beneficial ownership of 59,400 shares of the Company's common stock as of
June 30, 1998, all of which shares are held in portfolios of DFA Investment
Dimensions Group Inc. (Fund), a registered open-end investment company, or
in series of the DFA Investment Trust Company (Trust), a Delaware business
trust, or the DFA Group Trust and DFA Participation Group Trust, investment
vehicles for qualified employee benefit plans, all of which Dimensional
serves as investment manager. DFA disclaims beneficial ownership of all
such shares. Dimensional has sole voting power with respect to 42,300
shares. Certain officers of Dimensional also serve as officers of the Fund
and the Trust and as such officers have sole voting power with respect to
12,300 shares owned by the Fund and 4,800 shares owned by the Trust.
Dimensional has sole dispositive power over all 59,400 shares.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Proposals of qualified stockholders intended to be presented at the Company's
1999 Annual Stockholders Meeting must be received by the Secretary at the
address stated herein no later than July 3, 1999, in order to be considered for
inclusion in the Company's Proxy Statement and Proxy for that meeting.
By Order of the Board of Directors
RICHARD A. WOOD, JR.
Secretary
Waynesville, North Carolina
October 16, 1998
A copy of the Company's 1998 Form 10-K (Annual Report filed with the Securities
and Exchange Commission) is available at no charge to any stockholder requesting
it. Requests should be made in writing and addressed to the Secretary, Wellco
Enterprises, P. O. Box 188, Waynesville, NC 28786.
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<PAGE>
APPENDIX
FORM OF PROXY
WELLCO ENTERPRISES, INC.
P.O. Box 188, Waynesville, North Carolina 28786
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
STOCKHOLDERS MEETING, TUESDAY, NOVEMBER 17, 1998
The undersigned hereby acknowledges receipt of Notice of Meeting and Proxy
Statement each dated October 16, 1998, of the 1998 annual stockholders meeting
of Wellco Enterprises, Inc., and hereby revokes all proxies heretofore given for
said meeting and appoints Claude S. Abernethy, Jr., Rolf Kaufman and Fred K.
Webb, Jr. (and each of them with full power of substitution, or any one or more
of them acting in the absence of the others) as attorneys and proxies of the
undersigned to represent, vote and act for the undersigned as designated on the
back of this proxy with respect to all shares of the stock of said Company which
the undersigned is entitled to vote at the annual meeting of stockholders of the
Company to be held in the cafeteria of the Company's plant at 150 Westwood
Circle, Waynesville, North Carolina, at 3:00P.M., EST, on Tuesday, November 17,
1998 or at any adjournment there of.
(Continued, and to be marked, dated and signed on other side)
FOLD AND DETACH HERE
<PAGE>
Please mark
your vote as
indicated in
this example X
ITEM 1: Your Board of Directors recommends a vote FOR the election of the
following Directors:
Class I, term expiring in 2001: William M. Cousins, Jr., J. Aaron Prevost and
William D. Schubert
__________FOR ALL NOMINEES, except as marked to the right
__________WITHHOLD AUTHORITY to vote for all nominees
To withhold authority to vote for any Director nominee(s), print the name(s)
below:
________________________________________________________________________________
IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ABOVE AS SET FORTH
IN THE PROXY STATEMENT AND THE HOLDERS HEREOF WILL EXERCISE THEIR DISCRETION AS
TO ALL OTHER ITEMS OF BUSINESS WHICH MAY COME BEFORE THE MEETING.
________________________________________________________________________________
________________________________________________________________________________
Signature of Stockholder(s)
Date ___________________________________,1998
NOTE: SIGN NAME EXACTLY AS IT APPEARS HEREON AND DATE. Co-owners must all sign.
Attorneys, executors, administrators, trustees, guardians, etc. should sign in
official capacity and give title.
FOLD AND DETACH HERE
WELLCO ENTERPRISES, INC.
P.O. Box 188, Waynesville, North Carolina 28786
The annual meeting will be held on November 17, 1998 at 3:00P.M. in the
cafeteria of the Company's plant at 150 Westwood Circle, Waynesville, North
Carolina.
YOUR VOTE IS VERY IMPORTANT. PLEASE MARK, SIGN, AND DATE THE ABOVE, AND RETURN
IT IN THE ENVELOPE PROVIDED.
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