<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
Commission 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):
[ ] No fee required.
[ ] 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 22, 1997
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 22, 1997 at 10:00 A.M. (Central Daylight
Time), for the following purposes:
1. To elect two members to the Board of Directors;
2. 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 4, 1997 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 24, 1997
<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 22, 1997 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 24, 1997.
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 4, 1997, 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 1,259,116
shares of Common Stock and 328,359 shares of Class B Common Stock.
SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth information, as of March 4, 1997, with respect to
the beneficial ownership of the Company's common stock by each director and
nominee for director, for each of the named executive officers identified for
"Management Compensation" herein and by all directors and executive officers as
a group.
<TABLE>
<CAPTION>
COMMON STOCK CLASS B COMMON STOCK
------------------------ ------------------------
NO. OF SHARES NO. OF SHARES
AND NATURE OF AND NATURE OF
BENEFICIAL PERCENT BENEFICIAL
OWNERSHIP OF CLASS OWNERSHIP PERCENT
(1)(2) (3) (2) OF CLASS
------------- -------- ------------- --------
<S> <C> <C> <C> <C>
Thomas W. Florsheim................................ 164,278 12.84 202,140 61.55
234 E. Reservoir Ave., Milwaukee, WI 53212
John W. Florsheim.................................. 31,208 2.46 3,422 1.04
234 E. Reservoir Ave., Milwaukee, WI 53212
Thomas W. Florsheim, Jr. .......................... 45,304 3.56 3,514 1.07
234 E. Reservoir Ave., Milwaukee, WI 53212
James F. Gorman.................................... 12,000 .95 3,000 .91
Peter S. Grossman.................................. 11,825 .93 3,700 1.13
Robert Feitler..................................... 17,202 1.36 22,202 6.76
Leonard J. Goldstein............................... 1,000 .08 -- --
Frank W. Norris.................................... 2,774 .18 274 .08
Frederick P. Stratton, Jr.......................... 9,000 .71 6,000 1.83
All Directors and Executive Officers as a Group (11
persons including the above-named)............... 313,991 23.32 244,252 74.37
</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 -- 20,000; Mr. Robert Feitler --
10,000; Mr. John W. Florsheim -- 11,500; Mr. Thomas W. Florsheim, Jr. --
14,000; James F. Gorman -- 8,000; Peter S. Grossman -- 8,000; All Directors
and Executive Officers as a Group -- 87,500.
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
John W. Florsheim 1,538 --
Thomas W. Florsheim, Jr. 1,538 --
Peter S. Grossman 1,900 3,700
All Directors and Executive
Officers as a Group 9,292 8,016
</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, 1996, 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 150,638 11.96
</TABLE>
NOTE:
According to the Schedule 13G statement filed as a group by Quest Advisory
Corp. and Quest Management Company in February 1997, Quest Advisory Corp. has
sole voting and dispositive power with respect to 128,950 shares of Common
Stock of the Company and Quest Management Company has sole voting and
dispositive power with respect to 21,688 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.
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 eventuality is not
foreseen, the proxies will be voted with discretionary authority for a
substitute nominee designated by the Board of Directors.
2
<PAGE> 5
There are no family relationships between any of the Company's directors and
executive officers, except that Thomas W. Florsheim is the father of Thomas W.
Florsheim, Jr. and John W. Florsheim.
<TABLE>
<CAPTION>
SERVED AS
NOMINEES DIRECTOR PRINCIPAL OCCUPATION AND
FOR TERM EXPIRING 2000 AGE SINCE BUSINESS EXPERIENCE
- ---------------------------- --- --------- -------------------------------------------------------
<S> <C> <C> <C>
John W. Florsheim 33 1996 Executive Vice President of the Company, 1996 to pre-
sent; Vice President of the Company, 1994 to 1996;
Brand Manager, M&M/Mars, Inc. 1990 to 1994
Frederick P. Stratton, Jr. 57 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
CONTINUING DIRECTORS
TERM EXPIRES 1999
- ----------------------------
Thomas W. Florsheim, Jr. 39 1996 President and Chief Operating Officer of the Company,
1996 to present; Vice President of the Company, 1988 to
1996
Robert Feitler 66 1964 Chairman, Executive Committee of the Company, 1996 to
(1) present; President and Chief Operating Officer of the
Company 1968 to 1996; also a Director of Associated
Banc-Corp. and Strattec Security Corp.
Leonard J. Goldstein 70 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 66 1964 Chairman of the Board and Chief Executive Officer of
(1) the Company 1968 to present
Frank W. Norris 76 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
</TABLE>
NOTES:
(1) Member of Executive Committee, of which Mr. Feitler is Chairman. No meetings
were held in 1996. 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 1996. 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. No meetings were held in 1996. 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 1996. 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 nine meetings in 1996. 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, the four other most highly compensated executive officers of the
Company as of December 31, 1996 and a former executive, all for the year 1996,
as well as for the Company's two previous years.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------------ ----------------------- -------
OTHER ANNUAL RESTRICTED OPTIONS/ LTIP ALL OTHER
NAME AND PRINCIPAL COMPENSATION STOCK SARS PAYOUTS COMPENSATION
POSITION YEAR SALARY($) BONUS($) ($)(1) AWARDS($) (#) (2)(3) ($) ($)(1)
- -------------------------- ---- --------- -------- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thomas W. Florsheim 1996 400,000 -- -- -- 5,000 -- --
Chairman and Chief 1995 400,000 -- -- -- 5,000 -- --
Executive Officer 1994 400,000 -- -- -- 5,000 -- --
Robert Feitler 1996 256,000 -- -- -- -- -- --
President and Chief 1995 350,000 -- -- -- 5,000 -- --
Operating Officer(4) 1994 350,000 -- -- -- 5,000 -- --
Thomas W. Florsheim, Jr. 1996 202,100 -- -- -- 5,000 -- --
President and Chief 1995 152,000 -- -- -- 5,000 -- --
Operating Officer(5) 1994 141,855 -- -- -- 2,000 -- --
John W. Florsheim 1996 147,600 -- -- -- 5,000 -- --
Executive Vice President 1995 106,000 -- -- -- 5,000 -- --
(5) 1994 82,700 -- -- -- 1,500 -- --
James F. Gorman 1996 212,700 5,000 -- -- 2,000 -- --
Vice President 1995 199,500 -- -- -- 2,000 -- --
1994 197,023 -- -- -- 2,000 -- --
Peter S. Grossman 1996 222,400 5,000 -- -- 2,000 -- --
Vice President 1995 207,500 -- -- -- 2,000 -- --
1994 206,355 -- -- -- 2,000 -- --
</TABLE>
NOTES:
(1) Other compensation to the named individuals did not exceed the lesser of
$50,000 or 10% of salary.
(2) Options to acquire shares of Common Stock.
(3) The Company has granted no stock appreciation rights.
(4) Effective April 23, 1996 Robert Feitler retired as President and became
Chairman of the Executive Committee.
(5) Effective April 23, 1996 Thomas W. Florsheim, Jr. was elected President and
Chief Operating Officer of the Company and John W. Florsheim was elected
Executive Vice President of the Company.
4
<PAGE> 7
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ------------------------------------------------------------------------------------ POTENTIAL REALIZABLE
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS/ ANNUAL RATES OF
UNDERLYING SARS STOCK PRICE
OPTIONS/ GRANTED TO APPRECIATION FOR
SARS EMPLOYEES EXERCISE OR OPTION TERM
GRANTED IN FISCAL BASE PRICE EXPIRATION ---------------------
NAME (#) YEAR ($/SH) DATE 5% ($) 10% ($)
- ------------------------------- ---------- ---------- ----------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Thomas W. Florsheim 5,000 17 40.75 12/06/06 128,100 324,700
Robert Feitler -- -- -- -- -- --
James F. Gorman 2,000 7 40.75 12/06/06 51,300 129,900
Peter S. Grossman 2,000 7 40.75 12/06/06 51,300 129,900
Thomas W. Florsheim, Jr. 5,000 17 40.75 12/06/06 128,100 324,700
John W. Florsheim 5,000 17 40.75 12/06/06 128,100 324,700
</TABLE>
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 1996 and the number and value of options held at
December 31, 1996. 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 -- -- 20,000 114,375
Robert Feitler -- -- 10,000 98,125
James F. Gorman -- -- 8,000 45,750
Peter S. Grossman -- -- 8,000 45,750
Thomas W. Florsheim, Jr. -- -- 14,000 55,500
John W. Florsheim -- -- 11,500 26,750
</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, 1996 were
exercisable and in-the-money.
(3) The fair market value of the Company's Common Stock at December 31, 1996 was
$41.625 (average of bid -- $40.25 and asked -- $43.00). Value was calculated
on the basis of the difference between the option exercise price and $41.625
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
5
<PAGE> 8
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
- ----------------- ------- -------- -------- --------
<C> <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. -- 15; John W. Florsheim -- 3.
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
- ----------------- ------- -------- -------- --------
<C> <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.
6
<PAGE> 9
EMPLOYMENT AND DEFERRED COMPENSATION AGREEMENTS
The Company has entered into employment contracts with Thomas W. Florsheim,
Thomas W. Florsheim, Jr. and John W. Florsheim whereby, for services to be
rendered, their employment will be continued until December 31, 2001, 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. Thomas W. Florsheim, Mr. Thomas W. Florsheim,
Jr. or Mr. John W. Florsheim, 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. Thomas W. Florsheim, Mr. Thomas W. Florsheim,
Jr. or Mr. John W. Florsheim 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. Thomas W. Florsheim, $210,000 per annum for
Thomas W. Florsheim, Jr. and $150,000 per annum for Mr. John Florsheim will be
paid until December 31, 2003. Also, in the event Mr. Thomas W. Florsheim, Mr.
Thomas W. Florsheim, Jr. or Mr. John W. Florsheim 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, 1997, Mr. Thomas W.
Florsheim's annual salary is $400,000, Mr. Thomas W. Florsheim's, Jr. annual
salary is $280,000 and Mr. John W. Florsheim's annual salary is $200,000.
The Company entered into deferred compensation agreements with both Mr. Thomas
W. Florsheim and Mr. Robert 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 with the Company or at death.
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.
AMOUNT OF PAYMENT
---------------------------
DATE OF PAYMENT MR. FLORSHEIM MR. FEITLER
--------------- ------------- -----------
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
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.
7
<PAGE> 10
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 salary of the CEO was established by the Compensation and Fringe Benefit
Committee ("the Committee") at $400,000 as of January 1, 1996, which represented
no increase from 1995. It was also acknowledged that since the CEO is a
principal shareholder of the Company, his stock ownership provides performance
incentives that encourage long-term growth in value for public shareholders. A
stock option was granted at market value to the CEO in 1996 to reinforce these
performance incentives.
During 1996, Mr. Feitler, the then current President and Chief Operating
Officer, retired as an executive officer and was replaced by Mr. Thomas W.
Florsheim, Jr. Mr. John W. Florsheim was also named Executive Vice President of
the Company.
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 1996 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.
8
<PAGE> 11
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, 1996 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, 1991
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, 1997
<TABLE>
<CAPTION>
MEASUREMENT PERIOD WEYCO GROUP, NASDAQ NON- RUSSELL 3000 -
(FISCAL YEAR COVERED) INC. FINANCIAL INDEX SHOES
<S> <C> <C> <C>
1991 100 100 100
1992 111 109 112
1993 134 126 89
1994 150 121 92
1995 166 169 105
1996 180 206 161
</TABLE>
INDEPENDENT PUBLIC ACCOUNTANTS
It is expected that Arthur Andersen LLP, the Company's independent public
accountants for 1996, will be selected for 1997 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.
9
<PAGE> 12
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,
1997, in order to be considered for inclusion in next year's annual meeting
proxy statement.
WEYCO GROUP, INC. LOGO
March 24, 1997 JOHN F. WITTKOWSKE
Milwaukee, Wisconsin Secretary
10
