<PAGE> 1
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 Section 240.14a-11(c) or
- Section 240.14a-12
Weyco Group, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Weyco Group, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11.
1) Title of each class of securities to which transactions applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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Check box if any part of the fee is offset provided by Exchange Act Rule
O-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:
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4) Date Filed:
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<PAGE> 2
[WEYCOGroup, Inc. LOGO]
Milwaukee, Wisconsin
Notice of
ANNUAL MEETING OF SHAREHOLDERS
To be Held April 27, 1999
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, 333 West Estabrook Boulevard, Glendale,
Wisconsin 53212, on Tuesday, April 27, 1999 at 10:00 A.M. (Central Daylight
Time), for the following purposes:
1. To elect three members to the Board of Directors; and
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 8, 1999 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 30, 1999
<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, 333 West Estabrook Boulevard, Glendale, Wisconsin 53212, at 10:00
A.M. (Central Daylight Time) on Tuesday, April 27, 1999 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 30, 1999.
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 8, 1999,
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
3,418,497 shares of Common Stock and 954,128 shares of Class B Common Stock.
SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth information, as of March 8, 1999, 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................................ 479,117 14.02 606,420 63.56
333 W. Estabrook Blvd., Glendale, WI 53212
John W. Florsheim.................................. 119,340 3.49 10,266 1.08
333 W. Estabrook Blvd., Glendale, WI 53212
Thomas W. Florsheim, Jr............................ 162,731 4.76 10,542 1.10
333 W. Estabrook Blvd., Glendale, WI 53212
James F. Gorman.................................... 38,000 1.11 -- --
Peter S. Grossman.................................. 33,950 .99 11,100 1.16
Robert Feitler..................................... 45,606 1.33 66,606 6.98
Leonard J. Goldstein............................... 3,000 .09 -- --
Frank W. Norris.................................... 6,822 .20 822 .09
Frederick P. Stratton, Jr.......................... 27,000 .79 18,000 1.89
All Directors and Executive Officers as a Group (11
persons including the above-named)............... 999,266 29.23 723,756 75.86
</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 -- 65,000; Mr. John W.
Florsheim -- 54,500; Mr. Thomas W. Florsheim, Jr. -- 56,000; James F.
Gorman -- 28,000; Peter S. Grossman -- 28,000; All Directors and Executive
Officers as a Group -- 300,500.
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>
CLASS B
COMMON COMMON
------ -------
<S> <C> <C>
Thomas W. Florsheim 12,948 12,948
John W. Florsheim 6,333 --
Thomas W. Florsheim, Jr. 6,333 --
Peter S. Grossman 3,300 11,100
All Directors and Executive
Officers as a Group 28,914 52,962
</TABLE>
(3) Calculated on the basis of outstanding shares plus shares which can be
acquired upon exercise of outstanding stock options, by the person or group
involved.
The following table sets forth information, as of December 31, 1998, 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>
Royce & Associates, Inc., and Royce Management
Company
1414 Avenue of the Americas
New York, New York 10019 428,714 12.36%
</TABLE>
NOTE:
According to the Schedule 13G statement filed as a group by Royce &
Associates, Inc. and Royce Management Company in February 1999, Royce &
Associates, Inc. has sole voting and dispositive power with respect to
425,450 shares of Common Stock of the Company and Royce Management Company
has sole voting and dispositive power with respect to 3,264 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.
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.
2
<PAGE> 5
<TABLE>
<CAPTION>
SERVED AS
NOMINEES DIRECTOR PRINCIPAL OCCUPATION AND
FOR TERM EXPIRING 2002 AGE SINCE BUSINESS EXPERIENCE
- ---------------------------- --- --------- -------------------------------------------------------
<S> <C> <C> <C>
Thomas W. Florsheim, Jr. 41 1996 President and Chief Executive Officer of the Company,
1999 to present; President and Chief Operating Officer
of the Company, 1996 to 1999; Vice President of the
Company, 1988 to 1996
Robert Feitler 68 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 Strattec
Security Corp. and Trustee of Rembrandt Funds
Leonard J. Goldstein 72 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 2001
- ----------------------------
Thomas W. Florsheim 68 1964 Chairman of the Board, 1968 to present; Chief Executive
(1) Officer of the Company, 1968 to 1999
Frank W. Norris 78 1981 Chairman of the Board and Chief Executive Officer of
(1)(2)(3)(4) Ken Cook Company, 1997 to present; Director of
Associated Bank Milwaukee, 1977 to 1997; President of
Associated Bank Milwaukee, 1994 to 1997; Vice Chairman
of the Board of Associated Bank Milwaukee, 1991 to
1994; Chairman of the Board of Associated Bank
Milwaukee, 1985 to 1991
CONTINUING DIRECTORS
TERM EXPIRES 2000
- ----------------------------
John W. Florsheim 35 1996 Executive Vice President, Chief Operating Officer and
Assistant Secretary of the Company, 1999 to present;
Executive Vice President of the Company, 1996 to 1999;
Vice President of the Company, 1994 to 1996; Brand
Manager, M & M/Mars, Inc., 1990 to 1994
Frederick P. Stratton, Jr. 59 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, Midwest Express Holdings, Inc., Wisconsin
Electric Power Co. and Wisconsin Energy Corporation
</TABLE>
NOTES:
(1) Member of Executive Committee, of which Mr. Feitler is Chairman. No meetings
were held in 1998. 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 1998. 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 1998. 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 1998. 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 six meetings in 1998. All Directors attended at
least 75% of the meetings during 1998. 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 as
of December 31,1998, for the year 1998, as well as for the 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 1998 287,500 -- -- -- 10,000 -- --
Chairman and Chief 1997 400,000 -- -- -- 10,000 -- --
Executive Officer(4) 1996 400,000 -- -- -- 5,000 -- --
Thomas W. Florsheim, Jr. 1998 300,000 -- -- -- 10,000 -- --
President and Chief 1997 280,000 -- -- -- 10,000 -- --
Operating Officer(5) 1996 202,100 -- -- -- 5,000 -- --
John W. Florsheim 1998 215,000 -- -- -- 10,000 -- --
Executive Vice 1997 200,000 -- -- -- 10,000 -- --
President(5) 1996 147,600 -- -- -- 5,000 -- --
James F. Gorman 1998 222,500 -- -- -- 5,000 -- --
Vice President 1997 216,025 2,500 -- -- 5,000 -- --
1996 212,700 5,000 -- -- 2,000 -- --
Peter S. Grossman 1998 230,500 2,500 -- -- 5,000 -- --
Vice President 1997 224,140 2,500 -- -- 5,000 -- --
1996 222,400 5,000 -- -- 2,000 -- --
</TABLE>
NOTES:
(1) Other compensation to the named individuals did not exceed the lesser of
$50,000 or 10% of salary.
(2) Options to acquire shares of Common Stock.
(3) The Company has granted no stock appreciation rights.
(4) Effective January 1, 1999, Thomas W. Florsheim stepped down as Chief
Executive Officer of the Company. He remains employed as Chairman of the
Board of Directors of the Company.
(5) Effective January 1, 1999, Thomas W. Florsheim, Jr. was appointed President
and Chief Executive Officer of the Company and John Florsheim was appointed
Executive Vice President, Chief Operating Officer and Assistant Secretary of
the Company.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- -------------------------------------------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS/ ANNUAL RATES OF
UNDERLYING SARS STOCK PRICE
OPTIONS/ GRANTED TO APPRECIATION FOR
SARS EMPLOYEES EXERCISE OR OPTION TERM
GRANTED IN FISCAL BASE PRICE EXPIRATION --------------------
NAME (#) YEAR ($/SH) DATE 5%($) 10%($)
---- ---------- ---------- ----------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Thomas W. Florsheim 3,618 5 27.64 11-5-03 16,000 46,400
6,382 9 25.13 11-5-08 100,900 255,600
Thomas W. Florsheim, Jr. 3,618 5 27.64 11-5-03 16,000 46,400
6,382 9 25.13 11-5-08 100,900 255,600
John W. Florsheim 3,618 5 27.64 11-5-03 16,000 46,400
6,382 9 25.13 11-5-08 100,900 255,600
James F. Gorman 5,000 7 25.13 11-5-08 79,000 200,200
Peter S. Grossman 5,000 7 25.13 11-5-08 79,000 200,200
</TABLE>
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 1998 and the number and value of options held at
December 31, 1998. The Company has not granted any stock appreciation rights.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SAR'S OPTIONS/SAR'S
VALUE AT FY-END(#)(2) AT FY-END($)(2)(3)
SHARES ACQUIRED REALIZED --------------------------- ---------------------------
NAME ON EXERCISE(#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas W. Florsheim -- -- 55,000 10,000 641,500 7,200
Thomas W. Florsheim, Jr. 3,000 40,000 46,000 10,000 509,200 7,200
John W. Florsheim -- -- 44,500 10,000 487,100 7,200
James F. Gorman -- -- 23,000 5,000 264,500 5,600
Peter S. Grossman -- -- 23,000 5,000 264,500 5,600
</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, 1998 were
in-the-money, with the exception of certain options granted during 1998.
(3) The fair market value of the Company's Common Stock at December 31, 1998 was
$25.63 (average of bid -- $25.00 and asked -- $26.25). Value was calculated
on the basis of the difference between the option exercise price and $25.63
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 $160,000 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
5
<PAGE> 8
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. Gorman -- 25; Mr. Grossman -- 25; Mr. Florsheim, Jr. -- 17;
John W. Florsheim -- 5.
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 10 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 $160,000 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 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, $225,000 per annum for
Thomas W. Florsheim, Jr. and $161,250 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, 1999, Mr. Thomas W.
Florsheim's annual salary is $250,000, Mr. Thomas W. Florsheim's, Jr. annual
salary is $350,000 and Mr. John W. Florsheim's annual salary is $260,000.
6
<PAGE> 9
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 by 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 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.
The Company has entered into a death benefit plan agreement with Thomas W.
Florsheim under which his designated beneficiary(ies) would receive a lump sum
payment of $444,727 in the event of Mr. Florsheim's death while he is employed
by the Company. Because of this agreement, Mr. Florsheim is not a participant in
the Company's group term life insurance program.
The Company has entered into change of control agreements with four executives,
John Wittkowske, Peter Grossman, James Gorman, and David Couper. These contracts
provide that a lump sum equal to slightly less than three times his base amount
of compensation, (as defined in Section 280G of the Internal Revenue Code)
calculated with respect to the 3 taxable year period ending before the date the
change of control occurs, will be paid as severance pay in the event of a change
of control. The change of control agreements define a change of control as an
event in which:
(1) more than 25% of the voting power of the outstanding stock of the Company is
directly or indirectly controlled by a person or group of persons other than
the members of the family of Thomas W. Florsheim and their descendents or
trusts;
(2) the Company consolidates or merges with another corporation or entity which
is not a wholly owned subsidiary of the Company unless such consolidation or
merger is approved by the Board of Directors when the majority of the
Directors are persons who have been nominated by the Board of Directors or
the Florsheims;
(3) all or substantially all of the operating assets of the Company have been
sold;
(4) the majority of the existing members of the Board of Directors have been
replaced by persons not nominated by the Board of Directors or the
Florsheims, or
(5) Section 2 of Article III of the Company's Bylaws is amended to enlarge the
number of directors of the Company if the change was not supported by the
existing Board of Directors or the Florsheims.
As of January 1, 1999, Mr. Wittkowske's annual salary is $170,000, Mr.
Grossman's annual salary is $237,500, Mr. Gorman's annual salary is $227,500,
and Mr. Couper's annual salary is $104,500.
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 salary of the CEO was established by the Compensation and Fringe Benefit
Committee ("the Committee") at $250,000 as of April 1, 1998, as he began
transitioning to a more advisory status. 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 1998 to
reinforce these performance incentives.
On January 29, 1999, the Compensation and Fringe Benefit Committee established
Thomas Florsheim Jr.'s salary, effective January 1, 1999, as $350,000. The
Committee also determined John Florsheim's salary, effective January 1, 1999, as
$260,000.
7
<PAGE> 10
Stock options were also granted in 1998 to all other executive officers of the
Company to link total executive compensation to stock price performance.
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, 1998 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, 1993
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, 1998
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Weyco Group, Inc. Company 100 112 125 135 223 253
NASDAQ Non-Financial Index Stock Index 100 96 134 163 191 280
Russell 3000 - Shoes Peer Group Index 100 104 117 182 150 122
</TABLE>
INDEPENDENT PUBLIC ACCOUNTANTS
It is expected that Arthur Andersen LLP, the Company's independent public
accountants for 1998, will be selected for 1999 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, 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.
INCORPORATION BY REFERENCE
The Company's financial statements and the related management's discussion and
analysis of financial condition and results of operation are incorporated by
reference from the Company's Annual Report to Shareholders.
SHAREHOLDER PROPOSALS
Shareholder proposals must be received by the Company no later than November 30,
1999, in order to be considered for inclusion in next year's annual meeting
proxy statement. In addition, a proposal submitted outside of Rule 14a-8 will be
considered untimely, and the Company may use discretionary voting authority for
any proposal that may be raised at next year's annual meeting unless the
proponent notifies us of the proposal not later than February 13, 2000.
[WEYCOGroup, Inc. LOGO]
March 30, 1999 JOHN F. WITTKOWSKE
Milwaukee, Wisconsin Secretary
10
<PAGE> 13
8888
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 Thomas W.
Florsheim, Jr. 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 27, 1999 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
<PAGE> 14
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
WEYCO GROUP, INC.
CLASS B COMMON STOCK
APRIL 27, 1999
\/ Please Detach and Mail in the Envelope Provided \/
<TABLE>
<S><C>
/X/ Please mark your
votes as in this
example.
FOR WITHHELD
1. Election of / / / / Nominees: The shares represented by this proxy will
Directors Thomas W. Florsheim, Jr. be voted for Proposal 1 if no instruction
for their Robert Feitler to the contrary is indicated or if no
respective Leonard J. Goldstein direction is given.
terms.
INSTRUCTIONS: To withhold authority PLEASE MARK, SIGN, DATE AND RETURN THIS
to vote for any individual Nominee, PROXY IN THE ENCLOSED ENVELOPE.
print that nominee's name on the
line provided below.
- -----------------------------------
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> 15
8888
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 Thomas W.
Florsheim, Jr. 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 27, 1999 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
<PAGE> 16
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
WEYCO GROUP, INC.
COMMON STOCK
APRIL 27, 1999
\/ Please Detach and Mail in the Envelope Provided \/
<TABLE>
<S><C>
/X/ Please mark your
votes as in this
example.
FOR WITHHELD
1. Election of / / / / Nominees: The shares represented by this proxy will
Directors Thomas W. Florsheim, Jr. be voted for Proposal 1 if no instruction
for their Robert Feitler to the contrary is indicated or if no
respective Leonard J. Goldstein direction is given.
terms.
INSTRUCTIONS: To withhold authority PLEASE MARK, SIGN, DATE AND RETURN THIS
to vote for any individual Nominee, PROXY IN THE ENCLOSED ENVELOPE.
print that nominee's name on the
line provided below.
- -----------------------------------
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>
