<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the Com-
mission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
WEYCO GROUP, INC.
- - -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
WEYCO GROUP, INC.
- - -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - --------------------------------------------------------------------------------
(5) Total fee paid:
- - --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- - --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- - --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- - --------------------------------------------------------------------------------
(3) Filing party:
- - --------------------------------------------------------------------------------
(4) Date filed:
- - --------------------------------------------------------------------------------
<PAGE> 2
[WEYCOGroup, Inc. logo]
Milwaukee, Wisconsin
Notice of
ANNUAL MEETING OF SHAREHOLDERS
To be Held April 23, 1996
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of WEYCO GROUP,
INC., a Wisconsin corporation (hereinafter called the "Company"), will be held
at the general offices of the Company, 234 East Reservoir Avenue, Milwaukee,
Wisconsin 53212, on Tuesday, April 23, 1996 at 10:00 A.M. (Central Daylight
Time), for the following purposes:
1. To elect four members to the Board of Directors;
2. To act on a proposal to approve the Weyco Group, Inc. 1996 Nonqualified
Stock Option Plan; and
3. To consider and transact any other business that properly may come before
the meeting or any adjournment thereof.
The Board of Directors has fixed March 5, 1996 as the record date for the
determination of the common shareholders entitled to notice of and to vote at
this annual meeting or any adjournment thereof.
The Board of Directors requests that you indicate your voting directions, sign
and promptly mail the enclosed proxy(ies) for the meeting. Any proxy may be
revoked at any time prior to its exercise.
By order of the Board of Directors,
JOHN F. WITTKOWSKE
Secretary
March 25, 1996
<PAGE> 3
PROXY STATEMENT
INTRODUCTION
The enclosed proxy is solicited by the Board of Directors of Weyco Group, Inc.
for exercise at the annual meeting of shareholders to be held at the offices of
the Company, 234 East Reservoir Avenue, Milwaukee, Wisconsin 53212, at 10:00
A.M. (Central Daylight Time) on Tuesday, April 23, 1996, or any adjournment
thereof.
Any shareholder delivering the form of proxy has the power to revoke it at any
time prior to the time of the annual meeting by filing with the Secretary of the
Company an instrument of revocation or a duly executed proxy bearing a later
date or by attendance at the meeting and electing to vote in person by giving
notice of such election to the Secretary of the Company. Proxies properly signed
and returned will be voted as specified thereon. The proxy statements and the
proxies are being mailed to shareholders on approximately March 25, 1996.
The Company has two classes of common stock entitled to vote at the meeting --
Common Stock, $1.00 par value, with one vote per share and Class B Common Stock,
$1.00 par value, with ten votes per share. As of March 5, 1996, the record date
for determination of the common shareholders entitled to notice of and to vote
at the meeting or any adjournment thereof, there were outstanding 1,296,313
shares of Common Stock and 334,482 shares of Class B Common Stock.
SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth information, as of March 5, 1996, with respect to
the beneficial ownership of the Company's common stock by each director and
nominee for director and by all directors and officers as a group.
<TABLE>
<CAPTION>
COMMON STOCK
------------------------ CLASS B COMMON STOCK
NO. OF SHARES ------------------------
AND NATURE OF NO. OF SHARES
BENEFICIAL PERCENT AND NATURE OF
OWNERSHIP OF CLASS BENEFICIAL PERCENT
(1)(2) (3) OWNERSHIP (2) OF CLASS
------------- -------- ------------- --------
<S> <C> <C> <C> <C>
Thomas W. Florsheim................................ 167,717 12.79 202,140 60.43
234 E. Reservoir Ave., Milwaukee, WI 53212
Robert Feitler..................................... 10,000 .77 15,000 4.48
234 E. Reservoir Ave., Milwaukee, WI 53212
John W. Florsheim.................................. 24,217 1.86 3,422 1.02
234 E. Reservoir Ave., Milwaukee, WI 53212
Thomas W. Florsheim, Jr. .......................... 38,320 2.94 3,514 1.05
234 E. Reservoir Ave., Milwaukee, WI 53212
Leonard J. Goldstein............................... 1,000 .08 -- --
Frank W. Norris.................................... 1,774 .14 274 .08
Frederick P. Stratton, Jr. ........................ 9,000 .69 7,200 2.15
All Directors and Officers as a Group (11 persons
including the above-named)....................... 285,953 21.04 238,250 71.23
</TABLE>
NOTES:
(1) Includes the following unissued shares deemed to be "beneficially owned"
under Rule 13d-3 which may be acquired upon the exercise of outstanding
stock options: Mr. Thomas W. Florsheim -- 15,000; Mr. Robert Feitler --
10,000; Mr. John W. Florsheim -- 6,500; Mr. Thomas W. Florsheim, Jr. --
9,000; All Directors and Officers as a Group -- 62,500.
1
<PAGE> 4
(2) The specified persons have sole voting power and sole dispositive power as
to all shares indicated above, except for the following shares as to which
voting and dispositive power are shared:
<TABLE>
<CAPTION>
COMMON CLASS B COMMON
------ --------------
<S> <C> <C>
Thomas W. Florsheim 4,316 4,316
Robert Feitler -- --
John W. Florsheim 1,042 --
Thomas W. Florsheim, Jr. 1,042 --
Frederick P. Stratton -- 1,200
All Directors and Executive
Officers as a Group 8,500 9,216
</TABLE>
(3) Calculated on the basis of outstanding shares plus shares which can be
acquired upon exercise of outstanding stock options.
The following table sets forth information, as of December 31, 1995, with
respect to the beneficial ownership of the Company's Common Stock by those
persons, other than those reflected in the above table, believed by the Company
to own beneficially more than five percent (5%) of the Common Stock outstanding.
The Company believes there are no other persons who own beneficially more than
five percent (5%) of the Class B Common Stock outstanding.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- - --------------------------------------------------- -------------------- ----------------
<S> <C> <C>
Quest Advisory Corp., and Quest Management Company
1414 Avenue of the Americas
New York, New York 10019 169,638 13.09
</TABLE>
NOTE:
According to the Schedule 13G statement filed as a group by Quest Advisory
Corp. and Quest Management Company in February 1996, Quest Advisory Corp.
has sole voting and dispositive power with respect to 142,950 shares of
Common Stock of the Company and Quest Management Company has sole voting and
dispositive power with respect to 26,688 shares of Common Stock of the
Company.
ELECTION OF DIRECTORS
A majority of the votes entitled to be cast by outstanding shares of Common
Stock and Class B Common Stock (considered together, as a single voting group),
represented in person or by proxy, will constitute a quorum at the annual
meeting.
Directors are elected by a plurality of the votes cast by the holders of the
Company's Common Stock and Class B Common Stock (voting together as a single
voting group) at a meeting at which a quorum is present. "Plurality" means that
the individuals who receive the largest number of votes cast are elected as
directors up to the maximum number of directors to be chosen at the meeting.
Consequently, any shares not voted (whether by abstention, broker nonvote or
otherwise) have no impact in the election of directors except to the extent the
failure to vote for an individual results in another individual receiving a
larger number of votes. Votes "against" a candidate are not given legal effect
and are not counted as votes cast in an election of directors. Votes will be
tabulated by an inspector at the meeting.
In January of 1996, the Board of Directors voted unanimously to amend the
Company Bylaws to increase the number of directors from five to seven, and to
appoint Thomas W. Florsheim, Jr. and John W. Florsheim directors to fill the
newly created vacancies for a term to expire on April 23, 1996. John W.
Florsheim is being nominated for only a one year term in order to properly
stagger the directors' terms. Thomas W. Florsheim, Jr. is included with current
directors Robert Feitler and Leonard J. Goldstein for nomination for a
three-year term.
The persons who are nominated as directors and for whom the proxies will be
voted and all continuing Directors are listed below. If any of the nominees
should decline or be unable to act as a Director, which
2
<PAGE> 5
eventuality is not foreseen, the proxies will be voted with discretionary
authority for a substitute nominee designated by the Board of Directors.
<TABLE>
<CAPTION>
SERVED AS
NOMINEE DIRECTOR PRINCIPAL OCCUPATION AND
FOR TERM EXPIRING 1997 AGE SINCE BUSINESS EXPERIENCE
- - --------------------------- --- --------- -------------------------------------------------------
<S> <C> <C> <C>
John W. Florsheim 32 1996 Vice President of the Company, 1994 to present; Branch
Manager, M&M/Mars, Inc. 1990 to 1994
NOMINEES
FOR TERM EXPIRING 1999
- - ---------------------------
Thomas W. Florsheim, Jr. 38 1996 Vice President of the Company, 1988 to present
Robert Feitler 65 1964 President and Chief Operating Officer of the Company
(1) 1968 to 1996; also a Director of Associated Banc-Corp.
and Strattec Security Corp.
Leonard J. Goldstein 69 1992 Retired; Chairman of the Board of Miller Brewing Com-
(1)(2)(3)(4) pany 1991 to 1993; President and Chief Executive
Officer of Miller Brewing Company 1988 to 1991
CONTINUING DIRECTORS
TERM EXPIRES 1998
- - ---------------------------
Thomas W. Florsheim 65 1964 Chairman of the Board and Chief Executive Officer of
(1) the Company 1968 to present
Frank W. Norris 75 1981 Director of Associated Bank Milwaukee; President of
(1)(2)(3)(4) Associated Bank Milwaukee, 1994; Vice Chairman of the
Board of Associated Bank Milwaukee, 1991 to 1994;
Chairman of the Board of Associated Bank Milwaukee,
1985 to 1991
CONTINUING DIRECTOR
TERM EXPIRES 1997
- - ---------------------------
Frederick P. Stratton, Jr. 56 1976 Chairman of the Board and Chief Executive Officer of
(1)(2)(3)(4) Briggs & Stratton Corporation (Manufacturer of Gasoline
Engines) 1986 to present; also a Director of Banc One
Corporation and Wisconsin Energy Corporation
</TABLE>
NOTES:
(1) Member of Executive Committee, of which Mr. Florsheim is Chairman. No
meetings were held in 1995. The Executive Committee is empowered to exercise
the authority of the Board of Directors in the management of the business
and affairs of the Company between meetings of the Board, except for
declaring dividends, filling vacancies in the Board of Directors or
committees thereof, amending the Articles of Incorporation, adopting,
amending or repealing Bylaws and certain other matters.
(2) Member of Audit Committee, of which Mr. Stratton is Chairman. One meeting
was held in 1995. The Audit Committee reviews accounting policies and
practices of the Company, including the adequacy of the system of internal
accounting controls. It also recommends to the Board a firm of independent
public accountants to make an audit of the annual financial statements of
the Company and reviews with the independent public accountants the plan and
result of their audit of these financial statements.
(3) Member of Compensation and Fringe Benefit Committee, of which Mr. Norris is
Chairman. One meeting was held in 1995. The Compensation and Fringe Benefit
Committee establishes compensation arrangements for senior management.
(4) Member of Stock Option Committee, of which Mr. Norris is Chairman. One
meeting was held in 1995. The Stock Option Committee administers the
granting of stock options to officers and other key employees of the Company
and its subsidiaries.
The Board of Directors held fourteen meetings in 1995. The Company has no
nominating or similar committee of the Board of Directors.
3
<PAGE> 6
MANAGEMENT COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth total compensation of the Chief Executive Officer
and the four other most highly compensated executive officers of the Company for
the year 1995, as well as for the Company's two previous years.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------------
AWARDS
ANNUAL COMPENSATION -------------------- PAYOUTS
--------------------------------------- OPTIONS/ -------
OTHER ANNUAL RESTRICTED SARS LTIP ALL OTHER
NAME AND PRINCIPAL COMPENSATION STOCK (#) PAYOUTS COMPENSATION
POSITION YEAR SALARY($) BONUS($) ($) (1) AWARDS($) (2)(3) ($) ($) (1)
- - -------------------------- ---- --------- -------- ------------ --------- --------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thomas W. Florsheim 1995 400,000 -- -- -- 5,000 -- --
Chairman and Chief 1994 400,000 -- -- -- 5,000 -- --
Executive Officer 1993 400,000 -- -- -- 5,000 -- --
Robert Feitler 1995 350,000 -- -- -- -- -- --
President and Chief 1994 350,000 -- -- -- 5,000 -- --
Operating Officer 1993 350,000 -- -- -- 5,000 -- --
James F. Gorman 1995 199,500 -- -- -- 2,000 -- --
Vice President 1994 197,023 -- -- -- 2,000 -- --
1993 191,853 -- -- -- 2,000 -- --
Peter S. Grossman 1995 207,500 -- -- -- 2,000 -- --
Vice President 1994 206,355 -- -- -- 2,000 -- --
1993 201,081 -- -- -- 2,000 -- --
Thomas W. Florsheim, Jr. 1995 152,000 -- -- -- 5,000 -- --
Vice President 1994 141,855 -- -- -- 2,000 -- --
1993 131,043 -- -- -- 2,000 -- --
</TABLE>
NOTES:
(1) Other compensation to the named individuals did not exceed the lesser of
$50,000 or 10% of salary.
(2) Options to acquire shares of Common Stock.
(3) The Company has granted no stock appreciation rights.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- - ----------------------------------------------------------------------------------
% OF POTENTIAL REALIZABLE
NUMBER OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS/ ANNUAL RATES OF
UNDERLYING SARS STOCK PRICE
OPTIONS/ GRANTED TO APPRECIATION FOR
SARS EMPLOYEES EXERCISE OR OPTION TERM
GRANTED IN FISCAL BASE PRICE EXPIRATION --------------------
NAME (#) YEAR ($/SH) DATE 5% ($) 10% ($)
- - ------------------------------- ---------- --------- ----------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Thomas W. Florsheim 5,000 17 39.25 11/20/00 54,000 119,800
Robert Feitler -- -- -- -- -- --
James F. Gorman 2,000 7 39.25 11/20/00 21,700 47,900
Peter S. Grossman 2,000 7 39.25 11/20/00 21,700 47,900
Thomas W. Florsheim, Jr. 5,000 17 39.25 11/20/00 54,000 119,800
</TABLE>
NOTE: The Company has granted no stock appreciation rights.
4
<PAGE> 7
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END
OPTION/SAR VALUES
The following table provides information related to options exercised by the
named executive officers during 1995 and the number and value of options held at
December 31, 1995. The Company has not granted any stock appreciation rights.
<TABLE>
<CAPTION>
VALUE NUMBER OF VALUE OF UNEXERCISED
SHARES ACQUIRED REALIZED UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
NAME ON EXERCISE(#) ($) (1) AT FY-END(#) (2) AT FY-END($) (2)(3)
- - -------------------------------- --------------- -------- ------------------- --------------------
<S> <C> <C> <C> <C>
Thomas W. Florsheim 15,000 150,625 15,000 74,375
Robert Feitler 15,000 147,500 10,000 74,375
James F. Gorman 2,000 17,250 6,000 29,750
Peter S. Grossman 2,000 22,500 6,000 29,750
Thomas W. Florsheim, Jr. 2,000 18,000 9,000 29,750
</TABLE>
NOTES:
(1) Value is calculated based on the difference between the option exercise
price and the closing market price of the Common Stock on the date of
exercise multiplied by the number of shares to which the exercise relates.
(2) All options held by the named individuals at December 31, 1995 were
exercisable and in-the-money.
(3) The fair market value of the Company's Common Stock at December 31, 1995 was
$39.25 (average of bid -- $37.50 and asked -- $41.00). Value was calculated
on the basis of the difference between the option exercise price and $39.25
multiplied by the number of shares of Common Stock underlying the option.
PENSION PLANS
The Company maintains a defined benefit pension plan for various employees of
the Company, including salaried employees. The Company also maintains an
unfunded excess benefits plan so that participants in the defined benefit
pension plan may receive pension benefits which they would otherwise be
prevented from receiving as a result of certain limitations of the Internal
Revenue Code.
The following table shows estimated annual benefits payable at normal retirement
under the general plan formula to persons whose normal retirement age is 65 in
specified earnings and years-of-service classifications. Amounts in excess of
$118,800 or based on income in excess of $150,000 are payable pursuant to the
excess benefits plan.
<TABLE>
<CAPTION>
YEARS OF SERVICE
HIGHEST FIVE YEAR ----------------------------------------------
AVERAGE EARNINGS 10 15 20 25
- - ----------------- ------- -------- -------- --------
<S> <C> <C> <C> <C>
$ 100,000 $14,000 $ 22,000 $ 29,000 $ 36,000
150,000 22,000 34,000 45,000 56,000
200,000 30,000 46,000 61,000 76,000
250,000 38,000 58,000 77,000 96,000
300,000 46,000 70,000 93,000 116,000
350,000 54,000 82,000 109,000 136,000
400,000 62,000 94,000 125,000 156,000
450,000 70,000 100,000 141,000 176,000
500,000 78,000 118,000 157,000 196,000
</TABLE>
The plans provide for normal retirement at age 65 and provide for reduced
benefits for early retirement beginning at age 55. Pension benefits are payable
as a straight life annuity and are calculated under a formula which is
integrated with Social Security, although the amounts determined under the
formula are not reduced by Social Security benefits or other offsets. The normal
retirement benefit is based on (i) the highest average earnings for any 5
consecutive years during the 10 calendar years ending with the year of
retirement, (ii) length of service up to 25 years and (iii) the highest average
covered compensation for Social Security purposes. Earnings covered by the plan
are generally defined as wages for purposes of federal income tax withholding
and therefore may include minor items in addition to those included in the above
Summary Compensation Table as "Salary". Years of credited service under the
plans for the individuals described in the above Summary Compensation Table are
as follows: Mr. Florsheim -- 25; Mr. Feitler -- 25; Mr. Gorman -- 25; Mr.
Grossman -- 25; Mr. Florsheim, Jr. -- 14.
5
<PAGE> 8
The foregoing describes the general formula under the defined benefit plan and
related excess benefits plan as revised in 1991. Those salaried employees who
were covered in the plans on January 1, 1989 are provided with the higher of the
benefits described above or a minimum benefit based on a prior formula through
the defined benefit plan, the unfunded excess benefits plan described above and
an unfunded deferred compensation plan. The normal retirement benefit under the
prior formula is based on the highest average earnings for any 5 consecutive
years during the 15 calendar years preceding retirement and length of service up
to 25 years. Minimum benefit amounts are not subject to any deduction for Social
security benefits. Earnings covered by this formula are the same as those shown
in the above Summary Compensation Table as "Salary".
The following table shows estimated annual benefits payable under the prior
formula upon normal retirement to persons in specified earnings and
years-of-service classifications. Amounts in excess of $118,800 or based on
income in excess of $150,000 are payable pursuant to the excess benefits plan
and the deferred compensation plan.
<TABLE>
<CAPTION>
YEARS OF SERVICE
HIGHEST FIVE YEAR ----------------------------------------------
AVERAGE EARNINGS 10 15 20 25
- - ---------------- ------- -------- -------- --------
<S> <C> <C> <C> <C>
$100,000 $16,000 $ 23,000 $ 31,000 $ 39,000
150,000 24,000 35,000 47,000 59,000
200,000 32,000 48,000 63,000 79,000
250,000 40,000 59,000 79,000 99,000
300,000 48,000 71,000 95,000 119,000
350,000 56,000 84,000 111,000 139,000
400,000 64,000 95,000 127,000 159,000
450,000 72,000 107,000 143,000 179,000
500,000 80,000 120,000 159,000 199,000
</TABLE>
COMPENSATION OF DIRECTORS
Directors of the Company who are not also employees of the Company or
subsidiaries receive a quarterly retainer of $1,250. In addition, they receive
$1,000 for each Board or Committee meeting attended, except that for each
additional meeting attended on the same day the compensation is $500. These
Directors may defer payment of all or part of their fees under the Deferred
Compensation Plan for Directors until they cease to be Directors.
EMPLOYMENT AND DEFERRED COMPENSATION AGREEMENTS
The Company has entered into employment contracts with both Thomas W. Florsheim
and Robert Feitler whereby, for services to be rendered, their employment will
be continued until December 31, 1996, at salary levels to be determined and
reviewed periodically. These contracts provide, among other things, that a lump
sum amount equal to slightly less than three times his base amount compensation
(as defined in Section 280G of the Internal Revenue Code) will be paid to Mr.
Florsheim or Mr. Feitler, respectively, as severance pay, in the event the
Company terminates his employment without cause or he terminates his employment
following a change in control of more than 15% of the shares of the Company, the
replacement of two or more directors by persons not nominated by the Board of
Directors, any enlargement of the size of the Board of Directors if the change
was not supported by the existing Board of Directors, a merger, consolidation or
transfer of assets of the Company, or a substantial change in his
responsibilities. In the event Mr. Florsheim or Mr. Feitler is prevented from
performing his duties by reason of permanent disability, his normal salary will
be discontinued and a disability salary of $300,000 per annum for Mr. Florsheim
and $161,500 per annum for Mr. Feitler will be paid until December 31, 1998.
Also, in the event Mr. Florsheim or Mr. Feitler dies prior to the termination of
his employment under the contract, a death benefit equal to his salary at the
annual rate being paid to him at the date of death will be paid to a designated
beneficiary for a three-year period. As of January 1, 1996, Mr. Florsheim's
annual salary is $400,000 and Mr. Feitler's is $350,000.
The Company entered into deferred compensation agreements with both Mr.
Florsheim and Mr. Feitler under which each of them, or their designated
beneficiaries in the event of their death, would be entitled to a deferred
compensation benefit of $180,000 per year for twenty years upon reaching age 65
while employed by the Company, payable commencing upon retirement from
employment by the Company or at death. Under the original agreements, Mr.
Florsheim or Mr. Feitler could also elect to receive reduced payments in lieu of
the above amounts (a) upon termination of employment after reaching age 60, or
(b) upon termination of employment because of disability. In the event Mr.
Florsheim or Mr. Feitler would die prior to entitlement to the payments
described above, their designated beneficiaries would be entitled to a death
benefit of between $144,000 and $180,000 per year for twenty years.
6
<PAGE> 9
On December 1, 1995, the Board of Directors, with Mr. Florsheim and Mr. Feitler
abstaining, approved the amendment of the deferred compensation agreements
between the Company and Mr. Florsheim and Mr. Feitler. The amended agreements
accelerate the payments which would have been made under the previous
agreements. The amended agreements call for the following payments which have
the same present value at a 7% discount rate as of the employee's 65th birthday
as the compensation under the previous agreements.
<TABLE>
<CAPTION>
AMOUNT OF PAYMENT
-----------------------------
DATE OF PAYMENT MR. FLORSHEIM MR. FEITLER
- - --------------- ------------- -----------
<S> <C> <C>
12/01/95 $ 575,000 $ 600,000
2/01/96 575,000 600,000
2/01/97 575,000 700,000
2/01/98 423,751 232,432
</TABLE>
The Company has entered into death benefit plan agreements with both Thomas W.
Florsheim and Robert Feitler under which their designated beneficiaries would
receive a lump sum payment of $444,727 in the event of Mr. Florsheim's or Mr.
Feitler's death while they are employed by the Company. Because of these
agreements, neither Mr. Florsheim nor Mr. Feitler is a participant in the
Company's group term life insurance program.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Norris is a director of Associated Bank Milwaukee and Mr. Feitler is a
director of both Associated Bank Milwaukee and its parent, Associated Banc
Corporation. Mr. Norris is a member of the Compensation Committee.
REPORT OF THE COMPENSATION AND FRINGE BENEFIT COMMITTEE AND
STOCK OPTION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation and Fringe Benefit Committee and the Stock Option Committee are
composed of three non-employee directors who are responsible for establishing
the total compensation of the CEO and other executive officers of the Company.
The Company historically has not utilized a bonus or other similar incentive pay
scheme except for the granting of stock options, which are incentives for
increasing the Company's long-term growth and profitability.
Salaries of the CEO and other executive officers are reviewed annually and
adjusted according to individual performance and ability to fulfill the
position's assigned duties and responsibilities, its accountability and its
impact on the operations and profitability of the Company.
The salaries of the CEO and President were established by the Compensation and
Fringe Benefit Committee ("the Committee") at $400,000 and $350,000,
respectively, as of January 1, 1995, which represented no increase from 1994. It
was also acknowledged that since both the CEO and President are principal
shareholders of the Company, their stock ownership provides performance
incentives that encourage long-term growth in value for public shareholders.
Stock options were granted at market value to the CEO and President in 1995 to
reinforce these performance incentives.
In addition, stock options have also been granted to other executive officers of
the Company to link total executive compensation to stock price performance.
Options were granted in 1995 to other executive officers.
This report is submitted by the members of the Compensation and Fringe Benefit
Committee and the Stock Option Committee.
Leonard J. Goldstein
Frank W. Norris
Frederick P. Stratton, Jr.
7
<PAGE> 10
STOCK PERFORMANCE
The following line graph compares the cumulative total shareholder return on the
Company's common stock during the five years ended December 31, 1995 with the
cumulative return on the Nasdaq Non-Financial Stock Index and the Russell
3000-Shoes Index. The comparison assumes $100 was invested on December 31, 1990
in the Company's common stock and in each of the foregoing indices and assumes
reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
FOR THE YEAR ENDED DECEMBER 31, 1995
WEYCO GROUP, INC., NASDAQ NON FINANCIAL INDEX AND
RUSSELL 3000-SHOES INDEX
<TABLE>
<CAPTION>
NASDAQ
MEASUREMENT PERIOD WEYCO GROUP, NON-FINANCIAL RUSSELL 3000 -
(FISCAL YEAR COVERED) INC. INDEX SHOES
<S> <C> <C> <C>
1990 100 100 100
1991 99 161 149
1992 110 176 167
1993 132 203 132
1994 148 195 138
1995 162 268 156
</TABLE>
8
<PAGE> 11
PROPOSAL TO APPROVE THE WEYCO GROUP, INC.
1996 NONQUALIFIED STOCK OPTION PLAN
The Board of Directors of the Company believes its compensation structure should
provide incentive for management to increase shareholder value. Accordingly, the
Company utilizes stock options as a component of the total compensation package
for officers and other key employees of the Company and its subsidiaries. In
order to encourage those officers and employees to increase their equity stake
in the Company, the Board of Directors has adopted the Weyco Group, Inc. 1996
Nonqualified Stock Option Plan (the "1996 Plan"). The 1996 Plan is intended to
replace the Weyco Group, Inc. 1992 Nonqualified Stock Option Plan (the "1992
Plan"). The 1992 Plan is being replaced because an insufficient number of shares
remains available for issuance under that plan. A copy of the 1996 Plan is
annexed hereto as Exhibit A. The following description of the 1996 Plan is
qualified in its entirety by reference to the complete text set forth in Exhibit
A.
All key salaried employees, including officers, of the Company and its
subsidiaries are eligible to participate in the 1996 Plan. Currently, 15 such
employees participate in the 1992 Plan, and it is likely that the same
individuals will participate in the 1996 Plan.
The 1996 Plan will be administered by the Stock Option Committee of the Board of
Directors of the Company, initially Federick P. Stratton, Jr., Frank W. Norris,
and Leonard Goldstein, none of whom participate in any Company plans. The
committee has been constituted in this way partly to permit the 1996 Plan to
comply with the Rule 16b-3 under the Securities Exchange Act of 1934.
Under the 1996 Plan 100,000 shares of the Company's Common Stock are available
for issuance upon the exercise of options granted pursuant to the Plan. No
eligible employee shall be granted an option or options in any calendar year
covering more than 15,000 shares. No options may be granted under the plan after
December 31, 2005.
Options are granted without consideration by the committee, which determine the
number of shares subject to such options, the exercise date(s) and the
expiration date(s). The exercise price shall be 100 percent of the fair market
value of the shares on the date on which the options are granted, and may be
paid in cash, through surrender of shares of Company Common Stock owned by the
optionee ("delivered stock"), or a combination of both. As of March 5, 1996, the
market value of the Company's Common Stock was $37.50 per share (based on the
average of the high and low trades for the day on the NASDAQ National Market).
No options will be granted under the 1996 Plan pending shareholder approval of
the 1996 Plan. Options will be exercisable no sooner than 6 months after the
date of grant and, unless otherwise determined by the committee, no more than 5
years after date of grant. Options will expire upon the optionee's termination
of employment for cause, one year following termination of employment due to
death or 90 days following other termination of employment.
Options are not transferrable except by will or the laws of descent or
distribution.
In the event of a stock split, stock dividend, combination or exchange of shares
or similar change affecting the common stock, the committee, subject to approval
of the Company's Board of Directors, shall make substitutions or adjustments in
the aggregate number of shares reserved for issuance and in the number and
option price of shares subject to outstanding options as appropriate and
equitable to prevent any diminution or enlargement of the rights of participants
in the 1996 Plan.
Upon the dissolution or liquidation of the Company or upon any merger in which
the Company is not the surviving corporation and which is approved by the
Company's non-insider shareholders, the Company shall settle all outstanding
options exercisable by their terms for cash. The amount of cash to be paid for
any such option shall be equal to the difference between the option exercise
price and the fair market value of the Company's stock on the effective date of
such dissolution, liquidation or merger.
The federal tax consequences to optionees and the Company are as follows. An
optionee will not realize taxable income at the time an option is granted, but
taxable income will be realized, and the Company will be entitled to a deduction
(provided, under current IRS regulations, that it satisfies certain withholding
requirements), at the time of exercise. The amount of income (and the Company's
deduction) will be equal to the difference between the option exercise price and
the fair market value of the shares on the date of exercise. The income realized
will be taxed at ordinary income tax rates for federal income tax purposes. On a
subsequent disposition of the shares acquired upon exercise, capital gain or
loss as determined under the normal asset holding period rules will be realized
in the amount of the difference between the proceeds of the sale and the fair
market value of the shares on the date of exercise.
If the option exercise price is paid in delivered stock, the exercise is treated
as (a) a tax-free exchange of the shares of delivered stock (without recognizing
any taxable gain with respect thereto) for a like amount of new
9
<PAGE> 12
shares (with such new shares having the same basis and holding period as the
old), and (b) the issuance of additional shares, without consideration therefor,
in a taxable transaction. The optionee will recognize compensation income equal
to the fair market value of such additional shares on the date of exercise. The
optionee's basis in the additional shares will equal the amount of compensation
income recognized and the holding period of such shares will begin on the date
of exercise. This mode of payment does not affect the ordinary income tax
liability incurred upon exercise of the option described above.
The affirmative vote of the holders of a majority of the votes represented by
the shares of Common Stock and Class B Common Stock present, in person or by
proxy, and entitled to vote on the 1996 Plan at the annual meeting of
shareholders, voting together as a single class, is necessary for the 1996 Plan
to qualify for reduced reporting and short-swing profit liability treatment
under Securities and Exchange Commission rules and to prevent the income
realized upon exercise of an option from being subject to the deductible
compensation limit imposed under Internal Revenue Code Section 162(m).
Abstentions will count as shares present and entitled to vote but broker
nonvotes will be counted as shares present but not entitled to vote for this
purpose.
A copy of the 1996 Plan is attached hereto as Appendix A and should be read in
its entirety by the shareholders.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR ADOPTION OF THIS
PROPOSAL.
INDEPENDENT PUBLIC ACCOUNTANTS
It is expected that Arthur Andersen LLP, the Company's independent public
accountants for 1995, will be selected for 1996 by the Board of Directors
immediately following the annual meeting of shareholders. A representative of
Arthur Andersen LLP is expected to be present at the annual meeting of
shareholders with the opportunity to make a statement if so desired and such
representative is expected to be available to respond to appropriate questions.
METHOD OF PROXY SOLICITATION
The entire cost of solicitation of proxies will be borne by the Company. The
officers of the Company may solicit proxies from some of the larger
shareholders, which solicitation may be made by mail, telephone, telegraph or
personal interviews; these officers will not receive additional compensation for
soliciting such proxies. Request will also be made of brokerage houses and other
custodians, nominees and fiduciaries to forward, at the expense of the Company,
soliciting material to the beneficial owners of shares held of record by such
persons.
OTHER MATTERS
The Company has not been informed and is not aware that any other matters will
be brought before the meeting. However, proxies will be voted with discretionary
authority with respect to any other matters that properly may be presented to
the meeting.
SHAREHOLDER PROPOSALS
Shareholder proposals must be received by the Company no later than November 30,
1996, in order to be considered for inclusion in next year's annual meeting
proxy statement.
[WEYCOGroup, Inc. logo]
March 25, 1996 JOHN F. WITTKOWSKE
Milwaukee, Wisconsin Secretary
10
<PAGE> 13
COMMON STOCK
PROXY WEYCO GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Thomas W. Florsheim and Robert Feitler or either
of them, proxies with full power of substitution, to vote at the Annual Meeting
of Shareholders of Weyco Group, Inc. (the "Company") to be held on April 23,
1996 at 10:00 A.M., local time and at any adjournment thereof, hereby revoking
any proxies heretofore given, to vote all shares of Common Stock of the
Company held or owned by the undersigned as directed on the reverse, and in
their discretion upon such other matters as may come before the meeting.
(TO BE SIGNED ON REVERSE SIDE.)
SEE REVERSE SIDE
<TABLE>
PLEASE MARK YOUR
/X/ VOTES AS IN THIS
EXAMPLE.
<S> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election / / / / NOMINEES: 2. Proposal to approve The Weyco Group, Inc. / / / / / /
of Directors 1996 Nonqualified Stock Option Plan.
for their John W. Florsheim
respective terms. Thomas W. Florsheim, Jr. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR PROPOSAL 1
INSTRUCTIONS To withhold authority Robert Feitler AND FOR PROPOSAL 2 IF NO INSTRUCTION TO THE CONTRARY IS INDICATED
to vote for any individual nominee Leonard J. Goldstein OR IF NO DIRECTION IS GIVEN.
print that nominee's name on the
line provided below. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY IN THE
ENCLOSED ENVELOPE.
- - ---------------------------------
SIGNATURE(S) DATE
----------------------------------------- -------------------------- ---------------------------
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
</TABLE>
<PAGE> 14
CLASS B COMMON STOCK
PROXY WEYCO GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Thomas W. Florsheim and Robert Feitler or either
of them, proxies with full power of substitution, to vote at the Annual Meeting
of Shareholders of Weyco Group, Inc. (the "Company") to be held on April 23,
1996 at 10:00 A.M., local time and at any adjournment thereof, hereby revoking
any proxies heretofore given, to vote all shares of Class B Common Stock of the
Company held or owned by the undersigned as directed on the reverse, and in
their discretion upon such other matters as may come before the meeting.
(TO BE SIGNED ON REVERSE SIDE.)
SEE REVERSE SIDE
<TABLE>
PLEASE MARK YOUR
/X/ VOTES AS IN THIS
EXAMPLE.
<S> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election / / / / NOMINEES: 2. Proposal to approve The Weyco Group, Inc. / / / / / /
of Directors 1996 Nonqualified Stock Option Plan.
for their John W. Florsheim
respective terms. Thomas W. Florsheim, Jr. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR PROPOSAL 1
INSTRUCTIONS To withhold authority Robert Feitler AND FOR PROPOSAL 2 IF NO INSTRUCTION TO THE CONTRARY IS INDICATED
to vote for any individual nominee Leonard J. Goldstein OR IF NO DIRECTION IS GIVEN.
print that nominee's name on the
line provided below. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY IN THE
ENCLOSED ENVELOPE.
- - ---------------------------------
SIGNATURE(S) DATE
----------------------------------------- -------------------------- ---------------------------
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.
</TABLE>
