EXHIBIT 10.6


 


EMPLOYMENT AGREEMENT


 


THIS EMPLOYMENT AGREEMENT
(“Agreement”), dated as of January 1, 2017, 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, 2019, 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.


 


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 $639,500.00 (Six Hundred Thirty-Nine Thousand,
Five Hundred 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.


 




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(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.


 


3.          Term.
The term of this Agreement shall be from the date hereof to and including December 31, 2019. 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, 2019, 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.


 




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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.


 


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
	 	 	 
	 	Its	President


 


	Attest:  	/s/ John Wittkowske	 
	 	 	 
	 	Its Secretary	 


 


	 	/s/ Thomas W. Florsheim, Jr.
	 	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 28, 2017


 


TO:     WEYCO GROUP, INC.


 


Pursuant to Section 3(e) of the Employment
Agreement dated as of January 1, 2017, by and between Weyco Group, Inc., a Wisconsin corporation, and Thomas W. Florsheim,
Jr. of Milwaukee, Wisconsin, I hereby designate Jennifer Florsheim as beneficiary of the death benefits equal to my salary hereunder
for a three-year period.


 


	 	/s/ Thomas W. Florsheim, Jr.	 
	 	Thomas W. Florsheim, Jr.	 


 




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