-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BNMu3SIDhXBEKTjG1XOCKcZVlMWEgiMOanG/78HVAyw0ooHrnwx5bTukXcNCasut Ar7FskYIyaIi1zZSsu945A== 0000950124-97-001758.txt : 19970326 0000950124-97-001758.hdr.sgml : 19970326 ACCESSION NUMBER: 0000950124-97-001758 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970422 FILED AS OF DATE: 19970325 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WEYCO GROUP INC CENTRAL INDEX KEY: 0000106532 STANDARD INDUSTRIAL CLASSIFICATION: FOOTWEAR, (NO RUBBER) [3140] IRS NUMBER: 390702200 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-09068 FILM NUMBER: 97562210 BUSINESS ADDRESS: STREET 1: 234 E RESERVOIR AVE STREET 2: PO BOX 1188 CITY: MILWAUKEE STATE: WI ZIP: 53201 BUSINESS PHONE: 4142638800 MAIL ADDRESS: STREET 1: 234 EAST RESERVOIR AVENUE STREET 2: 234 EAST RESERVOIR AVENUE CITY: MILWAUKEE STATE: WI ZIP: 53212 FORMER COMPANY: FORMER CONFORMED NAME: WEYENBERG SHOE MANUFACTURING CO DATE OF NAME CHANGE: 19900514 DEF 14A 1 DEF 14A 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: - -------------------------------------------------------------------------------- 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 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.
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 ------------- -------- ------------- -------- 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
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 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:
COMMON CLASS B COMMON ------ -------------- 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
(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.
NAME AND ADDRESS OF AMOUNT AND NATURE OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS - -------------------------------------------------- -------------------- ---------------- Quest Advisory Corp., and Quest Management Company 1414 Avenue of the Americas New York, New York 10019 150,638 11.96
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 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.
SERVED AS NOMINEES DIRECTOR PRINCIPAL OCCUPATION AND FOR TERM EXPIRING 2000 AGE SINCE BUSINESS EXPERIENCE - ---------------------------- --- --------- ------------------------------------------------------- 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
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 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.
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) - -------------------------- ---- --------- -------- ------------ ---------- ---------- ------- ------------ 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 -- --
NOTES: (1) Other compensation to the named individuals did not exceed the lesser of $50,000 or 10% of salary. (2) Options to acquire shares of Common Stock. (3) The Company has granted no stock appreciation rights. (4) Effective April 23, 1996 Robert Feitler retired as President and became Chairman of the Executive Committee. (5) Effective April 23, 1996 Thomas W. Florsheim, Jr. was elected President and Chief Operating Officer of the Company and John W. Florsheim was elected Executive Vice President of the Company. 4 7 OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS - ------------------------------------------------------------------------------------ POTENTIAL REALIZABLE NUMBER OF % OF TOTAL VALUE AT ASSUMED SECURITIES OPTIONS/ ANNUAL RATES OF UNDERLYING SARS STOCK PRICE OPTIONS/ GRANTED TO APPRECIATION FOR SARS EMPLOYEES EXERCISE OR OPTION TERM GRANTED IN FISCAL BASE PRICE EXPIRATION --------------------- NAME (#) YEAR ($/SH) DATE 5% ($) 10% ($) - ------------------------------- ---------- ---------- ----------- ---------- ------- -------- 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
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.
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) ---- --------------- -------- ------------------- -------------------- 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
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 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.
YEARS OF SERVICE HIGHEST FIVE YEAR ---------------------------------------- AVERAGE EARNINGS 10 15 20 25 - ----------------- ------- -------- -------- -------- $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
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.
YEARS OF SERVICE HIGHEST FIVE YEAR ---------------------------------------- AVERAGE EARNINGS 10 15 20 25 - ----------------- ------- -------- -------- -------- $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
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 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 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 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
MEASUREMENT PERIOD WEYCO GROUP, NASDAQ NON- RUSSELL 3000 - (FISCAL YEAR COVERED) INC. FINANCIAL INDEX SHOES 1991 100 100 100 1992 111 109 112 1993 134 126 89 1994 150 121 92 1995 166 169 105 1996 180 206 161
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 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 -----END PRIVACY-ENHANCED MESSAGE-----