SHARE-BASED COMPENSATION PLANS

12 Months Ended

Dec. 31, 2025

SHARE-BASED COMPENSATION PLANS

SHARE-BASED COMPENSATION PLANS

18. SHARE-BASED COMPENSATION PLANS

At December 31, 2025 we had two share-based compensation plans: the 2017 Incentive Plan (the “2017 Plan”) and the 2024 Incentive Plan (collectively, “the Plans”). On May 7, 2024, the shareholders of Weyco Group, Inc. approved the 2024 Incentive Plan (the “2024 Plan”) which allows for the grant of up to 1.5 million share-based awards to executives, directors, and other salaried employees. Awards available for grant under the 2024 Plan include restricted stock and options to purchase common stock of the Company, as well as other forms of share-based compensation. Awards are no longer granted under the 2017 Plan; however, awards previously granted under such plan continue in accordance with their terms.

Restricted stock awards were the only form of share-based compensation granted in 2025 and 2024. Restricted stock awards and stock options are valued at fair market value based on the Company’s closing stock price on the grant date. Restricted stock granted in 2025 and 2024 vest ratably over five years. As of December 31, 2025, there were approximately 1.4 million shares remaining available for share-based awards under the 2024 Plan.

Upon vesting of restricted stock or the exercise of stock options, we may withhold shares to satisfy minimum statutory tax withholding requirements. The shares withheld have the effect of share repurchases by the Company as they reduce the number of shares that would have otherwise been issued. These transactions are accounted for as net share settlements and do not impact total compensation expense. During 2025, we withheld approximately 41,000 shares in connection with net share settlements. Cash paid for employees’ tax obligations to taxing authorities totaled $0.2 million and $0.4 million in 2025 and 2024, respectively; such payments were reflected as a financing activity in the consolidated statements of cash flows.

In accordance with ASC 718, share-based compensation expense of $1.7 million and $1.5 million was recognized in 2025 and 2024, respectively, for stock options and restricted stock awards granted since 2020. An estimate of forfeitures, based on historical data, was included in the calculation of share-based compensation.

At December 31, 2025, there was $0.9 million of total unrecognized compensation cost related to non-vested stock options granted in the years 2021 through 2023 which is expected to be recognized over the weighted-average remaining vesting period of 2.1 years. At December 31, 2024, there was $1.4 million of total unrecognized compensation cost related to non-vested stock options granted in the years 2020 through 2023 which was expected to be recognized over the weighted-average remaining vesting period of 2.9 years.

The following tables summarize our stock option activity during the years ended December 31, 2025 and 2024:

Stock Options

	Years ended December 31,
	2025				2024
			Weighted Average				Weighted Average
Stock Options	Shares		Exercise Price		Shares		Exercise Price
Outstanding at beginning of year		563,760	$	25.98		967,217	$	26.22
Granted		—		—		—		—
Exercised		(44,685)		24.07		(389,597)		26.53
Forfeited or expired		(6,370)		26.35		(13,860)		26.61
Outstanding at end of year		512,705	$	26.15		563,760	$	25.98
Exercisable at end of year		353,064	$	26.03		281,429	$	26.50

	Weighted Average Remaining
	Contractual Life (in Years)	Aggregate Intrinsic Value
Outstanding - December 31, 2025	5.4	$	2,688,000
Exercisable - December 31, 2025	4.7	$	2,019,000

The aggregate intrinsic value of outstanding and exercisable stock options is defined as the difference between the market value of our Company’s common stock on December 31, 2025 of $30.59 and the exercise price multiplied by the number of in-the-money outstanding and exercisable stock options.

Non-vested Stock Options

		Weighted Average		Weighted Average
	Number of Options	Exercise Price		Fair Value
Non-vested - December 31, 2023	442,388	$	24.93	$	5.28
Granted	—		—		—
Vested	(150,057)		23.38		4.52
Forfeited	(10,000)		25.60		5.73
Non-vested - December 31, 2024	282,331		25.46		5.66
Granted	—		—		—
Vested	(117,340)		24.15		4.89
Forfeited	(5,350)		26.33		6.18
Non-vested - December 31, 2025	159,641	$	26.40		6.22

The following table summarizes information about outstanding and exercisable stock options at December 31, 2025:

	Options Outstanding				Options Exercisable
		Weighted
		Average
	Number of	Remaining	Weighted		Number of	Weighted
	Options	Contractual Life	Average		Options	Average
Range of Exercise Prices	Outstanding	(in Years)	Exercise Price		Exercisable	Exercise Price
$18.00	81,470	4.7	$	18.00	81,470	$	18.00
$23.38 to $25.79	243,984	6.4	$	24.79	133,951	$	24.37
$27.94 to $37.22	187,251	4.5	$	31.45	137,643	$	32.40
	512,705	5.4	$	26.15	353,064	$	26.03

The following table summarizes our stock option activity for the years ended December 31:

	2025		2024
	(Dollars in thousands)
Total intrinsic value of stock options exercised	$	281	$	3,706
Net proceeds from stock option exercises	$	5	$	51
Income tax benefit from the exercise of stock options	$	73	$	964
Total fair value of stock options vested	$	574	$	678

Restricted Stock

The following table summarizes our restricted stock award activity during the years ended December 31, 2025 and 2024:

	Shares of Restricted	Weighted Average
	Stock	Grant Date Fair Value
Non-vested - December 31, 2023	69,090	$	25.54
Issued	54,855		34.65
Vested	(30,255)		24.86
Forfeited	(725)		27.54
Non-vested - December 31, 2024	92,965	$	31.12
Issued	65,350		30.04
Vested	(34,881)		29.27
Forfeited	(2,895)		31.54
Non-vested - December 31, 2025	120,539	$	31.06

At December 31, 2025, we expected 120,539 shares of restricted stock to vest over a weighted-average remaining contractual term of 3.8 years. These shares had an aggregate intrinsic value of $3.7 million at December 31, 2025. The aggregate intrinsic value was calculated using the market value of our Company’s common stock on December 31, 2025 of $30.59 multiplied by the number of non-vested restricted shares outstanding. The income tax benefit from the vesting of restricted stock for the years ended December 31 was $0.3 million in both 2025 and 2024.