Document:

LOAN MODIFICATION AGREEMENT

 

This LOAN MODIFICATION
AGREEMENT (the “Modification”) is made as of December 6, 2012, by and between WEYCO
InVESTMENTS, INC. (the “Lender”) and FLORSHEIM AUSTRALIA PTY LTD. ACN 134 045 435 (f/k/a Sha Capital Pty Ltd.;
the “Borrower”).

 

WHEREAS, pursuant to
that certain Loan Agreement dated as of January 23, 2009 (the “Loan Agreement”), by and between the Lender and the
Borrower, the Lender has agreed, among other things, to make revolving credit loans to the Borrower (the “Revolving Loans”)
in an amount not to exceed $2,100,000 outstanding in the aggregate at any one time (the “Revolving Credit Commitment”);

 

WHEREAS, the Borrower’s
obligation to repay the Revolving Loans is evidenced by that certain Revolving Credit Note dated January 23, 2009, issued by the
Borrower and payable to the Lender (the “Revolving Note”) ; and

 

WHEREAS, the Lender
and the Borrower now desire to amend the Loan Agreement and the Revolving Note to increase the amount of Revolving Credit Commitment
from $2,100,000 to $4,000,000 and to change the address where payments by the Borrower in respect of the Revolving Loans are to
be made.

 

NOW, THEREFORE, in
consideration of the mutual promises and conditions contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

  

1.           Amendment to Loan Agreement. The second sentence of Section 1(a) of the Loan Agreement is
hereby deleted and replaced in its entirety with the following:

 

“The revolving credit loans outstanding
at any one time shall never exceed a principal amount equal to FOUR MILLION AND 00/100 U.S. DOLLARS (U.S. $4,000,000; the “Revolving
Credit Commitment”)”.

 

2.           Amendments to Revolving Note.
The Revolving Note is hereby amended as follows:

 

(a)           The amount
“U.S.$2,100,000” listed beneath the caption on the top of the first page of the Revolving Note is hereby deleted and
replaced in its entirety with “U.S.$4,000,000”.

 

(b)           The amount “TWO
MILLION ONE HUNDRED THOUSAND AND 00/100 U.S.DOLLARS (U.S.$2,100,000)” provided in the first paragraph of the Revolving Note
is hereby deleted and replaced in its entirety with the amount “FOUR MILLION AND 00/100 U.S. DOLLARS (U.S.$4,000,000)”.

 

(c)           The fourth
paragraph of the Revolving Note is hereby deleted and replaced in its entirety with the following:

 

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“Payments
of principal, interest and other amounts due hereunder are to be made in lawful money of the United States of America to the Lender
at 101 Convention Center Drive Suite 850 Las Vegas, NV 89109, Attention: Ivan Farris, or at such other place as the holder shall
designate in writing to the Borrower.”

 

3.           Security.
All of the obligations of the Borrower under the Loan Agreement and the Revolving Note, each as amended by this Modification, shall
be secured by the “Security” referenced in the Loan Agreement.

 

4.           No Release. Except as expressly
provided for above, the Loan Agreement and the Revolving Note shall remain in full force and effect and shall continue to bind
the parties, and the execution and delivery of this Modification shall not release, discharge, or satisfy any present or future
debts, obligations, or liabilities to the Lender of the Borrower, or any debtor, guarantor, or any other person or entity liable
for the payment or performance of any such debts, obligations, or liabilities of the Borrower or any mortgage, security interest,
lien, or other collateral or security for any such debts, obligations, or liabilities of the Borrower or such debtors, guarantors,
or other such persons or entities. This is a loan modification and not a novation.

 

5.           Governing Law; Jurisdiction; Waiver
of Jury Trial. The validity, construction and enforcement of this Modification shall be determined and governed by the internal
laws of the State of Wisconsin, without giving effect to its conflict of laws principles. For the purposes of any action or proceeding
involving this Modification, the Borrower hereby expressly submits to the jurisdiction of all federal and state courts sitting
in such state and consents that any order, process, notice of motion or other application to or by any such court or a judgment
thereof may be served within or without such court’s jurisdiction by registered mail or by personal service, provided that
a reasonable time for appearance is allowed. The Borrower hereby irrevocably waives any objection that it may now or hereafter
have to the laying of venue of any such suit, action or proceeding arising out of or relating to this Modification brought in any
federal or state court sitting in such state and hereby further irrevocably waives any claim that any such suit, action or proceeding
brought in such court has been brought in an inconvenient forum. The Borrower and the Lender hereby also irrevocably and unconditionally
waive, to the extent permitted by applicable law, trial by jury in any legal action or proceeding relating to this Modification
or any other document executed in connection herewith and for any counterclaim therein.

 

6.           Counterparts. This Modification
may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any
of the parties hereto may execute this Modification by signing any such counterpart. Delivery of executed counterparts sent by
telecopy or e-mail shall be effective as an original and shall constitute a representation that any original will be delivered.

 

[Signature page follows]

 

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IN WITNESS WHEREOF,
the parties hereto have caused this Modification to be executed as of the date first above stated.

 

	 	FLORSHEIM AUSTRALIA PTY LTD.	 
	 	 	 
	 	By:	/s/ David Venner	 
	 	 	 	 
	 	 	 	 
	 	WEYCO INVESTMENTS, INC.	 
	 	 	 	 
	 	By:	/s/ Ivan Farris	 
	 	Name:	Ivan Farris	 
	 	Title:	President	 

 

    	3EMPLOYMENT
AGREEMENT

 

THIS EMPLOYMENT
AGREEMENT (“Agreement”), dated as of January 1, 2014, by and between WEYCO GROUP INC., a Wisconsin corporation
(the “Company”), and THOMAS W. FLORSHEIM, JR. of Milwaukee, Wisconsin (“Florsheim”).

 

W I T N
E S S E T H

 

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, 2016, 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 $591,100 (Five
Hundred, Ninety-one Thousand, One 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.

 

(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, 2016. 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, 2016, 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

 

(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 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.

 

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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).

 

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	 
	        	 	 	 	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

 

    	-11-

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