EXHIBIT 10.2

 
EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT (“Agreement”), dated as of January 1, 2008, by and
between WEYCO GROUP INC., a Wisconsin corporation (the “Company”), and THOMAS W.
FLORSHEIM, JR. of Milwaukee, Wisconsin (“Florsheim”).
 
WITNESSETH
 
WHEREAS, Florsheim is the Chairman and Chief Executive Officer of the Company,
and is familiar with the methods developed by the Company and the products
supplied by the Company to its customers; and
 
WHEREAS, the Company desires to extend the period of its exclusive right to
Florsheim’s services for the period commencing with the date hereof and ending
on December 31, 2010, in order to assure to itself the successful management of
its business, and
 
WHEREAS, Florsheim is willing to so extend the period of his employment, all on
the terms and subject to the conditions hereinafter set forth.
 
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth,
the parties hereto agree as follows:
 
1. Employment. The Company hereby employs Florsheim, during the term of this
Agreement, in an executive and managerial capacity, to supervise and direct the
operations of the Company as they are now or may hereafter be constituted.
Florsheim shall have such title and responsibilities as the Company’s Corporate
Governance and Compensation Committee of the Board of Directors shall from time
to time assign to him, but the duties which he shall be called upon to render
hereunder shall not be of a nature substantially inconsistent with those he has
rendered and is currently rendering to the Company as its Chairman and Chief
Executive Officer. During the term of this Agreement, Florsheim shall serve
also, without additional compensation, in such offices of the Company to which
he may be elected or appointed by the Company’s Board of Directors. The Company
shall not require Florsheim, without his consent, to serve principally at a
place other than Milwaukee, Wisconsin or its immediate suburban area, and shall
exert its best efforts so as not to require him in the performance of his duties
hereunder to be absent, without his consent, from said city or its immediate
suburban area during any weekend or legal holiday nor for more than ten (10)
days in any calendar month. Florsheim hereby accepts such employment and agrees
to devote his full time, attention, knowledge and skill to the business and
interest of the Company throughout the period of his employment hereunder.
Florsheim shall be entitled to take vacations in the same manner and for the
same periods of time as has been his custom during the previous three years.
 

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2. Compensation.
 
(a) As compensation for his services to the Company during the term of this
Agreement in whatever capacity or capacities rendered, the Company shall,
subject to the provisions of Section 3 hereof, pay Florsheim a salary of
$524,000.00 (Five Hundred, Twenty-four Thousand Dollars) per annum, or such
greater amount per annum as the Corporate Governance and Compensation Committee
of the Board of Directors of the Company may, in its discretion, fix; said
salary is to be payable in equal, or approximately equal, bi-weekly
installments.
 
(b) Nothing herein shall preclude Florsheim from receiving any additional
compensation, whether in the form of bonus or otherwise, or from participating
in any present or future profit-sharing, pension or retirement plan, insurance,
sickness or disability plan, stock option plan or other plan for the benefits of
Florsheim or the employees of the Company, in each case to the extent and in the
manner approved or determined by the Company’s Board of Directors. The Company
shall continue to provide Florsheim the use of an automobile, and other benefits
at least equal to those provided to him under his previous contract of
employment. These benefits are set forth in Schedule A hereto.
 
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3. Term. The term of this Agreement shall be from the date hereof to and
including December 31, 2010. Florsheim’s employment hereunder shall be subject
to the following:
 
(a) If, during the period of his employment hereunder, Florsheim is dismissed by
the Company for cause, thereupon his employment shall terminate. “Cause”, for
purposes of this subparagraph, shall mean conduct or activities that cause a
substantial demonstrable detriment to the Company.
 
(b) If Florsheim’s employment terminates pursuant to Section 3(a) above, the
Company shall be obligated to pay him his salary and other payments due to be
paid hereunder, on or prior to the date of termination; provided, that nothing
herein shall be deemed to entitle Florsheim to amounts accrued but not due to be
paid, or to accelerate the date on which any payment of salary or bonus is due.
 
(c) (i) If, during the term of this Agreement, the Company for any reason other
than that contained in Section 3(a) terminates the employment of Florsheim, or
in the event that he terminates his employment following an event described in
Section 6 hereof, the Company shall pay to Florsheim as severance pay, on the
first day of the seventh month which begins after the date of such termination,
a lump sum amount that, when added to any other payments or benefits which
constitute “parachute payments”, will be equal to 299% of Florsheim’s “base
amount”, as those terms are defined in Section 280G of the Internal Revenue Code
of 1986 (the “Code”) and regulations promulgated by the Internal Revenue Service
thereunder. The determination of Florsheim’s base amount shall be made by the
Company’s independent auditors.
 
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(ii) All or a portion of the payment otherwise required to be made pursuant to
the provisions of subparagraph (i) above shall be delayed to the extent the
Company reasonably anticipates that the Company’s deduction with respect to such
payment would be limited or eliminated by application of Code Section 162(m);
provided, however that such payment shall be made on the earliest date on which
the Company anticipates that the deduction for payment of the amount will not be
limited or eliminated by application of Code Section 162(m). In any event, such
payment shall be made no later than the last day of the calendar year in which
occurs the six (6) month anniversary of Florsheim’s termination of employment.
Any deferred amounts shall earn interest at the rate of 7% per annum until paid.
 
(d) In the event Florsheim is prevented from performing his duties by reason of
disability, the salary provided by Section 2(a) of this Agreement shall cease as
of the date he becomes permanently disabled, except that the Company shall pay
to Florsheim from the date such salary ceases to December 31, 2010, inclusive, a
salary at the rate equal to 75% of his then current salary, less any amount
received by Florsheim pursuant to a salary continuation insurance plan, the
premiums for which are paid in whole or in part by the Company. Florsheim shall
be considered to be suffering from a “disability” if he is, by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, either (i) receiving income replacement benefits for a period of
not less than three months under a welfare plan covering employees of the
Company or (ii) unable to engage in any substantial gainful activity.
 
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(e) In the event Florsheim dies prior to the termination of his employment
hereunder (for purposes of this Section 3(e), such employment shall not be
deemed terminated if, at the time of his death, the Company was making payments
pursuant to Section 3(d) above), the salary provided by Section 2(a) (or Section
3(d), as the case may be) shall cease as of the date of his death (prorated for
part of any month), and the Company shall pay to the beneficiary or
beneficiaries of Florsheim, as designated by him pursuant to written direction
given by him to the Company (or in the absence of such writing or in the event
the last such writing filed by him shall designate one or more persons who are
not living at the time of his death or shall for any other reason be wholly or
partially ineffective, to the personal representatives of his estate) a death
benefit equal to his salary hereunder (at the annual rate which was being paid
to him at the date of his death) for a three-year period. Such death benefits
shall be payable in thirty-six equal monthly installments, the first of which
shall be paid within sixty days next following the date of his death and the
remaining of which shall be made on the date during each of the thirty-five next
succeeding calendar months corresponding to the date of such first payment. If
any payments are required to be made under this Section 3(e) to a beneficiary of
Florsheim who shall have died after having commenced receiving payments
hereunder, such payment shall be made to the personal representative of said
beneficiary’s estate.
 
4. Restrictive Covenants. During the term of this Agreement, Florsheim shall
not, without the prior written consent of the Company, be engaged in or
connected or concerned with any business or activity which directly or
indirectly competes with the business conducted by the Company; nor will he take
part in any activities detrimental to the best interest of the Company.
 
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5. Remedy for Breach. In the event of the breach by Florsheim of any of the
terms and conditions of this Agreement to be performed by him (including, but
not limited to, leaving the Company’s employment or performing services for any
person, firm or corporation engaged in a competing or similar line of business
with the Company without the written consent of the Company), the Company shall
be entitled, if it so elects, to institute and prosecute proceedings in any
court of competent jurisdiction, either at law or in equity, to obtain damages
for any breach of this Agreement, and to enjoin him (without the necessity of
proving actual damage to the Company) from performing services for any such
other person, firm or corporation in violation of the terms of this Agreement,
or both. The Company shall not be so entitled, however, in the event Florsheim
should voluntarily leave the Company’s employment after the happening of any of
the events specified in Section 6 hereof during the term of this Agreement. The
remedies provided herein shall be cumulative and in addition to any and all
other remedies which the Company may have at law or in equity.
 
6. Specific Events. The following specific events will affect the rights and
obligations of the parties in the event of Florsheim’s leaving the employ of the
Company as set forth at Sections 3(c) and 5.
 
(a) The replacement of two or more of the existing members of the Company’s
Board of Directors by persons not nominated by the Board of Directors; or
 
(b) Any amendment to Section 2 of Article III of the Company’s By-Laws to
enlarge the number of directors of the Company if the change was not supported
by the existing Board of Directors; or
 
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(c) Any change in Florsheim’s duties or powers such that his duties or powers,
as changed, would be of a nature substantially inconsistent with those he has
rendered in the past and is currently rendering to the Company as its chief
executive officer; or
 
(d) A successful tender offer for 15% or more of the shares or merger or
consolidation or transfer of assets of the Company; or
 
(e) A change in control of more than 15% of the shares in the Company, such that
Florsheim decides in good faith that he can no longer effectively discharge his
duties.
 
7. Non-Disclosure of Secret or Confidential Information, etc. Anything herein to
the contrary notwithstanding, Florsheim, shall hold in a fiduciary capacity for
the benefit of the Company all knowledge of customer or trade lists and all
other secret or confidential information, knowledge or data of the Company
obtained by him during his employment by the Company, which shall not be
generally known to the public or to the Company’s industry (whether or not
developed by Florsheim) and shall not, during his employment hereunder or after
the termination of such employment, communicate or divulge any such information,
knowledge or data to any person, firm or corporation other than the Company or
persons, firms or corporation designated by the Company.
 
8. Reimbursement for Expenses. Florsheim shall be reimbursed by the Company,
upon his submission of appropriate vouchers, for all items of traveling,
entertainment and miscellaneous expenses, including membership dues at clubs
used primarily for business purposes, reasonably incurred by him on behalf of
the Company within the scope of and during his employment hereunder.
 
9. Assignment. This Agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of the Company, including any company or
corporation with which the Company may merge or consolidate or to which the
Company may transfer substantially all of its assets. Florsheim shall have no
power, without the prior written consent of the Company, to transfer, assign,
anticipate, mortgage or otherwise encumber in advance any of the payments
provided for herein nor shall said payments be subject to levy, seizure, or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by Florsheim nor shall they be transferable by operation of law
in the event of bankruptcy, insolvency or otherwise.
 
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10. Notices. Any notice required or permitted hereunder shall be sufficiently
given if sent by registered mail, with postage and registration fee prepaid, to
the party to be notified at his or its last known address as determined by due
diligence by the party sending such notice.
 
11. Severability. Nothing in this Agreement shall be construed so as to require
the commission of any act contrary to law, and wherever there may be any
conflict between any provision of this Agreement and any contrary material
statute, ordinance, regulation, or other rule of law pursuant to which the
parties have no legal right to contract, the latter shall prevail; but in such
event the provision of this Agreement so affected shall be curtailed and limited
only to the extent necessary to bring it within the requirements of such law. In
no event shall such illegality or invalidity affect the remaining parts of this
Agreement.
 
12. Prior Employment Agreements. This Agreement supersedes all oral or written
employment agreements heretofore made by and between the parties with respect to
the subject matter hereof, and any and all such agreements are hereby canceled
and terminated in their entirety.
 
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13. Applicable Law. This Agreement, executed in the State of Wisconsin, shall be
construed in accordance with and governed in all respects by the laws of the
State of Wisconsin to the extent not governed by federal law.
 
14. Waiver, etc. No amendment or modification of this Agreement shall be valid
or binding on the Company unless made in writing and signed by a duly authorized
officer of the Company or upon Florsheim unless made in writing and signed by
him. The waiver of a breach of any provision of this Agreement by either party
or the failure of either party to otherwise insist upon strict performance of
any provision hereof shall not constitute a waiver of any subsequent breach of
any subsequent failure to strictly perform.
 
15. Headings, etc. Section headings and numbers herein are included for
convenience of reference only, and this Agreement is not to be construed with
reference thereto. If there shall be any conflict between such numbers and
headings and the text of this Agreement, the text shall control.
 
16. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
 
17. Section 409A.
 
(a) In order to facilitate compliance with Section 409A of the Internal Revenue
Code, the Company and Florsheim agree that they shall neither accelerate nor
defer or otherwise change the time at which any payment due hereunder is to be
made, except as may otherwise be permitted under Code Section 409A of the
Internal Revenue Code and regulations thereunder.
 
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(b) Whether a termination of employment has occurred will be construed in a
manner consistent with the requirements described in IRS regulations under Code
Section 409A. Termination of employment by the Company on the one hand or by
Florsheim on the other hand (other than by death of Florsheim) shall be
communicated by a written notice of termination to the other. That notice shall
indicate the specific termination provision in this Agreement relied upon and,
to the extent applicable, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination under the provisions so
indicated and the termination date. The termination date shall be no later than
thirty (30) days after the date such written notice is provided but may be
earlier if so specified in the notice.
 
18. Termination of Certain Benefits. Coverage under the arrangements described
in Section 2(b) shall end upon the Florsheim’s date of termination of employment
(or earlier death described in Section 3(e) or earlier disability described in
Section 3(d)); provided, however, that Florsheim (or his beneficiaries) shall be
permitted to elect COBRA continuing health benefits coverage in accordance with
the usual rules of the Company’s health plan and such coverage shall be
continued in accordance with those rules so long as Florsheim or his
beneficiaries pays the full COBRA premium generally applicable to other
terminating employees (and their beneficiaries).
 
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IN WITNESS WHEREOF, Florsheim has duly executed this Agreement and the Company
has caused this Agreement to be executed by its duly authorized officers and its
corporate seal to be affixed hereunto, all as of the day and year first above
written.

       
WEYCO GROUP, INC.
a Wisconsin corporation,
 
   
   
  By   /s/ John W. Florsheim  

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Its President

 
 
Attest:    /s/ John Wittkowske

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    Its Secretary
 

         /s/ Thomas W. Florsheim, Jr.  

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Thomas W. Florsheim, Jr.

  
(SEAL)

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SCHEDULE A
 
Life and Accidental Death and Dismemberment Insurance
 
Health Insurance
 
Weyco Group, Inc. Pension Plan
 
Deferred Compensation Agreement
 
Weyco Group, Inc. Deferred Compensation Plan
 
Weyco Group, Inc. Excess Benefits Plan

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February 6, 2008

TO: WEYCO GROUP, INC.
 
Pursuant to Section 3(e) of the Employment Agreement dated as of January 1,
2008, by and between Weyco Group, Inc., a Wisconsin corporation, and Thomas W.
Florsheim, Jr. of Milwaukee, Wisconsin, I hereby designate _______________ as
beneficiary of the death benefits equal to my salary hereunder for a three-year
period.
 

       
/s/ Thomas W. Florsheim, Jr.
 

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Thomas W. Florsheim, Jr.

 
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