EXHIBIT
      10.3

     

    EMPLOYMENT
      AGREEMENT

     

    THIS
      EMPLOYMENT AGREEMENT
      (“Agreement”), dated as of January 1, 2008, by and between WEYCO GROUP
      INC., a Wisconsin corporation (the “Company”), and JOHN W. FLORSHEIM of
      Milwaukee, Wisconsin (“Florsheim”).

     

    WITNESSETH

     

    WHEREAS,
      Florsheim is the President and Chief Operating 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 help 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 President and Chief Operating 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 $468,000.00 (Four
      Hundred, Sixty-eight 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
      provide Florsheim the use of an automobile. The current 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 beings 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 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 the 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 an accident and health 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 subparagraph, 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.

     

    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.

     

    
      
        
        

      

      
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    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

     

    (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

     

    
      
        
        

      

      
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    (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.

     

    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.

     

    
      
        
        

      

      
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    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. 

     

    (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, 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.

     

    
      
        
        

      

      
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    18. Termination
      of Certain Benefits.
      Coverage under the arrangements described in Section 2(b) shall end upon
      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/
              Thomas W. Florsheim, Jr.
	 	
              
Its
              Chairman of the Board


    

     

    
      	
              Attest:

            	 	 	 
	 	 	 	 
	 	 	 	 
	/s/
              John
              Wittkowske	 	 	 
	
              
Its
              Secretary	 	 	
            
	
            	 	 	 


    

     

    
      	 	 	 	 
	
            	 	 	/s/
              John W. Florsheim
	
            	 	 	
              
John
              W. Florsheim
	(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 John W. Florsheim
      of
      Milwaukee, Wisconsin, I hereby designate __________________ as beneficiary
      of
      the death benefits equal to my salary hereunder for a three-year
      period.

     

    
      	 	 	 	 
	 	 	 	/s/
              John W.
              Florsheim
	
            	 	 	
              
John
              W. Florsheim


    

     

    
      
        
        

      

      
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